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Agenda Item No 14

 

The Vale of Glamorgan Council

 

Audit Committee 26th November 2013

 

Report from the Head of Accountancy & Resource Management

 

Update on Internal Audit Performance April to September 2013

 

Purpose of the Report

1.         To present to Members an update on the Internal Audit Shared Service (IASS) performance to the 30th September 2013 and to propose a quality assurance and improvement programme (QAIP) for consideration and endorsement.

Recommendation

THAT the Committee give due consideration and approve the Quality Assurance and Improvement Programme and note IASS's performance as outlined in the body of the report.

 

Reason for the Recommendation

To keep the Audit Committee informed.

 

Background

2.         One of the core functions of an effective Audit Committee is to: - "Oversee the work of Internal Audit (including the risk-based annual plan and charter) and monitor performance.

3.         The Public Sector Internal Audit Standards (PSIAS) came into effect on the 1st April 2013 and replaced the Code of Practice for Internal Audit 2006.  The PSIAS require the Head of Internal Audit to develop and maintain a quality assurance and improvement programme (QAIP) that covers all aspects of the internal audit activity.  The new Standards are designed to drive improvement and although they come into force this year, the first full review against these standards does not need to take place until the end of the financial year following.

4.         The QAIP should be designed to enable an evaluation of the internal audit activity's conformance with the PSIAS and assess the efficiency and effectiveness of the internal audit activity and identify opportunities for improvement.    

Relevant Issues and Options

5.         In order to assist the Audit Committee in ensuring that due consideration has been given by the Committee to all aspects of their core functions, a proposed Quality Assurance and Improvement Programme is attached at Appendix A for consideration and endorsement.  In addition, and included within the body of this report is a position statement on the IASS performance as at 30th September 2013.

Client Feedback

6.         At the completion of each audit, all recipients of our reports are asked to comment on their satisfaction with the audit process, by way of a survey questionnaire ranging from a score of 1 for very satisfied to a score of 5 very unsatisfied.  The results so far this Financial Year are summarised in Table 1 below.

Table 1.

No.

Question

Average

Score of

Responses

30/09/13

Average

Score of

Responses

2012/13

1

Where appropriate, briefing of client and usefulness of initial discussion.

1.400

1.404

2

Appropriateness of scope and objectives

 of the audit.

1.520

1.475

3

Timeliness of audit

1.480

1.621

4

Response of Officer to any request for

advice and assistance.

1.330

1.414

5

General helpfulness and conduct of auditor (s)

1.290

1.254

6

Discussion of findings / recommendations

during or at the conclusion of the audit.

1.000

1.530

7

Fairness and accuracy of report.

1.480

1.559

8

Practicality and usefulness of

recommendations.

1.430

1.667

9

Standard of report.

1.380

1.466

10

Client agreement with overall audit

opinion.

1.480

1.552

 

7.         For the first half of this year, 21 responses have been received which represents a 70% response rate, this is compared with a response rate of 42% for the Financial Year 2012/13.  Historically the return rate of questionnaires has been average, however, it is envisaged that a review of this process during this year focusing on the completion of questionnaires on-line will hopefully increase the response rate and improve results.

Benchmarking

8.         The IASS participates in the Welsh Chief Auditors Group (WCAG) benchmarking exercise which is undertaken annually.  This compares our performance and data with all Welsh Councils.  Table 2 below shows the comparison of key indicators for Bridgend County Borough Council against the overall average of the 18 out of 22 responses received.

View Table 2.

 

9.         As can be seen from Table 2 above, IASS's performance exceeds the average in 6 of the 8 indicators.  Every effort will be made to improve our performance on those indicators which are below the average; specifically 2 and 6.

External Audit

10.      The Council's External Auditors, Grant Thornton UK LLP, carry out a review of Internal Audit on an annual basis.  Their review informs them as to whether they can place reliance on the work of Internal Audit particularly in relation to the Council's main financial systems.  If they are happy to do so, then their work in these areas can be reduced as the opinion of the Internal Auditor can be relied upon.  Grant Thornton UK LLP have not passed any adverse comments on the 2012/13 audit work and have always placed reliance on Internal Audit as part of their review for the basis for their work.

Quality

11.      Quality control is achieved through:

Preparation of a detailed audit plan according to an agreed risk assessment methodology and widely consulted upon throughout the Council.

A documented audit methodology supported by standard working papers, and the review of each draft audit report by the Principal Auditors and/or the Operational Manager - Audit prior to issue.

Working hard to ensure audits meet the requirements of our customers by giving them the opportunity to comment on the Audit Brief and timing of work, and by working with managers to identify solutions in areas where there is scope for improvement.

Implementation of the Quality Assurance and Improvement Programme.

Ensuring the Section is compliant with the Public Sector Internal Audit Standards. 

Resource Implications (Financial and Employment)

12.      None as a direct consequence of this report.

Sustainability and Climate Change Implications

13.      None directly from this report

Legal Implications (to Include Human Rights Implications)

14.      Provision of an adequate and effective Internal Audit function is a legal requirement under the Accounts and Audit (Wales) Regulations 2005 as amended.

Crime and Disorder Implications

15.      Pursuing initiatives to prevent, detect and deter crime is encompassed within the terms of reference under which the audit function operates.

Equal Opportunities Implications (to include Welsh Language issues)

16.      None as a direct consequence of this report.

Corporate/Service Objectives

17.      The work of audit is intended to assist in the achievement of all corporate and service objectives.

Policy Framework and Budget

18.      The proposals in this report are in accordance with the policy framework and budget.

Consultation (including Ward Member Consultation)

19.      No further consultation is proposed.

Relevant Scrutiny Committee

20.      Corporate Resources.

Background Papers

None

 

Contact Officer

Helen Smith - Operational Manager - Audit Tel: 01656 754901

 

Officers Consulted

External Audit Manager - Grant Thornton UK LLP

 

Responsible Officer:

Alan Jenkins - Head of Accountancy & Resource Management

 

 

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