Authority and Basis of Operation
The Internal Audit function of a local authority arises from two principal pieces of legislation:
- Section 151 of the Local Government Act 1972 requires every local authority to make arrangements for the proper administration of its financial affairs and to ensure that one of the officers has responsibility for the administration of those affairs.
- Section 5 of the Accounts and Audit Regulations 1996 (England and Wales) states that "a relevant body shall maintain an adequate and effective system of internal audit of their accounting records and control systems".
Internal Audit is also governed by policies, procedures, rules and regulations established by us. These include standing orders, schemes of delegation, financial regulations, conditions of service, an anti-fraud, theft,corruption and bribery strategy, fraud prevention procedures and codes of conduct, among others. Similarly, internal audit takes due cognisance of external bodies, including CIPFA, the Audit Commission and the Local Government Association (see web links), together with all legislation affecting us.
To meet these requirements, Internal Audit is carried out within the Council by the work of an 'in-house' Senior Auditor and an external contractor which undertakes the audit of specific revenue systems (ie Council Tax, Benefits and National Non-Domestic Rates) and our IT systems. Both report directly to the Director of Finance ('the responsible officer').
Internal Audit work is undertaken in accordance with the Audit Plan, which is approved by our Management Team, the District Auditor, and Scrutiny Committee each year.
In order to undertake its function effectively, Internal Audit has unrestricted access to all our records (whether manual or computerised), cash, stores and other property, and may enter our property, or land, to obtain explanations. Such access is granted on demand and need not be subject to prior notice, and also extends to partner bodies or external contractors working on behalf of us.
To promote independence and objectivity, which are key requirements of an effective internal audit service, audit neither 'owns' any system under audit, or is given any responsibility for any aspect of work subject to audit.
Objectives of the Function
The objectives of Internal Audit are to:
- independently review and appraise systems of control throughout the Council;
- ascertain the extent of compliance with procedures, policies, regulations and legislation;
- provide reassurance to management that their agreed policies are being carried out effectively;
- facilitate good practice in managing risks;
- recommend improvements in control, performance and productivity in achieving corporate objectives;
- review the value for money processes, Best Value arrangements, systems and units within the Council;
- work in partnership with the external auditors;
- identify fraud as a consequence of its reviews and to deter crime.
Relevant Information
For further information:
