Cairngorms Nation­al Park Author­ity Intern­al Audit Report: Fin­an­cial Plan­ning (Decem­ber 2018)

Level of Assurance:

	Design	Oper­a­tion­al Effectiveness
Assur­ance	Sub­stan­tial	Sub­stan­tial

Con­tents

• Exec­ut­ive Sum­mary (Page 3 – 6)
• Appen­dices:
  • I Staff Inter­viewed (Page 7)
  • II Defin­i­tions (Page 8)
  • III Terms of Ref­er­ence (Page 9 – 10)

Report Status

• Aud­it­ors: Gemma Macdonald
• Dates Work Per­formed: 10/12/18 — 14/12/18
• Draft Report Issued: 21/12/18
• Final Report Issued: 10/01/19

Dis­tri­bu­tion List

• Dav­id Camer­on, Dir­ect­or of Cor­por­ate Services
• Danie Ral­ph, Fin­ance Manager

Exec­ut­ive Summary

Over­view:

This intern­al audit reviewed the fin­an­cial plan­ning pro­cess at Cairngorms Nation­al Park Author­ity (CNPA) to provide assur­ance and recom­mend­a­tions for improve­ment. CNPA’s budget­ing pro­cess involves two cost types: core costs (fixed, alloc­ated based on full-time equi­val­ents) and vari­able activ­ity costs. Fund­ing comes primar­ily from an annu­al Grant in Aid from the Scot­tish Gov­ern­ment. Scen­ario plan­ning is used to assess the impact of vari­ous budget changes. The budget is reviewed monthly, fort­nightly, and then daily from March.

Good Prac­tice:

The audit found CNPA’s fin­an­cial plan­ning to be based on accur­ate, reli­able inform­a­tion with reas­on­able assump­tions. The pro­cess was timely, with extens­ive con­sulta­tion, review, and approv­al. Budget refore­casts were con­duc­ted reg­u­larly to reflect changes or pre­dict the outturn.

Con­clu­sion:

The audit provided sub­stan­tial assur­ance on the design and oper­a­tion­al effect­ive­ness of CNPA’s fin­an­cial plan­ning controls.

Risks Reviewed Giv­ing Rise to No Find­ings of a High or Medi­um Significance:

• Fin­an­cial plans may not be based on accur­ate, reli­able, or rel­ev­ant information.
• The fin­an­cial plan­ning pro­cess may not be car­ried out in a timely manner.
• Fin­an­cial plans may be based on unreas­on­able assump­tions or forecasts.
• No, or lim­ited, scen­ario plan­ning or sens­it­iv­ity ana­lys­is may have been undertaken.
• Budget refore­casts may not be car­ried out reg­u­larly to reflect changes which may occur to plans, or to pre­dict the out­turn where expendit­ure in some areas dif­fers from expectations.
• Fin­an­cial plans may not be sub­ject to effect­ive con­sulta­tion, review, or approval.

Appendix I — Staff Interviewed

Name	Job Title
Danie Ral­ph	Fin­ance Manager

BDO LLP appre­ci­ates the time provided by all indi­vidu­als involved in this review.

Appendix II — Definitions

Level of Assurance

This sec­tion provides defin­i­tions for the level of assur­ance regard­ing design and oper­a­tion­al effect­ive­ness of intern­al con­trols, cat­egor­ized as Sub­stan­tial, Mod­er­ate, Lim­ited, and No. It details the find­ings from review and the cor­res­pond­ing opin­ions for each level. The sec­tion also defines the sig­ni­fic­ance of recom­mend­a­tions as High, Medi­um, and Low.

Appendix III — Terms of Reference

Back­ground:

The audit was con­duc­ted in accord­ance with the 2018 – 19 Intern­al Audit Plan.

Pur­pose of Review:

To provide assur­ance to man­age­ment and the Audit & Risk Com­mit­tee on the design and effect­ive­ness of CNPA’s fin­an­cial plan­ning controls.

Key Risks:

The key risks assessed were:

• Inac­cur­ate, unre­li­able, or irrel­ev­ant inform­a­tion in fin­an­cial plans.
• Untimely fin­an­cial plan­ning process.
• Unreas­on­able assump­tions or forecasts.
• Lim­ited or no scen­ario planning/​sensitivity analysis.
• Irreg­u­lar budget reforecasts.
• Inef­fect­ive con­sulta­tion, review, or approv­al of fin­an­cial plans.

Scope:

The scope of the review was to assess whether:

• Fin­an­cial plans were based on reas­on­able assump­tions and fore­casts and accur­ate, reli­able information.
• Plans were developed timely with appro­pri­ate con­sulta­tion, review, and approval.
• Scen­ario plan­ning and sens­it­iv­ity ana­lys­is were con­duc­ted to ensure flex­ib­il­ity and robustness.
• Budget refore­casts were car­ried out reg­u­larly to reflect changes or pre­dict outturns.

BDO LLP Information:

(Con­tact inform­a­tion for BDO LLP is included on the final page of the report).