Agenda item

The Director of Finance submits the Internal Audit Annual Report and Opinion for the financial year 2014-15 to the Audit and Risk Committee. The Committee is recommended to receive the report, consider whether Internal Audit has met the Committee’s expectations of the service during the financial year 2014-15, consider Internal Audit’s opinion on the Council’s system of internal control in 2014-15, consider the Internal Audit strategy for 2015-16, and make any recommendations it sees fit to the Director of Finance or the Executive.

The Director of Finance submitted a report that fulfilled the requirements of the Public Sector Internal Audit Standards (PSIAS) in producing the Internal Audit Annual Report and Opinion. The Audit and Risk Committee was recommended to receive the report and consider:

1.    whether Internal Audit had met the Committee’s expectations of the service during the financial year 2014-15;

2.    Internal Audit’s opinion on the Council’s system of internal audit control in 2014-15; and

3.    the Internal Audit Strategy for 2015-16.

The report provided the Committee with an overall view of Internal Audit work planned and completed in 2014-15, Internal Audit performance and a statement on conformance with the PSIAS, Internal Audit’s annual opinion for 2014-15 on the adequacy and effectiveness of the Council’s framework of governance, risk management and control, Internal Audit service developments in 2014-15, and the Internal Audit strategy and service development plans for 2015-16.

The Committee were informed the report identified the work carried out by the Internal Audit service, and included information on reports issued, the main influences on the level and standard of performance of Internal Audit during 2014-15, and the key priorities for the service in 2015-16.

The Internal Audit Manager stated it was the opinion of the Head of Internal Audit and Risk Management that the Council’s framework of governance, risk management and internal control was adequate and effective.

Members’ attention was drawn to Appendix A of the report (page 2), and the summary and extent of coverage and overall conclusion of audit work. It was reported that significant work had also been undertaken for the Leicester and Leicestershire Enterprise Partnership (LLEP), and though counted as one audit was a major piece of work. It was reported that Internal Audit issued client satisfaction survey questionnaires, and the results demonstrated that Internal Audit continued to have a very high level of satisfaction amongst client management.

The Committee was asked to note that a requirement of conformance with PSIAS was an assessment against all of the Standards was undertaken. It was noted that overall there was a high degree of conformance with the Standards, but there were a few specific actions, updates or improvements to be made, and detail on improvements would be brought to a future meeting.

Appendix A, Section 7 referred to the joint working protocol between Internal Audit and KPMG, and there was no requirement to change the protocol. The Committee was informed that Internal Audit had a constructive working relationship with KPMG, to enable it to avoid duplication, avoid unnecessary additional external audit work and continued to support the Audit and Risk Committee in its responsibilities for both functions. The external auditor requested Appendix A, Section 7.1, line three be amended to read “2014-15 was the third financial year to fall within this arrangement”.

Attention was drawn to the objectives and strategy for 2015-16, with particular reference to the financial pressures that faced the Council, and the importance of Internal Audit’s role in supporting the Council.

The Chair thanked the officer for the report.

RESOLVED:

that the Audit and Risk Committee:

1.    confirm Internal Audit had met the Committee’s expectations of the service during the financial year 2014-15;

2.    confirm Internal Audit’s opinion on the Council’s system of internal control in 2014-15;

3.    confirm the Internal Audit Strategy for 2015-16;

4.    agree the amendment in Appendix A, Section 7.1, line three to read “2014-15 was the third financial year to fall within this arrangement”.