Internal Audit: Not just about the AGAR
AUTHOR: ELEANOR GREENE, SECRETARY TO THE PARISH INTERNAL AUDITORS FORUM
At this time of year, every clerk is focused on getting their internal audit done and convening a full council meeting at which the Annual Governance and Accountability Return (AGAR) will be signed. Still, with the right advice, an internal audit is a year-round, positive process.
Local (parish and town) councils have been required to have an “internal auditor” for the last 20 years. For many authorities, that person is the only independent, professional reviewer of the council's accounts and controls and systems.
The combination of media stories and Public Interest reports showed that there was a need for internal auditors to raise the standard of their own work, try to increase the profile of council internal audit as part of the management of public money, and ensure that internal auditors were part of the standard-setting process. The goal is that whatever standards and guidance are devised will work for all types and sizes of the council.
Thus, starting in Hampshire and now spreading right across the country, the Parish Internal Auditor Forum was formed.
Pre-COVID-19, we had periodic face-to-face meetings. We have all been pixels on a Zoom screen during the last year, but between us, we inspect over 20% of the councils in the country.
In 2020 the forum was engaged by Joint Panel on Accountability and Governance (JPAG) to review, update and eventually fully rewrite Section 4 of the Practitioners' Guide (the bit about internal audit) to make it easier for members and officers to choose a competent internal auditor and to get the most out of their process and for the fee. This was published in March 2021 and can be used in audits during the current season.
Internal audit is not about the numbers. It is about the systems and controls that make the numbers trustworthy.
On that basis, it is hoped that the Internal Auditors Forum will be able to work with all professional bodies and representative organisations in the sector to push for continual improvement and development in standards so that the voice of internal auditors helps councils prove their worth to electors.
In time we hope to get a forum representative on JPAG as, if nothing else, we come to your homes and offices to understand the reality of compliance.
The biggest change that the forum realised was needed was to bring back a checklist so that electors and members and clerks and auditors can be clear about the range of information that supports the assertions in the Annual Return.
In the smallest councils, many of the activities and records do not happen. The review and testing will need to go far beyond the template given in the largest councils. The key point is that a professional, comprehensive internal audit adds value to a council's activities by allowing members and officers to tell ratepayers what they get for their contribution transparently.
This year's AGAR deadline is 30 June 2021.
Section 4 of Governance and Accountability is only nine pages. Give it a read, check that your council and internal auditor are meeting or even exceeding the standards, and if they are not involved with the forum, we'd love to have their input.
At some stage, we may even find out the collective noun for parish internal auditors.