“We welcome the various changes arising from the PSIAS and the JACOP and look forward to working with our clients to ensure they remain suitably positioned for success.”
1. NEW PUBLIC SECTOR IPPF standards can be found at www.iia.org.uk INTERNAL AUDIT STANDARDS (PSIAS) - FROM APRIL 2013 2. BOARD ASSURANCE The Government Internal Audit FRAMEWORKS Standards (GIAS) were replaced from April 2013 by the new Public Sector Internal Audit Standards (PSIAS); whereas GIAS only technically applied to Central Government the new name reflects the fact that the PSIAS apply to the wider public sector.
The PSIAS puts the standard of all public sector internal audit services on a consistent basis rather than sector by sector. So how do the new PSIAS impact upon your organisation? Well if your auditors have worked with compliant practices and kept those up to date with the Institute of Internal Auditors International Professional Practice Framework (IPPF) updated 2013 then the impact should be minimal.
The HM Treasury Guidance can be The introduction of a robust Board found at www.hm-treasury.gov.uk Assurance Framework can assist both senior management and Board 3. EDUCATION — JOINT better understand their objectives, risks and the range of assurances AUDIT CODE OF PRACTICE in place. Whilst the concept of Board Assurance Frameworks has been around for many years, organisations have typically been slow to adopt a formalised approach. Some helpful guidance was issued by HM Treasury in December 2012 to assist with introduction.
There are many sources of assurance in an organisation that can be harnessed to provide the evidence required to support the effectiveness of risk management and internal control; in turn Whilst a reduction in the number of informing and underpinning the standards is great news; one could governance statements made to ask “why do we still need two external stakeholders. standards?” In reality PSIAS are an the sources of annotated version of the IIA’s IPPF Understanding standards and internal audit assurance in place and their scope professionals should be able to allows organisations to better interpret a set of standards to the identify gaps and focus their planning most sectors in which they work and assurance effectively on the riskier areas. each individual client. Importantly, internal auditors should focus upon helping clients to be successful; adopting a risk based methodology, recognising the assurance framework and assisting clients to achieve their strategic goals whilst minimising their risks.
Frameworks and ensure that our input is focused on those aspects which keep them ‘awake at night’; after all what is better than a good nights sleep?
Embracing the scope and freedom of internal audit to review risks across the organisation and maximise the benefit of its consultative role it is important that organisations really understand the range of assurances in place and direct the work of internal audit to ensure that it adds most value.
PSIAS standards can be found at We are working with our clients to www.gov.uk develop their Board Assurance
(JACOP) FREEDOM
:
INCREASED
After years of waiting the updated JACOP Part 2 was finally published July 2013. Whilst the document may provide sector guidance, is it really still needed? The additional work, delays and uncertainty could be avoided if the sector simply adopted the Public Sector Internal Audit Standards which became effective from April 2013 (replacing GIAS as noted earlier).
“Fraud effects all organisations; be alert and ensure that staff are aware of the channels through which to act on suspicions.”
The requirements are significantly bank account for their legitimate shorter and less prescriptive than supplier often just before a large the previous Audit Code of Practice payment is due. (ACOP). This fraud is often directed towards There is a continued requirement those who are undertaking large for an Audit Committee. capital programmes; the main contractor is often well publicised No substantial changes in respect and staged payment profiles mean of External Audit, Regularity or that large payments are common. Fraud; these are all still keys areas But we are aware that this fraud is not only for your own organisation also being perpetrated against and its annual governance much smaller contracts such as statements but also for the funding web design and print contracts; so bodies and their auditors the vigilance is key across the board. National Audit Office. Particular ‘at risk’ sectors include The most substantial change is the Charities, Housing, Health, removal of the mandatory Education and Government. requirement to have internal audit; in line with the changes last year Considerable effort goes into for Sixth Form Colleges. ensuring that communications appear legitimate; letter heads, However this is not to be seen as a email addresses and websites are statement that internal audit is not all easily copied to look real. beneficial or not recognised as good practice by the funding bodies. Key advice: Rather this reflects the fact that an organisation’s need should drive Carefully review any the provision of internal audit; communications received; do internal audit remains good practice not respond to the contact across the public and private details on those sectors. communications. As internal auditors we have been adopting a pragmatic approach to the ACOP for many years and clients have benefited from a risk centred approach but this hasn’t been the case across providers. The JACOP can be found at www.skillsfundingagency.bis.gov.uk
4. FRAUD AWARENESS
A common and too often successful fraud of recent years has been associated with the change of supplier bank accounts; the fraudster impersonates the supplier and dupes them into changing the
Confirm all requested changes with your known contract manager directly on the contact details currently held. Do not rush to process any changes due to a stage payment date approaching; always speak with a known contact. Report any fraudulent attempts to your supplier, the local police to inform local crime profiles and other investigations, and notify the bank’s anti-fraud team. Advise any network groups you
are involved with to ensure that all your contacts remain vigilant to such attempts. Gateway can provide a fixed price counter fraud review which will advise you regarding your ability to protect your organisation from fraud. For further assistance please contact Gateway’s specialist counter fraud team through our Gillingham office.
5.PROCUREMENT — ARE YOU REALLY ACHIEVING BEST VALUE? The public and third sectors particularly are concerned with achieving or rather one should say ‘demonstrating’ the pursuit of best value from contracted services; but too often the procurement approach, time and costs are not congruent with achieving the end aim. Some of the inefficiencies we have identified include:
“Procurement shouldn’t just be about ticking boxes and completing masses of paperwork; offer flexibility and encourage innovation to achieve best value.”
Many contracted services are in reality well below the OJEU limits but are subjected to full OJEU procedures. A scaled and proportionate approach to procurement is required based upon the estimated contract value, type of goods or services and number of providers realistically interested in providing them. For high value contracts where frameworks are used the advantage of using them is often lost; too often providers are asked for the information they have already provided to secure their place on the framework. This just becomes as big an exercise as a full OJEU tender! The buying criteria are too defined (particularly in respect of services); limiting the innovation which providers can demonstrate in response to opportunities and restricting differentiation. Often resulting in a standardised tick box approach which results in compliance, achieves a low price but fails to reasonably allow one to say with confidence they have secured best value; this materialises in tenders of all sizes. Failure to adopt a proportionate approach to procurement can not only cost the organisation in terms of unnecessary time and effort but also deter suppliers from being involved in the process which needs to work for both sides; ultimately this limits the choice, flexibility and value achieved.
6. BOARD PERFORMANCE
Gateway has a wide range of facilitation, training and mentoring support services that can be used to improve corporate delivery or improve individual performance.
Robin Pritchard Chief Executive
Our facilitators are working with Audit Committees and internal audit teams to help address the increasing demand for focus on business critical risks through effective implementation of risk management and controls assurance frameworks along with associated internal audit methodologies.
Ryan Condron Risk & Assurance Manager
ABOUT GATEWAY ASSURE We are forward-thinking advisors redefining the delivery of assurance; bringing experienced professionals to the forefront of our service to ensure we add tangible value by helping our clients reach their potential and be prepared for tomorrow.
CPFA, IRM, ACGP
Lee Glover FCCA Director of Internal Audit
Gateway Head Office 7-8 Ambley Green Gillingham Business Park Kent ME8 0NJ Tel:
01634 382 908
Web: www.gatewayassure.com OFFICES & RESOURES NATIONWIDE
The information contained in this publication is prepared based upon our own interpretation and understanding. Whilst every care has been taken to ensure that the information is as accurate as possible it is written in a general context and should not be We offer all clients access to a wide interpreted as advice. We advise all range of specialist services individuals and organisations to seek specific professional advice tailored to provided by in-house teams or their needs.
through one of our Gateway strategic partner network member © Gateway Assure Ltd 2013. firms. Gateway Assure is an ethical assurance provider; a professional services firm with the unique advantage for our stakeholders of being a wholly owned subsidiary of a large successful Community Interest Company. We reinvest revenues in our service and the sectors in which we operate, with our operating surplus benefiting the public and third sectors.
Achieving a quality governance model that satisfies the CONTACT US expectations of stakeholders is a critical factor in achieving To discuss how we can help organisational success. position your organisation for success please contact: