Agenda item

Annual Report on Internal Audit Activity 2007-08 (Agenda Item 6)

Report of the Head of Internal Audit.

Minutes:

The Head of Internal Audit presented the report and explained that the purpose of the report was to satisfy the requirements of the Accounts and Audit Regulations 2003, the Accounts and Audit Regulations (Amendment) (England) 2006 and the Head of Internal Audit’s annual reporting requirements set out in the CIPFA Code of Practice for Internal Audit in Local Government in the United Kingdom 2006.  As required under the Code, the report informed members of the following matters:

 

a)                    An opinion on the overall adequacy and effectiveness of the organisation’s control environment.

b)                    Any qualifications to that opinion, together with the reasons for the qualification.

c)                    A summary of the audit work from which the opinion was derived, including reliance placed on work by other assurance bodies.

d)                    Any issues particularly judged to be relevant to the preparation of the Annual Governance Statement (formerly Statement of Internal Control).

e)                    A comparison of the actual work undertaken with the planned work, with a summary of the performance of the internal audit function against its performance measures and targets.

f)                      Compliance with the Standards of the Code.

g)                    Results of the internal audit quality assurance programme.

 

The Head of Internal Audit highlighted the fact that there had been a change of contractor during the year, with Deloitte and Touche Public Sector Internal Audit Ltd. appointed to replace Bentley Jennison Risk Management Ltd.  As a result the report covered the work of these two separate contractors.  The background to the change of contractors was given.  It was noted there had been problems with the issue of audit reports and during the takeover period by the new contractor but that the situation was rapidly improving.  Outstanding final audit reports relating to 2007/08 reviews were expected to be completed by the end of Quarter 1 of 2008/09, following which there would be intensive input to audit planning to ensure Quarter 1 and 2 scheduled reviews for 2008/09 were progressed without further delay.

 

On the basis of the internal audit work undertaken in 2007/08, the opinion given on the overall standards of internal control was that these were adequate for the year ended 31 March 2008 and hence accorded with proper practice.

 

A substantial assurance was given that the Council’s corporate governance framework complied with the best practice guidance on corporate governance issued by CIPFA/SOLACE.

 

The Council’s risk management systems were judged adequate during 2007/08.  It was noted that this area would be enhanced from further work to be undertaken in the coming year as part of the review of the Risk Management Strategy and in regard to staff training.

 

So far as the audit work undertaken during 2007/08 was concerned, there had been changes to the planned programme, details of which were noted.  These included additional ad hoc audits as well as the deletion of other work.

 

A member asked how the varying levels of assurance given in the audit opinions would relate to the Council’s ratings under the Comprehensive Performance Assessment (CPA).  It was explained that the substantial and adequate assurance levels were positive opinions but that CPA ratings were derived from a number of assessments, of which internal audit was just one area.  However, endorsement and implementation of high and medium level recommendations would serve to increase the Council’s performance for CPA purposes.

 

A list of comments and questions on the report received from Mr. P. Hewett were circulated at the meeting and it was agreed that written answers should be provided and circulated to members.

 

RESOLVED to

 

(1)         receive and note the Annual Report of the Head of Internal Audit;

(2)         note the overall standards of internal control and risk management were adequate during 2007/08;

(3)         note that a substantial assurance has been given in respect of corporate governance arrangements for the year ended 31 March 2008;

(4)         note that the adequate opinion on internal control and risk management is reflected in the Council’s Annual Governance Statement for 2007/08, as subsequently presented to the Committee (minute 21/08 below refers);

(5)         note that the substantial opinion with regard to corporate governance arrangements additionally needs to be acknowledged in the Council’s Annual Governance Statement for 2007/08, as subsequently presented to the Committee (minute 21/08 below refers);

(6)         written answers be provided and circulated to members as soon as possible to the questions submitted by Mr. Hewett.

 

Supporting documents: