Agenda item

Committee received the report of the Internal Audit Manager to seek the Committee’s approval for a proposed three-year Internal Audit Strategic Plan and Annual Operational Plan for 2011/12.

It was reported that the terms of reference of the Audit Committee included to approve Internal Audit strategic plans and the Annual Internal Audit Plan, and the Code of Practice for Internal Audit specified that the Head of Internal Audit must produce an audit strategy; this is the high-level statement of how the internal audit service will be delivered and developed in accordance with its terms of reference and how it links to the organisational objectives and priorities.  The Code also specified that the Head of Internal Audit should prepare a risk-based plan designed to implement the audit strategy.

The Internal Audit Business and Strategic Plan was attached at Appendix A to the report and had been developed using the Council’s standard template for its service business plans, but extended to incorporate two further elements of internal audit strategy, as set out in the Code of Practice, namely:  How the Internal Audit Manager will form and evidence his opinion on the control environment to support the Annual Statement on Internal Control; and how Internal Audit will identify and address significant local and national issues and risks.

It was reported that a key strategic theme for Internal Audit in 2010/11 was supporting the Council’s change programme by assisting with the implementation of the new service structures and to review the efficiency of business processes and develop standards of governance, internal control and conduct in the organisation.

Members were advised that the draft Internal Audit Annual Plan 2011/12, attached at Appendix B, was designed to implement the Internal Audit Strategy, as required by the Code of Practice, and was based on estimated available resources of 685 days being delivered by the in-house team of 3.81 full-time equivalent staff.  The Internal Audit Manager’s role as Deputy Section 151 Officer had been estimated as requiring 15 days, giving a net allocation to audit activity of 670 days.  Members noted that, should conflict of interest arise in relation to the role of Deputy Section 151 Officer, the Principal Auditor would carry out the work. 

It was reported that a key element of work in the coming months would be to establish a robust Internal Audit service to the Revenues and Benefits Shared Services arrangement with Preston City Council.  The Internal Audit Manager would consult with Service Heads, statutory officers and Management Team to inform and develop the detailed programme of audit assignments, which would be greatly influenced by the financial pressures affecting the Council and targeted as effectively as possible.

Development of the detailed programme would be formally reported and monitored by each meeting of the Audit Committee.

Following presentation of the Internal Audit Strategic and Annual Plans, Members raised questions on their content, which were suitably answered by the Internal Audit Manager.

It was proposed by Councillor Price and seconded by Councillor Williamson:

“(1)      That the Internal Audit Strategic and Business Plan for 2011/12 to 2013/14 be approved.

(2)               That the Internal Audit Annual Operational Plan for 2011/12 be approved.”

Upon being put to the vote, Members voted unanimously in favour of the proposition, whereupon the Chairman declared the proposal to be clearly carried.

Resolved:

(1)        That the Internal Audit Strategic and Business Plan for 2011/12 and 2013/14 be approved.

(2)        That the Internal Audit Annual Operational Plan for 2011/12 be approved.