Internal Audit
The East Kent Audit Partnership (EKAP) is a shared service between Canterbury City Council, Dover District Council, Folkestone & Hythe District Council and Thanet District Council, it was formed in 2007.
Why are we here?
The Council’s Section 151 Officer, (the Senior Officer in charge of the Council’s financial arrangements), has a duty to ensure that there is a continuous review of the Council’s financial arrangements, ensuring that the appropriate records are maintained and that the Council acts legally. There is therefore a statutory requirement to have an internal audit service.
Part of the function of Internal Audit is to provide assurance that the Council’s arrangements are subject to an appropriate level of internal control, and to report any risks, weaknesses in the internal control system, risk management or governance frameworks and any financial loss or irregularity to the Section 151 Officer. The four s.151 Officers from each partner council, together form the ‘Client Officer Group’, which governs the EKAP. They meet once a year to maintain strategic oversight of the partnership.
What do we do?
Internal audit is an independent appraisal function, which seeks to provide management with a level of assurance on the adequacy of internal controls and of risks to the Council’s functions and systems.
- We advise management on control.
- We assist the organisation to achieve its objectives by offering advice on operational processes and procedures.
- We alert management to any significant weaknesses or irregularities.
- We provide assurance on the reliability and integrity of systems, risk management and corporate governance frameworks and the extent to which they are adequately and effectively controlled.
- We may review any irregularity.
This is achieved through completing audit reviews, which are scheduled through a risk based work programme. Internal Audit has an agreed Audit Mandate and Charter which provides the authority to review any matter at any time and authorises the request of supporting documentation and explanations from any officer of the Council. However, we rarely call unannounced.
The Annual Report (reported each June/July) is a backward look at the year and summarises the outcomes form the audit reviews undertaken and the progress report (follow up) activity. The overall opinion / conclusion from the Annual Report is a key source of assurance for the Council to reflect in the Annual Governance Statement.
What is an audit committee?
The Council’s Audit Committee is comprised of members of the Council. The purpose of the Committee is to provide independent assurance of the adequacy of the Authority’s risk management framework and the associated control environment, independent scrutiny of the authority’s financial and non-financial performance to the extent that it affects the authority’s exposure to risk and weakens the control environment, and to oversee the financial reporting process.
The terms of reference of the Committee are detailed within the Council’s Constitution, copies of agendas, reports and minutes are available on the website. Internal Audit presents an update report detailing the findings for the period to each quarterly meeting of the Committee.
Who audits the Auditors?
Each council is required to review the effectiveness of their system of internal control including Internal Audit, on an annual basis and report their findings to the Audit Committee with the annual accounts in the Annual Governance Statement.
Once every five years the Internal Audit function undergoes an External Quality Assessment which evaluates how well the function complies with professional standards.
Grant Thornton UK LLP are the external auditors appointed to each council. As part of their independent testing, they will also review the work of Internal Audit, and where appropriate may place reliance on that work to support both their Value for Money review and their approval of the Council’s accounts and the financial processes that are in place.
What's the difference between internal and external audit?
Internal and External Audit liaise to ensure that there is no duplication in the work that they plan to cover. Where possible they rely on each other’s work to ensure maximum coverage from the resources available. The essential difference in their approach is that Internal Audit are looking to provide assurance on the systems and processes used by management to reduce risk, and External Audit are testing that transactions are correctly treated and conform to Standards, to be able to state that the Council’s accounts are “fairly presented”.
Additional information on Grant Thornton UK LLP can be found on their website www.grantthornton.co.uk.