1 March 2010
ITEM NO 7
INTERNAL AUDIT ANNUAL PLAN 2010/2011
Report by the Internal Audit Manager
Corporate Services Portfolio: Councillor Cheshire
Key Decision: No
1.0 PURPOSE OF REPORT
1.1 This report sets out the Internal Audit coverage for 2010/11, including the
Annual Audit Plan (see Appendix A). The audit plan aims to provide a
continuing overall assurance opinion on the adequacy and effectiveness of
the Council’s internal control framework. The audit plan for 2010/11 is a one
year plan and unlike previous years is not derived from a three year
strategic audit plan. This is because the Audit Partnership between Havant
and Winchester City Council is expanding to include Test Valley Borough
Council in 2010/11. However, this is being treated as an interim
arrangement due to a business case being developed during 2010/11 to
look at the potential of a larger audit partnership for 2011/12 and
consequently it is not possible at the current time to produce an audit plan
beyond next financial year.
1.2 The Annual Audit Plan for 2010/11 was considered and supported by the
Executive Management Team on 16 February 2010.
2.1 That the Audit Plan for 2010/11 be approved.
3.1 The 2010/11 annual audit plan has been cross referenced (where possible)
to the Council’s Strategic Risk Register.
3.2 Full consultation took place with the Executive Management Team and the
Risk Management Group in compiling the audit plan for 2010/11.
3.3 The Internal Audit Manager is currently in the process of consultation with
the External Auditors to agree a joint working protocol. The protocol seeks
to introduce a new joined up approach to auditing our Core Audits
(compulsory). One of the implications of this will result in Internal Audit
being able to allocate less audit days to the Core Audits over a three year
period. The audit plan for 2010/11 in Appendix A shows the audit resources
required if we are required to undertake full compliance audits on our core
systems and also the reduced resources required with an agreed protocol.
1 March 2010
As the consultation process with External Audit is in progress it has been
necessary to include both resource projections. It is hoped that the protocol
will be agreed but if not the plan will need to be re-assessed to address the
shortfall in resources that a full compliance audit plan would require.
3.4 The annual plan is revisited each year to determine whether new higher risk
activities merit a reassessment of the original plan to determine if changes
should be made to ensure the audit resource is directed at the areas of
greatest current risk. In particular for 2010/11 audit resources have been
allocated to two new areas of significant risk; the Public Service Village and
the Flexible/Smarter Working Project, including the decanting of staff to
other locations. In addition resources have been targeted at reviewing ICT
Security and the overall project management framework and a role (where
appropriate) for internal audit on significant partnership projects.
3.5 The estimates of the resources required for the majority of the audits should
now be considered as reasonably accurate as the majority have been
derived from the actual outputs of the last three years.
3.6 The annual audit plan is split into five areas:
3.7 Core Audits (Compulsory). There is a requirement that these audits are
undertaken annually and they form a key part of the opinion that the
External Auditors make on the adequacy of the Council’s Internal Audit
arrangements. As indicated in the audit plan it is hoped that there will be
agreement on a new joint working protocol that will enable internal audit
over a three year period to undertake a systems flowcharting and walk
through test approach instead of full annual compliance audits.
3.8 Corporate/Cross Department Audits. These review activities involve
issues of internal control and performance that potentially have an effect on
the whole organisation.
3.9 Service or Activity Audits. These are about reviewing specific services or
activities and the systems and processes in use. However, there are no
audits in the plan for 2010/11 of this type due to resources being required
on Corporate/Cross Department Audits.
3.10 On-going Activities. These are the items that support the framework in
which Internal Audit undertakes its activities. For example: Audit Planning
3.11 Contingencies. These are in place in case of special investigations and for
Section 151 Officer requirements.
4. FURTHER INFORMATION
4.1 The productive work performance indicator target is 82%.
4.2 The target for delivering the audit plan is to complete 95% of the original
plan to draft report stage by 31st March 2011.
1 March 2010
4.3 Five individual measures of customer satisfaction are in place. The
performance targets are a minimum of 3 out of 4 for each individual
4.4 Havant Borough Council and Winchester City Council continue to work in
Partnership in the provision of an Internal Audit Service and for 2010/11 this
will include Test Valley Borough Council. The Audit Manager will spend a
third of his time at each site. It should be noted that on a month to month
basis the percentage of time spent at each Council is likely to fluctuate
dependent on differences in the workflow at any given. However, the
objective is that the manager at the year end will have spent an equal
proportion of his time working on audit related matters at each Council. If
there is an in-balance then this will be identified in the Annual Internal Audit
Report and the proportion of time owed recovered in the next financial year.
4.5 Auditors from all sites undertake audits at the partnering Councils to
maximise the effective use of resources in terms of the skills and
experience of individual auditors.
5.1 Agreed recommendations, when implemented, will further improve financial
5.2 None directly from this report.
Strategy (Community and Corporate)
5.3 Supports the Council’s organisational strategies contained in the Corporate
5.4 None directly from this report.
5.5 The internal audit programme is based on the Council’s Risk Register and
internal audit contribute towards the Council’s overall corporate governance
framework of assurance.
5.6 None directly from this report.
1 March 2010
Internal Audit Plan 2010/11
Background Papers: Working papers held in Internal Audit.
Consultation and sign off:
Solicitor to the Council: 17 February 2010
Head of Resources: 17 February 2010
Contact Officer: John Cummins, Internal Audit Manager
Tel: 023 92 446331