Your Councillors

Audit, Governance & Standards Committee

30 July 2019

 

Annual Internal Audit Report & Opinion 2018/19

 

Final Decision-Maker

Audit, Governance & Standards Committee

Lead Head of Service

Rich Clarke Ė Head of Audit Partnership

Lead Officer and Report Author

Rich Clarke Ė Head of Audit Partnership

Classification

Public

Wards affected

All

 

Executive Summary

 

The report provides the opinion of the Head of Internal Audit for the year ended 31 March 2019, concluding the Council has sound internal control, risk management and governance arrangements.

Purpose of Report

 

Noting

 

 

This report makes the following recommendations to this Committee:

1.   The Committee notes the Head of Audit Partnership opinion.† The opinion states that, in the view of internal audit, the Councilís system of internal control, corporate governance and risk management arrangements have operated effectively during 2018/19.

2.   The Committee notes the work underlying the opinion and the Head of Auditís assurance it was completed with sufficient independence and conformance with Public Sector Internal Audit Standards.

3.   The Committee notes progress so far towards completing the 2019/20 audit and assurance plan.

 

 

Timetable

Meeting

Date

Audit, Governance & Standards Committee

30 July 2019



Annual Internal Audit Report & Opinion 2018/19

 

1.       CROSS-CUTTING ISSUES AND IMPLICATIONS

 

Issue

Implications

Sign-off

Impact on Corporate Priorities

We do not expect the recommendations will by themselves materially affect achievement of corporate priorities.  However, they will support the Councilís overall achievement of its aims by helping to achieve good governance.

Rich Clarke

Head of Audit Partnership

 

18 July 2019

Cross Cutting Objectives

The report recommendations support the achievement of cross cutting objectives through promotion of good governance.

Risk Management

The recommendations pose no new risks to the Council nor modify any existing risks.

 

Financial

The proposals set out in the recommendations are all within already approved budgetary headings and so need no new funding for implementation.

Staffing

We will deliver the recommendations with our current staffing.

Legal

Accepting the recommendations will help fulfil the Councilís duties under the Accounts and Audit Regulations 2015 to deliver an effective internal audit service.

Privacy and Data Protection

The recommendations have no new implications for privacy and data protection.

 

Equalities

The recommendations do not propose a change in service therefore will not require an equalities impact assessment

Public Health

We recognise that the recommendations will not negatively impact on population health or that of individuals.

Crime and Disorder

The recommendations have no new implications for crime and disorder.

 

Procurement

The recommendations require no new procurement to deliver.

 

 

 

 


 

2.††††† INTRODUCTION AND BACKGROUND

 

2.1†† This report meets the Head of Internal Audit annual reporting requirements mandated by the Public Sector Internal Audit Standards (PSIAS). The report includes the Head of Audit Partnershipís annual opinion on the overall adequacy and effectiveness of the organisationís framework of governance, risk management and control which can be used to inform the Annual Governance Statement for 2018/19.

2.2†† PSIAS, in particular Standard 2450: Overall Opinions, direct that the annual report must incorporate:

         The annual internal audit opinion,

         A summary of the work completed that supports the opinion, and

2.3††† A statement on conformance with PSIAS. Internal audit is a required service under Regulation 5 of the Accounts and Audit Regulations 2015.† The principal objective of internal audit, under that Regulation is to:

 

†††††††† Ö undertake [audit work] to evaluate the effectiveness of [Ö] risk management, control and governance processes, taking in account public sector internal auditing standards and guidance.

2.4††† As those charged with overseeing Governance, the Terms of Reference for this Committee require it to:

Öconsider the Head of Audit Partnershipís annual report and opinion, and a summary of audit activity (actual and proposed) and the level of assurance it can give over the councilís governance arrangements, and any report from Internal Audit on agreed recommendations not implemented within a reasonable timescale.

2.5†††† The overall scope of the Councilís audit service Ė which is delivered as part of a four way partnership with Swale, Ashford and Tunbridge Wells Ė is set out in the Audit Charter and Annual Plan.† The Plan for 2018/19 was agreed by this Committee in March 2018.† This Committee also received an interim update on progress to date in November 2018.

2.6†††† We have completed the work set out in the plan, subject to modifications as described in accordance with PSIAS.† Where there is work outstanding at the time of writing, it is sufficiently progressed that the Head of Audit Partnership is satisfied its conclusions will not materially affect the Head of Audit Opinion.† The final conclusions of any work outstanding will be reported verbally at the meeting (if available) and/or included within the first interim update of 2019/20.

2.7†††† We also include, at Annex C within the substantive report, a summary on progress so far with the 2019/20 audit and assurance plan.

 

 

3.        PREFERRED OPTION AND REASONS FOR RECOMMENDATIONS

 

3.1     The Head of Audit Partnership is satisfied the Council can place assurance on the system of control in operation during 2018/19.† Furthermore he is satisfied that the corporate governance framework complies in all significant respects with the best practice guidance issued by CIPFA/SOLACE.† Finally, he is satisfied that the Councilís risk management processes are effective.† We ask the Committee to note these opinions.

3.2     Please see the appendix for the full Annual Report for 2018/19 which includes a summary of all work conducted to support the opinion and confirms the independence and effectiveness of the internal audit service.

 

 

 

4.       CONSULTATION RESULTS AND PREVIOUS COMMITTEE FEEDBACK

 

4.1     All findings and recommendations identified within reviews are consulted on with the appropriate Head of Service and action plans are agreed with management to implement recommendations.† The headline messages within the report are as discussed with the s151 Officer across the year, and have been communicated to the s151 Officer to assist with his preparation of the Councilís Annual Governance Statement.† The attached report is adapted for comments received.

 

 

5.       NEXT STEPS: COMMUNICATION AND IMPLEMENTATION OF THE DECISION

 

5.1     The Head of Internal Audit opinion is incorporated within the Annual Governance Statement.

 

 

 

6.        REPORT APPENDICES

 

         Appendix 1: Annual Internal Audit Report & Opinion 2018/19

 

 

7.        BACKGROUND PAPERS

 

Full reports which inform the audit projects summarised within this annual report are available on request.