Issue - meetings

Purpose: to report on the work of internal audit in the year ended 31 March 2014, and to advise the committee of the Audit Manager’s opinion on the overall adequacy and effectiveness of the internal control environment. 

The committee considered the audit manager’s annual report on internal audit activity during 2013/14.  Internal audit had completed the audit plan for 2013/14, and had exceeded its targets with the exception of one.  The target to complete 90 per cent of follow-up audits had not been achieved as these were undertaken by a contract auditor and it was more cost-effective to group these together, which meant that the target to complete follow-up audits within six months was not always achieved.  The committee accepted this explanation. 

The audit manager was satisfied that sufficient internal audit work had been undertaken to allow a reasonable conclusion to be drawn on the adequacy and effectiveness of the council’s risk management, control and governance processes.  The audit manager’s opinion was based on the risk-based audits carried out during the year and other unplanned work on control systems.  No reliance had been placed on the work of other assurance bodies.  It was the audit manager’s unqualified opinion that satisfactory assurance could be placed on the council’s risk management, control and governance processes.  There was basically a sound system of internal control but there were some weaknesses which might put some system objectives at risk.  Notwithstanding the audit manager’s overall opinion, internal audit had identified a number of opportunities for improving controls and procedures across the council which officers had responded to positively. 

Throughout the year, the audit manager had reported on systemic control weaknesses.  This system had been replaced by a schedule of outstanding recommendations, which would be presented to the committee at each meeting. 

Internal audit had also undertaken proactive anti-fraud testing in 2013/14 which raised no recommendations.  No suspicions of fraud and corruption by officers, councillors or partners/contractors were reported to the audit manager during the year, and the audit manager had reviewed the entries within the gifts and hospitality register and had no concerns.

The committee congratulated the internal audit team on its performance throughout the year. 

RESOLVED: to note the internal audit annual report 2013/14.