Agenda item

Members considered a report on the Internal Audit Section’s progress against the 2017/18 agreed audit plan for the first nine months of the year and information on audit opinions given to date and progress against key performance targets.

The team currently operated with an establishment of 8 audit staff.  At the start of the year there were 7 audit staff with 1 vacancy.  One Auditor left and one Auditor was appointed and started in the team during quarter 1.  The remaining vacant post was recently back filled and the Auditor started in October.  Although the Audit Manager’s maternity was being back filled by one of the Principal Auditors in the team, the team had not yet back filled cover for the Principal Auditor so was not running on full capacity.  

The performance for Quarter 3 2017/18 was compared to the same period for the previous year:-

·         54% (50%) of the audit plan had been achieved so far which was above last year’s performance and higher than the profiled target of %50%;

·         The promptness of issue of draft report (comparing timescale between finalising all fieldwork and issuing the draft report to management) averaged at 16 days which was above the target time of 10 days;

·         The promptness of report finalisation (comparing timescale from meeting with client to discuss issues raised in the draft report to issue of finalised report to management) averaged 4 days (1 day) which was within the target time of 5 days.

·         Coverage of the plan at this stage of the year was above expectations; the target being 50% for Quarter 3.  Although there had been a reduced audit resource in the team there had been very little involvement with special investigations.  Although performance may have dipped throughout the year, historically things had picked up in the final quarter; this year would depend on sufficient audit resources being available to complete the audit plan.  All key financial systems would be reviewed by the year end.

·         16 (40) days had been spent finalising 14 (18) 2016/17 audit reviews; all of which had now been finalised.

·         A vacancy/secondment provision was taken into account in the planning stage which related to the Chief Internal Auditor’s work with Monmouthshire, and two Auditor posts.

·         Inevitably there would be some overruns on reviews undertaken within the team which might result in not as many reviews being undertaken as were planned for the year, but there had been a significant improvement in this over previous years.

·         From time to time the team got involved with non-planned audit work which often resulted in special investigations.  The team had been involved with one such issue for a number of months relating to an allegation of a senior manager colluding with a contractor; this matter had subsequently been referred to the police.

·         Generally, there had been positive feedback from service managers via the evaluation questionnaire and this would continue to be collated throughout the year and fed into the annual report for 2017/18.

·         The Financial Training programmes would continue throughout the year; 6 sessions had been delivered up to the end of Q3 to 89 delegates.  

·         27 jobs completed to at least draft report stage by 31 December 2017 warranted an audit opinion: 5x Good; 16 x Reasonable, 6 x Unsatisfactory and no Unsounds.  5 grant claims had been undertaken during the year; 3 opinions were Unqualified, 2 were Qualified.  Other reports had been completed which did not warrant an audit opinion or related to audit certification work.  Other work completed related to the Annual Governance Statements, the Council’s performance indicators, provision of financial advice and external clients. 

Discussions included the following:

·         What data analytics are used?  - Internal Audit use IDEA data interrogation tool.  Various tools are used within the audit systems. 

·         Given the amount of staff issues, the Internal Audit Team were ahead of schedule and should be congratulated on doing so well.  Reference to which should be added to the Annual Governance Statement.

Agreed

To note the Internal Audit Plan