Local Government Public Sector Internal Audit An Outsiders View

1
Local Government / Public Sector Internal Audit
An Outsiders View

• Presented by
• Mark Robinson Business Manager
• Jamie Houlders Business Director
• Hays Accountancy Personnel
• Public and Not for Profit Sector

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Agenda

• The 3 Ws
• Audience Analysis
• How has internal audit changed?
• Local Government characteristics
• The Market size / qualifications / scope
• Internal Audit opinions and profile

3
Agenda

• Permanent recruitment
• Temporary recruitment
• Mutual relationships
• Self help
• Review
• Questions

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Who are we?

• Mark Robinson
• 7 years recruitment experience with Hays
• Over 3 years permanent public sector recruitment
  in the East Midlands
• 6 years local government experience

• Jamie Houlders
• 7 years recruitment experience with Hays
• Over 2 years interim public sector recruitment in
  the East Midlands
• 6 years local government experience

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Where are we from?

• Hays Personnel Services is a division of Hays plc
• Hays Accountancy Personnel - Public Sector was
  established over 10 years ago
• Hays Accountancy Personnel - Public Sector
  operates from regional hubs
• East Midlands 3 dedicated consultants
  West Midlands 9 dedicated consultants
  
  Northants/Bedford 3 dedicated consultants
  

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Why are we here?

• Free lunch
• Richard Bonehams persistence
• The chance to widen the market knowledge of our
  clients
• To stimulate a more effective working
  relationship through increased understanding of
  the issues that the Internal Audit sector is
  facing

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Audience Analysis

• Area of Public Sector
• Experience in internal audit
• Qualification
• Length of time with current employer
• How far do you travel to work

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How has internal audit changed?

• 10 years ago
• Systems based
• Fraud prevention
• Traditional
• Failsafe before external audit

• Current
• Computer audit
• Remote systems audit
• Operational support
• Risk management
• Value adding
• Evolving
• Dynamic

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Local Government characteristics

• Wide mix of professions within each organisation
• Long term employees
• Risk averse individuals
• Closely linked network with many regional working
  groups
• Limited market knowledge outside Local Government
  and even within the sector

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The Market - Size

• Reducing market due to consortia and partnership
  working
• Flatter structures due to the inability to
  attract qualified candidates
• More temporary roles due to recruitment
  difficulties and under resourced teams
• 2.1m increase in Public Sector workers in the
  last 5 years

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The Market - Qualifications

• Low numbers of CIPFA qualified accountants (ie 8
  in the last 12 months in the whole of the East
  Midlands / Northants / Beds area
• CIMA will soon be most prevalent qualification in
  the Public Sector
• Now over 6000 IIA members in the UK
• Consortia more likely to provide IIA training
• Eventually Local Government may have very few
  qualified accountants working in internal audit
• Adverts now asking for either IIA or CCAB

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The Market Scope

• Long term career path to Director of Resources
  seems less common
• Will IIA be seen as a suitable qualification at
  Director level?
• Less audit positions at senior level as the
  number of providers in the Public Sector
  decreases

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IA the Directors view

• Recent study by Deloitte and Touche in
  conjunction with the IIA offered opinions on the
  different value received/offered by the internal
  audit function
• Internal audit function has improved markedly
  over the last 3 years
• The key areas of value are the assurance of
  internal controls and provision of risk
  assessment for the organisation rather than the
  provision of consultancy services

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IA The Auditors View

• Internal control adherence and risk assessment
  are the main value services
• Consultancy is another area where internal audit
  can add value
• There are no performance measurement criteria for
  internal audit functions

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IA - Profile

• Internal Auditors are not good at selling
  themselves to their own organisation
• Without highlighting areas of value added work,
  extra resources are unlikely to be given
• In the NHS, risk management is being separated
  out from internal audit (losing high profile
  area)
• Why should an internal client who has experienced
  a traditional systems audit over 10 years then
  accept the same person as a consultant? Possible
  training issue?

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Permanent Recruitment

• Very limited candidate market at all levels, low
  numbers of studiers currently
• Salary scales are similar with the exception of
  the Audit Commission - higher salaries and lease
  cars
• Most people in Local Government work within a 15
  mile radius of their employer. Movement between
  authorities is therefore limited unless it is a
  role closer to home or a relocation (external
  issues are house prices and schooling)

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Permanent Recruitment The Market (East Midlands)

• Only 1 local authority qualified level position
  in over 2 years not filled
• 4 senior positions with the Audit Commission this
  year (one specified qualified)
• Partnerships with external providers now
  established at Consortium Audit and Leicester
  City Council
• Qualification levels reducing in advertisements

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Permanent RecruitmentOther Sectors

• NHS has less in house suppliers, ie only one in
  the East Midlands
• Practices are recruiting from Public Sector as
  their workload and number of partnerships
  increase
• Commerce
• More travel between sites and operational roles
• Benefits cars, bonuses etc
• Recruit qualified external auditors, then groom
  them for mainstream line management

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Temporary RecruitmentThe Market East Midlands

• 90 of IA jobs registered have been at the
  qualified level
• 33 temporary IA vacancies successfully filled by
  Hays in last 18 months, of which 30 were Local
  Government based
• Of these Local Government jobs, 50 were due to
  heavy workload, 40 were providing cover while
  recruiting
• Average duration 3 to 6 months

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Temporary RecruitmentThe Candidates East
Midlands

• Backgrounds
• 50 have some local Government audit experience
  in last 5 years, but only 10 have 2 years plus
• 30 are from external audit / practice
• 20 accountants with no audit experience
• Qualification
• 3 in every 10 candidates are not qualified but
  working in qualified level positions

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Temporary RecruitmentThe Challenges

• Candidate supply where do they come from?
• Commitment 40 of roles filled with candidates
  looking for permanent employment
• Requests forward planning / flexibility over
  timing
• Open up the market how?
• Non Local Government Public Sector, Practice,
  Commerce
• Support at lower level
• Introduce more people to the market by
  identifying skill set not background

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How can we help you?

• Market advice re seasonal peaks
• Advise when a candidate becomes available
• Help to promote internal audit as a career option
  and provide a better understanding of the
  function
• Salary information and advice
• Sharing ideas discovered in other areas of the
  country through our network

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How can you help us?

• Involve us at the planning stage
• Refer ex colleagues who might want temporary work
• Advise us of your requirements as far ahead as
  possible to enable us to line a candidate up
• Provide an insight into the culture and issues
  within your organisation
• Offer examples of movement / progression within
  your departments

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Self help

• Review the way you assess your own skills and
  abilities
• Highlight areas where internal audit has
  contributed to improved CPA results, added value
  to the organisation
• Identify the key skills required to be successful
  in internal audit and think about where those
  skills could have been acquired outside of Local
  Government

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Review

• The Internal Audit function is undergoing
  substantial change
• Qualifications
• Background
• Skill set
• Selling audit as a career
• Self help

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Questions