Internal Audit Report
The Internal Audit Unit undertook independent objective assurance and consulting activities designed to add value and improve the department’s operations. It operated in accordance with standards issued by the Institute of Internal Auditors.
Audit Committee
Internal Audit Unit
Performance
Learning and development
Client assessment
Audit Committee
The Audit Committee is an independent advisory body to support the Director-General’s financial management responsibilities under the Financial Administration and Audit Act 1977 (PDF, 789 KB) and the Financial Management Standard 1997 (PDF, 693 KB) .
The Audit Committee is responsible for ensuring:
- the department meets its corporate governance obligations
- Internal Audit applies risk-based strategies formulating its audit plans and conducting audit reviews
- management action on audit recommendations is appropriate and timely.
The committee comprises:
Barry Leahy
Deputy Director-General (chair)
Brett Walker
General Manager, Executive and Strategic Services
Stuart Greaves
Senior Business Services Officer, Corporate Business Services
Greg Cumberland
Regional Manager – Industrial Relations, South West Queensland Region
Michael Schafer
Senior Director, Assurance and Risk Advisory Services (independent member)
The committee was assisted by officers from the Queensland Audit Office (QAO), the Director, Corporate Business Services and the Director, Internal Audit and Ethics Unit, Department of Employment and Industrial Relations.
Internal Audit provided secretariat support to the Audit Committee which met five times during 2006-2007.
During the year the Audit Committee reviewed:
- the adequacy of the strategic and annual audit plans
- the quality and timeliness of internal audit reports
- performance of the internal audit function against the annual audit plan
- items raised by the Queensland Audit Office
- the performance of areas that have acted on recommendations made by internal auditors or the Queensland Audit Office
- technical/operational issues relating to the finalisation of annual financial statements.
Internal Audit Unit
The Department’s internal audit services were provided by the Department of Education, Training and the Art’s Internal Audit Unit under a service agreement and joint annual audit plan with the former Department of Employment and Training.
The Internal Audit Unit undertook independent objective assurance and consulting activities designed to add value and improve the department’s operations. It operated in accordance with standards issued by the Institute of Internal Auditors.
The unit appraised the effectiveness of the department in:
- delivering agency outputs efficiently, effectively and economically so as to obtain best value for money
- optimising agency performance in terms of quality, quantity, timeliness, cost and where appropriate, location
- reporting agency financial and operational information in a relevant, reliable and timely manner
- correctly applying relevant policy, standards and guidelines
- ensuring the integrity and consistency of the agency’s corporate culture relating to ethical conduct and probity, including in relation to its tendering, contracting and other procurement processes.
The unit applied a risk assessment methodology based on AS/NZS 4360:2004 Risk Assessment Standard to its planning and audit programs in an effort to identify and minimise organisation risk.
Its effort was guided by three internal strategies:
- creating value through auditing
- communication and teamwork
- professionalism in the management of audits, the audit process and audit capability.
The unit provided:
- independent advice to the Director-General about the department’s effectiveness and efficiency
- advice to the Executive and business unit managers about their operational risks and the internal control systems designed to mitigate those risks
- advice on one-off and emerging issues, delivery strategies, control frameworks, risk treatments and implementation of audit recommendations.
The unit reported to the Audit Committee each quarter on the:
- progress in delivering the annual audit plan
- audits completed
- status of implementation of audit recommendations
- emergent issues.
Innovation
The unit continued to provide colleagues with exposure and access to its innovative in-house developed Project Management Software to improve the management of project/audit resources and performance reporting.
External Review
In accordance with its charter and the Institute of Internal Auditors’ (IIA) International Standards for the Professional Practice of Internal Auditing, Standard 1300 - Quality Assurance and Improvement Program - the internal audit function has to be externally assessed every five years. This was completed in 2005 with the unit achieving a good result having been found to comply with all IIA Standards. The unit is committed to building on this achievement through ongoing self assessment against the standards.
Financial and delivery performance
The unit contributed to the organisation by:
- focusing its efforts on audits with a business improvement, consulting or strategic focus to ensure alignment of business activities with the strategic direction of the department
- reviewing and monitoring internal controls for financial and non-financial processes and providing advice on risk management and systems improvements
- assessing the department’s conformance with financial legislation, regulations and standards
- reviewing financial reports, including performance information supplied to the accountable officer, executive groups and committees
- maintaining a consultative relationship with external audit.
Performance
Objective
Effective preparation and completion of a comprehensive strategic and annual audit program.
Results
92% of the approved audit program completed.
Billable hours targets met.
Stakeholder relationships
The unit reports directly to the Director-General and has a good relationship with key stakeholders including the Queensland Audit Office, Audit Committee, General Managers, business unit managers and staff and maintains these relationships by:
- consulting extensively in the preparation of the strategic and annual audit plans
- having a comprehensive customer service charter
- delivering sound practical advice and recommendations.
Objective
Stakeholders value audit reports and recommendations are accepted.
Results
Excellent client survey feedback.
Audit recommendations are reported as implemented.
Objective
Maintain professional standards in meeting client needs.
Results
Excellent client survey feedback.
Excellent five-yearly peer review result.
Extensive reliance by Queensland Audit Office on Internal Audit’s work.
Learning and development
The unit continued to attract and retain qualified, professional staff by:
- incorporating modern methodologies and techniques
- offering staff opportunities to gain experience in various types of audits.
Objective
Develop staff skills.
Results
Performance appraisal and development program implemented.
At least 2.5% of salaries allocated to professional development.
Objective
Maintain professional qualifications and best practice.
Results
All auditors hold tertiary qualifications with skills including accounting, business, commerce, information technology and teaching.
Staff are actively involved in professional associations such as the Institute of Internal Auditors, Australian Society of Certified Practicing Accountants and Information Systems Auditing and Control Association.
Client assessment
Post-audit surveys were used to assess clients’ views of the audit process. During 2006-2007, clients reported against ten key measures amongst which were communication, proficiency, conduct, accuracy and value. Clients also reported being better informed about their systems controls and risks.
Overall satisfaction in 2006-2007 was 94% against a target of 75%.
Key Measure |
03-04 |
04-05 |
05-06 |
06-07 |
|---|---|---|---|---|
Communication |
78% |
78% |
89% |
90% |
Proficiency |
89% |
87% |
83% |
100% |
Conduct |
100% |
100% |
94% |
100% |
Accuracy, logical and actionable |
89% |
91% |
86% |
90% |
Value adding |
78% |
91% |
97% |
90% |
Overall |
88% |
92% |
91% |
94% |
Future focus
The department has, subsequent to the machinery–of-government changes, created an Internal Audit and Ethics Unit. Over the next three years its efforts will be directed towards:
- being a primarily strategic audit function focused on adding value
- assisting management to achieve practical compliance with all relevant legislation and regulations
- maintaining a strong control environment where risks are identified, evaluated and managed
- reducing control costs through identifying redundant/duplicate controls for elimination and encouraging a climate of acceptance of a level of residual risk
- promoting awareness of ethical obligations and advising on and investigating misconduct and official misconduct.
Last updated 21 July 2009
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