Appendix 3 - Interim Audit Report

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Agenda Item: …. Ryedale District Council REPORT TO: Overview and Scrutiny Committee thDATE: 9 February 2006 REPORTING OFFICER: Audit Manager, North Yorkshire Audit Partnership James Ingham CPFA SUBJECT: Interim Internal Audit Report Q3 2005/2006; WARDS AFFECTED: 1.0 PURPOSE OF REPORT This report presents the Q3 Interim Internal Audit Report from the North Yorkshire Audit Partnership for 2005/2006. It covers work done stin the year to 31 December 2005. 2.0 RECOMMENDATIONS a. It is recommended that the report be received. 3.0 BACKGROUND The Accounts and Audit Regulations 2003 require all Councils to annually review their systems of internal control and to provide an adequate and effective Internal Audit function. It was agreed that this committee should act as an Audit Committee for the Council and, inter alia, receive reports from Internal Audit. 4.0 INTRODUCTION This report presents an Interim Internal Audit Report from the North Yorkshire Audit Partnership for 2005/2006. It covers work done in the styear to 31 December 2005. 5.0 POLICY CONTEXT This report supports the Council’s Corporate Strategic Objective of providing strong Community Leadership, by demonstrating a commitment to local democracy and accountability. Y:\Sue Shuttleworth\Agendas\Overview & Scrutiny\2005.2006\9 February 2006\Final Reports\Appendix 3 - Interim Audit Report.doc Overview and Scrutiny Committee thDate ...

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• Publié par: Shiom
• Nombre de lectures: 37
• Langue: English

Extrait

Y:\Sue Shuttleworth\Agendas\Overview & Scrutiny\2005.2006\9 February 2006\Final Reports\Appendix 3 - Interim Audit

Report.doc

Overview and Scrutiny Committee

Date

9

th

February 2006

•

Page 1

Agenda Item: ….

REPORT TO:

Overview and Scrutiny Committee

DATE:

9

th

February 2006

REPORTING OFFICER:

Audit Manager,

North Yorkshire Audit Partnership

James Ingham CPFA

SUBJECT:

Interim Internal Audit Report Q3 2005/2006;

WARDS AFFECTED:

1.0

PURPOSE OF REPORT

This report presents the Q3 Interim Internal Audit Report from the

North Yorkshire Audit Partnership for 2005/2006.

It covers work done

in the year to 31

st

December 2005.

2.0

RECOMMENDATIONS

a.

It is recommended that the report be received.

3.0

BACKGROUND

The Accounts and Audit Regulations 2003 require all Councils to

annually review their systems of internal control and to provide an

adequate and effective Internal Audit function.

It was agreed that this committee should act as an Audit Committee for

the Council and, inter alia, receive reports from Internal Audit.

4.0

INTRODUCTION

This report presents an Interim Internal Audit Report from the North

Yorkshire Audit Partnership for 2005/2006.

It covers work done in the

year to 31

st

December 2005.

5.0

POLICY CONTEXT

This report supports the Council’s Corporate Strategic Objective of

providing strong Community Leadership, by demonstrating a

commitment to local democracy and accountability.

Ryedale District Council

Y:\Sue Shuttleworth\Agendas\Overview & Scrutiny\2005.2006\9 February 2006\Final Reports\Appendix 3 - Interim Audit

Report.doc

Overview and Scrutiny Committee

Date

9

th

February 2006

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Page 2

6.0

REPORT

The Interim Report, detailed in appendix A, summarises the work

undertaken in the year to date.

The report provides an outline of the key issues emerging from the

audits undertaken in the first half year, together with any significant

comments from other audit areas.

Internal Audit continues to take a definite and constructive role in the

development of Risk Management and the Risk Register.

The Internal Audit Plan for 2006/07 has been drafted to take account of

the changing internal control environment at Ryedale DC and the

introduction of the revised International Auditing Standards, which

require, inter alia, some changes in emphasis.

The draft plan is currently with the client side for review and submission

to Senior Management Team, and will be brought to this committee for

approval in April.

The changes noted above are most pronounced in the audit of the

councils main financial systems which we are required by the Council’s

external auditors to review annually to enable a full statement of

assurance to be made for the SIC.

This requirement of the Audit

Commission is done by ourselves in co-operation with the Council’s

external auditors in order to optimise resources and equally to minimise

their annual audit fee.

Part of the revision is a requirement to have an

overall understanding of the entity and it’s environment, which requires

adequate documentation of the main systems (IAS 315).

The Audit Commission’s preferred method is for these systems to be

flowcharted.

A further change is necessary to meet their revised demand that the

internal audit covers the whole of the relevant financial accounting

period.

i.e. from 1

st

April to 31

st

March.

Previously we had an

established arrangement where we would provide full coverage by

starting our testing from the ‘end’ of the previous tested period and

therefore would over time cover the whole financial year.

However, as

stated we are now expected to provide tested coverage for the relevant

financial year.

This means that we will have to undertake

supplementary testing in Q1 each year to demonstrate full coverage in

addition to the main audit work.

It is not practicable to undertake the

full audit of all the main systems in Q1 for reasons of resources, and

the need of these main systems to be able to close down the year end

‘in peace’.

As the work has to be completed in Q1 to meet the SIC

reporting schedule, we are stuck between the proverbial rock and a

hard place!

Ultimately if we cannot have a sensible audit plan over a

reasonable period with sufficient audits (and days for those audits) then

the Audit Manager may have difficulty in providing a full assurance on

the systems of Internal Control for the SIC in the annual internal audit

report.

Y:\Sue Shuttleworth\Agendas\Overview & Scrutiny\2005.2006\9 February 2006\Final Reports\Appendix 3 - Interim Audit

Report.doc

Overview and Scrutiny Committee

Date

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th

February 2006

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7.0

FINANCIAL IMPLICATIONS

There are no financial implications, beyond the existing budget for

Internal Audit and any additional work in respect of Risk Management,

and special investigations.

8.0

RISK ASSESSMENT

Information,

none

Strategic,

That Internal Audit’s annual report contains an adverse assurance

opinion on the control systems of the Council.

Operational,

That systems will not be amended in the light of Internal Audit

reports and agreed recommendations.

People,

none

Reputation,

That the council does not take seriously the audit of it’s internal

control systems

Regulatory

None at present, though there is increasing pressure for regular

reporting of Internal Audit work to Audit Committees.

Financial.

none

9.0

CONCLUSION

The overriding conclusion in the Interim report is that, with limited

exceptions, the systems of Internal Control at Ryedale DC are, in the

opinion of Internal Audit, satisfactory, based on the audit work done

and knowledge of existing systems.

The draft Internal Audit Plan for 2006/07 and subsequent years is

developed through discussions with the Audit Manager, the Chief

Financial Officer, and the client manager.

It is considered that it

represents the best compromise between economy and effectiveness,

and will provide a sufficient level of assurance for the SIC and the

Council’s external auditors.

Once agreed by Senior Management

Team it will be brought to this committee for approval.

Background Papers: North Yorkshire Audit Partnership; Interim Internal

Audit Report Q3 2004/2005

Y:\Sue Shuttleworth\Agendas\Overview & Scrutiny\2005.2006\9 February 2006\Final Reports\Appendix 3 - Interim Audit

Report.doc

Overview and Scrutiny Committee

Date

9

th

February 2006

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Page 4

OFFICER CONTACT:

James Ingham; Audit Manager

North Yorkshire Audit Partnership

01723/232364

[e-mail]