Agenda item

The Committee considered the report of the Head of Audit Partnership setting out details of a number of issues to be addressed in order to put the Internal Audit Partnership in a strong position for the future.  These included:

·  The introduction of an Internal Audit Charter to define the purpose, authority and responsibilities of the Internal Audit service;

·  An external assessment of conformance with the Public Sector Internal Audit Standards (PSIAS);

·  The creation of a one employer model through the TUPE process for the Internal Audit shared service;

·  The extension of the Internal Audit shared service agreement for five years from 1 April 2014; and

·  The recruitment of a new Head of Audit Partnership as the current post holder would be retiring on 31 March 2014.

It was noted that:

·  In accordance with the PSIAS which came into effect on 1 April 2013, the Audit Committee was required to approve the Internal Audit Charter.

·  The PSIAS required that an independent external assessment of conformance be carried out at least once every five years.  The

Head of Audit Partnership considered that a five-year assessment was appropriate, subject to the Audit Committee continuing to be satisfied with the quality and effectiveness of the service.  He also considered that an early assessment would be helpful in terms of identifying any areas for improvement and providing positive assurance to the Committee and other stakeholders in terms of conformance with the standards.  In this connection, an external quality assessment would be carried out by a team from the Chartered Institute of Internal Audit in January 2014, and the cost (£7,000) would be spread across the four partner Councils.  It was the intention that full conformance with the PSIAS would be demonstrated by 31 March 2014.

·  The one employer proposal would address the disadvantages associated with the current shared service arrangements for Internal Audit, including lack of flexibility in the use of staff and to adjust the cost of the service; variations in pay and conditions of employment between the four partner authorities; no options for the rotation of staff; difficulties in maintaining auditor objectivity and independence; limited cross partnership learning and limitations regarding the resilience that can be provided; and difficulties in management control.

·  The shared service arrangements for Internal Audit were the subject of a five year collaboration agreement which was due to expire on 31 March 2015.  In the light of the proposed changes to the employment model and the need to attract a good quality candidate for the post of Head of Audit Partnership, it was proposed that the agreement be extended for five years with effect from 1 April 2014, expiring on 31 March 2019.

The Head of Audit Partnership advised the Committee that the Maidstone Internal Audit team had undergone some changes recently.  Russell Heppleston had been appointed as Audit Manager for Maidstone and Swale with immediate effect, and two new Internal Auditors had been appointed.

In response to questions by Members, the Head of Audit Partnership explained that:

·  In terms of the Internal Audit Charter, and, in particular, the training and qualifications needed to be an Internal Auditor, it had been a requirement of the recent recruitment exercise that the candidates be professionally qualified or pursuing a professional qualification.  Internal Auditors were expected to enhance their knowledge, skills and other competencies through continuing professional development, and at Maidstone a training budget was maintained to support that.

·  There was a risk that one or more of the four partner authorities might not agree to the proposal to extend the collaboration agreement to 2019.  However, the Officer Board was supportive, and there was no indication at the moment that any of the Councils wished to withdraw from the partnership.

RESOLVED:

(a)  That the Internal Audit Charter, attached as an Appendix to the report of the Head of Audit Partnership, be approved;

(b)  That it be noted that an external assessment of Internal Audit’s conformance with the Public Sector Internal Audit Standards will be carried out in January 2014;

(c)  That the proposal to create a one employer model for the Internal Audit shared service be noted;

(d)  That the proposal to extend the Internal Audit shared service agreement for five years from 1 April 2014 be noted; and

(e)  That the arrangements that are being put in place to recruit a new Head of Audit Partnership be noted.