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Internal Audit Performance Indicators - Performance Monitoring for

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Internal Audit Performance Indicators - Performance Monitoring for

    ITEM 8

    AUDIT COMMITTEE

    DATE 13 March 2007

    REPORT OF Head of Accounting and Financial

    Strategy

SUBJECT Internal Audit Performance Indicators

    Performance Monitoring for Quarter 3

    of 2006/07.

    STATUS Open

EXECUTIVE SUMMARY

This report outlines the performance of Internal Audit during Quarter 3 2006/07

    against a range of performance indicators as agreed by the Audit Committee in

    January 2006.

RISK ASSESSMENT

This report demonstrates compliance with the responsibility of the Audit

    Committee for monitoring the performance of Internal Audit, as documented in

    its Terms of Reference.

1. BACKGROUND AND ISSUES

The CIPFA Code of Practice for Internal Audit requires the creation of a

    performance management framework to demonstrate that the service is

    meeting its aims and objectives.

The framework should cover cost, efficiency and effectiveness (quality) of

    outputs.

Following the departure of the Head of Internal Audit a review is being

    undertaken regarding performance against the Audit Plan. Members will

    be verbally updated at the meeting.

Appendix 1 contains the performance details for the third quarter 2006/07

2. FINANCIAL IMPLICATIONS

None

3. LEGAL IMPLICATIONS

    There are no legal implications arising from this report but individual

    actions may require legal support and advice, which should be sought on a

    case by case approach, as appropriate.

4. HUMAN RESOURCES IMPLICATIONS

    There are no human resources implications arising from the report.

5. WARD IMPLICATIONS

    None

6. BACKGROUND PAPERS

    None

7. CONTACT OFFICER(S)

    Alan West Head of Accounting and Financial Strategy

    Telephone: Extension No. 3906

    ALAN WEST

    HEAD OF ACCOUNTING AND FINANCIAL STRATEGY

    APPENDIX 1

Departmental indicators:

     Target Outturn Variance Comment

    Economy

    Departmental cost Average or This indicator has been reported based on the Draft CIPFA

    compared to less = Benchmarking Report using the Cost per ?m Turnover figure. CIPFA ?1,212 ?1,569 ?357 Our figure appears to be higher than the average due to our

    benchmark use of Interim staff within the department. This is only a short

    term issue and actual figures will be reported as soon as they

    become available. Efficiency

    %age of Variance of 5% Our budgeted productive audit time is 64% - this appears to productive audit or less = be low due to the level of training which is currently being

    time compared to 59% to 64% 71% 7% undertaken within the department. This level will be budgeted increased in future years. productive time We have exceeded this target and indications are that this

    trend should continue into the final quarter. %age of annual Variance of 5% Not yet Systems are currently being put in place in order to monitor

    audit plan or less available this indicator and performance will be reported to future audit

    achieved committees.

    compared to

    planned

    achievement

     Target Outturn Variance Comment

    %age of draft 90% 57% (33%) For some of the audits completed there have been a number reports issued of issues identified which have required additional work to be within target completed and hence a delay in issue of the report

    Training and development of staff has led to some delays in

    the audit process.

    Several pieces of unplanned work have been undertaken

    during the quarter which have impacted on the time available

    and has caused delays in planned work due to staff

    availability.

    %age of final 90% 29% (61%) For some of the audit completed there have been a number

    reports issued of issues identified which have required additional work to be within target completed and hence a delay in issue of the report

    Training and development of staff has led to some delays in

    the audit process.

    Several pieces of unplanned work have been undertaken

    during the quarter which have impacted on the time available

    and has caused delays in planned work due to staff

    availability.

    %age of audits 90% 19% (71%) For some of the audit completed there have been a number

    completed within of issues identified which have required additional work to be time budget completed and hence additional time.

    Training and development of staff on audits has resulted in

    additional time being taken. Effectiveness

    %age of high 100% 100% N/A

    priority

    recommendations

    accepted

     Target Outturn Variance Comment

    %age of agreed 100% 0% (100%) One follow-up audit was completed during the quarter and of

    actions the four high risk exposure actions agreed in the original implemented report none had been implemented. %age of clients 100% 99% (1%) Only one unsatisfactory score was received, which was due satisfied with the to the delayed issue of the final report. audit process

    %age of qualified 100% 50% (50%) We are currently addressing this issue, with all members of

    staff within the staff undertaking professional qualifications as appropriate to department their post specification. Staff turnover Not to exceed 8% N/A One Principal Auditor left in December 2006.

    20%

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