Agenda Item No: Report
Report Title: Internal Audit Benchmarking 2003/2004
Report To: Audit Committee Date: 27 September 2004
Ward(s) Affected: All
Report By: Director of Finance and Community Services
Contact Officer(s): David Heath, Chief Internal Auditor
Purpose of Report:
To consider the Internal Audit work of the Audit and Performance Division
and the comparison with other internal audit departments in Sussex.
1 To receive and consider the report.
2 To note the comparative costs and achievements.
Reasons for Recommendations
1 The remit of the Audit Committee includes a duty to review whether the internal
audit function is adequately resourced and is able to discharge its function
2.1 The Audit Committee agreed Performance Indicators (PIs) for Internal
Audit at its meeting on 3 September 2001, and the Committee receives
feedback on the PIs as part of the Chief Internal Auditor’s Annual Report
on the Councils’ Systems of Internal Control. At its meeting on 2 June
2003, the Committee requested that a benchmarking summary that
compared the auditing performance and standards of other local
authorities with that of the Council be presented to future meetings of the
2.2 The Internal Audit Section at Lewes District Council (LDC) is a member
of the Sussex Audit Group (SAG), which has been established to enable
internal audit functions within public bodies in East and West Sussex to
share best practice. A regular feature of SAG information sharing is an
annual benchmarking study that compares internal audit performance
across a range of PIs and other measures.
2.3 The results of the SAG benchmarking study for 2003/2004 are now
presented to the Committee.
3 Benchmarking Study 2003/2004
3.1 The Sussex Audit Group comprises 14 internal audit functions from
neighbouring local authorities and one of the local universities. Not all
the members are committed to taking part in the benchmarking studies,
and the results from the following seven members were included in the
exercise for 2003/2004.
One of the above authorities provided only limited data, but with six
authorities providing a full response there is sufficient information for
comparative purposes. Member authorities provide the information on
the understanding that the results for specific authorities will not be
3.2 The major part of the benchmarking exercise covers issues such as the
staffing and organisation of internal audit, and the SAG indicators are not
the same as those agreed by the Committee for internal LDC use. A
selection of the main indicators for 2003/2004 is given in the table at
Appendix A of this report, with the results given for six authorities only.
3.3 The results show that four of the Internal Audit functions in the study
operated at full strength during 2003/2004 including LDC, which at 3.8
FTE was at its authorised complement. Lewes Internal Audit Section
achieved the most audit days (732) and the second highest proportion of
budgeted audit days (96.6%). The proportion of the audit plan completed
(85%) placed Lewes above the mean level. The Internal Audit staff at
Lewes are among the most experienced, and the total cost of the service
(£162,469) was the second highest of the sample. The cost per
chargeable day (£221.95) was the lowest.
3.4 The conclusions that can be drawn from the benchmarking data, which
are supported by external audit’s comments in recent Management
Letters, are that the Internal Audit function at Lewes is adequately
resourced and is achieving satisfactory standards of output and
4 Financial Appraisal
4.1 There are no additional financial implications arising from this report.
5 Environmental Implications
5.1 I have completed the Environmental Implications Questionnaire and
there are no significant effects as a result of these recommendations.
6 Risk Management
6.1 I have completed the Risk Management questionnaire and this report
does not require a full risk assessment because the issues covered by
the recommendations are not significant in terms of risk.
7 Background Papers
7.1 Annual Report on the Council’s Systems of Internal Control 2003/2004.
A Sussex Audit Group Benchmarking Results 2003/2004.
Sussex Audit Group Benchmarking Results 2003/2004
Authority A B C D E Lewes
Authorised number of 3 3.5 4 4.1 4 3.8
Internal Audit staff
Actual number of 3 3.5 4 4 3.6 3.8
Internal Audit staff
Actual/budget audit 398/417 568/601 591/654 227/464 654/675 732/758
days to carry out the
audit plan Note 1
% of actual/budget 95.5% 95.0% 90.4% 48.9 96.9% 96.6%
Completed/planned 51/56 27/47 41/43 14/29 26/32 52/61
number of audits
% audit plan 91.1% 57.0% 91.0% 48.3% 81.3% 85.0%
Total annual cost (£) 147,866 148,079 153,695 151,007 202,551 162,469
Cost per chargeable 292.05 260.70 260.06 268.50 323.05 221.95
Audit experience 1
0-5 years 2 1 3 1
6-10 years 1 1
11-15 years 1 2 1 2
16-20 years 1 2
21+ years 1 2 1 1
Does Internal Audit Yes Yes Yes Yes Yes Yes
have a formal follow
Does Internal Audit No Yes Yes Yes Yes Yes
Are results of client n/a Yes No Yes Yes Yes
surveys reported to
Note 1 Although second highest in overall costs, the cost per audit day is the
lowest because the Lewes Internal Audit Section generates more
productive days than the others in the benchmarking results.