Agenda Item No. 8
The Vale of Glamorgan Council
Audit Committee 24th April 2017
Report of the Operational Manager - Audit as the Head Audit
Audit Committee - Proposed Internal Audit Shared Service Strategy and Annual Risk-Based Audit Plan 2017/18
Purpose of the Report
- To present to Members the Council's proposed Internal Audit Shared Service Strategy and Annual Risk-Based Audit Plan for the year April 2017 to March 2018.
THAT Members review, consider and approve the proposed Internal Audit Shared Service Strategy and Annual Risk - Based Audit Plan for 2017/18 as appended to this report.
Reason for the Recommendation
To keep the Audit Committee informed and to approve the proposed Internal Audit Shared Service Strategy and Annual Risk-Based Audit Plan for 2017/18 to ensure compliance with the Public Sector Internal Audit Standards (PSIAS).
- It is important for Internal Audit to plan effectively to ensure that the service contributes to the Council's objectives at both strategic and operational levels. Planning enables Internal Audit to demonstrate both internally and externally that they are making best use of scarce resources. The Internal Audit service is delivered under a shared service agreement with Bridgend County Borough Council with the Vale of Glamorgan Council being the host authority and therefore the function is provided internally.
- Effective planning is one of the Standards contained within the Public Sector Internal Audit Standards (PSIAS) and against which our external auditors assess us. It is from this overall assessment of internal audit's programme of work and the contribution that this makes to the overall control environment of the Authority that our external auditors will draw the necessary assurances they need.
Relevant Issues and Options
- Internal Audit planning is not an exact science but it is felt that the proposed plan for 2017/18 strikes a good balance between the risks identified, the internal audit resources available and the assurance work being carried out by other agencies.
- The structure of the Internal Audit Shared Service is based on 18 full time equivalent employees (FTE's). The Service commenced the financial year 2016/17 with four vacant posts and this has now increased to nine, which represents 50% of the structure. Arrangements are in place to address this shortfall, however, a prudent approach to the number of deliverable productive days for the coming year is required. Therefore the proposed plan provides for 1,145 productive days being delivered during 2017/18. This is based on the following:
Quarter 1 - April to June 2017 status remains the same at 50% of the establishment.
Quarter 2 - July to September 2017 increases to 75% of the establishment in post.
Quarters 3 and 4 - October 2017 to March 2018 a full establishment in post.
- Obviously the delivery of the 1,145 productive days will be wholly dependent on the above materialising. Should this not be the case, there is also the potential to buy in any service shortfall during the year in order to meet the commitment.
- Attached at Appendix A is the proposed Internal Audit Strategy document for 2017/18 and the annual risk-based Audit Plan 2017/18 is attached at Appendix B. It demonstrates how the Internal Audit Shared Service will be delivered and developed in accordance with our Terms of Reference and how it links to the Council's objectives and priorities. The Strategy will be reviewed and updated annually in consultation with stakeholders namely the Audit Committee, Corporate Management Team, External Auditors and senior management.
- The 2017/18 proposed Annual Risk Based Audit Plan of work has been formulated to ensure compliance with the Standards as contained within the PSIAS. In order to keep Members of the Audit Committee fully informed, and to ensure compliance with Standards for Internal Audit.
Resource Implications (Financial and Employment)
- The level of service outlined above is included within the base budgets for the Vale of Glamorgan and Bridgend in 2017/2018.
Sustainability and Climate Change Implications
- None directly from this report
Legal Implications (to Include Human Rights Implications)
- Provision of an adequate and effective Internal Audit function is a legal requirement under the Accounts and Audit (Wales) Regulations 2014 as amended from time to time. The Public Sector Internal Audit Standards replaced the Code of Practice for Internal Audit in Local Government in the United Kingdom, last revised in 2006. In local government in Wales, the PSIAS is mandatory for all principal local authorities and other relevant bodies.
Crime and Disorder Implications
- 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)
- None as a direct consequence of this report.
- The work of audit is intended to assist in the achievement of all corporate and service objectives.
Policy Framework and Budget
- The proposals in this report are in accordance with the policy framework and budget.
Consultation (including Ward Member Consultation)
- No further consultation is proposed.
Relevant Scrutiny Committee
- Corporate Performance and Resources.
Helen Smith - Operational Manager - Audit
External Auditors - Wales Audit Office
Carys Lord - Head of Finance / Section 151 Officer