A report from the Head of Financial Management is attached.
The Internal Audit Charter 2917/2018 is attached.
The Internal Audit Quality Assurance and Improvement Programme 2017/2018 is attached.
The Peer Review of Internal Audit is attached
Minutes:
Andrew Baldwin presented a report setting out the Internal Audit Charter; Quality Assurance and Improvement Programme, External Peer Review Report and Action Plan.
It was explained that the Public Sector Internal Audit Standards (PSIAS) had come into force on 1 April, 2013.
These standards, which are based on the mandatory elements of the Institute of Internal Auditors (IIA) International Professional Practices Framework (IPPF), are intended to promote further improvement in the professionalism, quality, consistency and effectiveness of Internal Audit across the public sector.
A report was presented to Audit
Committee in December 2013 outlining the details of the
Standards.
Two of the Standards relate to:
• Internal Audit Charter;
• Quality Improvement and Assurance programme including an External Assessment.
One of the requirements of the
Standards is to produce an Internal Audit Charter that defines the
purpose of Internal Audit, its responsibilities and position within
the Council. The Charter acts as a
reference for measuring the effectiveness of
Internal Audit.
The PSIAS provide details of how the Charter should comply with the Standards.
Amongst others, these include:
· Recognition of the mandatory nature of the PSIAS;
· Internal Audit’s responsibilities, objectives and independence including accountability, reporting lines and relationships and arrangements for avoiding conflict of interest in non-audit activities;
· Definitions of the scope of Internal Audit activities, the terms ‘board’ and ‘senior management’ and the role of Internal Audit in counter fraud work;
· The role of Audit Committee and statutory officers with regard to internal audit;
· Internal Audit’s remit across the control environment and rights of access to records, assets, personnel and premises.
It is also a requirement of the Standards that the Internal Audit Service produces a Quality Assurance and Improvement Programme (QAIP) that is designed to provide reasonable assurance to Audit Committee members that the Internal Audit Service:
· Performs its work in accordance with the Internal Audit Charter, which is consistent with the Public Sector Internal Audit Standards, Definition of Internal Auditing and Code of Ethics;
· Operates in an efficient and effective manner;
· Contributes to the Council’s governance, risk management and control processes;
· Is adding value and continually improving Internal Audit’s operations.
The QAIP includes both internal
and external assessments for which the internal assessments are
both ongoing and periodic (e.g. team briefings, supervision, review
of working papers) and the external assessment must be undertaken
at least once every five years. The initial self assessment against
the Standards was undertaken in 2013 and this was also reported to
Audit Committee in December 2013.
PSIAS require that an external assessment of the Council’s internal audit function is carried out once every five years by a qualified, independent assessor or assessment team from outside the organisation. This can be in the form of a full external assessment or a self-assessment with independent external validation.
The internal audit service of Bury Council was externally assessed in October 2016 by a peer review process that was established by the North West Chief Audit Executive’s Group and the draft report was issued in December 2016 with details of the findings.
The overall judgement was that the service partially conforms to the Standards and a number of recommendations were made to enable the service to fully conform. An action plan has been put in place to address these.
Delegated decision:
1. That the Audit Committee approve the updated Internal Audit Charter.
2. That the Audit Committee approve the Quality Assurance Improvement Programme.
3. That the Audit Committee note the contents of the external peer review report and action plan.