Governance and Audit Committee

Key questions

June 2011 - Version 1

Reviewing the Audit Plan

Who did the Audit Partnership liaise with in drawing up the Audit Plan? Did this include External Audit?
How does the Audit Plan link to the corporate risk register and the council’s strategic plans?
What audits have you left off the Plan and why? When do you plan to carry out this work?
How does the Audit Plan fit with other assurance work? Are there any gaps or is there duplication?
Are agreed procedures in place for monitoring progress with the implementation of recommendations?
If management reject audit recommendations, which the auditors stand by, are suitable resolution procedures in place?
Does internal audit have appropriate resources, including skills, to deliver its objectives?
What assurance is there about the quality of internal audit’s work?
Is there appropriate co-operation between the internal and external auditors?

Reviewing the Annual Governance Statement (AGS)

What process that the council gone through to gather evidence to support the AGS? Has it involved staff from across the council?
Do the assurances available facilitate the drafting of a meaningful Annual Governance Statement?
Have assurance statements already gone through a process of challenge and review prior to presentation to the Governance and Audit Committee? What did this show?
Does the action plan flow out of the statement and clearly identify the significant governance issues that the council needs to address?
Does the action plan include actions outstanding from previous years, prioritised as necessary?
How will the action plan be communicated to staff, stakeholders and the public?
Do those producing the assurances understand fully the scope of the assurance they are being asked to provide and the purpose to which it will be put?
Do the assurances draw out material weaknesses or losses, which should be addressed?

Countering Fraud

Is the council committed to zero tolerance against fraud? How is this communicated and enforced?
Do we have appropriate strategies, policies and plans?
Have we assessed the management of counter fraud resources against good practice?
Do we raise awareness of fraud risks with new staff, existing staff, non executives and members?
Do we join in appropriately with national, regional and local networks and partnerships to ensure it is up to date with current fraud risks and issues?
Do we maximise the benefit of participation in data matching?
Have we reassessed the fraud risks because of the current economic climate?
Do we have a reporting mechanism that encourages staff to raise their concerns of money laundering?

Reviewing the Statement of Accounts

General questions

What issues were raised in last year’s audit letter and have these been addressed?
Do we have an adequately qualified and trained accountancy team?
Have the accounts been prepared in accordance with the latest SORP guidance?
Are the accounts within relevant legislation and accounting guidelines?
Have the accounts been checked for casting and cross referencing errors?
Has a senior officer review of the accounts been undertaken?
Has a peer review of the accounts been undertaken?
Have reconciliations been regularly undertaken during the year?
Have all related party transaction forms been completed and returned by Members?
How the accounting policies been reviewed?
Have working papers been completed that meet the requirements of the auditor?

Account specific questions

Is the outturn consistent with the financial messages in the quarterly budget monitoring reports to Cabinet? If not, why not?
How does the General Fund balance compare to the recommended level per the risk assessment of reserves reported to Members as part of the budget report?
Are there any significant variances in service net expenditure between years?
Have there been any exceptional items this year?
Have there been any significant write-offs?
Have there been any significant revaluations of fixed assets during the year?
Have there been any major asset acquisitions or disposals?
Has there been any significant increase in the level of debtors and creditors from last year?
How is the balance on the Collection Fund monitored?
How do the final accounts for the HRA differ to the latest budget monitoring report to Cabinet?
How does the HRA balance compare to that expected per the HRA Business Plan?
How have we ensured that all contingent liabilities have been disclosed?

Understanding the impact of IFRS on the Accounts

What is meant by surplus and deficit on the provision of services?
How has the balance on the general fund been affected over the year?
How does the segment report note link to the final accounts? ^[1]
Do we have any conditions on grants that are preventing us from using them?
What reserves are available to us to use for delivering future services to the public?

^[1] An authority shall present information on reportable segments within the notes. Reportable segments shall be based on an authority’s internal management reporting, for example departments, directorates, portfolios. The aim of segment reporting is to disclose information to enable users of a local authority’s financial statements to evaluate the nature and financial effects of the activities in which it engages. Code of Practice 2010/11

Risk Management

Is there a comprehensive process for identifying and evaluating risk and for deciding what levels of risk are tolerable?
Is the risk register an appropriate reflection of the risks facing the organisation?
Is appropriate ownership of risk in place?
How are these risks being managed?
How do we get assurance about the management of risks and how does this link to the annual governance statement?
How does management know how effective internal control is?
Is risk management carried out in a way that really benefits the organisation or is it treated as a box ticking exercise?

The Governance and Audit Committee itself

How does the Governance and Audit Committee know if it is being effective in achieving its terms of reference and adding value to corporate governance and control systems of the organisation?
Is the Governance and Audit Committee content that it has received sufficient training and has the appropriate skills mix?
Is the Governance and Audit Committee content with its level of understanding of the purpose and work of the organisation?
Is the Governance and Audit Committee content that it has sufficient time to give proper consideration to its business?
Is the Governance and Audit Committee content that it is avoiding any conflict of interest?
Is there evidence of the Governance and Audit Committees advice having an impact on the organisation?

A number of the questions detailed above have come the CIPFA Better Governance Forum briefing papers for Audit Committees. These briefing notes are provided on a regular basis and any future useful information will be provided to Members as part of the Guidance Pack.

Download: Key Questions (PDF 129KB)

Contents