Agenda item

(Chief Internal Auditor) To consider the attached report (AGC-020-2016/17).

The Chief Internal Auditor presented a report on the Internal Audit Strategy and Plan for 2017/18.

The Chief Internal Auditor reported that the Internal Audit Service supported and contributed to the achievement of the Council’s objectives by supporting good governance, with the outcomes from Internal Audit work feeding into the Annual Governance Statement. Following changes to the International Professional Practices Framework by the Global Institute of Internal Auditors, the Internal Audit Service had adopted a Mission and ten Core Principles, and the purpose, authority and responsibility of the Internal Audit Service was formally defined in the Internal Audit Charter.

The Chief Internal Auditor stated that the draft Audit Plan for 2017/18, and the indicative Plans for the two subsequent years (2018/19 and 2019/20) had included all of the fundamental financial systems, to provide assurance to Management and Members that there were controls in place for good financial management. The annual audit of these systems was also a request of the Council’s External Auditors. The Plan also included any high risk financial areas identified by the Corporate Risk Register, plus a contingency provision (6%) for investigations and other unplanned work identified during the year, as well as references to any cross-cutting or themed audits across the shared Internal Audit Service. There was also flexibility within the Plan to accommodate reviews of areas considered to be of a high risk to the achievement of the Council’s objectives. Progress against the Plan would be monitored by the Committee, and any proposed amendments would be subject to the approval of the Committee.

The Chief Internal Auditor advised the Committee that the longer term plan was to formalise the shared Internal Audit Service between Harlow District, Broxbourne Borough and Epping Forest District Councils, and further progress had been made with Broxbourne Borough Council becoming the host authority and employer of the shared Internal Audit Staff from 1 April 2017. A Shared Services Board had been established to oversee and implement the Shared Internal Audit Service, and to consider any major changes to the Service.

The Chief Internal Auditor highlighted that the proposed Audit Plan for 2017/18 totalled 500 days, and was based on what needed to be provided for the Council through the use of themes. The Plan had been reduced from the 800 days proposed in previous years, and it was not envisaged that there would be any further reduction from the 500 days currently proposed. The Internal Audit Three Year Plan, attached at Appendix 1 of the report, was explored in more detail by the Chief Internal Auditor for the benefit of the Committee. An Audit Needs Assessment had been undertaken to determine which areas should be audited and which should not, and the Chief Internal Auditor offered to go through this process with the Chairman of the Committee to provide further reassurance.

The Vice-Chairman suggested that the Audit Plan should be monitored more closely by the Committee in future, and enquired if the Audit Plan covered all of the risks listed in the Corporate Risk Register. The Chief Internal Auditor undertook to list all of the audit work scheduled for each risk in the Register. Cllr Patel commented that it would be useful to also audit the projects within the Transformation Programme and enquired whether this would form a separate area within the Plan. The Chief Internal Auditor reassured the Committee that this would be predominantly covered by the 37 days set aside in the Plan for ‘Projects, Joint Working and Partnership Audits’ but there was also the 30 days ‘Contingency’ allocation within the Plan which could be used to investigate other areas as directed by the Committee.

Resolved:

(1)        That the Internal Audit Strategy and Plan for 2017/18 be approved; and

(2)        That the process employed for the Audit Needs Assessment used to develop the Audit Plan for 2017/18 be explained in full by the Chief Internal Auditor to the Chairman of the Committee.