Annual Report and Opinion for 2012-13 (Agenda item 11)
Report by the Head of Internal Audit.
The Internal Audit Consortium Manager gave a detailed overview of the report which had been developed to satisfy the mandatory requirements of the new Public Sector Internal Audit Standards (PSIAS), effective from April 2013 (specifically Standard 2450), and to satisfy the requirements of the Accounts and Audit (England) Regulations 2011.
The structure of the report had been revised to previous years; a commentary on compliance with new standards must now be prepared in much the same way as the extent of compliance achieved against the CIPFA Code of Practice had to be documented.
It was noted that when considering the report and its attached opinions, the statements made therein should be viewed as key items which need to be used to inform the organisation’s Annual Governance Statement.
Internal Audit’s service provisions and costs had increased marginally by 2.3% compared with the previous year. This had been due to an expanded Internal Audit Plan being delivered in 2012/13.
In order to provide the Council an overall opinion on its control environment, the Internal Audit Consortium Manager had revisited the assurance levels given to individual audit assignments throughout the year, relating to both financial and non financial systems. These had been highlighted in the tables on page 91 and 92 of the agenda.
Members were asked to note that this year a change of methodology had been applied to work carried out to support the preparation of the Annual Governance Statement.
On the basis of the audit work undertaken in 2012/13, the Internal Audit Consortium Manager’s opinion was that the overall adequacy and effectiveness of the Organisation’s governance, risk and control framework for the year ended 31 March 2013 were adequate. A good assurance had been additionally given to Breckland’s corporate governance and risk management arrangements, whilst an adequate assurance had been awarded to the Anglia Revenues and Benefits Partnership in respect of its governance.
The table of individual audit opinions at paragraph 3.4.1 of the report confirmed that there had been 4 audits where less favourable assurances had been given (3 limited assurances and 1 unsatisfactory assurance). This unsatisfactory assurance was in relation to procurement which was still an area of particular concern.
The report also set issues of significance to be considered when compiling the authority’s Annual Governance Statement for 2012-13. At paragraph 3.6.1 of the report, the details of eleven high priority recommendations, 5 of these had been earmarked for completion within the financial year and 5 had been carried over from the previous year’s audits, 2 of which had since been delivered by management.
A review of audit work delivered in 2012/13 compared with the Annual Audit Plan that had been approved on 3 February 2012 had been highlighted at paragraph 3.7.1 of the report.
An overview of the Audit Plan on pages 101 to 103 of the agenda noted where it had been necessary to reschedule work in year whilst abbreviated management summaries relating to the 12 audits that had been finalised since the progress report on Internal Audit Activity were highlighted at appendices 2, 3 and 4.
In response to a question about the work of the West Suffolk Partnership, Members were informed that the work commissioned from Deloittes had been quite separate from that performed by the Partnership and there had not been any duplication.
Mr Ludlow raised concerns about the number of performance measures applying to procurement. In response, Members were informed that any particular contract would have performance measures set against it and formed part of the approval process.
The Chairman asked if there was a Corporate Procurement department within the Council. The Assistant Director of Finance explained that there was, officers/managers often sought guidance from this department. The procurement process was currently under review and a paper would be brought to the Committee with money saving ideas. A discussion followed about procurement issues and how these could be resolved by the introduction of a corporate resource. The Chairman felt that the report had highlighted procurement concerns and said that he would like to see a whole Norfolk-wide procurement system put in place which would save money for all concerned.
Referring to property management on page 109/110 of the agenda in relation to re-leasing other properties, Mr Ludlow asked about fire risk and who was responsible for carrying out these fire risk assessments. Members were informed that the tenant was responsible as it formed part of the lease.
It was noted that the word ‘with’ had been omitted from the third sentence under Risk Management on page 111 of the agenda.
Mr Ludlow mentioned the note below the table on page 137 of the agenda in relation to the assurance gradings standards. The Internal Audit Consortium Manager explained that these were linked to CIPFA standards and had been developed in conjunction with Deloittes.
Referring to the questions and concerns raised in the previous report about the non-action of the high recommendations, the Assistant Director of Finance explained that there were a number of recommendations that the Council was unable to confirm the status of as managers had not updated the system because the agreed deadlines had not been reached; however, the message had been reinforced and Managers had been requested to update the Performance system every quarter in future as progress on actions, even if the deadline was not due, was still important for management and committee. The following report on pages 141 onwards provided an extract of the Performance Plus system. Members were informed that the Asset Management Plan had since been approved but had not as yet been signed off and therefore should not be classed as a high risk. Referring to the Maintenance and Street Lighting Contracts on page 151 of the agenda, the Assistant Director of Finance advised that a report would be put forward later in the year which would be recommending a fundamental change to this service so there had been mitigating circumstances as to why this had not been actioned. Mr Ludlow highlighted the fact that street lighting issues had been on-going since 2010 and felt it was rather a long time for it to be left until contract renewal.
The Chairman felt that the process needed to be improved as the dates were not coalescentand there seemed to be no monitoring systems in place.
The Deputy Chief Executive said that he would take all this information back to the managers.
1) the Annual Report of the Internal Audit Consortium Manager be received and noted;
2) it be noted that the overall adequacy and effectiveness of the organisation’s governance, risk and control framework (i.e. control environment) were adequate for the year ended 31 March 2013;
3) it be noted that a good assurance had been given in respect of Corporate Governance and Risk Management arrangements for the year ending 31 March 2013;
4) it be noted that an adequate assurance had been awarded in respect of the Anglia Revenues and Benefits Partnership Governance arrangements for the year ending 31 March 2013; and
5) note that the opinions expressed together with significant matters arising from internal audit work contained within the report be given due consideration when developing and reviewing the Council’s Annual Governance Statement for 2012/13.
- HoIA Annual Report and Opinion for 2012-13 (Final v2), item 23. PDF 190 KB
- Appendix 1 BRK 2012-13 MASTER, item 23. PDF 15 KB
- Appendix 2 Management Summaries 2012-13, item 23. PDF 131 KB
- Appendix 3 New Management Summaries 2012-13, item 23. PDF 138 KB
- Appendix 4 Revenues and Benefits Audits (Final), item 23. PDF 80 KB
- Appendix 5 West Suffolk Partnership Assurance Definitions, item 23. PDF 37 KB
- Appendix 6 Norfolk Internal Audit Assurance Definitions, item 23. PDF 43 KB
- Appendix 7 BRK Assurance Chart (Final)_PRINT IN COLOUR, item 23. PDF 15 KB
- Appendix 8 Limitations and Responsibilities re Audit Opinion, item 23. PDF 55 KB