Agenda item

The Head of Internal Audit and Corporate Anti-Fraud will submit a report prefacing the annually reviewed and revised Internal Audit Charter and Strategy.

The Head of Internal Audit and Corporate Anti-Fraud submitted a report prefacing the annually reviewed and revised Internal Audit Charter.

It was explained that the update had been considered in the light of the revised Public Sector Internal Audit Standards which had become effective on the 1^st April, 2017.  The latest review ensured that the Charter reflected the current working arrangements of the function but also the aspirations and developments necessary to ensure continuous improvement.  In addition, the Charter reflected the changes within the broard client base and the revised structure of the Service that became effective from 1^st April, 2017 following a fundamental review as part of the Future Council programme.

The report outlined those organisations to which Internal Audit provided services and indicated that coverage was now a 40:60 split between Council and non-Council clients.  The Charter would be reviewed annually to ensure it remained reflective of the current working arrangements and professional standards.

The Charter was appended to the report and the Head of Internal Audit and Corporate Anti-Fraud ran through the changes that had been included and the implications thereof.

Reference was then made, amongst other things, to the following:

·         The new definition of Internal Audit as defined by the Public Sector Internal Audit Standards which focussed on evaluating and improving the effectiveness of risk, control and governance beyond that of basic compliance

·         The 10 Core Principles for internal Audit as defined in the International Standards for the Professional Practice of Internal Auditing.  It was noted that the final three Principles listed in particular focused more on the new approach to audit including the consultancy and advisory  role

·         It was noted that CIPFA had yet to update its own guidance aligned to the new Auditing Standards

·         The Code of Ethics included four components which set out the accountability for Internal Audit.  It was noted that independence and accountability were key in this respect

·         The arrangements for Anti-Fraud, Corruption and Bribery were outlined as were the management responsibilities for ensuring that appropriate arrangements were in place

·         The Charter made reference to the requirement that Internal Audit had the necessary authority to obtain such information and explanations it considered necessary in order to fulfil its responsibilities as well as the need to demonstrate that it was providing value to those organisations it dealt with particularly as this related to consultancy work

·         In relation to the resourcing of Internal Audit, it was reported that the vacancy within the unit was to be filled from the 2^nd May, 2017.  The person appointed was a L Booth (formerly from KPMG) who would be responsible for the ‘Council Team’ and would attend future meetings of this Committee

·         Arising out of the above, there was a discussion centering on the ability of the service to undertake the required consultancy work with the current staffing structure.  In response, the Head of Internal Audit and Corporate Anti-Fraud stated that his service was in no different position to many other service areas, however, given the changing approach to risk awareness and risk profiles, this was not considered to be an issue.  The biggest advantage with the new Charter was the ability to be forward focussed and proactive in being able to promote organisational improvement

·         Reference was made to the allocation of planned days to each individual client and how variances would be addressed throughout the year. 

·         Arising out of the above, reference was made to the intention to produce a strategy document for each client.  The Council’s Strategy document detailing the approach over the next three years would be submitted to the next meeting

RESOLVED  that the report be received and it be noted that the Committee is satisfied that the Internal Audit Charter meets the requirements of the Public Sector Internal Audit Standards and adequately represents and describes the required function to provide this Committee and senior management with a professional service.