Agenda item

To consider a report setting out the Head of Internal Audit’s annual internal audit opinion for 2013/14.

The Committee received the Annual Report from the Head of Audit and Risk Management as required by the Public Sector Internal Audit Standards (PSIAS). This was timed to inform the Annual Governance Statement (AGS). As required by the PSIAS, the Annual Report included the Head of Audit and Risk Management’s opinion on the control environment, a summary of work supporting the opinion and a statement on compliance with PSIAS.

The Head of Audit and Risk Management’s opinion was that based on the work carried out, she could give reasonable assurance that sound system of internal control was in place and that controls were operating satisfactorily except for some areas of significant weakness which were noted in the Report. It noted, however, that no system of control could provide absolute assurance against material misstatement of loss, nor could Internal Audit give that assurance.  The Head of Internal Audit’s opinion provided could, therefore, only provide reasonable and not absolute assurance based on the work undertaken and the areas audited. The Report stated that the Council was broadly compliant with PSIAS and noted actions to be taken forward to ensure full compliance.

Arising from the Committee’s discussion the following points were noted:

·                     The Committee was advised that the follow-up audit of car parking had now been completed.  The weaknesses identified had been addressed to the satisfaction of Internal Audit.

·                     It was proposed to defer the external assessment required under the Quality Assessment and Improvement Programme required by PSIAS to later in the five-year cycle within which it needed to be undertaken.  Initial indications were that the cost of an external assessment would be significant, and the possibility of peer reviews with other local authorities had been proposed but there was still uncertainty around the qualifications required to undertake the assessment and a lack of clarity around the form of peer review that would be acceptable.  The proposal was in line with advice from the Better Governance Forum.  It was anticipated that the Home Counties Internal Audit Group might be able to undertake peer reviews.

·                     A number of significant control weaknesses relating to procurement had been identified at the audit of procurement in schools, and each school had received an individual memo setting out the areas they needed to address.  It had been identified that the Council’s existing Contract Standing Orders were often difficult for schools to apply to their own circumstances.  There was a risk that if schools were not complying with these they would not be testing the market fully and not achieving best value.  To address this, a new set of Contract Standing Orders specific to schools would be drafted and presented to the Schools Forum for comments.  

·                     The Summary of Internal Audit Performance set out in the report was an indication that nearly all audits had been finalised.  There had been an increased number in the Children, Young People and Learning department as there had been a number of additional cross-cutting reviews this year that would not normally be undertaken.

The Committee noted the Head of Audit and Risk Management’s Annual Report, setting out the Head of Internal Audit’s Opinion for 2013/14.