Audit Committee
6 December 2011
Agenda Item No________9_____
Progress Report on Internal Audit Activity, April – October 2011
Summary:
This report provides an update to the Committee on the
outcomes of audit work completed since the previous report (up
to August 2011), and assesses the performance and
effectiveness of the Internal Service in delivering the Annual
Audit Plan between April and October 2011.
Conclusions:
Three additional audit assignments have been completed since
the previous report to Committee, and the audit plan remains on
schedule to deliver the Annual Report and Opinion of the Head
of Internal Audit. Internal Audit continues to deliver an effective
service to the Council.
Recommendations:
It is recommended that the Committee notes the progress made
in delivering the Annual Audit Plan, and the outcomes of the
work of Internal Audit completed at this stage.
Cabinet member(s):
Ward(s) affected:
All
All
Leah Mickleborough, Deputy Audit Manager
01508 533954; lmickleborough@s-norfolk.gov.uk
Contact Officer, telephone
number, and e-mail:
1.
Background
1.1.
The Annual Audit Plan was approved by the Audit Committee on 8 March 2011.
On 13 September 2011, we provided an update report to the Committee
highlighting that to 31 August 2011, 27 days (13%) of the plan had been
delivered, culminating in 2 completed audit assignments.
2.
Delivery of the Annual Audit Plan
2.1.
Appendix A provides an overview of the status of individual audit assignments.
Following the amendments highlighted in our previous progress report, the audit
plan now totals 206 days, of which 97 days (47%) have now been delivered.
2.2.
In our previous audit report, we noted that the Business Continuity audit had
been moved to December due to planned changes in service management. In
September, this Committee received an update from the new service manager,
and subsequently work has been undertaken to map the Council’s current
arrangements against best practice (outlined in the British Standards Institute’s
BS25999), then prioritise further work in an action plan. Due to the work required
Audit Committee
6 December 2011
within the action plan, we have considered that the audit would be more effective
towards the end of Quarter 4.
2.3.
We are also engaging with management on the audits of two further areas –
namely communications and parks and open spaces, to assess where audit
assurance would be of greatest value. This may result in further amendment to
the audit plan – any further changes will be confirmed to this Committee in March
2011.
2.4.
Due to the original audit plan having orientated work towards the end of the
financial year, and the subsequent amendments made to the plan, the plan is not
as far progressed as in previous years. However, resources have been allocated
to all pieces of work and it is still expected that the plan will be fully delivered
ahead of presentation of the Head of Internal Audit’s Annual Report and Opinion.
3.
Outcomes of Work Undertaken
3.1.
We have completed three additional assignments since our report in September,
the outcomes of which are included at Appendix B.
3.2.
The review of the waste management contract with Kier resulted in a limited
assurance opinion being awarded. One high priority item was raised in respect
of the income payable to the Council for garden waste collections. Subsequent
to the completion of the audit fieldwork, management have confirmed that the
income due has now been received.
4.
Effectiveness of Internal Audit
4.1.
We assess the performance of the internal audit contractor, Deloitte, against a
range of primary measures. These are compared to prior year performance as
follows:
Indicator
Target
April –
October
2011
April – 12
November
2010
Comment
% of audit
recommendations
accepted
90%
100%
96%
Number of days
between
completion of audit
fieldwork and draft
report issue
No more
than 10
days
14.2 days
15.1 days
Not meeting target
Number of days
between issue of
draft and final
reports
No more
than 15
days
9.3 days
20.0 days
Achieving target
Number of days
between
completion of
fieldwork and final
report issue
No more
than 25
days
23.5 days
35.1 days
Achieving target
Achieving target
Audit Committee
6 December 2011
4.2.
Meeting the target timeframes for delivery of draft and final reports has proved
historically challenging. As such, it is pleasing to note the significant
improvement in timeframes to deliver final reports once the draft report has been
issued, meaning that the overall time to deliver audit reports has also improved.
4.3.
Issuing draft reports within 10 days is still causing issue, albeit we have not had
significant delays on any individual audits and, due to ongoing changes made to
working practices – some of which were highlighted within our Annual
Effectiveness Review (presented to the Committee in June 2011), performance
has shown ongoing improvement throughout the year. As such, we are hopeful
this will continue to reduce.
4.4.
We also assess Deloitte against other measures to monitor their overall
performance. Feedback on individual audit assignments has averaged 5.3 out of
6 (good) and no areas have received a rating below adequate (4 out of 6) on any
audit. Audit briefs are issued in a timely manner ahead of fieldwork starting, and
there has been minimal delays in completing audit fieldwork.
4.5.
We continue to monitor and ensure ongoing compliance with the CIPFA Code of
Practice for Internal Audit, and have undertaken a review of the effectiveness of
our working practices in conjunction with other Internal Auditors nationally and
locally, which has been discussed within the Internal Audit Consortium. Changes
arising from this review will be incorporated into the Annual Audit Planning
process for 2012/13, the outcomes of which will be presented to this Committee
in March 2011.
4.6.
The outcomes of this work indicate that the Internal Audit service has continued
to remain effective for the Council. A more complete review of Internal Audit
effectiveness will be provided in June 2012, alongside the Internal Audit Annual
Report and Opinion.
Appendices attached to this report:
Appendix A – Review of work delivered in accordance with the Annual Audit Plan
2011/12
Appendix B – Management summaries of completed audit assignments