Audit

Internal Audit is an independent appraisal function for the review of the internal control system as a service to the organisation.  It objectively examines, evaluates and reports on the adequacy of internal control as a contribution to the proper, economic, efficient and effective use of resources.  The service is delivered by Veritau limited, a company wholly owned by the County Council and the City of York Council whose staff work to the Public Sector Internal Audit Standards issued by the UK Public Sector Internal Audit Standards Advisory Board.

School Audit Arrangements

Currently schools are not subject to full audits on a periodic basis.  A small number of individual school audits may still take place, although in general auditing within schools will take the form of “Themed Audits”. Schools can opt to procure an individual school audit via discussion with the Assistant Director – Audit Assurance. The cost of a school audit will be determined by agreement and will depend upon the extent of the audit coverage compared to a “full” school audit.

The timing of the audit visit for a school audit will normally be agreed between the Headteacher or Business Manager and the auditors between two and four weeks prior to the start of the audit.  An Audit Specification will then be issued to the school setting out arrangements for the audit and Veritau will request that a Pre-Audit Questionnaire be completed and returned before the audit to minimise the disruption that may be caused on the day(s) of the visit by asking questions, etc.  "Full" audits may involve two auditors and involve preparatory work at County Hall, days "on site" and then further work at County Hall to produce the report and follow it up.  All staff will wear identity badges when on school premises.

The broad content of an individual school audit may cover:-

  1. Governance
  2. Financial Management
  3. Contracting, Purchasing and Best Value
  4. Petty Cash
  5. Income
  6. Capital and Property
  7. Extended Schools Arrangements
  8. Human Resources
  9. Systems Reconciliation
  10. Banking Arrangements
  11. Catering
  12. Insurance and Risk Management
  13. Protection and Information Technology
  14. Pupil Numbers
  15. Asset Management
  16. Voluntary Funds and School Trips

For a school audit, close contact will be maintained throughout the course of an audit with the Head teacher, Business Manager or Bursar and any problems discussed as necessary, together with any internal audit recommendations that may arise.  In due course, the report will be sent to the Headteacher for comments and agreement, with a copy to the Corporate Director – Children & Young People’s Service.

Reports will normally express an opinion on the standards of control at the school. This opinion will fall in one of the following four categories:-

Substantial Assurance

A sound system of governance, risk management and control exists, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited.

Reasonable Assurance

There is a generally sound system of governance, risk management and control in place. Some issues, non-compliance or scope for improvement were identified which may put at risk the achievement of objectives in the area audited.

Limited Assurance

Significant gaps, weaknesses or non-compliance were identified. Improvement is required to the system of governance, risk management and control to effectively manage risks to the achievement of objectives in the area audited.

No Assurance

Immediate action is required to address fundamental gaps, weaknesses or non-compliance identified. The system of governance, risk management and control is inadequate to effectively manage risks to the achievement of objectives in the area audited.

All audit findings will also be ranked as follows:-

Priority 1

A fundamental system weakness, which presents unacceptable risk to the system objectives and requires urgent attention by management.

Priority 2

A significant system weakness, whose impact or frequency presents risks to the system objectives, which needs to be addressed by management.

Priority 3

The system objectives are not exposed to significant risk but the issue merits attention by management.

Following a health-check visit an abbreviated report may be issued.

Once a school audit report has been issued the Headteacher will be requested to respond in writing within three weeks to the recommendations made.  It should be noted that in paragraph 20 of the LMS Financial Procedure Rules (to be found in Annex B of the LMS Scheme in Section 2.0 of this manual at paragraph 20.5) includes a requirement that Internal Audit reports are given prompt consideration.

Once agreement to the recommendations has been agreed a copy of the audit report will be sent to the Chair of the school's governors informing him/her that an audit has been conducted, and there are no outstanding items.  This will include a request that the Chair report the fact that the audit has taken place to the Governing Body.  Where an Auditor has concluded that the school’s controls offer limited or no assurance the Assistant Director – Audit Assurance will also offer to attend the Governing Body meeting to present and discuss the report.

At the close of each full audit Veritau will issue a Client Satisfaction Survey to the Headteacher requesting feedback on the manner in which the audit was conducted, the timeliness of the audit, satisfaction with the reporting arrangements, and a number of other key areas.

Throughout their activities the intention of Veritau is to be constructive and helpful.  In this way the Service provides a form of protection and security not only to the Council as a whole but individually to all staff, particularly those who have financial responsibilities or who are accountable for assets, stores and similar transactions on behalf of the Council.

If any Headteacher or Governor at any time considers there is a problem within their area of responsibility the Head of Internal Audit, the Deputy Head of Internal Audit or the Assistant Director - Audit Assurance will be pleased to discuss this with them.

Training courses

Some time is spent each year responding to requests from schools, Directorates and Service Units for advice on various aspects of their procedures.  In addition, a Schools Audit Newsletter is published each term and training courses are made available for governors and school staff.

Special investigations

The County Council has adopted a Whistleblowers' Charter to provide all employees with avenues to raise concerns and receive feedback on any actions taken and also to reassure staff that they will be protected from reprisals or victimisation for whistle blowing in good faith.  The Whistle blowing Policy Statement for the County Council can be found at

https://www.northyorks.gov.uk/fraud-investigation-and-whistleblowing

School Audit Alerts

If you are aware of have any suspicion of fraud being committed against the Council then please report it via the Veritau fraud team on 0800 9179 247 or counter.fraud@veritau.co.uk.

The information provided is dealt with in the strictest confidence and you may report the fraud anonymously.

Further information can be found in Chapter 22 of the School Finance Manual

Useful downloads

Veritau School Pre-Audit Questionnaire - to be completed at least 5 days prior to the audit visit.

Weblinks

Veritau [new window] - Company website – includes a section for schools