Internal Audit and External Audit

External audit

The main external audit is a statutory requirement which provides:

  • assurance that the University’s accounts present a true and fair view of its financial position; and
  • proof to HEFCE that the money is properly expended

The work takes place on an annual cycle, peaking during the October/ November period, and primarily involves the Financial Accounting and Treasury team of the Finance Division. External audits are also required for other specific elements of the University’s activity (e.g. College Court, the University of Leicester Pension & Assurance Scheme and also for some Research Grants & Contracts).

In addition, each year the University makes a number of returns to various bodies including HEFCE and NCTL (National College of Teaching and Learning) all of which may be subject to external audit.

Internal audit

To be effective, Internal Audit must be distinct from, and independent of the Institution’s External Audit provision.

The Internal Auditors, who report to the University’s governing body, Council through its Audit Committee, conduct audits on the University’s systems of governance, risk management, internal control, value for money and data quality (eg student number returns to HEFCE) and the extent to which strategic initiatives are attaining their goals across the University, although this does not extend to the academic process.

As a result, the scope of the work undertaken by Internal Audit is much wider than that undertaken by External Audit and may cover a number of non-financial areas within the University, with multiple audits being undertaken each year, involving a range of areas of the University’s operations. Internal Audit is not, however, a substitute for good management – this responsibility rests fully with the senior management of the University.

Internal Audit are charged with promoting and supporting improvement and efficiency by being a “critical friend”, not just policing the compliance of existing structures and processes.

The University's Internal Audit service is currently provided by KPMG LLP registered auditors. Reporting to Council, through its Audit Committee, they provide an objective assurance and consultancy service to the University, helping us to accomplish our objectives by evaluating the effectiveness of the systems and procedures for risk management, control, and governance.

The Purpose of internal audit

The annual audit programme is determined largely by the University’s policy and strategy on managing risk. The purpose of the agreed audits is to provide the University’s Council, Audit Committee and its managers with independent and objective assurance that:

  • the University’s objectives and the agreed plans of its Colleges, Departments and Corporate Services are being pursued in a way that will help them succeed;
  • the risk management processes defined by the University’s policy are in place and operating as intended;
  • the processes have been designed well enough to enable managers to manage the risks that they are responsible for in an effective way;
  • managers are responding to risks adequately and effectively so that those risks are reduced to an acceptable level; and,
  • the controls that managers have in place are successful in managing those risks

The risks audited include those that are identified in the University’s risk register.
In addition and as a matter of course, the Internal Audit service will always review the financial administration in a unit. This will focus upon the controls in place for the financial routines and systems in operation, particularly in how closely the unit meets the requirements identified in the University’s Finance Regulations.

 

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