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Agenda item

Annual Internal Audit Report & Opinion 2018/19

Minutes:

The Head of Audit Partnership introduced the Annual Internal Audit Report and Opinion 2018/19.  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 2018/19; that the corporate governance framework complied in all significant respects with the best practice guidance issued by CIPFA/SOLACE; and that the Council’s risk management processes were effective.  The Head of Audit Partnership had reached his conclusions independently and without any undue pressure from Officers or Members.

 

·  Some assurance projects had been removed from the 2018/19 audit plan or rescheduled/delayed, but this had not affected the overall opinion.  Executive summaries of the findings of the planned 2018/19 assurance projects completed so far had been provided, but the full reports could be made available upon request.  In terms of following up actions, the actions marked as overdue stemmed chiefly from three specific projects reported originally as part of the 2017/18 audit programme: Emergency Planning, Contract Management and Animal Welfare Control.  Updates would be provided as part of the interim reporting later in the year, but the Head of Audit Partnership was satisfied in the context of the overall opinion that there were no undue threats to the Council in relation to the progress on these matters.

 

·  The report detailed other audit service work carried out throughout the year including three counter fraud and corruption investigations, one of which resulted in a former member of staff receiving a Police caution; and the completion of three independent reviews commissioned by Kent’s Safeguarding Boards.  The report also provided an update on progress towards completing the 2019/20 audit and assurance plan.

 

·  All Internal Audit services were required to seek an external quality assessment at least every five years.  The Audit Partnership’s most recent such assessment was by the Institute of Internal Auditors in the spring of 2015.  A suitably qualified assessor would be appointed this autumn with a view to a report being submitted to Members in the spring of 2020.

 

Members thanked the Head of Audit Partnership for a very comprehensive summary of the activities of the Internal Audit team during 2018/19 and thanked the team for its work and achievements in terms of professional development.  They also thanked the Director of Finance and Business Improvement and the Procurement team for the progress made in improving contract management across the Council.

 

In response to questions:

 

The Head of Audit Partnership advised the Committee that:

 

·  The way in which audit reports with weak assurance ratings were dealt with differed at each of the four partner authorities.  The update on the Internal Audit Charter, scheduled to be reported to the Committee in January 2020, could be brought forward to September to enable consideration to be given at an early opportunity to a proposed mechanism for extra examination of audit reports with weak assurance ratings.

 

·  One of the advantages of working in a four way partnership was that issues of resilience were easier to manage.  There had been an extended period of sickness absence coupled with additional investigative and reporting work but there had been limited impact in the context of the Partnership in that some low risk more routine work was rescheduled from one year to another.  He was satisfied that this was an appropriate response to risks as they changed and that he could still give a comprehensive opinion.

 

The Director of Finance and Business Improvement advised the Committee that the procedures for authorising and approving virements were set out in the Financial Procedure Rules contained within the Council’s Constitution.

 

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 2018/19 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.

 

3.  That progress so far towards completing the 2019/20 audit and assurance plan be noted.

 

4.  That consideration be given to a proposed mechanism for extra examination of audit reports with weak assurance ratings as part of the forthcoming review of the Internal Audit Charter.

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