Minutes:
Consideration was given to a report introduced by Colin Earl, Assistant Director, Audit, ICT and Procurement, which referred to a review of Internal Audit which was commissioned by the Interim Director Finance and Corporate Services. The commissioning of the review was in part based on concerns about possible weaknesses within the Service and opportunities to re-focus and improve it, in line with current expectations for modern internal audit services and following comments made to the Audit Committee during the course of the year.
An action plan had been developed which showed the steps that were now being taken to address the issues raised. The report also confirmed to the Committee the need for certain improvements was already known and early actions had already been taken to ensure statutory requirements could be met. It was also noted that some actions had already been implemented whilst the review was being undertaken
Progress was to be monitored by the Chief Executive and reported to the Audit Committee at each of its meetings in the forthcoming year, which the Committee welcomed. A further external review was proposed to be commissioned in 2016/17 which would involve a further deep dive into audit practice, including reviewing audit files, provide assurance on evidence of improvement and make any further recommendations for development.
Further information was also provided on the reasons and scope of the review, measures already put in place, assurances about improved performance, proposed structure, recommendations moving forward and the actions and the process of monitoring progress.
This was further highlighted by the representative from Price Waterhouse Cooper by some of the findings from the forensic review that was undertaken and the need for a collective team effort to ensure the changes were delivered.
The Committee explored further and asked questions about the performance process, personal development reviews and how the issues were being addressed, the reasons for resistance from some team members and were advised that these and other actions to improve productivity were now being enforced and rigorously tested.
It was recognised that the capacity and performance were affected by the budget cuts, but the implementation of a mixed delivery arrangement model, which would include a core in-house resource supplemented by specialists as required, would ensure the Service could meet statutory requirements.
The representative from Price Waterhouse Cooper gave an update on the performance management of individual staff and the recognition for this process to be undertaken effectively, the probability of sharing services, the need for increased productivity and the need for enhancements to the capability of the team which would be tested out as part of the new delivery model.
There was strong emphasis on risk management. This was being embedded and would be reflected in the 2016/17 Audit Plan.
The profile of Internal Audit needed to be raised and there was some evidence that working practices were changing and moving in the right direction.
In response to queries about a different model of delivery, staff development and to prevent any staleness in working practices, it was pointed out that there was experience within the team combined with a programme of development. The service also had an apprentice and CIPFA trainee, so there was a mixture of experienced and new staff and insights. In terms of shared working practices across South Yorkshire this was an area that would be explored further to determine whether an approach could be adopted moving forward.
The Chief Executive confirmed discussions around shared services were taking place and again reassured the Committee that there would be an external scrutiny process providing support and challenge to the action plan moving forward, supplemented with the self-assessment, which was endorsed by KPMG.
Discussion ensued on the future delivery of the Internal Audit function and management, implementation and timescale of the changes recommended, included the strengthening of planned work. The Committee wished to see the recommendations and the new structure implemented as soon as possible and the level of challenge and risk managed appropriately.
It was also noted that information about the Internal Audit function would be cascaded through the M3 Manager Briefing Sessions and would be considered by the Senior Leadership Team on a regular basis.
Resolved:- (1) That the implications of the findings and conclusions from the Review of Internal Audit completed by Price Waterhouse Cooper be received and noted.
(2) That the action plan put in place to respond to the Review be supported and reviewed regularly.
(3) That the actions already taken and improvements made be supported.