Item 11 - Review of Internal Audit Charter
West Dunbartonshire Council · 11 June 2025
Back to Audit Committee — 11 June 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
WEST DUNBARTONSHIRE COUNCIL Report by Chief Officer - Resources Audit Committee: 11 June 2025 Subject: Review of Internal Audit Charter 1. Purpose This report provides the Audit Committee with the updated Internal Audit Charter (the Charter) for approval. The Charter defines the terms of reference for the Council’s Internal Audit function to carry out its role to enable the Chief Audit Executive to prepare the annual Internal Audit opinion on the adequacy of the Council’s overall control environment. 2. Recommendations 2.1 It is recommended that Members approve the revised Internal Audit Charter. 3. Background 3.1 The Local Authority Accounts (Scotland) Regulations 2014 require a local authority to operate a professional and objective internal auditing service which is provided in accordance with recognised internal auditing standards and practices. These standards and practices are set out in the Global Internal Audit Standards (UK public sector) and require Internal Audit to have suitable operational independence from the organisation. 3.2 The 2014 Regulations provide the mandate for the Internal Audit function to operate in West Dunbartonshire Council alongside relevant sections in the Council’s Local Code of Good Governance and Financial Regulations. 3.3 The Global Internal Audit Standards state that the Chief Audit Executive must develop and maintain an Internal Audit Charter that specifies, at a minimum, the following: • Purpose of Internal Auditing. • Commitment to adhering to the Global Internal Audit Standards. • Mandate, including scope and types of services to be provided, and the Audit Committee’s responsibilities and expectations regarding management’s support of the Internal Audit function. • Organisational position and reporting relationships. Page 1 Item 11
Page 2
3.4 The Chief Audit Executive must periodically review the Internal Audit Charter and present it to ‘senior management’ (Corporate Management Team) and the ‘board’ (Audit Committee) for approval to confirm that it accurately reflects their understanding and expectations of the Internal Audit function. 4. Main Issues 4.1 The revised Internal Audit Charter at Appendix 1 to this report expands upon the regulatory and policy framework outlined in paragraphs 3.1 and 3.2. The Institute of Internal Auditor’s model Internal Audit Charter format has been used as it has been designed to conform with the Global Internal Audit Standards, whilst customising it to address the unique organisational aspects that affect the Internal Audit Mandate, Scope and Internal Audit assurance and advisory services within UK Local Government. 4.2 The main significant changes to the Internal Audit Charter since its previous approval by the Audit Committee on 3 May 2023, reflect the following: Section Amendment Purpose Set out essential conditions to fulfil the purpose of internal auditing as set out in Global Internal Audit Standards Domain I Mandate Update to reference compliance with Global Internal Audit Standards. The legal requirements i.e. Local Authority Accounts (Scotland) Regulations 2014 have been added Independence, Organisational Position and Reporting Relationships Clarify the Council’s Internal Audit function’s position within the organisation, including the nature of the CAE’s functional reporting relationship with the Audit Committee Audit Committee Oversight Relevant updates by standard setters to the role of the Audit Committee in respect of the Internal Audit function Chief Audit Executive Roles and Responsibilities Explicit references to cover the arrangements for appropriate resourcing Objectivity Inclusion of arrangements for avoiding conflicts of interest if Internal Audit undertakes non-audit activities Scope and Types of Internal Audit Services Defines the types of Internal Audit activity, nature and scope of advisory and consultancy services, and scope of Internal Audit assurance engagements Page 2
Page 3
5. People Implications 5.1 There are no personnel issues. 6. Financial and Procurement Implications 6.1 The Internal Audit function must have sufficient staff and other resources to enable it to fulfil its mandate and to carry out the objectives of the Internal Audit Charter. This is to deliver a programme of independent and objective audit assurance work alongside other available sources of assurance to enable the Chief Audit Executive to prepare Internal Audit assurance and annual opinions on the adequacy of the Council’s overall control environment. The Internal Audit function’s resources are set out in the Internal Audit Strategy. 7. Risk Analysis 7.1 The Local Authority Accounts (Scotland) Regulations 2014, that require a local authority to operate a professional and objective internal auditing service in accordance with recognised standards and practices, provide the mandate for the Internal Audit function to operate in West Dunbartonshire Council along with relevant sections in the Council’s Local Code of Corporate Governance and Financial Regulations. This Internal Audit Charter expands upon that framework. 7.2 Approval of the Internal Audit Charter (Appendix 1), as recommended in this report, will ensure that the Council’s Internal Audit function is tasked to carry out its role in accordance with the Global Internal Audit Standards (UK public sector) effective from 1 April 2025. 8. Equalities Impact Assessment (EIA) 8.1 There are no issues. 9. Consultation 9.1 This report has been subject to consultation with appropriate Chief Officers. 10. Strategic Assessment 10.1 This report helps ensure strong governance and will help support delivery of the Council Plan, and in particular priority 4: Inclusive and Adaptable, with the Council seeking to provide high quality and adaptable services that deliver value for money. ......................................... Laurence Slavin Chief Officer - Resources Date: 11 June 2025 _________________________________________________ Page 3
Page 4
Person to Contact: Andi Priestman, Shared Service Manager – Audit & Fraud Email: andi.priestman@west-dunbarton.gov.uk Appendices: Appendix 1 – Internal Audit Charter Background Papers: Report to Audit and Performance Review Committee on 3 May 2023 (Internal Audit Charter Update) Global Internal Audit Standards (UK Public Sector) Wards Affected: All Wards Page 4