Mr Russell Heppleston, Deputy Head of Audit Partnership, introduced the Annual Internal Audit Report and Opinion 2017/18 on behalf of the Head of Audit Partnership.  In accordance with the Public Sector Internal Audit Standards, the report included

·  The annual opinion of the Head of Audit Partnership on the overall adequacy and effectiveness of the Council’s internal control, governance and risk management;

·  A summary of the work undertaken by Mid-Kent Audit that supported the opinion; and

·  A statement on conformance with the Public Sector Internal Audit Standards.

It was noted that the Head of Audit Partnership was satisfied from the audit work completed that the Council could place assurance on the system of control in operation during 2017/18; that the corporate governance framework complied in all significant respects with the best practice guidance issued by CIPFA/SOLACE and that risk management processes were effective.  The Head of Audit Partnership had decided independently and without any undue pressure from Officers or Members.

Mr Heppleston drew the Committee’s attention in particular to the interim findings of the contract management audit which was underway, with some further testing outstanding; the approach to following up audit recommendations; the work undertaken by Internal Audit in relation to counter fraud and corruption and risk management; how the service complied with Standards and the Code of Ethics; the support given to the Internal Audit Team in continuing development and upholding professional competence to ensure that the Team had the necessary skills to deliver the Audit Plan; and the introduction of new audit management software.

The Chairman thanked the Deputy Head of Audit Partnership for a very comprehensive summary of the activities of the Internal Audit Team during 2017/18 and thanked the Team for its work and achievements in terms of professional development.

In response to questions by Members, the Officers explained that:

·  Career progression was designed to recognise achievement of qualifications.

·  The audit findings in relation to the accounts receivable system were being taken very seriously and the recommendations were being addressed.

·  Following the review of procurement by Internal Audit which provided a weak assurance, the Council’s Financial and Contract Procedure Rules had been revised and comprehensive training had been provided for people across the Council involved in procurement.  The findings of the review had been taken very seriously and acted upon.

·  The Internal Audit review of subsidiary company governance did not provide an assurance rating as it was recognised that the Company was still evolving.  A report would be submitted to a future meeting of the Committee on the governance arrangements for the Company.

RESOLVED:

1.  That the Head of Audit Partnership’s opinion that the Council’s system of internal control, corporate governance and risk management arrangements have operated effectively during 2017/18 be noted.

2.  That the work underlying the opinion and the Head of Audit Partnership’s assurance that it was completed with sufficient independence and conformance with Public Sector Internal Audit Standards be noted.