Issue - meetings

(Finance & Economic Development Portfolio Holder) To consider the attached report (C-026-2009/10).

(1)        That the supplement of the resources of the Internal Audit Team within the approved budget, by engaging an external audit provider to undertake an agreed schedule of audits up to 31 March 2011 be agreed in principle; and

(2)        That authority be delegated to the Chief Executive to appoint the preferred audit provider on the basis of the most economically advantageous tender.

The Portfolio Holder for Finance & Economic Development presented a report on the options for service delivery for the Internal Audit Unit.

In recognition of the importance of the Internal Audit function and the previous problems experienced in recruiting and retaining staff when vacancies had arisen, the Portfolio Holder presented various options for the delivery of the service. It was proposed to seek an external supplier to work with the Internal Audit Unit to aid the completion of the agreed Audit Plan during 2009/10, and in particular the auditing of the core financial and ICT systems. This external provision would be continued until the end of the 2010/11 municipal year to make the contract commercially viable and allow the Council to consider its options for future years following a period of joint working. The Internal Audit Unit would continue to engage consultancy or agency staff as necessary to ensure the completion of the Audit Plan in 2009/10. It was proposed that authority be delegated to the Chief Executive to appoint the external audit partner following a competitive tendering exercise. It was envisaged that the existing budget of £74,000 would be sufficient to provide 125 audit days per year, which would equate to a minimum of eight finance or ICT audits.

The Cabinet was in favour of the proposals, particularly as it would give the Internal Audit Unit access to specialist audit skills and enable them to deal with the peaks and troughs in the workload. It was acknowledged that the Council had a competent and experienced core team but were experiencing recruitment difficulties having recently lost two key members of the Unit.

Decision:

(1)        That the supplement of the resources of the Internal Audit Team within the approved budget, by engaging an external audit provider to undertake an agreed schedule of audits up to 31 March 2011 be agreed in principle; and

(2)        That authority be delegated to the Chief Executive to appoint the preferred audit provider on the basis of the most economically advantageous tender.

Reasons for Decision:

The Council’s Internal Audit team had lost two fully qualified accountants in recent months and was vulnerable to further reductions in qualified and experienced staff. A viable solution needed to be found in order that the governance arrangements of the Council were maintained.

Other Options Considered and Rejected:

To retain the existing Internal Audit arrangements fully in-house, or to fully outsource the service.