The Audit Manager presented a report on the Annual Audit Assessment for Middlesbrough Council for the audit year 2012/2013. The Annual Assessment comprised a summary of the delivery of the 2012/2013 plan of internal audit work and provided an overall opinion on the Councils control environment based on the internal audit work undertaken. The assessment also reported on the outturn performance of the shared internal audit service against agreed performance measures as detailed in the service level agreement and gave an update on the progress made to develop the shared service.
Members approved the 2012/2013 Audit Plan at their meeting in June 2012. The total number of planned audit days for 2012/2013 was 1,325. The performance target for the Service was to deliver 100% of the agreed Audit Plan.
During the year under review, TVAAS operated in accordance with the CIPFA Code of Practice for Internal Audit in Local Government in the United Kingdom. The overall opinion of the Audit Manager on the controls operated in the Council was that they provided Satisfactory Assurance. There were no qualifications to this opinion and no reliance was placed on the work of other assurance bodies in reaching this opinion. The overall opinion was based on the audit work completed during 2012/2013 as detailed in Appendix A to the submitted work.
During 2012/2013 the following areas of concern were highlighted by internal audit work and have therefore been recommended for inclusion within the Councils Annual Governance Statement: Foster Carers Payment Module, Payroll overpayment and Data Protection. Detailed information in relation to each item was contained within the submitted report.
The original number of days planned for audit work for 2012/2013 was 1325 (2011/2012 - 1440 days). The final outturn completion of the Plan was 92%. Whilst this was less than the targeted 100% it was an improved position compared with last year (86%).
A number of variations to the agreed audit plan occurred during 2012/2013 as a result of emerging issues and/or requests from directorates. A number of audits were not started because the proposed audit area was no longer considered to be a priority area for review. Appendix D to the submitted report detailed the variations to the version of the Plan originally agreed in June 2012. The variations had been reported to the Audit and Governance Committee throughout the year. Variations highlighted in bold were those that had been requested since the last progress report was presented to the Committee in February 2013.
In addition to the areas detailed in Appendix D, additional time had been spent on following up implementation of previously agreed recommendations and on responding to queries and requests for advice from Council departments.
All future significant variations to the Audit Plan would continue to be subject to a Change Control process to ensure that audit resource remained focussed on areas of strategic importance to the Council and reassure Members of the Committee that there was a controlled process for deviating from the agreed audit plan.
In order to continuously improve the delivery of internal audit services, TVAAS regularly reviewed and modernised the way it worked. Recent changes within the team had led to a review of the way in which audit plans were managed and delivered and how the individual skills and knowledge of the audit team could be maximised.
During 2012/2013, work carried out by members of TVAAS had helped identify a number of issues and key risks that needed to be addressed, examples of which were given in the submitted report. The Service had a strategy and action plan in place which detailed its vision and key development actions to be taken.
In order to ensure that TVAAS delivered an effective internal audit service, the Manager completed the annual assessment against the criteria set out in the CIPFA (Chartered Institute of Public Finance and Accountancy) Code of Practice for Internal Audit. The final assessment of the Service against the Code was attached at Appendix E to the submitted report. A detailed assessment of the Service against the new PSIAS (Public Sector Internal Audit Standards) would be carried out and reported to the Audit and Governance Committee later in the year.
AGREED that the Internal Audit Annual Assessment be received and noted.