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Hayley McGrath, Corporate Governance Manager, introduced the report on Year End Internal Audit Assurance Report 2015/16. The report requests that the Governance and Audit Committee review and comment on the internal audit activity from 1 October 2015 to 31 March 2016 and the performance of internal audit by reference to national best practice benchmarks.
Hayley McGrath stated that Colchester Borough Council has been using an external auditor, Mazars, to run its internal audit for a number of years. The Council has an Audit Plan which lasts for five years, and is broken down into yearly plans. Key financial systems and services are audited either fully or on an interim bases each year, with other areas reviewed on a cyclical and risk related basis depending on issues such as use of contractors or whether the service is public facing.
With regard to the audit process, Hayley McGrath stated that this starts with an audit brief being written and then agreed with senior management. Following the audit a report including the recommendations resulting from the audit is submitted to management to accept the recommendations. In terms of reporting to the Governance and Audit Committee, two reports come to the Committee the 6 month and year end reports with the majority of audits being reported at the end of the year. The reports only include detailed information on the limited or no assurance audits.
During 2015/16, there were two full assurance ratings, which included the audit on Creditors and the Museums services. Two services, Payroll and Parking Services Partnership, had their audits reduced from substantial to limited. All recommendations from the audits have been agreed with management, and there are currently no recommendations outstanding.
Hayley McGrath highlighted that Colchester Borough Homes also use Mazars for their internal audit, and when joint audits are undertaken the audit days are shared between the organisations. In addition, the contract with Mazars has recently been extended for three years, with the option to extend for a further two years. The contract includes a slight reduction in the number of audit days so that these days can be used to provide specialist provision for certain services that require upfront audit controls.
The Committee welcomed the report; Councillor Jarvis questioned the categorisation of the recommendations given the high number of priority two recommendations for the Animal/Pest Control audit, but lower number of overall recommendations for the Payroll audit which had one priority and one priority two recommendation. Alan Woodhead, Mazars, stated that whilst each recommendation is a priority, the priority one recommendations are the highest and therefore the categories of audit are based on this. In both cases all the recommendations made have been accepted by management.
Councillor Chillingworth requested further information on contract management and the audit of the service. The Committee agreed that a presentation on contract management and its role at Colchester Borough Council would be helpful.
Councillor Barlow requested that the detailed recommendations from the audits be displayed in order of their priority in future reports.
RESOLVED that;
- the Internal Audit Activity for the period 01 October 2015-31 March 2016 be noted.
- the performance of internal audit by reference to national best practice benchmarks be noted.
- A report on contract management be brought to the Governance and Audit Committee on 13 September 2016.