1.      INTRODUCTION AND BACKGROUND

1.1    Internal audit is a required service under Regulation 5 of the Accounts and Audit Regulations 2015.  The principle objective of internal audit, under that Regulation is to:

         … undertake [audit work] to evaluate the effectiveness of […] risk management, control and governance processes, taking in account public sector internal auditing standards and guidance.

1.1        As those charged with overseeing Governance, the Terms of Reference for this Committee require it to:

…consider the Head of Internal Audit Partnership’s annual report and opinion, and a summary of Internal Audit activity (actual and proposed) and the level of assurance it can give over the Council’s corporate governance arrangements..

1.2        The overall scope of the Council’s audit service – which is delivered as part of a four way partnership with Swale, Ashford and Tunbridge Wells– is set out in the Audit Charter and Annual Plan.  The Plan for 2017/18 was agreed by this Committee in March 2017.  This Committee also received an interim update on progress to date in November 2017.

1.3        We have completed the work set out in the plan, subject to modifications as described in accordance with PSIAS.  Where there is work outstanding at the time of writing, it is sufficiently progressed that the Head of Audit Partnership is satisfied its conclusions will not materially affect the Head of Audit Opinion.  The final conclusions of any work outstanding will be reported verbally at the meeting (if available) and/or included within the first interim update of 2018/19.

2         AVAILABLE OPTIONS

2.1        The role of this Committee includes considering the Annual Report of internal audit as a required part of its purpose.  We recommend no alternative course of action.

3         PREFERRED OPTION AND REASONS FOR RECOMMENDATIONS

3.1    The Head of Audit Partnership is satisfied the Council can place assurance on the system of control in operation during 2017/18.  Furthermore he is satisfied that the corporate governance framework complies in all significant respects with the best practice guidance issued by CIPFA/SOLACE.  Finally, he is satisfied that the Council’s risk management processes are effective.  We ask the Committee to note these opinions.

3.1        Please see the appendix for the full Annual Report for 2017/18 which includes a summary of all work conducted to support the opinion and confirms the independence and effectiveness of the internal audit service.

4         RISK

4.1   This report is presented for information only and has no risk management implications.

5         CONSULTATION RESULTS AND PREVIOUS COMMITTEE FEEDBACK

5.1        All findings and recommendations identified within reviews are consulted on with the appropriate Head of Service and action plans are agreed with management to implement recommendations.  The headline messages within the report are as discussed with the s151 Officer across the year, and have been communicated to the s151 Officer to assist with his preparation of the Council’s Annual Governance Statement.  The attached report is adapted for comments received.

6         NEXT STEPS: COMMUNICATION AND IMPLEMENTATION OF THE DECISION

6.1     Not applicable.

7         CROSS-CUTTING ISSUES AND IMPLICATIONS

This report is provided for information rather than decision and consequently raises no new issues or implications.

8         REPORT APPENDICES

The following documents are to be published with this report and form part of the report:

·         Appendix 1: Annual Internal Audit Report & Opinion 2017/18

9         BACKGROUND PAPERS

Full reports which inform the audit projects summarised within this annual report are available on request.