Agenda item - Internal Audit and Corporate Fraud Progress Report

Report of the Interim Executive Director of Finance & Resources (copy attached).

1)           That the Audit and Standards Committee note the report

53.1      The Committee considered a report that summarised the progress made against the Internal Audit and Corporate Fraud Plan 2015/16.

53.2      Councillor Sykes asked if the changes to the Audit Plan particularly the focus on IT systems would require specialist advice. Furthermore, Councillor Sykes noted the potential changes to the audit service and requested assurance that the integrity of such a key service would be retained.

53.3      The Head of Internal Audit confirmed that due to the specialist nature of IT systems, external services would be required. In relation to the potential changes to the service, the Head of Internal Audit clarified that the size of the audit programme had been reviewed and he believed there was scope to reduce workload without any reduction in the integrity of work.

53.4      Dr Horne asked if the Head of Internal Audit was confident in delivering the remaining audits in the 2015/16 programme. In addition, Dr Horne stated his belief that the committee should have some input on the future of the Internal Audit function.

53.5      Councillor Druitt expressed his concern that the benefits of economies of scale detailed in the report may also lead to a lack of focus in audit delivery and asked how the committee could ensure that was not the case.

53.6      The Head of Internal Audit stated that after considering the options available in determining the future of the service, it had been his judgement that working as part of a shared service agreement was the preferred option to ensure the integrity of internal audit. It was his expectation that the current Internal Audit team would still be based in Brighton & Hove and would benefit in learning from co-operation with other partners and would allow the team to use specialist support from partners. In response to the matters raised by Dr Horne, the Head of Internal Audit clarified that he was confident the 2015/16 Audit Plan would be delivered to schedule. The Head of Internal Audit supplemented that subject to agreement by Policy & Resources Committee, a period of due diligence would be required for the proposal of a shared service agreement. There was an overlap of responsibility for the Internal Audit service between the Section 151 Officer, the Audit & Standards Committee and Policy & Resources Committee however; the ultimate decision would be made by the latter.

53.7      RESOLVED- That the Audit and Standards Committee note the report