Agenda item

To seek the approval of the Audit Committee for an updated Internal Audit Charter.

To seek the approval of the Audit Committee for the Internal Audit Plan for 2017/18.

There was submitted a report by the Council’s Audit and Governance Manager (A.3) which sought the Committee’s approval for an updated Internal Audit Charter and the Internal Audit Plan for 2017/18.

The Committee was reminded that Public Sector Internal Audit Standards required that the Audit and Governance Manager: -

1. Periodically reviewed the Internal Audit Charter and presented it for approval.

2. Provided a high level statement of how the Internal Audit Service would be delivered and developed in accordance with the Internal Audit Charter and how it linked to the organisational objectives and priorities.

3. Established a risk based Internal Audit Plan, at least annually, to determine the priorities of the Internal Audit function, consistent with the Council’s goals.

4. Had in place a mechanism to review and adjust the plan, as necessary, in response to changes to the Council’s business, risks, operations, programmes, systems and controls.

5. Produced a plan that took into account the need to produce an annual Internal Audit opinion.

6. Considered the input of senior management and the Audit Committee in producing the plan.

7. Assessed the Internal Audit resource requirements.

It was reported that the Internal Audit Charter had been reviewed and updated to reflect recent changes to the Public Sector Internal Audit Standards together with other desirable changes.

Members were reminded that the Standards required the Charter to be a formal document that: -

·         Defined the Internal Audit activity’s mission, purpose, authority and responsibility;

·         Established the Internal Audit activity’s position within the organisation including the nature of the “Chief Audit Executive’s” (Audit and Governance Manager’s) functional reporting relationship with the Board (Audit Committee);

·         Authorised access to records, personnel and physical properties relevant to the performance of engagements;

·         Defined the scope of Internal Audit activities;

·         Defined the terms “Board” and “Senior Management” for the purpose of Internal Audit activity;

·         Covered the arrangements for appropriate resourcing;

·         Defined the role of Internal Audit regarding fraud-related work; and

·         Included arrangements for avoiding conflicts of interest if Internal Audit undertook any non-audit activities.

Members were made aware that further changes were due to be made to the Public Sector Internal Audit Standards in 2017, but had yet to be published. Any required revisions to the Charter required would be brought to a future meeting of the Committee for approval.

The Committee was informed that the Internal Audit function would continue to deliver a service that took account of, and followed, the requirements as set out in the Charter, and which:

·         Discharged the Council’s statutory responsibilities with regard to internal audit;

·         Provided a service compliant with the requirements of the Standards;

·         Contributed to the Council’s governance, risk and assurance arrangements;

·         Enabled the Audit and Governance Manager to provide an annual opinion on the overall adequacy and effectiveness of the Council’s control environment; and

·         Delivered a quality service.

The Internal Audit resources available were considered sufficient to be able to deliver the proposed Internal Audit Plan 2017/18 that would meet the above requirements.

Having discussed the proposed Internal Audit Plan it was:

RESOLVED that

(a)       the updated Internal Audit Charter be approved;

(b)        the Internal Audit Plan for 2017/18 be approved; and

(c)       the existing arrangements for updating the Plan during the year, where necessary to reflect changing Authority activity and operational needs and to provide flexibility of service delivery, be continued, with significant amendments reported to this Committee as part of the periodic Internal Audit reporting arrangements.