Agenda item

Report of the Internal Audit Manager

The Committee received the report of the Internal Audit Manager to advise Members of the latest monitoring position regarding the 2014/15 Internal Audit Plan, seek approval for proposed variations to the Plan and update Members on the results of recent audits.

It was noted that the report was based on the monitoring position up to 18^th August 2014.  A detailed monitoring report, as at that date, was attached as Appendix A to the report.  A summary of the position at that date, taking into account ongoing and planned work commitments, was shown in a table in the report.

It was reported that, overall, current commitments totalled 498 days compared with the current plan of 690 days.  This gave an uncommitted resource of 192 days, including both the general contingency of 40 days and the unallocated balance of the contingency for investigation work (22 days). 

Members were advised that there was a vacant post of Principal Auditor in the Internal Audit Section and the Internal Audit Service was being reviewed.  The outcome would be reported to the Committee.

It was reported that within the Assurance Work section, Preston City Council had requested that a programme of audits be developed in connection with the Revenues and Benefits Shared Service arrangements to provide assurance on controls surrounding their highest rated risks.  It was estimated that this programme of work would require 35 days out of a total 40 days allocated in the plan to the Shared Service, and that inclusion of a corresponding programme of audits in relation to Lancaster City Council’s arrangements would require 25 days, which was an increase of 20 days on the current plan budget.

Under the heading of Consultancy, 28 days had already been committed to support work regarding development of the Council’s Complaints Policy, the review of Financial Regulations and development of the Council’s Procurement Strategy.  It was proposed that the plan budget be raised by 20 days to 35 days to cover these commitments and allow for a small amount of future work.

It was expected that the Ad Hoc Advice provided by the Service would be around 15 days greater than budgeted for.  The variances which had to be found from within the plan totalled 55 days and to meet these demands it was proposed that there should be a reduction of 10 days to Assurance Work on ‘Core Financial Systems’, a reduction of 25 days to assurance work on ‘Risk Based Audits’ and that 20 days (i.e. half) of the General Contingency should be applied.

Details of the audit reports issued since the last update report to Committee on 22^nd January 2014 were reported, together with the key conclusions and action points relating to those reports where a ‘Limited’ or ‘Minimal’ assurance opinion had been given. 

An update was given on a tracked item relating to the maintenance of asset records, and it was noted that resources had been identified within Property Group and Financial Services to take forward the required actions, including a review of the IT systems used by the two services.  It was planned that a reconciliation of the two systems would take place by the end of October 2014 and guidance in connection with inventories would be revisited with a view to it being issued by December 2014.

It was reported that Internal Audit was currently involved in an internal investigation relating to the income management and banking arrangements at one of the Council’s establishments and details of the issues arising and any action taken would be reported to the Committee.

Resolved unanimously:

(1)        That the current monitoring position be noted.

(2)        That the proposed revisions to the Audit Plan, as set out in the table in paragraph   1.2 of the report, be approved.

(3)        That the results of recent audits (sections 3 – 5 of the report) be noted.