The Committee considered the report of the Head of Audit Partnership setting out details of the projects included in the three-year Internal Audit strategic plan.  It was noted that:-

·  The four-way Internal Audit Partnership between Maidstone, Ashford, Swale and Tunbridge Wells Borough Councils had been in place for almost 18 months.  A survey of the Chief Executives of the partner authorities showed that the Partnership was considered to be successful, working well and providing an improved service.  One of the business objectives of the Partnership was to co-ordinate audit work, where possible, in order to achieve efficiencies.  This had culminated in the creation of individual three-year Internal Audit strategic plans for each partner authority.

·  The three year Internal Audit strategic plan had been prepared to take full account of organisational objectives and priorities.  It had been prepared on a risk basis which involved scoring each of the potential audit subjects in terms of materiality, inherent risk and control risk, taking into account changes to systems, revised management arrangements, past history and the views of Heads of Service.  The plan started by setting out the audit work that would be carried out in relation to the fundamental financial systems, which were reviewed on an annual basis.  It then went on to set out the other service areas that would be subject to an internal audit, some of which had little or no financial risk, but were subject to regulatory, legal, technological or reputational risk.

·  Once the planned work had been determined, it had to be compared to resource availability.  This had been identified through a resource assessment as 500 annual productive/chargeable “auditor days” which was the total number of days available to the Maidstone Internal Audit team to spend on the strategic plan.  It was anticipated that in the majority of cases, individual audit projects would be completed within 15 days. 

·  The Maidstone Internal Audit team consisted of three full time operational auditors supported operationally by an Audit Manager for two days of the week and strategically by the Head of Audit Partnership.  Each auditor was expected to complete twelve projects each year.  The majority of the time of the Maidstone auditors would be spent on Maidstone audit projects.  However, they would also work at other partnership sites where it was efficient to do so.  This would be reciprocated on a quid pro quo basis.  The planned audit projects shown for 2011/12 to 2013/14 were considered to be achievable with the existing level of resources.

The Committee asked a number of questions of the Officers relating to, inter alia, the criteria for the inclusion of projects within the Internal Audit strategic plan; the adequacy of the resources and skills available to implement the plan; the operational implications of slippage in the plan and of auditors being diverted to undertake work in other departments within their authorities; the role of the Audit Committee in approving, but not directing the plan; and the arrangements for reviewing progress against the plan.

RESOLVED:  That the three-year Internal Audit strategic plan for the period 2011/12 to 2013/14, attached as an Appendix to the report of the Head of Audit Partnership, be approved.