Agenda item

Report of Internal Audit Manager.

The Committee considered the report of the Internal Audit Manager regarding the draft internal audit plan for 2016/2017.

The internal audit plan for each year began with a calculation of the number of audit days available.  Twelve “managed” audits were required to be undertaken this year to satisfy the external auditors and these were detailed in the report.

In addition to the core audits, days were also set aside for verifying the Benefits Subsidy Claim, special investigations, follow ups, advice and National Fraud Initiative activity.  The days necessary to carry out this work was calculated and taken from the auditor time available.  The remaining figure was the days available to carry out other audits specifically for the Council.  Appendix A detailed these calculations.

A risk assessment was carried out on all areas listed in the “Audit Universe” in order for the annual internal audit plan to be produced.  The “Audit Universe” was a list of all the areas and systems across the Council which could be audited.  The completed risk assessment, included at appendix B to the report had been arranged by the level of risk and by the date the last audit review was undertaken.

The draft plan had been submitted to Corporate Management Team (CMT) on the 9 February 2016.  CMT had proposed adding a review of Prevent and Protect, in conjunction with Lewes District Council.

At the time of the report, Lewes District Council had planned to carry out a review of the use of agency staff and consultants.  The Committee was advised that this was now being undertaken by the Head of Human Resources.  This had now been replaced in the plan with a cross authority review of the Leisure Trust, with 5 days being marked down in both authorities’ plans.

The proposed plan was included at appendix C to the report.

The Committee was advised that given the shared services agreement with Lewes District Council, it was likely that the audit plan for 2017/18 would be a joint one with Lewes.

The Committee discussed the days available to undertake the audits, taking into account staffing levels.  The Internal Audit Manager clarified that of the 859 days available, 522 were spent carrying out the audits.  Working in partnership with Lewes District Council would increase resilience to cope with the volume of work and staff absences.

The Committee was advised that in terms of resource assurances, the Council’s Section 151 Officer had a statutory responsibility to ensure that the Council’s internal audit function was sufficiently resourced to meet the requirements of the Council.  BDO were also required to be satisfied with the resources in order to give a clean audit opinion.

The Committee discussed whether the audit plan should focus more on the high risk areas but acknowledged the risk of neglecting low risks areas.  The Internal Audit Manager stated the audit plan was a balancing act in order to give an overview of the whole authority. 

The Committee suggested that key performance indicators be set for the low risk areas identified, for managers to report back and raise any issues, instead of internal audit using resources to undertake a full audit.    The Internal Audit Manager responded that this could be considered.

The Committee commented on the high risk area of Procurement (purchasing and contracts) and the information detailed in appendix B of the Internal Audit Report to 31^st December 2015, relating to no contracts being put in place for 65 suppliers with annual expenditure and there being no up to date contracts database.  The Internal Audit Manager clarified that a contracts database was in the process of being constructed and implemented.

RESOLVED: (Unanimous) That the proposed internal audit plan for 2016/17 be adopted.