Agenda item

Report of the Director of Finance and Resources

The Audit and Procurement Committee considered a report of the Director of Finance and Resources that provided the results of the External Quality Assessment of the Internal Audit Service and the updated Internal Audit Charter.

The Public Sector Internal Audit Standards required that a Quality Assurance and Improvement Programme (QAIP) must be developed and maintained. The Programme was designed to enable an evaluation of internal audit activity’s conformance with the Standards and an evaluation of whether internal auditors applied the Code of Ethics. It also assessed the efficiency and effectiveness of internal audit activity and identified opportunities for improvement. The QAIP must include both internal and external assessments. External Assessments must be completed at least once every five years and an assessment for the Internal Audit Service at Coventry City Council had now been undertaken, with the final report issued in May 2024. The Standards required that the results of the assessment were discussed with the Audit and Procurement Committee. 

There were two options available for conducting external assessments; a full external assessment; or a self-assessment with independent external validation. The preferred option to use a self-assessment approach was approved by the Audit and Procurement Committee at its meeting on 26th June 2023 (minute 6/23 referred) and consequently, a tri-party arrangement was entered into with Solihull MBC and Sandwell MBC with each Council acting as the assessor for another. The assessment for Coventry City Council was undertaken by the Head of Audit at Sandwell MBC who had over 30 years internal audit experience. 

The independent external validation was based on the review a self-assessment checklist completed by the Internal Audit Service, along with interviews and a review of a number of key documents. The overall conclusion reached by the assessor was that “from the evidence reviewed as part of the independent validation of the self-assessment Coventry City Council’s Internal Audit Service conformed to the requirements of the Public Sector Internal Audit Standards and the requirements of the Local Government Application Note, with no key areas of non-compliance with the standards identified.” 

Notwithstanding the overall conclusion of the assessment, a number of improvement actions to further build on conformance were identified, both by the Chief Internal Auditor in completing the self-assessment and by the assessor.  These were detailed in the full report attached as an Appendix to the report. The assessor had recommended that these were included in an action plan, with completion monitored by the Audit and Procurement Committee. This action plan had been included in the Internal Audit Annual Report and was also detailed in the report. Progress in completing the action plan would be included in future reports to the Audit and Procurement Committee. 

One of the improvement actions highlighted in the report, action plan reference 1, was to “Identify Internal Audit’s contribution to the review of effectiveness of the control environment within the Internal Audit Charter.”  As such, the Charter had been updated to reflect this, Section 7 referred, and was included in a further Appendix to the report. The Public Sector Internal Audit Standards required that the Charter was approved by the Audit and Procurement Committee and this report provided an opportunity to do this.

RESOLVED that the Audit and Procurement Committee:

1)  Notes the results of the External Quality Assessment, including the improvement action plan.

2)  Approves the updated Internal Audit Charter.