Appendix II
                                                  INTERNAL AUDIT REVIEW - CODE OF PRACTICE
              Please insert 1 in appropriate box to indicate Y = YES, P = PARTIAL, N = NO.  The sheet will work out overall compliance Where 'partial' or 'no', 
                     you should give reasons for any non-compliance, and any compensating measures in place or actions in progress to address this.
             Ref    Adherence to the Standard                                   Y     P     N     N/A Evidence/Comments                                         Action Plan Ref
             1      Scope of Internal Audit
             1.1    Terms of Reference                                            1                    See existing TOR 2005/06
             1.1.1  Do terms of reference:
                    (a)  establish the responsibilities and objectives of Internal 
                    Audit?                                                        1
                    (b)  establish the organisational independence of Internal 
                    Audit?                                                        1
                    (c) establish the accountability, reporting lines and 
                    relationships between the Head of Internal Audit and:         1
                         [i]   those charged with governance?                     1
                         [ii]  those parties to whom the Head of Internal Audit 
                    may report?                                                   1
                    (d)  recognise that Internal Audit's remit extends to the 
                    entire control environment of the organisation?               1
                    (e)  identify Internal Audit's contribution to the review of the 
                    effectiveness of the control environment?                     1
                    (f)  require and enable the Head of Internal Audit to deliver 
                    an annual audit opinion?                                      1
                    (g)  define the role of Internal Audit in any fraud-related or 
                    consultancy work [see also 1.3.2]?                                  1              To be included in updated TOR (2007/08)                        1.a.
                    (h)  explain how Internal Audit's resource requirements will 
                    be assessed?                                                        1              To be included in updated TOR (2007/08)                        1.b.
                    (i)  establish Internal Audit's right of access to all records, 
                    assets, personnel and premises, including those of partner 
                    organisations, and its authority to obtain such information 
                    and explanations as it considers necessary to fulfil its 
                    responsibilities?                                             1
                    Does the Head of Internal Audit advise the organisation on 
             1.1.2  the content and the need for subsequent review of the         1                    Ish (TOR ?)
                    terms of reference?                                                                                                                                2
             1.1.3  Have the terms of reference been formally approved by the 
                    organisations?                                                1
             1.1.4  Are terms of reference regularly reviewed?                          1              Update annually in future                                       3
             1.2    Scope of Work
                    Are the organisation's assurance, risk management 
             1.2.1  arrangements and monitoring mechanisms taken into 
                    account when determining Internal Audit's work and where                           Managers SIC assurance statements  / Risk Register / 
                    effort should be concentrated?                                1                    RM reviews / Systems / CO's
             1.2.3  Where services are provided in partnership has the Head 
                    of Internal Audit identified:                                                      Services not provided in partnership
                    (a)   how assurance will be sought?                                            1
                    (b)   agreed access rights where appropriate?                                  1
             1.3    Other Work
                    Where Internal Audit undertakes consultancy and/or fraud and 
                    corruption work, does it have the: 
             1.3.1
                    [a] skills, and                                               1
                    [b] resources to do this?                                     1
                    Do the terms of reference define Internal Audit’s role in:                         TOR / Audit Manual / Constitution
             1.3.2  [a] fraud and corruption?                                     1
                    [b] consultancy work?                                         1
                      Fraud and Corruption
              1.4
                      Has the Head of Internal Audit made arrangements, within the        1                      Anti Fraud and Corruption Policy
                      organisation's anti-fraud and anti-corruption policies, to be notified 
              1.4.2   of all suspected or detected fraud, corruption or impropriety?
              2       Independence
              2.1     Principles of Independence
                      Is Internal Audit:
              2.1.1   [a] independent of the activities it audits?                        1                      No resp, identified in TOR/Aud Manual/Constitution
                      [b] free from any non-audit [operational] duties?                   1
                      Where internal audit staff have been consulted during system,       1
                      policy or procedure development, are they precluded from 
              2.1.2   reviewing and making comments during routine or future audits?
              2.2     Organisational Independence
              2.2.1   Does the status of Internal Audit allow it to demonstrate           1                      Reports to Memb/CEO/S151 Officer
                      independence?
                      Does the Head of Internal Audit have direct access to:
              2.2.2   [a] officers?                                                       1
                      [b] members?                                                        1
              2.2.3   Does the Head of Internal Audit report in his or her own name to           1               In name of DOF
                      members and officers?                                                                                                                                            4
                      [a] Is there an assessment that the budget for Internal Audit is    1
                      adequate?
                      [b] Does any budget delegated to service areas ensure that:
              2.2.4   [i]    Internal audit adherence to the Code is not compromised?                        1
                      [ii]   the scope of Internal Audit is not affected?                                    1
                      [iii]  Internal Audit can continue to provide assurance for the                        1
                      Statement on Internal Control?
              2.3     Status of the Head of Internal Audit
              2.3.1   Is the Head of Internal Audit managed by a member of the                   1               DOF  via Deputy DOF
                      corporate management team?
              2.4     Independence of Internal Audit Contractors
                       Does the planning process recognise and tackle potential conflicts                           No empoyment of external contractors in this field
                       of interest where contractors also provide non-internal audit 
               2.4.1
                       services?
               2.5     Declaration of Interest
               2.5.1   Do audit staff make formal declarations of interest?                  1                      Annual Conflict of Interest declarations
               2.5.2   Does the planning process take account of the declarations of         1                      Audit annual planning process (LTR)
                       interest registered by staff?
               3       Ethics for Internal Auditors
               3.1     Purpose
               3.1.1   Does the Head of Internal Audit regularly remind staff of their             1                No - we should include in Team Briefs
                       ethical responsibilities?                                                                                                                                            5
               3.2     Integrity
               3.2.1   Has the internal audit team established an environment of trust       1                      How do we measure ????
                       and confidence?                                                                                                                                                      6
               3.2.2   Do internal auditors demonstrate integrity in all aspects of their    1                      CIPFA/IIA Standards and incl in Audit Manual
                       work?
               3.3     Objectivity
               3.3.2   Are internal auditors perceived as being objective and free from      1                      Structure/Constitution/Aud Commission
                       conflicts of interest?
                       Is a time period set by the Head of Internal Audit for staff where          1                Not formalised - we should produce something maybe.
               3.3.3   they do not undertake an audit in an area where they have had 
                       previous operational roles?                                                                                                                                          7
               3.3.4   Are staff rotated on regular/annually audited areas?                  1
               3.4     Competence
                       Does the Head of Internal Audit ensure that staff have sufficient                            Regular training sessions, seminars etc and KIE
                       knowledge of:
                       [a] the organisation’s aims, objectives, risks and governance         1                      Induction /Profesional PublicationsInternet & Intranet
                       arrangements?
                3.4.1  [b] the purpose, risks and issues of the service area?                1                      As above
                       [c] the scope of each audit assignment?                               1                      Assignment sheets
                       [d] relevant legislation and other regulatory arrangements that       1                      Seminars, conferences, training, publications etc
                       relate to the audit?
               3.5     Confidentiality
               3.5.1   Do internal audit staff understand their obligations in respect to    1                      Audit Manual, training, KIE, Team Briefings etc
                       confidentiality?
               4       Audit Committees