To consider the Audit Manager’s Report No. AUD1701 (copy attached), which describes the results of a self-assessment carried out by the Audit Manager against the Public Sector Internal Auditing Standards (PSIAS) and sets out a plan to address or minimise any non-compliance.
The Committee considered the Audit Manager’s Report No. AUD1703 which explained the legislative requirements and best practice guidance for reporting on the adequacy and effectiveness of the Council’s framework of governance, risk management and control environment and set out the Audit Manager’s opinion on the level of assurance.
The Report advised that, in accordance with the requirements of the Public Sector Internal Audit Standards (PSIAS), the Audit Manager was required to report on an annual basis on the overall adequacy and effectiveness of the Council’s framework of governance, risk management and control, including the result of the PSIAS self-assessment and the Quality Assurance Improvement Plan for the internal audit service for 2017/18.
The Committee was informed of the audit work for 2016/17, the audit plan for which had been communicated to the Committee in June, 2016.
The Report set out an assurance opinion on the adequacy of the system of internal control on each of the audit assignments completed in 2016/17. It was noted that there were five categories of assurance that could be given and details of these were set out in the Report. In assessing the level of assurance to be given for 2016/17 in respect of previous audit work, the opinion was based on: all audits undertaken during 2016/17; the results of any follow-up action carried out in 2016/17 in respect of previous audit work; and, any significant recommendations not accepted by management and any potential consequences. The opinion of the Audit Manager was that, using the information outlined in the report, her professional opinion was that substantial assurance on the effectiveness of the Council’s risk management, control and governance for 2016/17 could be given. The category of assurance of ‘substantial’ meant that key controls designed to achieve the system/function/process objectives were in place and that there were opportunities to enhance/strengthen these controls.
The Report gave details of the PSIAS and it was noted that the Quality Assurance and Improvement Plan would look to address some of the non-compliance and partial compliance over the following financial year, taking into account the resources available.
In respect of the Quality Assurance and Improvement Plan (QAIP), the Committee noted that the Hampshire Audit Managers’ Group was carrying out an external assessment as a peer review exercise, the scope of which would be discussed and agreed with the Chief Finance Officer, with the results to be reported to the Committee. Members were advised that the QAIP would be reported annually to the Committee alongside the Audit Opinion in order to inform Members of progress against compliance with standards and the level of assurance on the adequacy and effectiveness of the Council’s control environment. The Audit Opinion report structure would be reviewed to ensure the inclusion of all relevant areas of the PSIAS. The Committee was also advised that changes to the Audit Plan would be communicated to senior managers and the Committee for review and approval. Future Audit Plans would detail the approach to using other sources of assurance, such as external audit, Department for Work and Pensions and National Fraud Initiative data matching exercises.
The Annual Governance Statement was produced annually and published alongside the Council’s Statement of Accounts in September. This showed how the Council had complied with its Code of Corporate Governance and reported on the governance framework in place at Rushmoor. The Auditor’s Opinion on the adequacy and effectiveness of the Council’s risk management, control and governance was required to be considered ahead of the Annual Governance Statement as it provided underlying assurances which were key to that Statement. The Auditor was required to consider whether there were any governance issues that should be raised within the Annual Governance Statement, as well as the revised reporting lines of the Audit team. The Audit team now reported to the organisation and, in particular, to the Chief Executive, the leadership team and the Chairman of the Licensing and General Purposes Committee.
RESOLVED: That the Audit Manager’s Report No. AUD1703 be noted.