APPENDIX B - REVIEW OF AUDIT AND INVESTIGATIONS - Savings Options for 2010/11 and 2011/12

Sep 14, 2026

Review of audit and investigations under the Corporate Director – Customer & Corporate Services appendix outlines how services can achieve savings without reducing front-line capacity. It assesses current audit costs, explores shared audit management, and evaluates staffing reductions or income growth through a revised audit plan. The review considers limits on additional income and covers risk management, consultancy allocations, VFM work, and reliance on statutory assurance versus advisory and overlapping functions.

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Pages12

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APPENDIX B

REVIEW OF AUDIT AND INVESTIGATIONS

Introduction

Findings

Internal Audit Service

Additional Income

Audit Plan

APPENDIX B REPORT OF THE CORPORATE DIRECTOR – CUSTOMER & CORPORATE SERVICES APPENDIX B REVIEW OF AUDIT AND INVESTIGATIONS 1 Introduction 1.1 Given the current financial environment, each service has to assess the opportunities for savings. Audit is currently above average in cost in the benchmarking figures, and is a support service that does much more than the minimum statutory requirement. As such, it is an area where savings need to be considered if cuts in front-line services are to be avoided. The main way to achieve savings for 2010/11 and 2011/12 is to either reduce staff costs or increase income using current resources. With the exception of the Deloitte partnership the supplies and services budget is minimal and there is very little scope for reduction. 1.2 Options have been fully explored and are detailed in the findings. 2 Findings Internal Audit Service 2.1 The development of a shared audit service or shared audit management with another audit service has been explored. No audit service has been identified that would wish to enter into this type of arrangement at this current time. This included discussion with Milton Keynes, Bedford Borough and Central Bedfordshire. Milton Keynes and Bedford have indicated that they would want to manage their own service and therefore any shared service. 2.2 The current structure and services provided by the audit service at Luton does not help the financial viability of a shared service as the other services do not provide a full pro-active consultancy role and the Head of Audit role manages a range of other services as well. If we changed to the proposed structure we would then match the audit structures Milton Keynes, Bedford Borough and Central Bedfordshire. 2.2 Additional Income 2.2.1 Although additional income is being achieved this year there is little opportunity for this in 2010/11 and the audit plan would have to be reduced to accommodate any additional work. There is a high risk in keeping staff in the hope of attracting new fee paying work that might not be available. 2.3 Audit Plan 2.3.1 To reduce the number of audit staff or to provide more resource to generate income the current audit plan must be reduced. Review of the plan shows that in the last three years there has been a change in the emphasis of audit work from assurance to pro-active consultancy. Whilst this is commendable and is seen as adding value to the authority it is not an essential function and there is overlap with the remit of Luton Excellence (LEx) . Our audit process is well established and goes some way beyond mandatory requirements and indeed that of many other local authorities. 2.3.2 Discussion with the External Auditor revealed there would be no objection to a reduction in the internal audit coverage and plan. It was stated that the plan must cover sufficient core financial audit work to help external audit provide their assurance on key controls and for the head of the audit service to give their overall opinion on controls. With the increased risk approach to the audit of grants by external audit the opportunity for internal audit to work on behalf of external audit is reduced. If internal audit returned to the essential and statutory assurance role external audit would not disagree with the audit plan being reduced by up to 450 days. This would, however, be a bare minimum resource and is not recommended. 2.3.3 The CIPFA Code of Practice on Internal Audit states “ IA can also, where resources and skills exist, provide additional services including fraud related and consultancy work”. Audit is primarily assurance work. Other work is additional and nonessential. 2.3.4 The internal audit value for money project work has been on specific projects with the Head of Audit as project leader for the IM and HR reviews. These commenced before LEx and are now nearing completion. Due to the nature of the work it was agreed that the audit manager would undertake

FAQs

What savings options are identified for 2010/11 and 2011/12?

The document states savings should be achieved by reducing staff costs or increasing income using current resources, noting limited scope for reducing the supplies and services budget.

Why is a shared audit service not pursued at the current time?

No audit service was identified that would enter this arrangement, and other services indicated they would manage their own audit service and therefore any shared service.

How can the audit plan be reduced while maintaining required assurance?

It explains that any reduction must still cover sufficient core financial audit work for external audit assurance and for the head of audit’s overall opinion on controls, while stating that returning to the essential statutory assurance role could allow reduction by up to 450 days but is not recommended as a bare minimum.

Sep 14, 2026

Uploaded by Ava Thompson