Agenda item

(Chief Internal Auditor) To consider the attached report (AGC-002-2018/19).

The Chief Internal Auditor presented their Annual Report for 2017/18.

The Chief Internal Auditor informed the Committee that this report was presented in support of the Internal Audit opinion on the adequacy of the Council’s internal control environment and provided a summary of the work undertaken by the Internal Audit shared service during 2017/18. The Accounts and Audit Regulations 2015 also included a requirement for the Authority to carry out an annual review of the effectiveness of its system of internal audit as part of the wider review of the effectiveness of the system of governance.

The Chief Internal Auditor reminded the Committee that the 2017/18 Internal Audit Plan had been presented to the Audit and Governance Committee in March 2017. A total of 19 assurance reviews were completed and overall the audits were positive with the majority being given Substantial assurance and there were no Limited or No assurance reports. Furthermore, the reports that had been given Moderate assurance, related to a specific area rather than a breakdown of controls across the Council.

The Chief Auditor also stated that her opinion had not relied solely upon the formal audits undertaken, but also took account of special investigations undertaken by the Internal Audit or the Corporate Fraud Team. There had been no significant (estimated at more than £10,000) investigations into suspected internal fraud, although an internal investigation had been carried following the Chief Internal Auditor receiving a Whistleblowing allegation. Furthermore, the Corporate Fraud Team reported directly to the Chief Internal Auditor, which ensured that there was a corporate approach to anti-fraud activities as well as ensuring synergies with the Internal Audit team. 

In November 2016 the service was confirmed as being fully compliant with the Public Sector Internal Audit Standards (PSIAS) by an external assessor, which remained the case because there had been no significant changes in the way the Internal Audit service was delivered or operated and the Chief Internal Auditor had not taken on any additional responsibilities.

The performance indicators for the service in 2017/18 were as follows:

The Committee commented that they were mindful of the resourcing issues that had impacted the 2017/18 internal audit and had caused the deferrals; consequently it was surprising that it had not been reflected in the resources constraints. It was also highlighted that the implementation of the Internal Audit Work Plan and the need for future deferrals should be minimised as much as possible. The Chief Internal Auditor advised that if she had felt that not enough work had been completed or not fully understood, she would have declared it in her report and although there had been some deferrals, a wide range of areas had been covered.

The Committee advised that they had requested that criteria for any potential deferrals on the current Audit Plan would be established. The Chief Internal Auditor advised that the criteria for deferrals would be considered by the Corporate Governance Group.

Resolved;

(1)          The Annual Report of the Chief Internal Auditor for 2017/18 and the Assurance Level given be noted;

(2)          That the Annual Report of the Chief Internal Auditor for 2017/18 be included as part of the review by the Committee of the adequacy and effectiveness of Internal Control; and

(3)          That, for the twelve-month period ending 31 March 2018, the confirmation by the Chief Internal Auditor that the Council had an adequate and effective Governance, Risk Management and Control Framework be noted.