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ITEM CA7
CABINET
– 19 JULY 2005
STATEMENT
ON INTERNAL CONTROL 2004/05
Report by
Solicitor to the Council & Monitoring Officer and Head of Finance
& Procurement
Introduction
- The Accounts and
Audit Regulations 2003 requires that the Council conducts a review at
least once a year on the effectiveness of its system of internal control
and produces a statement on its effectiveness as part of the Council’s
Statement of Accounts. The scope of internal control spans the whole
range of the Council’s activities and includes controls designed to
ensure that:
- the Council’s
policies are put into practice
- its values are
met and laws and regulations are complied with
- required processes
are adhered to
- financial statements
and other published information are accurate and reliable
- human, financial
and other resources are managed efficiently and effectively and
- high quality
services are delivered.
- This report reviews
the process for the production of the Statement on Internal Control
(SIC), presents the SIC for 2004/05 and seeks confirmation from the
Cabinet that it is satisfied with the process for reviewing the system
of internal control.
Compilation
of the Statement on Internal Control
- On 31 August 2004
the former Best Value & Audit Committee endorsed proposals for a
process of gaining assurance on risk management and internal control.
Since this time Heads of Service have been required to complete a risk
register for their service on a quarterly basis. Additionally Business
Managers are required to complete an Internal Control Checklist bi-annually.
The Checklist asks a series of key questions relating to the following
areas:
- Risk management
- Performance
management
- Financial management
- Legislation
- Human resources
- Procurement/contracts
- Information
technology
- Project management
- Partnerships
- Other significant
control issues.
Action
plans are required for all areas that are not considered by the Business
Manager to be fully compliant.
- Heads of Service
and Business Managers are required to sign Certificates of Assurance
to confirm that they have updated the documents. Risk registers and
internal control checklists are then reviewed by the relevant Director,
who also signs a Certificate of Assurance to confirm that he has discussed
and agreed the documents.
- Risk registers
and internal control checklists are reviewed by the SIC Working Group,
a group of senior officers, chaired by the Solicitor to the Council.
Progress is reported quarterly to the Audit Working Group.
- An internal audit
report during the second half of 2004/05 made no recommendations concerning
improvements to the SIC process adopted. In giving a judgement of qualified
assurance, the report did make recommendations concerning actions for
Directorates contained within the internal control checklists.
Statement
on Internal Control 2004/05
- The Statement
on Internal Control 2004/05 is attached at Annex 1 (download
as .doc file) . It has been compiled by the members of the SIC
Working Group drawing on the following information:
- Risk Registers
compiled by Heads of Service and endorsed by Directors
- Internal
Control Checklists compiled by Business Managers and endorsed
by Directors
- The view
of the Chief Internal Auditor
- The view
of the external auditor as contained within the annual audit and
inspection letter
- Reports
by other independent inspection bodies.
- The Statement
was agreed by CCMT on 23 June 2005 and discussed by the Audit Working
Group on 7 July 2005. As required by the Regulations, it has been signed
by the Chief Executive and Leader of the Council and additionally the
Chief Financial Officer and the Monitoring Officer. The Audit Committee
will be asked to approve the Statement on Internal Control 2004/05 for
inclusion in the Statement of Accounts at its meeting on 20 July 2005.
- Progress on actions
identified as part of the SIC process will be monitored by the SIC Working
Group and reported to the Audit Working Group and Audit Committee on
a regular basis.
Production
of the Statement for 2005/06 and Beyond
- All directorates
have made significant progress in the assurance process. During 2005/06
work will need to be undertaken to ensure that risk registers and risk
management become further embedded in the workings of the Council and
that the risk management strategy is fully implemented. There will also
need to be a review of the internal control checklist to ensure that
the areas covered are complete.
RECOMMENDATION
- The Cabinet
is RECOMMENDED to endorse the review of internal control undertaken
during 2004/05 as evidenced by the Statement on Internal Control 2004/05.
P
G CLARK
Solicitor to
the Council and Monitoring Officer
SUE
SCANE
Head of Finance
& Procurement
Background
Papers: Nil
Contact
Officers:
Peter Clark Tel 01865 815363
Hilary Cameron Tel 01865 815460
July
2005
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