Meeting documents

Cabinet
Tuesday, 19 July 2005

CA190705-07

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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

  1. 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.

  1. 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.
  2. Compilation of the Statement on Internal Control

  3. 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:

    1. Risk management
    2. Performance management
    3. Financial management
    4. Legislation
    5. Human resources
    6. Procurement/contracts
    7. Information technology
    8. Project management
    9. Partnerships
    10. Other significant control issues.

    Action plans are required for all areas that are not considered by the Business Manager to be fully compliant.

  4. 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.
  5. 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.
  6. 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.
  7. Statement on Internal Control 2004/05

  8. 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:

        1. Risk Registers compiled by Heads of Service and endorsed by Directors
        2. Internal Control Checklists compiled by Business Managers and endorsed by Directors
        3. The view of the Chief Internal Auditor
        4. The view of the external auditor as contained within the annual audit and inspection letter
        5. Reports by other independent inspection bodies.

  9. 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.
  10. 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.
  11. Production of the Statement for 2005/06 and Beyond

  12. 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.
  13. RECOMMENDATION

  14. 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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