Decision details

Review of Effectiveness of Audit Committee

Decision Maker: Audit Committee

Decision status: For Determination

Is Key decision?: No

Is subject to call in?: No


To review the results of the annual review of effectiveness of the Audit Committee


The Financial Services Manager reported that the annual review of the Audit Committee’s effectiveness had been carried out using principles established by the Chartered Institute of Public Finance and Accountancy (CIPFA).


Members were informed that CIPFA had published updated Practical Guidance for Local Authority and Police Audit Committees in 2018, which included the suggestion that a lay or independent member should be included in Audit Committees, although this was not a requirement.


The conclusion of the review, which used a questionnaire approach shown at Appendix 1 to the report, was that the Committee could demonstrate that it had been established in accordance with best practice and that it continued to operate effectively, whilst operating without an independent member.  The Committee needed to be alert to any changes in its membership and the expertise of its Members so that suitable training could be arranged and Appendix 2 to the report included a skills framework.


CIPFA’s Practical Guidance also included suggested terms of reference for audit committees and it was pointed out that the Committee’s Terms of Reference had been revised in December 2014 to reflect this.  The Practical Guidance also included possible wider functions of an audit committee:-


·         considering governance, risk or control matters at the request of other committees or statutory officers;

·         working with local standards committees to support ethical values and reviewing the arrangements to support those values; and

·         reviewing and monitoring treasury management arrangements in accordance with the CIPFA Treasury Management Code of Practice.


Audit Committee did support some work of the Standards Committee to support ethical values, particularly around reviewing whistleblowing arrangements.  For South Lakeland District Council, the treasury management scrutiny function was carried out by the Overview and Scrutiny Committee.  The Terms of Reference did not refer to requests for consideration of matters from other committees or statutory officers: any such proposals needed to be considered on a case-by-case basis, bearing in mind the need to maintain the independence of the Audit Committee.


Members discussed the suitability of seeking an independent member to sit on the Committee.  Both Gareth Kelly, External Audit, and Peter Harrison, Internal Audit, were of the opinion that this was not necessary in the context of local government.  The Committee did not feel it appropriate at this time to make such an appointment, however, suggested that the matter be kept under review.




(1)        the review, and its conclusion that the Audit Committee is operating effectively in all material aspects, be approved;


(2)        an independent member be not sought for the Audit Committee at this time; and


(3)        the skills framework for members of the Audit Committee, as at Appendix 2 to the report, be noted.

Report author: Shelagh McGregor

Publication date: 03/01/2019

Date of decision: 05/12/2018

Decided at meeting: 05/12/2018 - Audit Committee

Accompanying Documents: