Agenda item

That the report be noted.

The Internal Audit Manager introduced a report on the outcome of the Wales Audit Office (WAO) annual assessment of Internal Audit.  On the recruitment drive and the filling of two vacancies, he advised that alternative options would be explored since one of the candidates had withdrawn.

Ms. A. Hughes of WAO explained the background to the annual assessment of Internal Audit in accordance with the eleven Code of Practice standards of the Chartered Institute of Public Finance Accountancy (CIPFA).  She confirmed the view taken by WAO that for 2011/12 Internal Audit had complied fully with eight of the standards, partially complied with two and had not met one, resulting in five recommendations as set out in the report.  She added that the issues raised had not been significant enough to affect the WAO view on the work on Internal Audit.

Following Members’ concerns on the third recommendation relating to adequate resources, the Internal Audit Manager assured the Committee that a plan would be in place to deal with the unfilled vacancy.  Councillor G.H. Bateman asked about levels of staffing and was informed that the restructure of Internal Audit had concentrated on staff at senior auditor level and that only one post was currently vacant.

The Chair referred to paragraph 23 of the report which indicated that the Committee needed to satisfy itself on the impact of lost work.  Ms. Hughes explained that following consultation with Directorate management teams, the Internal Audit Manager was responsible for assessing the removal of issues from the Audit Plan to be re-introduced in the following year’s Plan for consideration if the work was deemed to be still valid.  She had discussed with the Internal Audit Manager the delays arising from this and felt that the Committee should have knowledge of such items.

Mr. P. Green of RSM Tenon assured Members that nothing was lost but suggested that a report providing information on deferred work and intended actions could be brought to the Committee to demonstrate transparency in the process.

The Internal Audit Manager said that revised plans were brought to the Committee for approval and that during the previous year, 22 audits had been deferred following planning meetings with management teams.  Fourteen audits had appeared in this year’s plan with the remaining items deemed as not urgent and therefore removed.

Mr. P. Williams felt that the Committee should be provided with a report on the deferred items and associated risk profile, together with fundamental risk areas and action plans detailing the reasons and process going forward.  He also questioned whether the Internal Audit Manager was satisfied he had sufficient resources.  In responding, the Internal Audit Manager replied that there were sufficient resources to carry out the audits, including some regulatory and systems work whilst concentrating on risk work, and that many of the deferred items related to advisory work.

On the fifth recommendation, Mr. Williams sought detail on the suggested independent quality assurance review to be undertaken by RSM Tenon.  The Chair suggested that she and the Vice-Chair discuss separately with the Internal Audit Manager to enable her to report back to the Committee.  Mr. Green explained that this would consist of RSM Tenon’s technical division sending a team to look at the Council’s compliance with auditing standards and that this could be undertaken in the next quarter.

Mr. J. Herniman of WAO said it was not the case that items deferred from the plan were forgotten and hoped that the Audit training would assist with the first recommendation on the development of the Committee, suggesting that Members may wish to reflect on this at a later date.

On the fourth recommendation, Councillor A. Woolley said that the need to provide training to ensure that regular staff appraisals were undertaken had been previously identified by Overview & Scrutiny, with a target date of March 2009.  The Chair pointed out that a later report on the agenda indicated that the appraisals policy had not been updated since 2005.  Councillor R.B. Jones said that training and development needs should be incorporated in the personal development plans of managers to ensure that staff appraisals were undertaken.

The Internal Audit Manager explained that appraisals had lapsed due to the department undergoing a restructure as part of the Finance Function Review and would recommence once the review was complete.  He and other officers had attended refresher appraisal training in preparation for this.

The Chief Executive commented that the structure was fit for purpose.  He proposed that he and the Head of Finance meet with the Internal Audit Manager to discuss the resources issue and the variation of the Audit Plan and share the outcome with the Chair and Vice-Chair.  A report be submitted to the meeting in September 2012 on items deferred from the Plan.

RESOLVED:

That the report be noted.