Agenda item

3:30

The report presents the Internal Audit progress report for 2014/15 (AG7).

The Committee is RECOMMENDED to:

(a)          approve the revised Internal Audit Plan; and

(b)         commission the Monitoring Officer to undertake the review of the Effectiveness of Internal Audit.

The Committee considered a report (AG7) which outlined progress since the last Internal Audit report was presented to the Committee in September 2014 including measures to alleviate significant resourcing pressures estimated to be equivalent to two FTE.  

Mr Dyson reported that the in-year resource deficit had been reduced to 270 days through outsourcing audit days from Hampshire County Council, and through assurance based risk management days from Zurich, the County Councils insurers.

Overall the total audit days being delivered had reduced from 1141 days to 870 days. In addition to the reduced resources there had been pressures on the available resource that had also required changes to the original planned activity; Up to 8 December, 63 days had been spent on counter-fraud, mainly on reactive investigation activity; and, there were internal performance issues to be addressed including overruns on planned audits.

As a result, there were three areas that were no longer going to be subject to audit this year, or where the audit methodology had been adapted to significantly reduce the number of days:

Feeder Systems - It was originally intended that an audit of all the financial feeder systems would be undertaken. This had been removed from the audit plan for this year. Assurance on these systems would be taken from the Finance Business Partners who provided an annual assurance statement to the Chief Finance Officer on the systems operating in their Directorate; Internal Audit would be testing the reconciliation controls for transfer of data from the feeder into SAP, as part of the audit of the Main Accounting System.

Schools - It was originally intended that thematic financial audits across a sample of school would be undertaken. Assurance would now be taken, as in previous years, from an audit of the Management Accounting (Schools) team, and the oversight they have over financial management in schools.

Governance - In recent years Internal Audit had undertaken a programme of governance audits testing the key controls operating corporately and within the Directorates, including targeting some specific teams/establishments. This work had contributed to the Directors' Annual Assurance Statements. The methodology was changing this year in order to reduce the number of audit days; a risk assessment template would be submitted to all direct reports to Deputy Directors asking them to self-assess the risk of each of the key governance systems in their service. The risk assessment would then be followed up with a controls assurance interview with Internal Audit, who would also seek evidence to support the management responses. At the end of the interviews, an assessment of the adequacy of the controls would be agreed between the Manager and Internal Audit, together with an action plan. The results would then be presented to the Deputy Directors, and then to the Director. Committee would receive a report showing the outcomes across the Council.  

For 2015/16 the position was stronger regarding resources. A Principal Auditor was scheduled to return from maternity leave before July 2015; internal resource would be prioritised for planning to OCC and Thames Valley Police. The resourcing strategy with OCC and Buckinghamshire County Council will not be dependent on the sharing of resources (with the exception of the Chief Internal Auditor). The actual resourcing plan will be finalised towards the end of March 2015.

A member expressed concern that the Highway contracts had been removed from the plan due to concerns about slippage on contracts and value for money..  In response, Mr Dyson confirmed that in Audit terms there were no issues of concern presently and that slippage and value for money were performance issues.

RESOLVED: to:

(a)          approve the revised Internal Audit Plan; and

(b)          commission the Monitoring Officer to undertake the review of the Effectiveness of Internal Audit.