Agenda item

Report of the Executive Director of Resources

The Committee considered a report of the Executive Director of Resources, which provided an update on the progress made in implementing internal audit recommendations since the last update in December 2014.

Given the number of audits that the Internal Audit Service complete every year, it was critical that a robust procedure was in place to ensure that it obtained appropriate assurance that audit recommendations had been implemented, but in a way that allows the Service to respond to new risks facing the Council.  Where appropriate, Internal Audit defines within its audit reports the follow up process to those responsible for the system / area under review, along with an agreed date of when this would take place.

There were currently three considerations that determined the follow procedure adopted and these were set out within the report submitted and, in summary, were whether the area audited was of such significance that it was subject to an annual review; the level of assurance provided in the audit; and a ‘catch all’ process for those reviews where neither of the other criteria applied but a follow up review was necessary.  Overall, it was believed that the procedures achieved the right balance between ensuring action was taken in response to risks identified and allowing the service to focus on identification of new risks.  The Committee noted that this was of particular importance given the reduction in the size of the Audit Team over the last few years.

The report and appendices set out the results from the latest follow up exercise and, of the 223 actions followed up, 88% had been implemented based on the formal and self-assessment follow up method.  When analysed by follow up method there was a 63% implementation rate for the formal follow up method and a 95% implementation rate for the self-assessment method.

The Committee noted that, whilst there was a clear difference in results between the follow up methods, this was likely to be due to one of the following reasons:

·  The audit process for the formal follow review was rigorous, consisting of an assessment of the implementation of the action and the outcome achieved.

·  The majority of schools audits were followed up through the self-assessment process as the actions identified in such reports were likely to be straightforward, not time consuming to implement, and tended to focus on compliance rather than control issues.

After the follow up had been completed, the results were collated within Internal Audit and if progress was not consistent with expectations, audit management would determine the next course of action based on the reasons for the lack of progress.  The report identified the various courses of action available and the appendices to the report highlighted the proposed actions for audits where recommendations remained outstanding.

RESOLVED that the Audit and Procurement Committee note:

1.  The current procedure for following up audit recommendations.

2.  The progress made in implementing audit recommendations and confirmed their satisfaction with the proposed action by the Chief Internal Auditor for audits where actions remain outstanding.