Agenda item

Governance and Audit Committee Self Assessment

The Chartered Institute of Public Finance and Accountancy (CIPFA) document on “audit committees – practical guidance for local authorities and police” sets out the guidance in the function and operation of audit committees. It is good practice for audit committees to complete a regular self-assessment exercise, to be satisfied that the Committee is performing effectively (report of the Head of Internal Audit is enclosed).

 

Minutes:

The Committee noted that the Chartered Institute for Public Finance and Accountancy (CIPFA) document on “audit committees – practical guidance for local authorities and police” set out the guidance on the function and operation of audit committees. It represented CIPFA’s view of best practice and incorporated the position statement previously issued. The guidance stated “the purpose of an audit committee is to provide those charged with governance independent assurance on the adequacy of the risk management framework, the internal control environment and the integrity of the financial reporting and annual governance processes”.

 

The Section 151 Officer had overarching responsibility for discharging the requirement for sound financial management, and to be truly effective required an audit committee to provide support and challenge.

 

Good audit committees were characterised by; balanced, objective, independent knowledgeable and properly trained Members, a membership that was supportive of good governance principles, a strong independently minded chair, an unbiased attitude and the ability to challenge when required.

 

It was therefore good practice for audit committees to complete a regular self-assessment exercise against a checklist, to be satisfied that the Committee is performing effectively.

 

In addition, the Public Sector Internal Audit Standards also called for the audit committee to assess their remit and effectiveness, in relation to Purpose, Authority and Responsibility, to facilitate the work of the Committee.

 

The Governance and Audit Committee had regularly carried out the self-assessment exercise in the past and had taken action where necessary to ensure full compliance with best practice.

 

The updated guidance provided two tools against which the Committee could assess itself, the first (self-assessment of good practice) supported an assessment against recommended best practice to inform and support the Committee. The second assessment tool (evaluating the effectiveness if the audit committee) helped Committee Members to consider where it was most effective and where there may be scope to do more. To be effective the Committee should be able to identify evidence of its impact or influence lined to specific improvements.

 

At its meeting on 12 September 2017, the Committee had reviewed the assessment tools and concluded on action points that were required.  The results were attached at Appendix 1 to the report, and members were asked to review and ensure that this was still an accurate reflection.

 

Members attention was drawn to the following action points agreed as part of last year’s review:

 

·         Promoting the principles of good governance and their application to decision making – it would be beneficial to have wider managers at meetings, as appropriate. 

o   The Committee responded that managers had been called into meetings when required, and that this had worked well.

 

·         Helping the authority to implement the values of good governance, including effective arrangements for countering fraud and corruption risks – fraud policies needed updating and taking back to Committee for approval.  Training to then be provided to members on the Council’s fraud policies.

o   The Committee responded that fraud policies had been considered.  With regard to training, the Chairman stated that he had attended a forum which covered risk management and fraud, and that all Committee members had the opportunity to attend training when advised.

 

With regard to question 18 of the good practice questions – has the Committee obtained feedback on its performance from those interacting with the committee or relying on its work’, members questioned how this feedback could be  obtained and how this area could be addressed in the future.  The Head of Internal Audit advised that it was not unusual for there to be no tangible evidence for this question.  By virtue of it’s Terms of Reference, the Committee was trusted to carry out its work, and it had a lot of decision making powers.  If no negative feedback was received, it could be assumed that there were no issues with what it was doing.  Other areas of evidence that could be used to satisfy the questions was that the Committee’s minutes were approved at full Council as part of the governance process, and that the Authority produced an Annual Report on its work, which members were advised would be used by the Internal Auditor as a suggestion for other authorities.

 

With regard to training, the Chairman commented that he attended other meetings of Governance and Audit at other authorities, and that other members of the Committee were also able to do this.  The Head of Internal Audit commented that as District Council elections were due to be taking place in May next year, that any internal Governance and Audit training should be re-visited as part of the training programme following these elections.

 

AGREED:

 

a)    That the Committee’s self-assessment, against best practice at Appendix 1 to the report, be agreed; and

 

b)    That Governance and Audit training be considered as part of the training programme following District Council elections in May 2019.

Supporting documents: