The Deputy Chief Executive/Director of Finance reported that the Accounts and Audit Regulations 2006 specified that there should be a review of “the System of Internal Audit” conducted annually, and its results reviewed by a committee, as part of the Statement on Internal Control (SIC). He commented that the review of the system was more than a review of the Internal Audit Service and, as there was still no established good practice, prescribed action or even recommendations, it had been conducted on the basis of a self-assessment of compliance with the CIPFA Code of Practice for Internal Audit in Local Government, a Customer Satisfaction Survey, in accordance with the current advice available, the results of work undertaken to prepare the Annual Governance Statement and the findings of Audit Commission reviews.

The conclusion was that the ‘system of internal audit’ was performing effectively and that the Internal Audit Service was making a good contribution to the control environment of the Council.

In response to questions from Members as to whether it was considered best practice for a review of internal audit to be undertaken by the Director of Finance, the Chair proposed that a comparison exercise be undertaken of practice in other local authorities. In response to further comments with regard to the relationship between internal audit and elected Members, the Director agreed to supply to Members with the Committees terms of reference, together with the Internal Audit Manual.

Resolved – That the report be noted.