Agenda item

Consider a report by Chief Officer Audit & Risk on proposed strategic direction to deliver Internal Audit assurance and support services to the Council, the Pension Fund, and the Health and Social Care Integration Joint Board, and on proposed Internal Audit annual plan 2020/21 to enable preparation of the statutory annual Internal Audit opinions on the adequacy of internal controls, governance, and risk management.  (Copies attached).

7.1       With reference to paragraph 10 of the Minute of 11 March 2019, there had been circulated copies of a report by the Chief Officer Audit and Risk seeking approval to the proposed Internal Audit Strategy and Internal Audit Plan 2020/21 to enable the preparation of the annual opinions on the adequacy of the overall control environment for Scottish Borders Council, Scottish Borders Pension Fund, and Scottish Borders Health and Social Care Integration Joint Board.  Ms Stacey explained that the Internal Audit function followed the professional standards as set out in Public Sector Internal Audit Standards (PSIAS) effective 1 April 2013 (updated 2017) which required the establishment of risk based plans to determine the priorities of the Internal Audit activity and that these plans were sufficiently flexible to reflect the changing risks and priorities pertaining to each organisation.  The Internal Audit function also included the requirement to provide senior management and members with independent and objective assurance which was designed to add value and improve the organisation’s operation.  In addition, the Chief Officer Audit and Risk was also required to prepare an Internal Audit annual opinion on the adequacy of the organisation’s overall control environment.  The background to the Internal Audit Strategy was set out in Appendix 1 to the report.  Ms Stacey explained that the Internal Audit Annual Plan 2020/21, detailed in Appendix 2, set out the range and breadth of audit areas and sufficient work within the audit programme of work to enable the Chief Officer Audit and Risk to prepare an Internal Audit annual opinion.  Key components of the audit planning process included a clear understanding of the organisation’s functions, associated risks, and assurance framework.  There were staff and other resources currently in place to achieve the Internal Audit Annual Plan 2020/21 and to meet its objectives. 

7.2       The Committee discussed the report and Ms Stacey advised that the Internal Audit Strategy outlined the strategic direction and reflected the Council’s decision on 26 September to reintegrate all of the services directly delivered by SB Cares into the Council from 1 December 2019.  This had an effect of reducing the percentage allocation of resources to non-SBC organisations and increased the percentage allocation of resources to the Council.  The proposed coverage in the Internal Audit Annual Plan would enable assurance to be provided to the Committee and Corporate Management Team though the plan would be considered to be flexible and would periodically be reviewed, and amended as required, to reflect any new arrangements or changing risks and priorities.  Members were advised that this was an evolving plan and recent discussions had been held with Service Directors which highlighted the flexibility required within the plan due to some of the issues that came up during the year which would be incorporated into the plan, whilst the core objective would be to increase the scope within the plan. 

            DECISION

AGREED:-

(a)       the Internal Audit Strategy as detailed in Appendix 1 to the report; and

(b)       the Internal Audit Annual Plan 2019/20 detailed in Appendix 2 to the report.