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Annual Assurance Statement 2018/19 and Internal Audit Annual Report (Shared Internal Audit Service - SIAS)

Meeting: 30/05/2019 - Audit Committee (Item 45)

45 Annual Assurance Statement 2018/19 and Internal Audit Annual Report (SIAS) pdf icon PDF 558 KB

The ATTACHED report asks the Committee to:

·         Note the Annual Assurance Statement and Internal Audit Annual Report

·         Note the results of the self-assessment required by the Public Sector Internal Audit Standards (PSIAS) and the Quality Assurance and Improvement Programme (QAIP)

·         Accept the SIAS Audit Charter

·         Seek management assurance that the scope and resources for internal audit were not subject to inappropriate limitations in 2018/19

Minutes:

The Committee had a report before them which detailed the Shared Internal Audit Service’s (SIAS) overall opinion on the adequacy and effectiveness of Hertsmere Borough Council’s control environment and summarised the internal audit work that informed this opinion. It also set out the outcome of the self-assessment against the Public Sector Internal Audit Standards (PSIAS) which incorporated the requirements of the Quality Assurance and Improvement Programme (QAIP), showed SIAS’s performance in respect of delivering the Council’s 2018/19 audit plan and presented the SIAS Audit Charter.

 

There were two areas of intentional non-conformance with PSIAS as previously agreed and reported as these areas did not fit the nature of a shared service and suitable alternative structures had been adopted that complied with the principles:

1)    Reporting Structures: The Head of Assurance reports to Director of Resources of Hertfordshire County Council, along with the SIAS Board which represents the partner bodies.  This is deemed more appropriate than reporting to several Audit Committees.

2)    Appraisal: The Head of Assurances appraisal is undertaken by the Director Resources of Hertfordshire County Council on behalf of all the member authorities.

It was noted that an external peer review and assessment was due by quarter three in 2020 and Members were reassured by the Corporate Director as Chief Financial Officer that they provided input in to the process.

 

The Internal Auditor confirmed that, in line with 2.10 of the report, during the year:

  • No matters threatened SIAS’s independence; and
  • SIAS was not subject to any inappropriate scope or resource limitations.

 

During discussion of this item, the Corporate Director gave formal notice that the scope and resources given to SIAS had not been subject to inappropriate limitations in 2018/19.

 

The Head of Shared Internal Audit Service reported that they were able to provide a “Satisfactory overall assurance on financial systems” and “limited overall assurance on non-financial systems”.  It was highlighted that the assurance definitions had changed at the start of 2018/19, and that the definitions for limited assurance had materially changed, such that an overall assurance opinion of limited assurance in 2018/19 should not be conflated with such an outcome in 2017/18. The limited assurance opinion for non-financial systems did not represent a negative direction of travel from the outcomes in 2017/18.  There were no critical level recommendations made during 2018/19.  The Head of Shared Internal Audit Service noted that there were two outstanding reports in draft form and that they would be published when available.

 

The Head of Shared Internal Audit Service was pleased to report that performance targets for 2018/19 had been achieved.

 

The External Auditor confirmed in response to a Member query that they took in to account the Internal Audit reports as part of the council’s overall assessment, however they did not rely on them and undertook their own substantive audit.

 

Finally, it was commented that a welcome change would be the placement of the summary annual assurance opinion at paragraph 2.11 at the start of section 2 within  ...  view the full minutes text for item 45