Annual Review of the Effectiveness of Internal Audit for 2009/10 (Agenda item 11)
Report of the Head of Internal Audit.
The Head of Internal Audit presented the report which primarily sought to confirm that proper arrangements had been made to comply with the statutory requirements and to present evidence to Members that the system of Internal Audit at Breckland Council was effective.
The Accounts and Audit (Amendment) Regulations 2006 stated at paragraph 6(3) that the relevant body shall at least once in each year conduct a review of the effectiveness of its system of internal audit.
This was the first time that this detailed report had been presented to the Audit Committee. This year marked a departure from previous arrangements in so far as a separate report had now been developed to enable a more detailed evaluation of the effectiveness of the system of Internal Audit to be undertaken, involving Members in this process which was felt to be transparent and robust.
The Head of Internal Audit had in place a performance and quality assurance framework to demonstrate that the Internal Audit Service was:
· Meeting its aims and objectives;
· Compliant with the CIPFA Code of Practice for Internal Audit in Local Government;
· Meeting internal quality standards, confirmed through performance indicators and post audit feedback received;
· Putting forward practical audit recommendations that were agreed with senior management and led to ongoing improvements to the internal control environment at the Council, as evidenced by the subsequent implementation of agreed actions.
· Continually seeking to improve service delivery whilst also adding value and assisting the Council in achieving its objectives;
· Producing work which the External Auditor was able to place reliance upon; and,
· Supporting an effective Audit Committee.
The aims and objectives of the Internal Audit Service had been established in Internal Audit’s Terms of Reference, Internal Audit’s Strategy, Annual Audit Needs Assessment and Strategic/Annual Audit Plans, which were updated each year and submitted to the Audit Committee for formal approval.
It had been confirmed that there had been full compliance with best practice guidance in all areas this year.
The Quality Standards applying to the Internal Audit Service were explained.
Referring to one of Councillor Hewett’s questions with regard to paragraph 3.8.2 of the report, it was noted that following completion of audit fieldwork it had taken 26.9 days on average to issue a final audit report in 2009/10 compared with the 25 day target set. This was a much improved position on 2008/09 where it had taken 62.4 days.
The Independent Member asked if was possible for Breckland Council employees to ‘cover up’ risks given that audits were announced prior to fieldwork commencing and questioned the need for surprise visits. The Head of Internal Audit explained that the scope of audit work and the random sampling undertaken precluded the opportunity for covering up risks.
A Member had concerns that the report was too technical for the public to understand. The Chairman and the Head of Finance reminded the Committee that the majority of reports taken forward were technical given the topics that were covered.
The Senior Audit Manager pointed out that the Annual Audit letter was much more accessible and readable to the wider audience as a style writer was used. There was also an increased emphasis on the Audit Commission to make the Annual Governance report more comprehensible to the public.
Referring to paragraph 3.6.1 of the report, a Member pointed out that there was no reference as to where these mentioned documents could be found. He felt that some signposting would be beneficial.
RESOLVED that the findings of this report and the evidence given in support of the effectiveness of the Internal Audit Service be noted, taking this into consideration when receiving the Head of Internal Audit’s Annual Report and Opinion, and the Council’s Annual Governance Statement.