Issue - meetings

Report of the Head of Audit and Risk Management to inform Members of the proposed Annual Internal Audit Plan for 2008/09 and to advise Members of the internal audit strategy.

The Head of Audit and Risk Management, Anne Woods, introduced this report, which set out the draft internal audit plan and audit strategy for 2008/09 and how this would be resourced. The internal audit plan was risk-based, and had been produced following consultation with management teams, with items on the plan cross-referenced with departmental risk registers where appropriate. 64 projects were planned, with a small contingency. Any significant changes to the plan would be communicated to the Audit Committee if they arose. Ms Woods reported that the 64 projects did not include visits to individual establishments such as schools, which would add around 29 further projects, meaning that the number of projects overall would be similar to the 91 undertaken in 2007/08.

The Chair asked if there were any questions from the Committee. Cllr Gorrie enquired about progress with the audit of the key financial systems. Ms Woods responded that these were currently in draft form and would be reported to the next Audit Committee meeting, although any key findings had already been reported. Ms Woods reported that the same list of key financial systems would be audited in 2008/09. Cllr Gorrie asked how many priority 1 recommendations and key findings came from audits of key financial systems in 2007/08. Ms Woods responded that of around 126 priority 1 recommendations issued last year, around 2 of these related to key financial systems. Cllr Gorrie queried why the plan included allocating 175 days of the limited resource available on an area of audit where so few issues arose, and where there was little change from year to year, when more days could be better spent on areas where there were potentially greater issues. The Chair disagreed that less time should be spent on the key financial systems, as the quality of the work could not be guaranteed to be consistent each year and required monitoring.

The Chief Financial Officer, Gerald Almeroth, welcomed the comments from Cllr Gorrie, but noted that there were changes to the key financial systems every year and that it was normal under a risk-based approach to spend time on key areas of control such as financial systems. Even were no changes to take place, it would still be necessary to monitor the quality of the work. Mr Almeroth reported that it was more cost-effective for the audit of the key financial systems to be carried out by Internal Audit rather than the external auditor and that, as a proportion of the total audit plan, the time allocated for the key financial systems seemed broadly appropriate. It was noted that the external auditor was reliant on Internal Audit’s work on the key financial systems. Mr Almeroth also noted that the audit plan included 80 days on project management work and 75 days on procurement, and that a contingency was available.

Cllr Gorrie expressed concern that an appropriate balance had not quite been achieved in the allocation of resources within the audit plan, and stated that it would be  ...  view the full minutes text for item 12