Division(s): N/A

ISSUE

YES

NO

N/A

Comment

Terms of Reference

Have the committee’s terms of reference been approved by full Council?

Yes

The functions of the Committee are set down in the Constitution of the Council, which is subject to annual formal review by Senior Officers and Members. It is approved by full Council annually.

Do the terms of reference follow the CIPFA model?

No

The CIPFA model ToR is more specific in its definition of functions. The OCC model covers in general all of the key areas suggested, or discharges them through the AWG. The constitution can be updated in 2007 to make the functions more explicit in line with the CIPFA model. This is not a material weakness as operationally the Committee does deliver all the functions suggested in the model. The process is reported to Cabinet and the Statement on Internal Control itself is approved by the Audit Committee.

Action: Terms of Reference to be reviewed to comply with CIPFA model.

Internal Audit Process

Does the committee approve the strategic audit approach and the annual programme?

Yes

The Internal Audit Strategy and Annual Plan was approved by the Audit Committee at the 26 April 2006 meeting

Is the work of internal audit reviewed regularly?

Yes

Quarterly performance reports are presented to the Audit Committee. Reports on progress against the plan are presented to every AWG. Annual Review of Internal Audit by KPMG is reported to Audit Committee in accordance with Accounts and Audit Regulations 2006.

Are summaries of quality questionnaires from managers, reviewed?

No

This is a performance indicator to be reported for 2006/07

Is the annual report, from the head of audit, presented to the committee?

Yes

This was presented to the Committee at the 28 June 2006 meeting

External Audit Process

Are reports on the work of external audit and other inspection agencies presented to the committee?

Yes

KPMG present system of accounts reports (interim and final). Audit Commission present the annual Audit and Inspection Letter.

Other inspection agencies do not routinely report to the Committee, however their reports are considered when producing the SIC at which point any serious concerns would be brought to the attention of the Committee. The Committee also has the right to request to see reports from inspection agencies as they consider appropriate. Separate enquiries are made of Directorates by the Monitoring Officer with regards to any control issues that arise from independent inspections. From 06/07 the Internal Control Checklist will have a specific question on this.

Does the committee input into the external audit programme?

Yes

The audit programme was presented to the 26 April 2006 meeting, in addition to discussion at the AWG.

Does the committee ensure that officers are acting and monitoring action taken to implement recommendations?

Yes

Reports are presented by KPMG that include follow up on recommendations. In addition reports on progress with regards to the Statement on Internal Control Action Plan are provided quarterly to the Statement on Internal Control Working Group and any significant issues would then be reported to Audit Working Group and Audit Committee. In addition, there are six monthly updates twice a year to Audit Committee on progress generally on the preparation of the Statement on Internal Control. In addition, the Audit Working Group holds individual Officers to account.

Does the committee take a role in overseeing

• risk management strategies,
• internal control statements,
• anti fraud arrangements and
• whistle blowing strategies?

Yes

The Committee and AWG receive annually the updated risk management strategy, and twice a year a summary report on the internal control statements from Directors. The Committee through the AWG also receive regular updates on the risk management process and test the process by calling in risk registers and requiring Officers to attend to go through this.

Anti fraud arrangements are reported by Internal Audit and External Audit through the various reporting cycles.

The Committee do not formally consider the whistleblowing strategy. This remains subject to review by the Monitoring Officer and is reviewed by the Corporate Governance Working Group and subject to approval by the Leader and Deputy Leader of the Council.

Membership

Has the membership of the committee been formally agreed and a quorum set?

Yes

Memberships and appointments to the Audit Committee are formally approved by Full Council. The quorum for the Committee is three.

Is the chair free of executive or scrutiny functions?

No

The Chairman is not part of the Executive function but is a Member of the Corporate Governance Scrutiny Committee.

Action: Require clarification from KPMG as to what the potential conflict is with regards to this recommendation.

Are members sufficiently independent of the other key committees of the council?

Yes?

The majority of Audit Committee Members sit on one or more Scrutiny Committees. As a Committee as a whole they are sufficiently independent to address any control issues.

Action: Require clarification from KPMG as to whether present arrangements are appropriate.

Have all members’ skills and experiences been assessed and training given for identified gaps?

No

Training and briefings have been given with regards to general training on audit and control matters. There has been no individual assessment of skills and experiences.

However, both Independent Chairman of Audit Working Group and Chairman of Audit Committee completed an assessment setting out their relevant experience related to audit work.

Action: Review of individual Members of the Audit Committee skills and experience by way of training profile. Survey of training needs to be undertaken and a general training programme worked out for the next 12 months.

Can the committee access other committees as necessary?

Yes

All Audit Committee Members have the right to attend all other Committees, save where the Committee goes into Confidential Session.

Meetings

Does the committee meet regularly?

Yes

8 times a year, approximately every 6 weeks. The AWG also meets every 6 weeks

Is a separate meeting held with the external auditor and the internal auditor?

No

Both External and Internal Audit can report independently to the Audit Committee, and can request a private session should it be necessary, however separate meetings are not scheduled as a routine, and have not occurred.

Action: To address this an AWG meeting will be organised so that at least annually separate closed agenda items can be allocated to KPMG and the Head of Internal Audit that can be attended by members of the Audit Committee only, with no officers present.

Are meetings free and open without political influences being displayed?

Yes

Both the AWG and the Audit Committee have free and open discussions without political influence. KPMG attend a number of meetings and can confirm this.

Are decisions reached promptly?

Yes

Decisions are taken at the end of each agenda item

Are agenda papers circulated in advance of meetings to allow adequate preparation by members?

Yes

Draft agenda is circulated 4 weeks in advance. Actual agenda and papers are circulated two weeks before each meeting

Does the committee have the benefit of attendance of appropriate officers at its meetings?

Yes

Both the Committee and the AWG can call on any officer to attend as appropriate. Director for Resources, Section 151 Officer and County Solicitor (Monitoring Officer) and Assistant Head of Finance (Internal Audit) attend Audit Working Group and Audit Committee.

Training

Is induction training provided to members?

Yes

Induction was provided at the commencement of the new Council and is part of the annual training event on the audit function contained in Members Training Programme.

Is more advanced training available as required?

Yes

Members receive regular briefings on developments within Audit and presentations on a number of key corporate strategies that relate to responsibilities of the Committee eg. Risk Management Strategy, Project Management etc.

Administration

Does the authority’s S151 officer or deputy attend all meetings?

Yes

All meetings are attended by either S151 Officer. As the Assistant Head of Finance (Audit) also attends each meeting it is not considered necessary for the deputy S151 officer to attend in the absence of the Head of Finance

Are the key officers available to support the committee?

Yes

Officer who attend each meeting are Director for Resources, Head of Finance (S151 Officer), Assistant Head of Finance (Audit), Solicitor to the Council / Monitoring Officer