Agenda item

ACARAC (03-18) Paper 3 – IA update report

Item 4 - Internal Audit Annual Report 2017-18

ACARAC (03-18) Paper 4 – Internal Audit Annual Report and Opinion 2017-18

Item 5 - Internal Audit Fraud Report

ACARAC (03-18) Paper 5 – Internal Audit Fraud Report

Item 6 - Latest Internal Audit Report

ACARAC (03-18) Paper 6 – Assembly Members’ Allowances Audit Report

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4         

5         

5.1        Gareth Watts presented these four items to the Committee. His update report was noted and he outlined that his Annual Report provided an overall opinion for 2017-18 that ‘…the framework of governance, risk management and control is adequate and effective’ which was in line with the Public Sector Internal Audit Standards (PSIAS) descriptions. 

5.2     Gareth highlighted areas where his work had added value to the organisation, for example: establishing prioritisation criteria; review of the Investment and Resourcing Board which had resulted in changes to the governance structure; and the Capacity Review. He added that there was good general recognition of Internal Audit’s advisory role.

5.3     Gareth also informed the Committee of a trainee auditor within the Governance and Assurance team who should be qualified by the end of the year. This was welcomed by the Committee as necessary support for Gareth alongside the TIAA contract. In response to questions about approval of the work produced by TIAA, Gareth explained that, as the contract manager, he carried out quality assurance of all reports produced by TIAA. He added that Dave would sign off audits of areas within his remit, such as risk management and information governance.

5.4     The Committee commended the completion of all the recommendations by management, including the recommendations in relation to the audit on Key Financial Controls, which had been implemented before the report was presented to the Committee.

5.5     The Committee encouraged Gareth to place additional focus on the Business Directorate in future years and continue to ensure that his audit programme and independence was not compromised. 

5.6     Both Gareth and Dave provided assurance to the Committee by describing how, as outlined in the Internal Audit Charter update previously presented, independence was safeguarded. Dave added that during their weekly catch-ups Gareth’s work was discussed at length to ensure that there was no conflict of interest and that his independence was protected.     

5.7     Regarding the Annual Report on Fraud, Gareth confirmed that the report covered third party contractors and online card systems. During 2017-18 there were no reported cases of fraudulent activity brought to Gareth’s attention.

5.8     Subsequent to the implementation of the procurement card online system, and following the Key Financial Controls audit, Nia continued to ensure that Heads of Service approved purchases made using the cards to minimise any delays.  

5.9     Gareth’s final item was the Assembly Members’ Allowances audit report. His assurance rating was moderate, with all four recommendations being agreed. He was assured that the Members’ Business Support (MBS) team were following the correct processes and procedures, and the identified duplicate payments (made by human error) were rectified. He would be carrying out some additional work on value for money in relation to Members’ allowances in August.

5.10    In response to questions from the Committee about the sample used for this audit, Gareth explained that the sample was substantively tested. He added that the whole control framework had been evaluated and that his review took account of the automated and other checks in place as well as the knowledge of MBS staff. 

The Committee welcomed Gareth’s updates and the safeguards in place to protect his independence.