NORTH YORKSHIRE FIRE AND RESCUE AUTHORITY AUDIT AND PERFORMANCE REVIEW COMMITTEE 25 JUNE 2014 INTERNAL AUDIT PROGRESS REPORT TO 31 MAY 2014

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1 ITEM 5 NORTH YORKSHIRE FIRE AND RESCUE AUTHORITY AUDIT AND PERFORMANCE REVIEW COMMITTEE 25 JUNE 2014 INTERNAL AUDIT PROGRESS REPORT TO 31 MAY 2014 Report of the Head of Internal Audit 1.0 PURPOSE OF THE REPORT 1.1 The purpose of the report is inform members of the internal audit work completed since 1 April INTERNAL AUDIT PROGRESS REPORT 1.1. The Internal Audit plan for 2014/15 was agreed by the Audit and Performance Review Committee on 23 April The attached report provides details of the internal audit work undertaken by Veritau for the North Yorkshire Fire and Rescue Authority between 1 April 2014 and 31 May As would normally be expected at this point in the year, work has commenced on several topics from the 2014/15 audit plan. However none had progressed to report stage as at the end of May Recommendation 2.1 That the report be noted. Report prepared and presented by Roman Pronyszyn, Client Relationship Manager, Veritau Ltd. ROMAN PRONYSZYN Client Relationship Manager Veritau Limited County Hall Northallerton 10 June 2014

2 North Yorkshire Fire and Rescue Authority Internal Audit Progress Report Audits Completed to 31 May 2014 High Assurance 0 Substantial Assurance 0 Moderate Assurance 0 Limited Assurance 0 No Assurance 0 Audit Opinion N/A Client Relationship Manager: Head of Internal Audit: Circulation List: Roman Pronyszyn Max Thomas Members of the Audit and Performance Review Committee Director of Finance and Technical Services Date: 10th June 2014

3 Background 1 The work of internal audit is governed by the Accounts and Audit Regulations 2011 and the Public Sector Internal Audit Standards (PSIAS). In accordance with the PSIAS, the Head of Internal Audit is required to report, to those charged with governance, progress against the internal audit plan agreed by the Committee and to identify any emerging issues which need to be brought to the attention of the Committee. 2 The Internal Audit plan for 2014/15 was agreed by the Audit and Performance Review Committee on 23 April The total planned number of audit days for 2014/15 is This report details progress made in delivering that plan, and also provides an update on the work which was ongoing at the time we issued the 13/14 annual report of the Head of Internal Audit in April Internal Audit Progress 2014/15 3 At the end of the 2013/14 year, two additional reviews requested by the Director of Finance and Technical Services were ongoing. We have subsequently concluded on both pieces of work. 4. Work has commenced on two new pieces of audit work from the 14/15 plan. By the end of May 2014, neither of these audits had been completed. Further details are included in appendix 1. Roman Pronyszyn Client Relationship Manager Veritau Ltd 10 June 2014

4 Table of 2014/15 audit assignments to 31 May 2014 Appendix 1 Audit Status Assurance Level Fundamental / Material Systems audits Payroll and Personnel General Ledger Budget Management Cash and Bank Financial Internal Control Framework Completed No assurance level. The time was used to help complete the internal control environment work (see below) Key Financial system access and backup management. Business Assurance Business Risk Management Procurement and Contract Management Performance Management: Sickness Absence performance data Process Review In Progress In Progress Specific and Strategic Reviews Station Audits Pensions Information Governance Additional Reviews requested by Director of Finance and Technical Services (started in 2013/14) Undertaking a stage 3 disciplinary investigation Assessment of the impact on the internal control environment of the findings from the stage 3 disciplinary investigation. Completed Completed No opinion given on investigations No opinion given on investigations

5 Appendix 2 Audit Opinions and Priorities for Actions Audit Opinions Audit work is based on sampling transactions to test the operation of systems. It cannot guarantee the elimination of fraud or error. Our opinion is based on the risks we identify at the time of the audit. Our overall audit opinion is based on 5 grades of opinion, as set out below. Opinion Assessment of internal control High Assurance Substantial Assurance Moderate assurance Limited Assurance No Assurance Priorities for Actions Priority 1 Priority 2 Priority 3 Overall, very good management of risk. An effective control environment appears to be in operation. Overall, good management of risk with few weaknesses identified. An effective control environment is in operation but there is scope for further improvement in the areas identified. Overall, satisfactory management of risk with a number of weaknesses identified. An acceptable control environment is in operation but there are a number of improvements that could be made. Overall, poor management of risk with significant control weaknesses in key areas and major improvements required before an effective control environment will be in operation. Overall, there is a fundamental failure in control and risks are not being effectively managed. A number of key areas require substantial improvement to protect the system from error and abuse. A fundamental system weakness, which presents unacceptable risk to the system objectives and requires urgent attention by management A significant system weakness, whose impact or frequency presents risks to the system objectives, which needs to be addressed by management. The system objectives are not exposed to significant risk, but the issue merits attention by management.