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Family Support Agency Forum

Wednesday, 8 May 2013

Yvonne McBain

Agenda 1 Introduction & Objectives 2 Internal Audit 3 Approach & Common Findings 4 Next Steps

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Introduction & Objectives

Objectives of todays session By the end of the session, you will: Understand what and who Internal Audit are Understand why Internal Audit do what they do Know the approach that Internal Audit takes to its reviews Learn about the common findings from previous work Know who to contact if you have a question / need advice

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Context Family Support Agency . . . Circa 14.3m annual budget Approx 106 FRCs nationwide Number of Counselling Organisations Two regional support agencies Limited number of FSA staff & resources available Primary focus is the provision of support to families However FSA also need comfort on adequacy of grantees operations & controls nationwide
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Internal Audit

What is Internal Audit? Institute of Internal Auditors definition: to provide independent assurance to Management and the Audit Committee on the effectiveness of internal controls . . . is a management function that operates by measuring and evaluating the effectiveness of controls in place.
we provide assurance and comfort we provide guidance and advice on how to improve areas we are a sounding board and are there to be consulted

Internal Audit assess Governance, Risks and Controls

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Governance - what is it?

The term Corporate Governance is in common use all over the public and private sector Bar continues to rise and obligations and onus on Boards (Voluntary or not) continues to increase Governance basically means, How an organisation is run In simple terms it is shorthand for . . .
Who is accountable for what How we make decisions How we know that something is really happening

Tone from the Top . . . . .& throughout an organisation

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Why do we need Internal Audit?

CONTROL FRAMEWORK

RISKS
Family Support Agency

Assets

FAILURE !!

Financial Reputation IT People Processes

Consequences

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Where Internal Audit sits. . .

SHAREHOLDER(S)
ultimate accountability to FSA / shareholder(s)

External Audit

VBOM
line responsibility to Board

Audit Committee
independent assurance to the Audit Committee

Management / Co-ordinator

Internal Audit Operations

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Governance, Risk, Controls - Clear accountability is crucial. . .

RESPONSIBILITY

AUTHORITY

ACCOUNTABILITY

If it is to be, it is up to me. . .

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Internal Audit process how do we decide what to do?

On an annual basis we agree a plan of work with the Audit Committee & Management in FSA. . . This is based on: Results of previous years findings Discussions with Management and the Audit Committee Areas of greatest risk and concern Input from our own experiences

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Scope of Internal Audit

Our work covers all FSA operations: Annual Internal Financial Controls review Code of Practice assessment Audit Committee training Review of FSA Board Provide advice and assistance as needed to Management, Audit Committee and FSA Board Accounting training Risk identification & Assessment workshops FRC / CO Grantee reviews
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Approach & Common Findings. . .

Approach for Grantee Reviews - what we look at . .

Focus on three areas: Governance meet selected Board members, gain an understanding of the structure of the FRC & assess whether key governance risks have been addressed Delivery identify levels of funding and programmes under which monies are received and test to ensure they are being used for the correct purpose (in line with the grant application) Compliance review of financial processes and procedures in place within the organisation to determine whether an appropriate level of financial control exists.
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Approach what we ask for . . .

Request a sample of key documents in advance, including: Terms of reference for Board & List of Board Members / Board SubCommittees and their members Copies of Board meeting minutes & AGM minutes Listing of Services provided Financial Statements / Accounts Annual progress reports & grant application form Financial procedures / policies manual Documentation to support key payments, expenses paid / receipts etc Meet with the co-ordinator, Board members, accountant, FSA liaison person
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Common Findings No formal terms of reference for Boards & subcommittees Lack of awareness of Boards roles & responsibilities Inaccurate or no minutes of Board meetings retained

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Common Findings No formal terms of reference for Boards & subcommittees Lack of awareness of Boards roles & responsibilities Inaccurate or no minutes of Board meetings retained Absence of documented corporate governance policies (e.g. selection / appointment process for Board; conflict of interest etc) Inadequate segregation of duties

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Common Findings Absence of Financial policies & procedures (authorised signatory, approvers etc) Lack of evidence to support payments made / expenses claimed

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Common Findings Absence of Financial policies & procedures (including identifying who is authorised to sign / approve etc) Lack of evidence to support payments made / expenses claimed Inaccurate or no time records maintained Absence of payslips / supporting documentation for payroll

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Common Findings Absence of Financial policies & procedures (including identifying who is authorised to sign / approve etc) Lack of evidence to support payments made / expenses claimed Inaccurate or no time records maintained Absence of payslips / supporting documentation for payroll Inappropriate physical access controls over holding of cash / cheque book

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Common Findings Absence of Financial policies & procedures (including identifying who is authorised to sign / approve etc) Lack of evidence to support payments made / expenses claimed Inaccurate or no time records maintained Absence of payslips / supporting documentation for payroll Inappropriate physical access controls over holding of cash / cheque book Do any of these resonate with you?
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Next Steps. . .

Your views
What are your key challenges? Where can we help? Where would you like more guidance? Any questions?

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Contact: Yvonne McBain T: M: E: 01 792 8722 086 824 9887 yvonne.mcbain@ie.pwc.com

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