Agenda item

(Chief Internal Auditor) To consider the attached report (AGC-003-2014/15).

The Chief Internal Auditor presented a report on the Internal Audit Annual Report 2013/14 and the review of the effectiveness of the system of Internal Audit.

The Chief Internal Auditor stated that this report had been presented in support of the Internal Audit opinion on the adequacy of the Council’s internal control environment. It provided a summary of the work undertaken by the Internal Audit Unit and detailed the overall performance against the Audit Plan for 2013/14. The Accounts and Audit Regulations included a requirement for the Council to carry out an annual review of the effectiveness of its system of internal audit as part of the wider review of the effectiveness of the system of governance. A review had been undertaken by the Corporate Governance Group and was presented to the Committee to assist it with assessing the effectiveness of the system of internal audit on behalf of the Council.

The Chief Internal Auditor advised the Committee that the work of Internal Audit continued to improve awareness of Governance requirements and promote improvement in the Council’s systems. During the year, 36 audit reports had been issued, of which 4 had full assurance, 30 had substantial assurance and 2 had limited assurance. Therefore, it could be concluded that the Council’s systems were generally operating satisfactorily and appropriate follow-up action had been taken where necessary to reduce the risk of error or fraud.

In respect of Performance Management for the year, the Chief Internal Auditor informed the Committee that the final figure for both the planned audits completed (88% against a target of 90%) had been marginally below target. This was due to the long-term sickness of one member of staff, who had now fully returned to work, plus study days for another member of staff who had been studying for a professional qualification. No figure was given for the User Satisfaction performance as the introduction of a new, simplified electronic form did not improve the rate of return – as highlighted earlier in the meeting. Management would be reminded of the need to complete and return the survey forms in a timely manner.

The Chief Internal Auditor reported that the Internal Audit Section could demonstrate that it had a good understanding of the functions of the Council and had achieved the Council’s objective to identify improvements to its control systems. The performance of the Unit had remained close to its key targets and all fundamental financial systems were examined and reported on. The Council’s External Auditors were able to place reliance on the work of Internal Audit when conducting their formal assessment of the Team’s work as part of their review of the 2012/13 accounts. The Quality Assurance & Improvement Programme required by the Public Sector Internal Audit Standards introduced in April 2013 was currently under development and would be reported to the Committee later in the year, hopefully at the next scheduled meeting in September, along with the Internal Audit Charter.

The Chief Internal Auditor stated that, in his opinion, the Council had in place a satisfactory framework of internal control, which provided reasonable assurance regarding the efficient and effective achievement of its objectives in 2013/14. Consequently, having considered all the issues, the Corporate Governance Group was satisfied that the Council’s system of Internal Audit had been effective during 2013/14.

Resolved:

(1)        That the Audit Plan Status Report for 2013/14, as at 31 March 2014, be noted;

(2)        That, in the context of the Council’s Governance Statement, the review of the effectiveness of the system of internal audit for 2013/14, as undertaken by the Corporate Governance Group, be noted; and

(3)        That the satisfaction of the Committee with the effectiveness of the system of internal audit during 2013/14 be confirmed.