4. IA Annual Plan 2024-25 (AEPB) FINAL
North Ayrshire Council · 23 August 2024
Back to Ayrshire Economic Partnership Board — 23 August 2024 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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AYRSHIRE ECONOMIC PARTNERSHIP BOARD MEETING – 23 AUGUST 2024 REPORT BY CHIEF AUDITOR, EAST AYRSHIRE COUNCIL SUBJECT: AGD INTERNAL AUDIT PLAN 2024/25 PURPOSE OF REPORT 1. The purpose of this report is provide for noting an annual consolidated internal audit plan in line with obligations laid out in the Ayrshire Growth Deal (AGD) Governance Document (Appendix 1). RECOMMENDATIONS 2. The Partnership Board is asked to: (i) Consider and endorse the Internal Audit Annual Plan 2024/25. (ii) Recommend the report for consideration by the Ayrshire Economic Joint Committee (AEJC), noting the statutory context at paragraphs 3 and 6. BACKGROUND REQUIREMENT TO HAVE AN INTERNAL AUDIT FUNCTION 3. The Local Authority Accounts (Scotland) Regulations 2014 require local authorities to operate a professional and objective internal auditing service; in practice this means that the internal audit function is operationally independent; free from limitations on the scope of its work and that the Chief Auditor reports independently with no undue influence. The internal audit service must be provided in accordance with recognised standards and practices which are currently those set out in the Public Sector Internal Audit Standards (PSIAS). It is the responsibility of each authority to ensure compliance with the PSIAS. CONTROL ENVIRONMENT WITHIN COUNCILS 4. It is primarily the responsibility of management to establish an appropriate and sound system of internal controls, and to monitor the continuing effectiveness of that system. 5. Internal Audit reports are presented to senior management and include recommendations that, when implemented, will further improve the control environment.
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MAIN REPORT INTERNAL AUDIT PLANNING 6. From 2021/22 each Council, in line with PSIAS requirements, carries out a risk assessment and decides how many days are to be allocated to the AGD in year. These days are approved as part of each Council’s Annual Internal Audit Plan by the relevant audit committee in line with the PSIAS. The approved days are consolidated and brought to the AEPB and AEJC. The Plans are informed by the Audit Scotland publications listed in Background Papers. The 2024/25 Plan is attached at Appendix 2. REPORTING ARRANGEMENTS FOR INDIVIDUAL INTERNAL AUDIT ASSIGNMENTS 7. On 13 September 2021 the AEJC agreed that outcomes from individual internal audit assignments will be shared with the established readership in the Council which carried out the work, the East Ayrshire Council Chief Auditor and members of the AEJC and other relevant forums in line with any revisions to governance arrangements agreed by the AEJC. Through the PMO, assignment reports are placed within an “audit room” on the AGD portal. A summary of this work is included in the AGD Internal Audit Annual Report for consideration by the AEPB and AEJC. IMPLICATIONS 8. Eight implications have been considered in the preparation of this report. Implications Yes No Paragraph number in report 1. Policy/Strategic Planning No 2.Governance No 3. Human Resources No 4. Equality and Fairer Scotland Duty No 5. Financial No 6. Risk Yes Para 9 7. Community Wealth Building No 8. Net Zero No RISK IMPLICATIONS (INTERNAL AUDIT RESOURCES) 9. Each year there is the ongoing risk of significant unplanned work emerging in each Council, planned resources for AGD work not being available and work not being carried out to an acceptable standard which would compromise the ability to complete sufficient work to produce an Annual Internal Audit Opinion for the AGD; local mitigations should offset the potential impact of these risks. APPENDICES 10. The report is supported by two appendices: • Appendix 1: AGD Governance Document (Internal Audit Extract)
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• Appendix 2: AGD Consolidated Internal Audit Annual Plan 2024/25 Eilidh Mackay Chief Auditor, East Ayrshire Council 15 August 2024 BACKGROUND PAPERS 1. Public Sector Internal Audit Standards (PSIAS) (3rd edition March 2017) 2. Chartered Institute of Public Finance and Accountancy (CIPFA) Local Government Application Note for the United Kingdom Public Sector Internal Audit Standards (2nd edition February 2019) 3. Chartered Institute of Public Finance & Accountancy (CIPFA), CIPFA Statement on the Role of the Head of Internal Audit in Public Service Organisations (2nd edition April 2019) 4. Audit Scotland, Scotland’s City Region & Growth Deals (January 2020) 5. Audit Scotland, Scotland’s City Region & Growth Deals Follow-Up (August 2023) 6. AGD Governance Document V15 Deal Documents - All Documents (south-ayrshire.gov.uk) Person to Contact: Eilidh Mackay, Chief Auditor, East Ayrshire Council Email: eilidh.mackay@east-ayrshire.gov.uk Implementation Officers: Eilidh Mackay, Chief Auditor, East Ayrshire Council John McCallum, Senior Manager (Audit, Fraud, Safety & Risk), North Ayrshire Council Email: johnmccallum@north-ayrshire.gov.uk Cecilia McGhee, Chief Internal Auditor, South Ayrshire Council Email: Cecilia.McGhee2@south-ayrshire.gov.uk
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Appendix 1 AGD GOVERNANCE DOCUMENT V15 (INTERNAL AUDIT EXTRACT) 2.16 The Accountable Body’s Chief Auditor will be appointed as Chief Auditor for the AGD to coordinate Internal Audit activity. 2.17 Each partner will be responsible for allocating Internal Audit resources as required for local AGD activities. The Accountable Body’s Internal Audit section will reserve the right to review programme and project activities as required and request information from all partners regarding these activities. 2.18 Each year a consolidated Internal Audit Plan will be presented to the AEJC and AREP having been prepared following: • consultation with relevant senior officers of the AGD PMO; • consideration of the risks affecting the AGD at programme and project level; • consideration of both internal and external factors affecting the AGD; • consideration of previous internal and external audit findings; • consideration of all of these elements which will inform Public Sector Internal Audit Standards (PSIAS) based risk assessments carried out locally by the Accountable Body and Partner Authorities; and • any relevant items subsequently included in local Internal Audit plans approved by each partner’s audit committee in line with PSIAS obligations will be reflected in the consolidated AGD Internal Audit Plan. 2.19 All AGD Internal Audit work will be carried out in line with the PSIAS with individual Internal Audit assignment reports presented to the AEJC and AREP for noting. 2.20 The relevant annual Internal Audit Report will be submitted to both UK and Scottish Governments upon completion. The AEJC and AREP will be advised of the overall outcomes from Internal Audit work in an annual Internal Audit Report the timing of which is anticipated to align with the annual accounts timetable and will be reported to the AEJC and AREP for noting in line with PSIAS requirements. The Annual Internal Audit Report will include a summary of AGD internal audit work in year by all partners, an annual opinion for the AGD and for further assurance will also include the authority–wide Annual Internal Audit opinions prepared by each partner. 2.21 Actions arising from Internal Audits will be followed up by the relevant Internal Audit team in line with established arrangements in that authority and these follow-up reports will be presented to the AEJC and AREP for noting. 2.22 Further audit, advisory consultancy or investigative work may be requested by the AEJC and AREP. 2.23 The Accountable Body’s Chief Auditor will liaise with partner Chief Auditors through established arrangements.
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Appendix 2 AGD CONSOLIDATED INTERNAL AUDIT ANNUAL PLAN 2024/25 Council Internal Audit plans agreed in line with PSIAS Anticipated Assignments Indicative Days East Ayrshire 18 April 2024 AGD Advisory as required based on risk assessment. Anticipated to include: • Chief Auditor support to Joint Committee • Audit Manager & Senior Auditor “critical friend” support to PMO • Support to scheduled review of Governance Document V15 15* North Ayrshire 21 March 2024 As required based on operational risk. 20 South Ayrshire 20 March 2024 Ayrshire Growth Deal - Follow Up of actions from 2023/24 Assignment (if required). Review of contract management within the AGD programme. 20 Total days 55 *estimated potential allocation within a wider Small Advisory contingency of 40 days agreed by committee.