CIPFA urges proper resourcing of internal audit in public sector organisations

Heads of internal audit occupy a critical position in public governance and must be senior managers who are properly resourced and have regular and open engagement across their organisation, particularly with the leadership team and audit committee.

That advice has come from the Chartered Institute of Public Finance and Accountancy (CIPFA) in a revised publication The Role of the Head of Internal Audit in Public Sector Organisations.

The publication sets out five key principles, aligned with the UK Public Sector Internal Audit Standards (PSIAS), which outline the key expectations of heads of internal audit. It also identifies the conditions that will allow them to thrive, CIPFA said.

The principles set out individual and organisational responsibilities, and represent best practice guidance that can form the basis of conversations between internal auditors, leadership teams and audit committees to support internal audit effectiveness.

The Chartered Institute said it hoped the publication would be read by public sector leaders and members of audit committees to better understand the work of internal audit and the need to appropriately support it.

CIPFA said postholders must be professionally qualified and suitably experienced, and lead and direct an internal audit service that is resourced to be fit for purpose.

Internal audit heads should be expected to champion best practice in governance, objectively assess the adequacy of governance and management of existing risks and comment on responses to emerging risks and proposed developments.

CIPFA said the PSIAS provided clear standards for internal audit, but heads in public services faced additional challenges in ensuring professional standards are maintained and their internal audit teams remain effective.

One key reason for this is that the organisation in which they operated also determined the resources, scope and authority given to internal audit.

Rob Whiteman, CIPFA CEO, said: “The time is right for a refreshed CIPFA statement setting out best practice for the head of internal audit role. Heads of Internal Audit across the whole public sector are working in increasingly high pressure environments, contending with restricted resources and growing levels of financial risk.

“While many organisations are already doing a great job in this space, it’s crucial that Heads of Internal Audit and their teams are given the tools they need to provide quality assurance to their organisations.”

A collection of case studies was also launched by CIPFA to accompany the refreshed statement. ‘Leading internal audit in the public sector: putting principles into practice’ gives a series of examples of organisations across the public sector that are "leading the way with innovative solutions to provide better support and assurance to their organisations and clients".