Mr. Seamus McCarthy:

While we have many big organisations with huge budgets, not all of them are big. Some are small and they might have a turnover of €20,000, €1 million, €1.5 million or €10 million. They vary considerably. For instance, the HSE has a substantial internal audit function but all public bodies are expected to have some internal audit function. The smaller ones tend to contract it out and, therefore, they will use Mazars or Deloitte to carry out an internal audit programme that is set for them and reviewed by the audit committee within the organisation. Their focus should be on the operation of the internal controls. Our primary focus is on the true and fair view in the financial statements and the propriety and governance issues at a higher level but we expect internal audit to go in and look in detail at what happens within schemes, the payments systems and so on.

Where there is a well-established and professional internal audit function operating, we take into account the work they are doing when we plan our work. We can place reliance, therefore, on the internal audit's work if we are satisfied that it is independent and professional and producing the right quality of work. We tend to try to avoid a situation where if they have programmed a piece of work, we cut across it and do the same thing. It is not an efficient use of resources. We examine the work they have done, the areas they have covered and the findings and we look for the systemic implications of what they find. That is the kind of thing we draw to the attention of the audit committee when we report and to management in a management letter and so on. We also look to see that where internal audit has carried out an exercise, the organisation responds to the recommendations and implements them or changes the control regime in order that risks are closed off. Our auditors meet regularly with internal audit personnel to try to understand their programme and their priorities and to a certain extent to assess and be satisfied that the internal audit function is meaningful to the operation of the organisation.