Internal audit – reducing institutional risk and increasing value
‘Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes’
IIA Inc. definition
The KCG internal audit focuses on strategic, operational and financial risks while ensuring comfort on core systems and processes. We work with you to create a shared view of the risk exposures within the institution and of the actions necessary to implement improvements.
Within Higher Education institutions Internal Audit’s role is to provide the Governing body, through its Audit Committee, with an objective evaluation and opinion on the overall adequacy and effectiveness of the institution’s framework of governance, risk management and control. Our role is also provide expert internal management consultancy capability to provide support and advice during period of organisational change and rationalisation.
Our modern, risk-focused internal audit service looks beyond core financial systems and controls. We systematically review all key processes, including strategic and business planning, operational business processes such as sales or service delivery, human resources, estates management, procurement, and ICT. We also provide assurance that your corporate governance arrangements and risk management functions are fit for purpose and substantively comply with recognised best practice standards and regulatory requirements.
The key stages to delivering a tailored internal audit programme that meets your needs is as follows:
- Develop a thorough understanding of the institution and its strategic objectives, through discussion and review of relevant documentation
- Assessing your approach to risk management and whether it will support the development of a strategic, risk-based internal audit plan
- Identify and assess, with you, the key risks that could significantly impact on the achievement of institutional and departmental objectives
- Develop the internal audit plan from the information gathered and the assessments made and obtain agreement from you that the plan is focussed in the right areas before approval by the audit committee
- Regular re-appraisal of your risk profile and the impact of emerging risks that affect the scope and direction of the internal audit plan.
All work delivered in accordance with the plan will be timetabled in agreement with you. When we report at the conclusion of fieldwork we always do so within your business context. We highlight areas of good practice as well as recommendations for improvement. We provide robust opinion on both the design and operation of controls, so that you are clear about the overall strengths and weaknesses in the area being reported on.
Effective Internal Audit in Higher Education
KCG’s approach is to provide an internal audit service to HEIs under a shared service consortium arrangement. Through joint employment, we form part of the ‘staff’ of our Member institutions, which is important for us to be able to absorb institutional culture and working practices. Our staff work at all levels of our Member institutions’ institutional structures with particular focus on strong working relationships with Boards/ governing bodies and sub-committees, Vice Chancellors and Executive/ senior management teams.
We become established as an integral part of our Member institutions, identifying and assisting with the development of risk mitigation strategies, and supporting management by identifying opportunities for efficiencies and performance improvement, cost reduction, and revenue and customer service optimisation.
KCG helps institutions respond to challenges in the sector, moving away from the traditional transaction-based and compliance role to being more proactive and strategic, making a more positive and demonstrable contribution to the achievement of institutional strategic objectives. The KCG Internal Audit approach involves working at Board/ governing body level, engaging regularly with Audit Committees as well as with executive management, linking clearly the audit programme with institutional strategic risk. In this way, Internal Audit can genuinely ‘add value’ and assist in promoting institutional performance improvement.
In carrying out our work, we are required to comply at all times with the Office for Students audit requirements contained within the Office for Students’ Terms and Conditions for Funding for higher education institutions (https://www.officeforstudents.org.uk/media/1286/ofs-rfip-b3_ofs-terms-and-conditions-of-ofs-funding-for-heis-to-31-july-2019.pdf)., the Public Sector Internal Audit Standards (PSIAS), and other industry best practice and professional standards, including the Chartered Institute of Internal Auditors (IIA) Standards.
Whilst we work extensively with institutions regulated by OfS, the KCG Consortium model of internal audit is also available to alternative providers. These institutions receive an internal audit service that is comparable to that delivered to HEIs, which is therefore fully compliant with the requirements and standards defined by OfS.
Our internal audit services
In addition to our consortium membership model of internal audit delivery, we also work with non-members. The following are the key internal audit services we provide:
Outsourced internal audit – In place of an in-house function, and on a fully commercial basis, we offer a range of solutions, including:
- Generating the internal audit strategy
- Assessment of audit needs and audit planning
- Performing all internal audit work on your behalf
- Acting as your head of internal audit
Co-sourced internal audit – We supplement your in-house team where additional or specialist skills are needed, specifically: project management expertise and ICT. We also work with organisations to help build audit methodologies and standards, develop internal audit plans, and training of staff.
Effectiveness and improvement – Our internal audit effectiveness reviews are designed to assess whether the in-house function is meeting the needs of the business, and to identify key improvement actions. Key aspects of our effectiveness reviews are:
- Benchmarking against best practice
- Assessing alignment to the strategic and operational imperatives of the business
- Advising on internal audit methodologies and approach
- Providing assurance that internal audit is managed effectively and delivers value for money.
What you can expect
The KCG internal audit team is highly experienced in working in collaboration with member institutions to implement best practice internal audit solutions. We tailor our approach to the specific needs of our members to ensure they receive optimum value from their investment in internal audit.