Agenda item

To present the report of the Internal Audit Manager.

The report of the Head of Internal Audit regarding the Anglesey Internal Audit Service’s conformance with the Public Sector Internal Audit Standards (PSIAS) was presented for the Committee’s consideration.

The Internal Audit Manager reported that it is a statutory requirement for Internal Audit to work in compliance with proper audit practices. The Public Sector Internal Audit Standards and the CIPFA Local Government Application Note came into force on 1st April, 2013 and superseded the 2006 CIPFA Code of Practice for Internal Audit in Local Government. The new standards have been produced by the Relevant Internal Audit Standard Setters (RIASS), including the Chartered Institute of Public Finance and Accountancy, are mandatory in nature and apply to various parts of the UK public sector, including Local Government. They are intended to promote further improvement in the professionalism, quality and effectiveness of internal audit across the public sector.

The Officer said that the RIASS have developed a checklist to satisfy the requirements set out in PSIAS 1311 and 1312 for periodic self-assessments and externally validated self- assessments as part of the Quality Assurance and Improvement Programme. Each requirement on the checklist must be ticked to indicate full, partial or non-conformance with the Standards and evidence provided for each response, along with the reasons for any partial conformance or non- conformance and a statement of the compensating measures put in place or actions in progress to address this. The best practice checklist (Appendix 1 to the report) has been completed to provide an annual assessment for 2016/17 and shows that Anglesey’s Internal Audit Service is fully compliant against 97% of the 334 individual requirements. A summary of the checklist results is provided in the table at paragraph 3.5 of the report. The Officer elaborated on the six areas identified as being non-compliant as well as the 5 areas assessed as being partially compliant as per paragraph 3.6 of the report. The Officer also drew attention to Standards 1100, 1110 and 1130 in relation to independence and objectivity to which the Internal Audit Service currently conforms. At present, the Chief Audit Executive (CAE) has no operational responsibilities other than Internal Audit. The advertisement of the post of Head of Audit and Risk combining the responsibilities for audit, risk and insurance renders the service non-compliant with the Standards and means that in future, the CAE will need to declare to the Audit and Governance Committee a conflict of interest and non-compliance with Standard 1100 (Independence and Objectivity).

The Officer referred to the Improvement Plan attached as Appendix 2 to the report which sets out the recommendations made to address the areas of non-conformance, the actions proposed and the completion timescale. Progress against the proposed actions will be reported in the Annual Report 2016/17. In accordance with the Standards, an external assessment must take place at least every five years by a qualified, independent assessor or assessment team from outside the organisation. Anglesey’s Internal Audit Service’s peer assessment is scheduled to be performed in early 2017 by Denbighshire County Council’s Head of Internal Audit; the results of the assessment will be reported to this Committee in May, 2017.

The Head of Function and Section 151 Officer said that he was satisfied with the results of the checklist and confident that the areas of non-conformance do not have implications for the Service’s operational abilities or its ability to meet the greater part of the Standards.

The Committee noted the information presented by the Internal Audit Manager and was satisfied both with the overall outcome of the self-assessment and with the evidence provided to show that the areas of partial and non-compliance are either being addressed or have plans in place to address them.

It was resolved –

•           To accept the self-assessment as presented and agree that the current areas of partial or non-compliance do not significantly impact on the Service’s ability to demonstrate overall compliance.

•           To approve the Improvement Plan 2016/17.

NO FURTHER ACTION ENSUING