Agenda item

Report and appendices attached.

The Head of Fraud, Audit Insurance and Risk  presented a report setting out the Global internal Audit Standards.

The report introduced and outlined the Global Internal Audit Standards which are to be followed by the Council from 1 April 2025

It was explained that the main changes in the Global Internal Audit Standards (GIAS) include a new structural organisation, a stronger emphasis on risk management, increased focus on Audit Committee involvement, the introduction of "essential conditions" regarding governance, revised requirements for engagement planning and communication, and a more robust quality assurance and improvement program, all aiming to enhance the effectiveness and relevance of internal audit functions within the organisation. 

Whilst GIAS is different to the material it replaces, (PSIAS) most of the requirements have the same practical effect as the previous standards.

Internal Audit have recently been assessed against PSIAS and this has identified recommendations to be addressed. As we address these recommendations we will also ensure that we are complying with the new GIAS.

The Council will be reviewing and revising the Audit Charter and Strategy, and the teams’ Audit Manual ensuring that all key documents support the strategy, planning and delivery of the service. We will develop the quality assurance improvement plan. 

It was explained that updates on progress will be reported to future audit committees.

·         Councillor Moss asked whether Internal Audit always sit in Finance?

The Head of Fraud, Audit Insurance and Risk stated that no, internal audit does not always sit within the finance department; while it often has a focus on financial controls, it is considered a separate, independent function within an organization. 

·         Councillor Moss referred to next steps set out at  4.14 and 4.15 and asked when the Committee should expect a further report back?

The Head of Fraud, Audit Insurance and Risk explained that the Council have just received the  CIPFA Code of Practice which accompanies the GIAS and the CIPFA Application Note for the standards.  It is the intention to keep Audit Committee up to date as often as is needed as the application of the new standards take place. The Council internal Audit Team have recently been reviewed against the existing standards (PSIAS) and it is intended to bring a report regarding this in April 2025, there have been recommendations from this PSIAS review to implement and as these are implemented we will be referring to the new standards to ensure we meet these too.

·         Councillor Moss asked what practical changes in the way that Internal Audit work are necessitated by the new standards and whether it involves extra work?

The Head of Fraud, Audit Insurance and Risk explained that many of the introduced new standards are already being met by the team, such as  planning, supervising and communicating regarding audit engagements. The standards look to improve the governance arrangements and Audit will be required to report upon the organisations risk management processes, and this has already identified this in the 2024/25 plan.

The standards express that auditors are expected to embrace change, learn new skills and apply new tools and techniques to enhance their performance and value.

The team are keen to develop and will continue to do so. Going forward there is a requirement that detailed training records are maintained so these are to be introduced during 2024/25.  There is also a requirement to follow up all recommendations going forward, so these will need additional work as we currently do not follow up those recommendations which merit attention.

• Councillor Moss encouraged committee members to look closely at Appendix 1 *Audit Committee guidance and Tool Kit).

It was agreed:

That the Audit Committee:

1.    Note the content of the report and refer to the guidance found in appendices 1-3.

2.    Request a further report on the implementation of the standards, including any actions identified and taken as a result of the gap analysis which will be carried out.