Meeting documents

            Meeting: Audit Committee (County Hall, Durham - Committee Room 1B - 06/06/2008 09:00:00 AM)

                  Item: A5 Review of Effectiveness of the System of Internal Audit

Report of the Head of Internal Audit and Risk Management

1. The Council has a new requirement under the Accounts and Audit (Amended) (England) Regulations 2006 to review the effectiveness of its system of internal audit each year. The review has to be considered by a committee of the Council as part of the consideration of the system of internal control, which supports the Annual Governance Statement (AGS).

Supporting Information

2. The CIPFA Code of Practice for Internal Audit in Local Government in the United Kingdom 2006 sets the Standard for Internal Audit across 11 key areas of activity. In order to inform this review a desktop self-assessment against the checklist was carried out, which in the absence of best practice guidance is the approach currently adopted by a number of high performing County Councils.

3. In seeking to provide independent evidence of compliance with the CIPFA Standard, Internal Audit is able to draw upon the observations of the Audit Commission’s triennial review of Internal Audit, which formally identified as part of its 2006/07 programme of work, that “in many respects the division’s operations represent best-practice working arrangements”. Details of all high priority recommendations for improvement, identified within the action plan that accompanied the External Auditor’s report and which were noted by Members at the Audit Committee meeting of 10 December 2007, have now been addressed.

4. Internal Audit activity also helps to support the internal control element of the CPA Use of Resources (UoR), an assessment of which has been completed by the Audit Commission for 2006/07, where a score of 3 (consistently above minimum requirements, performing well) was achieved. An additional source of assurance comes from our customer satisfaction surveys. For 2007/08, the performance of Internal Audit was rated by our customers as good at 1.31 (very good = 1, good = 2, satisfactory = 3, poor = 4).

5. Keeping Members informed of the work of Internal Audit is clearly critical in enabling the Authority to form an opinion on the comprehensiveness and reliability of the Council’s key methods of assurance. In this regard, Internal Audit reports on a range of performance measures to Members, formerly to Cabinet and from December 2007, to the Audit Committee on a quarterly basis in accordance with the Audit Charter.

Summary and Key Observations

6. Our assessment against the checklist confirms that Internal Audit complies with the CIPFA Code of Practice in the majority of areas. The assessment, supporting evidence and an action plan of proposed improvements are included as Appendix 2 for Members to consider.

Recommendation

7. Members are asked to consider this report together with the supporting evidence provided and confirm that, subject to implementing those areas identified for improvement, they are assured that the system of Internal Audit for 2007/08 has operated effectively.

Background Papers - Audit Files & Working Papers

No

Finance

There are no direct financial implications arising for the Council as a result of this report, although we aim through our audit planning arrangements to review core systems in operation and ensure through our broad programme of work that the Council has made safe and efficient arrangements for the proper administration of its financial affairs.

Staffing

None

Equality and Diversity

None
Accommodation

None

Crime and disorder

None

Sustainability

None

Human rights

None

Localities and Rurality

None

Young people

None

Consultation

None

Health

None

To view tables, please refer to PDF attachment or Hard Copies Located in the Record Office or Corporate Services.

Attachments

 Effectiveness of System of Internal Audit 06 June 2008_Final.pdf