This report updates Members on the requirement of the authority to publish a Statement of Internal Control (SIC) within its final accounts each year. It provides details of the process and the document used to support the SIC. As part of the Use of Resources assessment which is part of the CPA rating for authorities our External Auditor’s (EA) requested last year that the SIC should be presented as a separate document to Members for formal approval before including it within the authority’s final accounts. The recommendation from EA reflects that this Committee is nominated to carry out the functions of an Audit Committee.
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Recommendation
2.1
To approve the SIC for inclusion within the 2006/07 final accounts.
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Report
3.1
Corporate Governance is the system by which this authority directs and controls its functions and how it relates to the community. The corporate governance framework requires local authorities to demonstrate that they are complying with the principles of good governance.
3.2
Because of the importance of good corporate governance in maintaining and enhancing public confidence in local government, every authority has to publish an annual statement (Statement of Internal Control (SIC)) in its final accounts on how it has discharged its overall responsibility in relation to corporate governance i.e. a sound system of internal control is in place including the management of risk. This statement has to be signed by the Leader and the Chief Executive and approved by Members.
3.3
The work of the SIC was covered to some extent in the Internal Audit annual report on the June agenda of this Committee.
3.4
The authority has a process in place for establishing, maintaining and reviewing the system of internal control and risk management. A “Review of Internal Control – Detailed Procedures” document was developed by the Head of Finance (Accountancy & Audit) and the Senior Auditor which supports the SIC. A copy of this background document is available upon request from the Senior Auditor.
3.5
The supporting document is divided into internal control areas and for each area responsible officers are required to sign assurance statements that internal controls are in place and working or identify any non-compliance.
3.6
Assurances are taken from this document to form the SIC and any issues of non-compliance are identified within the document and included within the Statement.
3.7
The SIC for 2006/07 is attached as an appendix and Members attention is directed to the non-compliance issues highlighted within section 5 of the statement.
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Implications
4.1
Comments from the Council’s Section 151 Officer
The main change with the introduction of the statement of internal control is that responsible officers are asked to provide written assurances that controls are in place or to identify potential weaknesses. External Audit would also like us to further develop an assurance framework, mapping the Council’s strategic objectives to risks, controls and assurances to provide members with information to support the statement of internal control. This recommendation is not considered a priority currently but gives members a flavour of what a good authority is expected to achieve.
4.2
Comments from the Council’s Monitoring Officer
No comments
4.3
Comments from the Head of Paid Service
As is often the case, there are additional responsibilities which are described in this report and the work involved will need to be absorbed by existing resources.
4.4
Local Agenda 21
No comments.
4.5
Equality
No comments.
4.6
Crime and Disorder
No comments.
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Report Author
5.1
Paul Hunter, Senior Auditor, (01289) 301777, ph@berwick-upon-tweed.gov.uk
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Service Head
6.1
Charles Oakley, Head of Finance (Accountancy & Audit)
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Background Papers
7.1
Assurance Document - Review of Internal Control (Detailed Procedures)
