Audit Committee, on 13th July, 2015, considered an update on the Internal Audit Shared Service with Bridgend County Borough Council which proposed an extension to the Partnership Agreement until 31st January 2018.  


Cabinet, at its meeting held on 14th March 2012, approved the proposal that the Vale of Glamorgan Council becomes a partner and hosts the Internal Audit Shared Service (IASS) with Bridgend County Borough Council and authorised the Head of Paid Service and the Section 151 Officer, in consultation with the Leader, to make the necessary detailed arrangements under delegated authority to establish the IASS, including admission of further interested parties if appropriate subject to a Partnership Agreement and Contract.


The Bridgend and Vale IASS was now in its third year of the three year commitment.  In this short time, considerable service developments and progress had been made.  Overall the performance of the Partnership had been very good in respect of both the delivery of the Audit Plan and the feedback from customers, all of which had been reported regularly to the respective Audit Committees.


The stated aim of the IASS was to provide a shared service solution, focused on a series of identifiable and measurable objectives, in which both Councils had an equal share in terms of control, direction and influence.


As such, the IASS continued to meet its objectives by:

-    Being affordable and representing value for money

-    Enhancing the professionalism and quality of audit services provided to both Councils through shared knowledge and best practice

-    Remaining flexible and responding to changing service requirements and priorities

-    Extending access to specialist audit services and other related disciplines to both Councils

-    Delivering efficiencies and economies of scale

-    Improving the investment in staff training and development and providing opportunities for career progression for staff within the service.

Overseeing the IASS was the Joint Partnership Board comprising the respective Section 151 Officers (or their nominees) from each Council.  The Board monitored the performance of the IASS and ensured that it delivered the standards and expectations as set out in the Partnership Agreement.  Whilst the partners jointly oversee the performance of the IASS, the responsibility for the adequacy of the whole system of internal audit remains with the Councils themselves who were responsible for approving Audit Plans and monitoring delivery via their respective Audit Committees.


The individual Councils were responsible for overseeing the effectiveness of the internal audit function at Council level, and holding the Head of Internal Audit to account for delivery of the approved Audit Plan.  They were also responsible for the effectiveness of their governance, risk management and control arrangements, hold managers to account for delivery and hold regular progress updates on internal audit work; consider key themes and issues, and take them forward as necessary.


The coming together of the two divisions saw the immediate need for a new organisational structure which reduced the number of full time equivalents (FTE) posts between the two divisions from 29 to a maximum of 24 under the new IASS.


In respect of overall performance, in 2013/14 both Councils’ annual Audit Plans were achieved and the total cost of service was circa £193k underspent.  This was primarily due to a further reduction in staffing numbers and the number of vacant posts being carried by the service for the period concerned.


In 2014/15, both Councils’ annual Audit Plans were achieved although Bridgend achieved 93.5% of the original planned productive days.  Whilst this was a shortfall of 84 productive days, the overall impact was minimal as all high risk areas were covered and the Head of Audit was able to provide the necessary annual opinion on the Council’s overall governance, risk management and internal control arrangements.  The overall total cost of the service was circa £135k underspent and this was due to vacant posts during the year.


The budget for 2015/16 for the whole of the Internal Audit Shared Service had been set and showed an overall reduction of 17% from the original budget set in 2013/14.  The Internal Audit challenge would be to continue to provide the annual assurance opinion in a climate where our clients want, and need, to reduce costs.  This includes internal audit costs.  There was a need to look at how we can deliver for less obvious resources and how we use data, rather than people, to deliver the audits.  Our plans and approach would require more flexibility and there would be a need to work even more closely with senior management to ensure resources were employed to the greatest advantage.


Both partners had indicated their desire to continue with the partnership and wished to extend the arrangement for a further two years.  The partnership had been successful and it was considered that it would continue to be so.  Both partners had set challenging financial targets and these would have a considerable impact on the audit resources that would be available to 2017/18.  The service would continue to provide the flexibility to react, and be pro-active to changing needs.  Over the next three years, working practices would continue to develop to deliver an excellent service whilst addressing the need to do more with less.  In addition, opportunities for extending the shared service to other neighbouring Authorities would be explored, including the potential for expanding the specialist computer audit service.


Having considered the contents of the report, It was




(1)    T H A T Cabinet be recommended to extend the Internal Audit Shared Service Partnership for a period of two years to 31st January, 2018.


(2)    T H A T Cabinet be recommended to delegate authority to the Head of Finance / Section 151 Officer and the Operational Manager – Audit, in consultation with the Leader and Managing Director, to explore options for expanding the Internal Audit Shared Service.


Reason for decisions


(1&2)    To facilitate monitoring of the Internal Audit Shared Service for the Internal Audit function.”


Attached as Appendix – Report to Audit Committee: 13th July, 2015