BOROUGH OF POOLE
REPORT TO RESOURCES OVERVIEW GROUP
30 SEPTEMBER 2004
INTERNAL AUDIT & REVIEW SECTION – AUDIT PLAN 2004/05
PART OF PUBLISHED FORWARD PLAN: NO
STATUS – GENERAL
1.PURPOSE AND POLICY CONTEXT
1.1 This Report summarises the revised Risk Based Strategic Audit Plan and the Operation Audit Plan for the year 2004/05 (summary shown in Appendix A and Appendix B).
2. DECISION REQUIRED
2.1 Members are asked to note:
- the Risk Based Strategic Audit Plan
- the Operation Audit Plan for 2004/05
- the revised risk assessment procedures
3.STRATEGIC AUDIT PLAN
3.1Revision of Strategic Audit Plan
3.1.1As reported to Members of this Committee in January 2004, given the increasing importance of risk management, it was considered appropriate to revise the production of the strategic audit plan, using an enhanced risk assessment, in line with best practice.
3.1.2The types of risk to the achievement of the Authority’s objectives used in the assessment are as follows:
Professional
Legal
Resources (including financial)
Physical
Contractural
Reputational
Technological
Environmental
3.1.3For each audit area, a score is calculated for each type of risk by multiplying the likelihood of a risk event occurring by the impact of the risk should it occur. These are added together to produce the total risk score for each area. A weighting factor is applied based on the length of time since the area was last audited (i.e. the greater the time since the last audit, the greater the risk score). A summary of the risk assessment process is shown in Appendix C.
3.1.4Based on the resultant risk scores, the frequency that the audit will be undertaken is determined. The highest risk areas are audited annually, whilst the lowest risk areas are audited every five years.
3.1.5Members will be interested to note that many of the key financial systems of the Authority, for example, the Main Accounting System and Housing Benefits are audited annually. Other high risk areas fall within a variety of Service Units, for example, the Schools Capital Programme (SASS), and the Regeneration Project (Policy Directorate).
4.ANNUAL AUDIT PLAN 2004/05
4.1 Using the information in the Strategic Audit Plan, the Annual Audit Plan for 2004/05 was compiled. It includes a range of risk scores to ensure that all risk areas are covered within a five year period.
4.2 Due to the increased responsiveness of the new scoring system, the Risk Based Audit Plan will be updated on a six monthly basis, to ensure that the risk profile of the Authority is kept current.
5.CONSULTATION
5.1 The S151 Officer (Head of Financial Services) has approved the revised Strategic and Operational Plan and the Audit Commission have been consulted.
R L Jackson
Head of Financial Services
Name and Telephone Number of Officer to Contact:Keith McCormick 633123
File:metis/committee reports/other/ROG – Audit Plan 2004 05
Appendix AStrategic Audit Plan 2004/05 – 2008/09
Appendix BOperational Audit Plan 2004/05
Appendix CRisk Assessment Scoring Mechanism
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