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Agenda item

Internal Audit Review of Effectiveness

This report details the Director of Finance, Investment & Risk (Section 151 Officer)’s review of the effectiveness of the Council’s internal audit.

Minutes:

The Director of Finance, Investment and Risk introduced the item. It was explaining that this was an Annual Report to the Committee giving an assessment of the internal audit function for 2019/20. This was being presented late due to the impact of Covid.

 

It was highlighted that there was more work to be done to finalise the Annual Audit Plan for 2019/20. An internal review had been completed on the function of internal audits. The Committee was reminded that this service was delivered by Mazars under contract.  This contract had been re-let in 2018 for 6 years with the option of a two year extension.

 

A peer review of the audit function had been conducted by another local authority in 2015/16 with a good result. It had been hoped that another peer review would have been undertaken in 2020 but this had also been delayed by Covid. It was hoped this would be delivered in 2021. 

 

Performance was reviewed with it being highlighted that this was slightly below target. However, as already explained to the meeting by the Head of Internal Audit, it was hoped that this position would be recouped. Progress with the issuing of reports was slightly behind but it was stressed that the report did also contain good performance data.

 

Croydon participated in the CIPFA annual audit club which provided benchmarking against other boroughs. This demonstrated good performance in some areas such as low costs per day leading to good level of activity and reports.  Stakeholder audit feedback scored 100% on usefulness with an overall score of 92% which was compared with 75% in 2006/7. This demonstrated a good improvement in the quality of the audit work undertaken.

 

As a result of the self-assessment undertaken, it had been determined that the audit function generally conformed to standards. This meant the service had been judged to be demonstrating effectiveness for money. Whilst there was work that needed to be completed, the Director of Finance, Investment and Risk determined that she was satisfied with the quality of work of the internal audit function. This was described as incredibly thorough with there being no fear in issuing reports with recommendations.

 

A Member highlighted that it seemed unusual that the Director of Finance, Investment and Risk and Internal Audit were producing reports on each other’s functions. It was noted that this would not happen in the private sector. It was asked if this structure was typical for local authorities. The Director of Finance, Investment and Risk confirmed that it was a similar structure across local authorities but that the Head of Internal Audit had a direct line to the Chief Executive should it be judged that something was not being administered appropriately. The Member stated that he would like to look at how this was achieved in other Councils just to explore other practice. It was also noted that the peer review would be shared with the Committee once completed. 

 

RESOLVED: The Committee AGREED to note the Internal Audit Review of Effectiveness 2019/20.

 

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