Agenda item

Agenda item

Internal Audit Plan 2016-17

Report of the Head of Finance (Shared Services) and Head of Assurance (Shared Internal Audit Service - SIAS)

 

This report seeks approval of the Watford Borough Council and Watford and Three Rivers Shared Services Internal Audit Plans for 2016/17.

 

Minutes:

The Committee received a report of the Head of Finance (Shared Services) including the Shared Internal Audit Service’s draft 2016/17 audit plans for Watford Borough Council and Shared Services.

 

The Audit Manager for the Shared Internal Audit Service outlined some of the key points in the plans.

 

The Portfolio Holder noted the reference to Shared Services.  He stated that in recent years this term had changed.  Previously the Joint Shared Services Committee had monitored the Shared Services.  The current arrangement was a Lead Authority model, where one authority acted as the provider of the service and the other was the client.  He suggested that the title of the Shared Services Internal Audit Plan should be amended to reflect this.

 

The Audit Manager acknowledged the Portfolio Holder’s comments and said that he was happy to make the changes. 

 

The Portfolio Holder suggested that it be might be useful to speak to the Director of Finance, Section 151 Officer, and ask her for the most appropriate title.

 

The Audit Manager agreed that he would speak to the Director of Finance and Head of Finance (Shared Services) and then inform the Committee of the revised name.

 

Councillor Khan noted the contents of the plan and asked who was consulted by internal Audit.

 

The Audit Manager explained that Internal Audit consulted the Heads of Service and their teams.  Areas of risk were considered within these discussions, including those from operational and strategic risk registers.  Discussions also took place with the Director of Finance and Head of Finance in his role as Audit Champion.  The draft plan was provided to the Council’s Leadership Team for discussion and approval prior to submission to Audit Committee.  In addition Internal Audit included its own proposals based on risks seen in other authorities, joint reviews being conducted with other authorities and based on horizon scanning exercises for local government.

 

In response to a question from Councillor Khan about Member involvement, the Audit Manager said that officers were happy for Audit Committee to make contributions.  Any suggestions would be discussed with the relevant officers.

 

Councillor Silver said that he agreed with Councillor Khan’s comments.  He had noted that 12 days had been allocated to an audit on ‘Museum Exhibits’, whereas only 10 days had been allocated to ‘Housing Allocations’.  In his opinion housing was more important than museum exhibits.

 

The Audit Manager explained that an audit on housing allocations was a review, carried out periodically in most councils with a well established programme of work.  The area was traditionally well controlled and subject to regular review. With regard to the museum audit, there were concerns about the transfer of artefacts to new sites.  As the area had not been covered before it was likely to take longer and would then not be repeated for several years.

 

The Head of Finance (Shared Services) commented that the Museum audit had been requested by officers.  The plan was developed with the Internal Audit team, with suggestions fed back to him by Leadership Team.  The aim was to ensure the proper use of Council Taxpayers’ money.  He informed the Committee that a reserve list was compiled and items could be added.  Reviews often took less time than had been estimated and it was then possible to add extra audits into the plan.

 

The Audit Manager added that occasionally some audits did not proceed which meant that other audits could be undertaken.  It was also noted that a contingency budget existed, which could be utilised to address the need for additional projects in the year or any Member suggestions for audit work. The Audit Plan also took account of other sources of assurance, e.g. external audit, consultants, peer reviews, seeking not to duplicate this work in the internal audit plan.

 

Councillor Khan commented that he felt there needed to be more democratic scrutiny.  Councillor were the ones held responsible, as they were elected by the people.  He questioned whether Executive Councillors should have a role.

 

The Portfolio Holder responded that it was for Audit Committee to undertake the role suggested by Councillor Khan.  He considered it to be inappropriate for the Executive Members to be involved.  This was a tool to monitor the Council and should be an open process.

 

Councillor Khan responded that concern would be raised if the Executive suggested something should not be audited.  However, the Executive may identify areas suitable for auditing.  He stressed that Members should be included. 

 

Councillor Silver suggested that the Executive could make representations to Audit Committee for inclusion in the Plan.  He added that it might useful to include reasons why special items had been included in the list of proposed reviews. 

 

Councillor Mauthoor said that she agreed with the previous comments and that it was useful for the Committee to be more involved before the final list had been compiled.  She questioned whether currently there were sufficient meetings to enable this to happen or if information could be emailed to the Committee.  She asked whether it would be possible to add funeral arrangements to the list as the service was being outsourced to an external company.

 

The Head of Finance (Shared Services) responded that if the decision to outsource the funeral arrangements was to be made, it would be subject to call-in and the decision could be scrutinised.  

 

Following a question from Councillor Silver about the detailed scopes of reviews, the Head of Finance (Shared Services) informed Members that the Plan would be presented at future meetings.  Officers would ensure that any changes were highlighted in the report.

 

The Audit Manager advised that a number of days were being held for IT, as the service provision beyond June had still to be decided.  He added that he was happy to keep Members informed of any further information about forthcoming reviews.

 

Councillor Mauthoor asked for clarification of the differences between Internal Audit and External Audit. 

 

The Audit Manager explained that Internal Audit reviewed internal control, risk and governance.  External audit was responsible for auditing the financial statements and any areas that may have contributed to a material misstatement of the financial statements, as well as value for money reviews and grant certification work.

 

Andrew Brittain advised that External Audit reviewed financial statements, how operations were affected, value for money and grants.  There maybe times that there appeared to be some overlap, but the two teams would be looking at different aspects.

 

The Audit Manager assured the Committee that the two services worked together and tried to avoid duplication.

 

The Head of Finance (Shared Services) stated that Internal Audit’s work showed whether the Council was carrying out its processes properly.

 

RESOLVED –

 

that the Watford Borough Council and Watford and Three Rivers Shared Services Internal Audit Plans for 2016/17 be approved.

 

Supporting documents:

 

rating button