Agenda Item No 10

The Vale of Glamorgan Council


Audit Committee: 27th July, 2016


Report of the Head of Finance / Section 151 Officer


Effectiveness of Audit Committee - Self-Assessment 2015/16

Purpose of the Report

  1. To summarise for Members the findings of the self-assessment checklist on the effectiveness of the Audit Committee.


That Members agree the outcome of the self-assessment which demonstrates the effectiveness of the Audit Committee and compliance with the Committee's Terms of Reference.

Reason for the Recommendation

To keep the Audit Committee informed on the effectiveness of the Audit Committee.


  1. The Chartered Institute of Public Finance & Accountancy (CIPFA) 2013 Position Statement: Audit Committees in Local Authorities and Police emphasises the importance of Audit Committees being in place as they are seen as key components of governance. The purpose of an Audit Committee is to provide those charged with governance independent assurance on the adequacy of the risk management framework, the internal control environment and the integrity of the financial reporting and annual governance processes. In this way, the Audit Committee is an important source of assurance for the organisation's arrangements for managing risk, robust governance arrangements, maintaining an effective control environment, and reporting on financial and other performance.
  2. Internal Audit has reviewed the effectiveness of this Audit Committee in line with guidance published by CIPFA. The guidance is not mandatory but does provide fundamental principles to compare the Audit Committee to, which if not followed could lead to a lack of confidence in Internal Audit and the Audit Committee and could indicate weaknesses in the overall governance process.

Relevant Issues and Options

  1. The completed checklist and its findings are attached at Appendix A to this report and the checklist indicates that the overall effectiveness of the Audit Committee is very good. There were 26 of 28 positive responses which demonstrate best practice.
  2. The negative responses are in regard the membership. The first relates to the fact that the checklist asks if the Chair is free from executive or scrutiny functions. Although not on Cabinet, the Chair does sit on a Scrutiny Committee, however not in the capacity as Chair. Although total independence is seen as best practice, membership of Scrutiny is not seen as an issue that impacts on the effectiveness of the Audit Committee. Due to the number of committees and number of Members within the Authority it is expected that some Members will have to be Members of other Committees.
  3. The second issue is in relation to Audit Committee members being sufficiently independent from other key committees of the Council. During the municipal year 2015/16, 4 of the 7 Members of Audit Committee have also sat on Scrutiny (Corporate Performance and Resources), with one being Chair and another Vice Chair. There is no evidence to suggest that this has had any detrimental impact on the effectiveness of Audit Committee and it is expected that Members will have to sit on other Committees.

Resource Implications (Financial and Employment)

  1. None as a direct consequence of this report.

Sustainability and Climate Change Implications

  1. None as a direct consequence of this report.

Legal Implications (to Include Human Rights Implications)

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

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


Contact Officer

Helen Smith - Operational Manager - Audit Tel: 01656 754901

Officers Consulted

External Audit - Wales Audit Office

Responsible Officer:

Carys Lord - Head of Finance / Section 151 Officer