Members received the report of the Audit Manager which gave details of the latest peer review of Rother District Council’s Internal Audit Service.  It was a requirement of the Public Sector Internal Audit Standards that an external quality assessment of the Council’s Internal Audit Service be carried out at least once every five years, the last review being in April 2017.

When the standards first came into effect in April 2013, the Sussex Audit Group, which was comprised of Audit Managers from the local authorities in East and West Sussex, decided to carry out peer reviews rather than external assessments and to carry out this work on a reciprocal basis to avoid any financial cost. This work was planned to ensure that neighbouring authorities did not audit each other.  A similar approach was adopted this time with a reciprocal arrangement between Hastings Borough Council (since replaced by Chichester District Council), Lewes District and Eastbourne Borough Councils, Wealden District Council, and Rother District Council.

A full review of Rother’s Internal Audit Service was carried out by the Chief Internal Auditor at Lewes District and Eastbourne Borough Councils, hereafter referred to as “the Assessor”, using a framework first devised by the London Borough Councils.

The first part of the peer review consisted of a detailed examination of Internal Audit’s policies and procedures and was designed to assess the section’s purpose and positioning, its structure and resources, and its working methods against accepted good practice. The second part of the process involved the Audit Manager (a) reviewing the findings in the Assessor’s draft report and responding to any recommendations for improvement, and (b) adding his own assessment of how well the Internal Audit team was performing, taking into account the comments made in the customer feedback section.

The Assessor’s final report was attached at Appendix A to the report.  The outcome of the review was a good one, with no significant issues found. The overall finding was that “Rother’s Internal Audit function “generally conforms” with the standards”.  The peer review made a total of six recommendations (referred to as ‘remedial actions’ in the report) and with the exception of one, all of the points made in the report had been accepted and would be implemented.  Two of the recommendations had already been addressed prior to the report being issued.

A revised Quality Assurance and Improvement Programme action plan had been produced to incorporate actions to be taken following the peer review, which was attached at Appendix B to the report.

Members had the opportunity to ask questions and the following points were noted during the discussions:

•           the Chair had now had the opportunity to meet with the Audit Manager to discuss his concerns about how the audit function was viewed and would be meeting the Internal Audit Team in due course;

•           the Council was going through a cultural shift and there would be a greater focus on Performance Management and the monitoring of recommendations from Internal Audit; and

•           Members agreed that the Internal Audit Peer Review was a very good report, which highlighted the excellent work of the Internal Audit function and its importance to the Council.

RESOLVED: That:

1)         the information in the report be noted; and

2)         the excellent work of the Internal Audit function and its importance to the Council be recognised.