Audit Progress Committee The role of the audit committees in bringing added value to Internal Audit IAS Conference 2014 - Adding value through Internal Audit 1 Experience as External Member Corporation of London: local authority Department of Energy and Climate Change: government department Nuclear Decommissioning Authority: independent authority Debt Management Office: UK Agency Audit Progress Committee 2 1. The Role of Audit Committees Why? Who? What? When ? 2. The Added Value of Audit Committees Generally To Internal Audit The role of Audit Committees in providing added value 3 cipfa.org Why have an Audit Committee? To: Provide assurance on an organisations financial management, control and risk Improve accountability Provide focus on governance, risk management and good financial controls Provide specialist consideration of audit matters Bring independence and scrutiny to Internal and External Audit Work APC Purpose: Similar but emphasis on Internal Audit and controls in Directorate Generals 4 cipfa.org Who is involved in Audit Committees? All have non-executive/external members but structures are different UK Government Departments: 3 to 4 external members with one as the chair who sits on main Board Corporation of London: 7 elected members, one of whom is Chair and all sit on main Council plus 2 external members Audit Progress Committee: 7 Commissioners plus 2 external members 5 cipfa.org What does the Audit Committee do? Approve the Internal Audit Plan Approve the Internal Audit Budget and Resource Plan Receive reports on progress from Chief Internal Auditor including performance measures Approve decisions on appointment of Chief Internal Audit Executive Review and advise on Internal Audit reports Review the key risks and risk assessment process Approve external audit plan Review external audit findings 6 cipfa.org Performance Measures for Internal Audit: Examples % of Audit Plan completed: Target 90% % of Recommendations fully implemented: Target 75% Timely Production of Draft Report: Target 80% Timely agreement and issue of Draft Reports: Target 80% Customer Satisfaction: Target 90% % of Audit Staff with professional qualification: Target 75% Plus: Peer Review and Benchmarking 7 cipfa.org 7 Commissioners and chaired by one of the Commissioners 2 external members with financial management and audit expertise Scrutinise and endorse the Internal Audit Plan Review the content, validity and clarity of Internal Audit reports Follow up implementation of recommendations Summary of Audit Progress Committee 8 cipfa.org When do Audit Committees work? For committees there is variation Debt Management Office 4 times a year quarterly Department of Energy and Climate Change and Corporation of London: 6 times a year and 2 close together for accounts review Audit Progress Committee: -4 Main Meetings a year -2-3 Preparatory meetings per main meeting 9 cipfa.org What is the added value of Audit Committees? 10 cipfa.org Oversee its independence Support effectiveness of the Internal Audit Process Promote effective use of internal audit in the assurance framework Provide forum for open debate and mature questioning Demonstrate its standing in the organisation What is the added value of Audit Committees for Internal Audit? 11 cipfa.org To ensure that Internal Audit has the necessary support in the Commission Auditee takes the audit findings seriously Auditee provides appropriate action plan Auditee follows up recommendations The Committee provides an important link with the Commission itself What is the added value of APC for Internal Audit? 12