Agenda item

To receive a report, on the future provision of internal audit services.

Michael Hudson, Interim Chief Financial Officer, explained to the Committee the options available for the delivery of the Council’s Internal Audit service and the internal and external drivers that have led to this review.

In summary these options were;

1.    Retain in – house and restructure.

2.    Enter into a partnership model of delivery with another local authority.

3.    Outsource the service to an external private provider.

The Interim Chief Finance Officer went on to explain that against the assessment criteria and weightings the Internal Audit service had been assessed as being a good service.  He stated that they were an excellent team. 

After consideration of the detailed assessments, Option 2 (SWAP Partnership) was the recommended option.

Members of the Committee welcomed the recommended option noting the potential for economies of scale, further career prospects for staff and the sharing of specialist knowledge and best practice.  However some of the Committee urged caution, stressing the need for stability within Internal Audit during this period of significant change that Wiltshire Council was currently experiencing.  The team had an excellent working relationship with the areas they were auditing and that a change would be unhelpful at this stage.  The Interim Chief Finance Officer reaffirmed the continuity of staff, and the need to invest through opportunities.  The team needed to be flexible and have sufficient skills and capacity to ensure it can respond to the changing needs of its client.  The Service needed to plan for the continual investment in the staff to ensure the high levels of skills are retained, coupled with the growing focus on joint local authority working, standardisation of processes that is driving the sharing of best practice.  SWAP have the specific resource and technological systems.

The Leader re-iterated that the management restructure and the future provision of internal audit were two separate issues.

The Interim Chief Financial Officer explained that should the Committee recommend the proposal to Cabinet a paper would be brought back to this Committee detailing the negotiations that had taken place.

Resolved

i)          Approve Officers to enter into formal negotiations with the South West Audit Partnership (SWAP) under a section 101 of the Local Government Act 1972 as amended by the 2000 Act, agreement, to assess further the feasibility of Wiltshire Council entering into a joint local authority Internal Audit partnership.

ii)         Bring back to Audit Committee any formal proposal to enter a TUPE transfer arising from these negotiations, for consideration.

iii)        Agree that in case negotiations with SWAP result in this option being withdrawn, in parallel with SWAP negotiations the Section 151 Officer, in consultation with the Cabinet Portfolio Holder for Finance, and the Chairs of Audit Committee and Resources Overview & Scrutiny Commission, should pursue alternative arrangements to ensure the Internal Audit Service has effective leadership following option IA as proposed in this report as set out at paragraph 21.