Agenda item

Internal Audit Plan & Audit Scope 2009/10, and 2010/11.

The Head of Finance, HR and Business Support asked Members to note the report setting out details of the Audit Plan and Scope for 2009/10 and the arrangements for 2010/11.  The Joint Committee were reminded of comments made at a previous meeting as regards the timing of the last audit coinciding with the Local Government Reorganisation (LGR) for County Durham, and that whilst this factor had not been taken into account by the Audit Commission, it had caused additional complication. 

Members were informed that in order to help tackle issues raised by Audit Commission within the Annual Governance Report 2008/09, this report had several sections outlining the approach.  Members noted an introduction setting out the background to why there was a need for the audit process, how LGR had affected the audit and clarification as regards conflict relating to some records.

The Head of Finance, HR and Business Support explained that the report also contained reference to recommendations set out within the Annual Governance Report 2008/09:

• “The Joint Committee should formalise arrangements with Durham County Council for the provision of internal audit through the development of a formal service level agreement”
• “The Joint Committee should strengthen existing internal audit arrangements through an agreement of an annual plan of work, ensuring that internal audit work covers all of the key financial systems for the year and production of an annual report to inform the Annual Governance Statement”.

In order to address those recommendations and to further strengthen governance and assurance, the Joint Committee were asked to consider the following proposals:

• That a system be developed to allow details of income to be processed directly into Durham County Council’s Financial Management System
• Annual reviews of the Crematorium be carried out in the last quarter of the financial year to ensure as much coverage as possible of the years’ transactions
• That an annual plan of work to be carried out by internal audit together with the audit days required be submitted to the Joint committee on an annual basis, to be drawn up in consultation with the appropriate Manager 
• Any Terms of Reference must include relevant expenditure items specifically relating to the Crematorium’s operations during the year and budgetary control, financial reporting risk management and governance arrangements
• That an annual report on the outcome of internal audit activity be presented to the Joint Committee for consideration as part of the development of the Annual Governance Statement.

Resolved:

(a)       That Members agree to the provision of an Internal Audit Service to the Central Durham Crematorium and the Joint Committee through Durham County Council, in accordance with the approach, scope and plans set out in the report; and that the agreement to this report acts as a Service Level Agreement for the provision of Internal Audit Services for 2009/10.

(b)       That the outcome of Internal Audit Annual Reviews be reported to the Joint Committee to inform assurance on internal control and financial governance.