Agenda item

Report of the Head of Audit and Risk Management to inform Members of the overall adequacy and effectiveness of the system of internal control and risk management operating throughout 2009/10 and present a summary of the audit work undertaken to formulate the opinion, including reliance placed on work by other bodies. The report also fulfils the requirements of the Audit Committee terms of reference.

Anne Woods, Head of Audit and Risk Management, presented the report on the overall adequacy and effectiveness of the system of internal control and risk management operating throughout 2009/10, in accordance with the terms of reference of the Audit Committee and the CIPFA Code of Practice annual reporting requirements. The report included the sources of assurance for the overall audit opinion for 2009/10, including external inspections. Appended to the report was a summary of the feedback from senior managers regarding the effectiveness of the system of internal audit.

In response to a question from the Committee regarding the overall findings of the report, the Head of Audit and Risk Management confirmed that there were no significant governance issues which should be included in the AGS. Audit reports with limited assurance had been produced during the year, however these did not have an impact on the overall Audit opinion. The Committee expressed concern regarding priority 1 recommendations that were outstanding, in response to which the Head of Audit and Risk Management confirmed that 95% of recommendations had been implemented fully, and the remaining 5% were in the process of implementation. The Chair reminded officers that the Committee wished for all recommendations to be implemented fully, not just priority 1 recommendations.

In response to a question from the Committee regarding the response rate for the feedback provided by senior managers, it was confirmed that the information was based on 1:1 interviews with 20 senior managers.

The Chair noted the comments of the Chief Financial Officer in relation to the report, and asked how the Council could place confidence in its systems of internal control, risk management and internal audit. The Head of Audit and Risk Management confirmed that this reliance was based on the work of internal audit and the Council’s external auditors. The Chair asked whether the review of effectiveness of the system of internal control received confirmation from a cross-section of senior officers that systems were sound, in response to which the Chief Financial Officer confirmed that this was the case, and that responses had been received from individual departments.

In response to a question from the Chair regarding project management, the Head of Audit and Risk Management reported that resources were available within Internal Audit to undertake reviews covering areas such as terms of reference, project documentation and the compliance framework relating to project work. The Chair requested that a report on Project Management be produced for the Committee’s consideration in order to satisfy Members that everything was being done in the appropriate manner.

On a motion by the Chair it was:

RESOLVED

i)                    That the content of the annual audit report and assurance statement 2009/10 be noted for reasonable assurance, but not absolute assurance.

ii)                  That the annual audit report and assurance statement be presented to the next available Full Council meeting for information.

iii)                That a report on the overall Project Management arrangements be produced for the Committee’s consideration in order to satisy the Committee that project management arrangements were adequate and sound.