Joint Independent Audit Committee Annual Report 201 7/2018
Joint Independent Audit CommitteeAnnual Report 2017/20181
To the Police, Crime and Victims’ Commissioner and the Chief Constable of DurhamConstabularyJoint Independent Audit Committee Annual Report 2017/18IntroductionThe Chartered Institute of Public Finance and Accountancy (CIPFA) recommends that AuditCommittees report on their work and assess their performance. This is the report of the JointIndependent Audit Committee.The Joint Independent Audit Committee was established in April 2013 to independently review andadvise on the effectiveness of the Police, Crime and Victims’ Commissioner (PCVC) and ChiefConstable’s governance, risk management and control frameworks, financial reporting and annualgovernance processes, internal and external audit, and treasury management. This report sets outhow these responsibilities were met in 2017/18.The Committee members, appointed through a recruitment process are Elsie Davies (Chair), JenniferFlynn, Roger Humphries, and Derek Shingleton. Two additional members selected by theirauthorities are Cllr Edward Bell from Durham and the late Cllr David Regan from Darlington. TheCommittee is accountable but independent of the PCVC and the Chief Constable. CIPFA sets criteriafor this accountability which forms the basis of this report: Has the committee fulfilled its agreed terms of reference?Has the committee adopted recommended practice?Have the development needs of the committee members been assessed and are committeemembers accessing training opportunities?Has the committee assessed its own effectiveness or been the subject of a review?What impact has the committee had on the improvement of governance, risk and control?The report will also consider: Progress in addressing last year’s action plan detailed in the Ethical Standards Review.Has the committee fulfilled its terms of reference?Terms of reference have regard to CIPFA guidance and are reviewed regularly.Details can be found on the PCVC website and are summarised below:Governance, risk and controlInternal auditCorporate governance arrangements, Annual GovernanceStatements, arrangements to secure value for money, assuranceframework, risk management arrangements, internal controls, andfraud risks.There is a process in place detailing the requirements forMembers of the Joint Independent Audit Committee to declareany conflicts of interest, or any offers of gifts and hospitality whichmay be received.Internal audit charter and resources, audit plan, performance ofthe internal audit service and its independence, Head of Internal2
Audit’s annual report and opinion, progress of internal auditactivity against the audit plan, internal audit reports.External auditScope and depth of external audit work, its independence andvalue for money, annual management letter, report to thosecharged with governance and other reports, effectiveness ofrelationships between external and internal audit and otherinspection bodies.Financial reportingAnnual statement of accounts, accounting policies, concernsarising from the audit, report to those charged with governance.Accountability arrangements Report to the PCVC and Chief Constable with advice andrecommendations on any relevant matters, review performanceagainst terms of reference annually and report the results to thePCVC and Chief Constable.Treasury ManagementEnsure effective scrutiny of the treasury management strategyand policies.The Committee believes it has met these requirements, through both relevant agenda items and theeffectiveness of its review. Audit activity is reviewed periodically including internal and externalaudit plans and reports. The external quality assessment of internal audit was also considered.Aspects of governance, including risk management, have been reviewed. Treasury managementstrategy and performance have also been reviewed. The Annual Governance Statements have beenconsidered and were discussed again at the October meeting. The annual accounts and externalauditor’s report were considered and approved then.Has the committee adopted recommended practice?As part of its annual review, the Committee reviewed its performance against good practicesidentified by CIPFA. There is a minor area where improvements can be made (Appendix 1) thereview shows the Committee is following good practice in the way it operates.Has the committee assessed its own effectiveness or been the subject of a review?The Committee has assessed its own effectiveness based on CIPFA guidance.Have the development needs of committee members been assessed and are they accessingbriefing and training opportunities?Members have received training and briefings in several areas during 2017/18, including estatesstrategy, collaborations, HMICFRS inspections, professional standards and the budget settingprocess. They declared themselves satisfied that their current training needs are being met.What impact has the committee had on the improvement of governance, risk and control?The Committee has considered a wide range of areas during the year, but legislation restricts therole of police audit committees. The Chief Constable and PCVC are ‘those charged with governance’the Committee’s role is non-executive and purely advisory.The Committee has made an impact during the year and good examples of this are: The Committee has identified areas where briefings and training were required to fulfil itsrole. It has received presentations on a range of areas including custody, professionalstandards, collaborations, HMICFRS inspections, the estates strategy, the use of body cams,3
stop and search, and the budget setting process. This provides assurance on thesearrangements. The Committee has a key role in reviewing the annual accounts and annual governancestatements. With its overview of governance, the Committee is well-placed to provideassurance to the PCVC and Chief Constable before they formally approve these documents. The Committee monitors internal audit resources and progress against the audit plan. Itregularly challenges progress, resources and discusses findings from reports.Committee’s Conclusions on GovernanceThe PCVC and Chief Constable have established a Joint Independent Audit Committee. Itsrole is to provide an independent review of the effectiveness of governance, riskmanagement and control frameworks, financial reporting and annual governance processes,internal and external audit, and treasury management. This annual report sets out how theCommittee fulfilled these responsibilities in 2017/18.The Committee recognises the significant challenges facing the Commissioner and ChiefConstable and aims to support them in developing governance arrangements as theyaddress key challenges, while also meeting the continuing requirement to make cost savings.Elsie Davies (chair Joint Independent Audit Committee)4
Appendix 1Self-Assessment of Good PracticeGood practice questionAudit Committee Purpose and Governance1. Do the organisations have a dedicated auditcommittee?2. Does the audit committee report directly tofull council? (Applicable to local governmentonly).3. Do the terms of reference clearly set out thepurpose of the committee in accordancewith CIPFA’s Position Statement?4. Is the role and purpose of the auditcommittee understood and accepted acrossthe organisations?5. Does the audit committee provide supportto both organisations in meeting therequirements of good governance?6. Are the arrangements to hold thecommittee to account for its performanceoperating satisfactorily?Functions of the Committee7. Do the committee’s terms of referenceexplicitly address all the core areasidentified in CIPFA’s Position Statement? Good Governance Assurance Framework Internal Audit External Audit Financial Reporting Risk Management Value for Money (VfM) or Best Value Counter-fraud and corruption8. Is an annual evaluation undertaken to assesswhether the committee is fulfilling its termsof reference and that adequateconsideration has been given to all coreareas?9. Has the audit committee considered thewider areas identified in CIPFA’s PositionStatement and whether it would beappropriate for the committee to undertakethem?10. Where coverage of core areas has beenfound to be limited, are plans in place toaddress this?YesPartlyNoXN/A topolice auditCommitteesXXXXXXXXXXXXXXN/A5
Good practice questions11. Has the committee maintained its advisoryrole by not taking on any decision-makingpowers?Membership and Support12. Has an effective audit committee structureand composition of the committee beenselected? This should include: separation from the executive an appropriate mix of knowledge and skillsamong the membership a size of committee that is not unwieldy independent members have beenappointed using an appropriate process.13. Does the chair of the committee haveappropriate knowledge and skills?14. Are arrangements in place to support thecommittee with briefings and training?15. Has the membership of the committee beenassessed against the core knowledge andskills framework and found to besatisfactory?16. Does the committee have good workingrelations with key people and organisations,including external audit, internal audit andthe chief financial officer?17. Is adequate secretariat and administrativesupport to the committee provided?Effectiveness of the Committee18. Has the committee obtained feedback on itsperformance from those interacting with thecommittee or relying on its work?19. Has the committee evaluated whether andhow it is adding value to the organisation?20. Does the committee have an action plan toimprove any areas of weakness?XXXXXXXXXXXXXIssues arising from this self-assessment are:Monitor the process for succession planning and how this should affect the future recruitment ofcommittee members.Annual review of the Joint Chief Finance Officer Role.6
Appendix 2Evaluating the Effectiveness of the Audit CommitteeThe Committee assessed each area and agreed a score from 1 to 5. 1 means no evidence can befound that the audit committee has supported improvements in this area. 5 means clear evidence isavailable from a number of sources that the committee is actively supporting improvements acrossall aspects of this area.Areas to Add ValuePromoting the principles of goodgovernance and their application todecision making.Contributing to the development of aneffective control environment.Supporting the establishment ofarrangements for the governance of riskand for effective arrangements to managerisks.Advising on the adequacy of the assuranceframework and considering whetherassurance is deployed efficiently andeffectively.Supporting the quality of the internal auditactivity, particularly by underpinning itsorganisational independence.Aiding the achievement of theorganisation’s goals and objectives throughhelping to ensure appropriate governance,risk, control and assurance arrangements.Supporting the development of robustarrangements for ensuring value formoney.Helping the organisations to implementthe values of good governance, includingeffective arrangements for counteringfraud and corruption risks.Promoting effective public reporting to theorganisation’s stakeholders and localcommunity and measures to improvetransparency and accountability.Areas to Develop7
Audit’s annual report and opinion, progress of internal audit activity against the audit plan, internal audit reports. External audit Scope and depth of external audit work, its independence and value for money, annual management letter, report to those charged with governance and other reports, effectiveness of
Joint Committee 09-03-20 Page 1 MINUTES JOINT FINANCE/AUDIT COMMITTEE & ACADEMIC AFFAIRS AND ENROLLMENT MANAGEMENT COMMITTEE UNIVERSITY OF SOUTHERN INDIANA BOARD OF TRUSTEES September 3, 2020 The Finance/Audit Committee and the Academic Affairs and Enrollment Management Committee of the
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