Agenda item

The Head of Audit West presented the report.

He said that when B&NES and North Somerset had commenced joint working, it had been decided to review how the two authorities developed their audit plans. They had been using different, but similar processes. An attempt was made to identify best practice; what other authorities in the South West did was examined, and there had been liaison with CIPFA. This work had been going on over the past twelve months. Factors that had to be taken into account in developing a new model were a reduction in resources and changes in organisational models and the way services were delivered. It was clear that an increased rate of change meant that continuing to use the old bottom-up methodology was unsustainable. The new methodology was in essence the one that Audit West had recommended to other councils in the South West. It was called the Reasonable Assurance Model. The eight themes of the model were illustrated on page 35 of the agenda. The model was based on a strategic top-down view of what a good or excellent organisation should look like. It was considered that if all eight themes were managed and delivered effectively, the outcome should be a good council. Examples of the areas to be assessed for each theme were listed on pages 36 and 37 of the agenda. Some things identified had never previously been on the audit plan; the top-down approach had led to a reassessment of priorities, which had revealed that in the past too much time had been spent on areas where assurance was high and performance was strong. The new model should allow more time to be spent on areas where assurance was low and performance weak. Page 38 summarised the risk assessment process.

A Member asked how it could be established that the application of the new methodology had resulted in the development of a better audit plan and better outcomes. The Head of Audit West replied that it was his formal opinion that the current methodology was not sufficiently strategic and that the new methodology was more robust, better fitted the Council’s priorities and would deliver a much higher level of assurance. The Chair commented that if it was better, it should result in a reduced external audit fee.

Members debated the identification and management of risk and the role of the Section 151 Officer and the Audit Team. The Independent Member suggested that Councillors could draw on their knowledge of what was happening in the community to assist with this process. The Divisional Director – Business emphasised the statutory framework within which the Council had to work. Mr Henderson said that the external auditors looked at the Council’s annual governance report to ensure it adequately reflected the audit findings and those of any other reviewing body. He believed that the new methodology might help the external auditors obtain a better understanding of the Council.

In reply to a question from a Member the Head of Audit West explained that risk arising from a change in the nature or extent of a service would be classified as inherent risk.

RESOLVED to note the proposed draft audit plan methodology.