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Agenda Item No 14

The Vale of Glamorgan Council

 

Audit Committee: 27th July 2016

 

Report of the Head of Finance / Section 151 Officer

 

External Assessment

Purpose of the Report

  1. To present to Members the draft scope for assessing the Internal Audit Shared Service compliance with the Public Sector Internal Audit Standards (PSIAS).

Recommendation

THAT the Committee consider and approve the scope for the External Assessment.

Reason for the Recommendation

To facilitate the monitoring of the Council's Internal Audit Shared Service and to ensure it remains compliant with the Public Sector Internal Audit Standards.

Background

  1. External Assessments are required to be undertaken to appraise and express an opinion about the internal audit's conformance with the PSIAS' Definition of Internal Auditing and Code of Ethics and to include recommendations for improvement, as appropriate. An external assessment must be conducted at least every five years, in accordance with the PSIAS. Appointment of the External Assessor and scope of the External Assessment will be approved by the Audit Committee.
  2. At the Committee meeting held on 28th January 2016, Members expressed their preference for the External Assessment against the PSIAS to be carried out by an independent organisation rather than by peer review. It is proposed that the external assessment will be undertaken during the latter half of this financial year (2016-17) in order to comply with the requirements of the Standards.

Relevant Issues and Options

  1. In accordance with the requirements of both Councils' Audit Committees a procurement exercise will be undertaken to procure the most economically advantageous organisation to undertake an external assessment of the Bridgend and Vale Internal Audit Shared Service ensuring compliance with the Vale of Glamorgan Council's Contract and Financial Procedure Rules.
  2. In advance of the external assessment, the Head of Audit will complete the Checklist for Conformance with the PSIAS which is attached to the Local Government Application Note.
  3. The scope of the External Assessment will consist of a broad scope of coverage that includes a review of the following elements of Internal Audit activity:-

Conformance with the Standards, Definition of Internal Auditing, the Code of Ethics, Internal Audit Shared Service Charter and the Annual Risk Based Audit Plan;

Policies, Procedures, Practices and any applicable legislative and regulatory requirements;

Integration of the Internal Audit activity into both Bridgend and the Vale of Glamorgan Councils' governance framework, including the audit relationship between and among the key officers and Members involved in the process;

Tools and techniques used by Internal Audit; and

The mix of knowledge, experience, and disciplines within the staff group, including staff focus on process improvement delivered through the Quality Assessment and Improvement Programme (QAIP).

  1. The Head of Audit in consultation with the Head of Finance / Section 151 Officer for the Vale of Glamorgan will confirm the Terms of Reference for the review, timescales and convenient dates for the review.
  2. The outcome of the External Assessment will be reported to the Internal Audit Shared Service Board in the form of a written report. The results will be reported to the Councils Corporate Management Team / Board and the respective Audit Committees.
  3. The External Assessment report will be accompanied by a written action plan in response to significant comments and recommendations identified.
  4. Any significant areas of non-compliance will be reported in the Annual Report of the Head of Audit for 2016-17 and in the Annual Governance Statement (AGS) if deemed necessary.
  5. It should be noted that the same proposal was presented to Bridgend County Borough Council's Audit Committee on 30th June 2016 where it was resolved that the External Assessment be undertaken by an independent provider and not via a peer review.

Resource Implications (Financial and Employment)

  1. It is envisaged that the External Assessment is estimated to cost in excess of £1,500. However, this is wholly dependent on whether the Internal Audit Shared Services is perceived as a single provider of the Internal Audit Services. This will be met from within the budget for the service.

Sustainability and Climate Change Implications

  1. None directly from this report.

Legal Implications (to Include Human Rights Implications)

  1. The External Assessment of the Internal Audit function is a requirement of the Public Sector Internal Audit Standards.

Crime and Disorder Implications

  1. 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)

  1. None as a direct consequence of this report.

Corporate/Service Objectives

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

Policy Framework and Budget

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

Consultation (including Ward Member Consultation)

  1. No further consultation is proposed

Relevant Scrutiny Committee

  1. Corporate Performance and Resources

Background Papers

Public Sector Internal Audit Standards

Contact Officer

Helen Smith - Operational Manager - Audit                 Tel: 01656 754901

Officers Consulted

None

Responsible Officer:

Carys Lord - Head of Finance / Section 151 Officer

 

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