Report from the Head of Financial Management attached
Internal Audit Charter attached
Quality Assurance and Improvement Programme attached
Minutes:
Andrew Baldwin presented a report setting out the Internal Audit Charter and; Quality Assurance and Improvement Programme.
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.
A
copy of the updated QAIP for 2018/19 was attached to the
report.
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 trial report was issued in December 2016 with details of the findings. The recommendations relating to the findings have all been implemented.
A copy of the updated Internal Audit Charter for 2018/19 was attached to the report and this has been updated in 2017/18 to take account of the feedback from the external assessment of the service carried out by Peer Review.
Delegated decision:
1. That the Audit Committee approve the updated Internal Audit Charter.
2. That the Audit Committee approve the Quality Assurance Improvement Programme.