What Does an Internal Auditor Actually Do?
Estimated reading time: 6 minutes
The internal audit is one of the most important parts of a council's governance framework, yet it's often one of the least understood.
Some people see the internal auditor as someone who arrives once or twice a year to look for mistakes or highlight their failings. Others assume they're there to "pass" or "fail" the council.
In reality, neither is true.
A good internal audit is about providing independent assurance, identifying opportunities for improvement and helping councils strengthen their governance, financial management and internal controls.
What Is an Internal Audit?
An internal audit is an independent review of how a council manages its finances, governance and risk.
Rather than focusing solely on the accounts, the auditor considers whether the council has appropriate systems and controls in place to support good decision-making and safeguard public funds.
The aim is not to catch people out.
It's to help ensure the council is operating effectively, transparently and in accordance with legislation and recognised good practice.
What Does an Internal Auditor Look At?
Although every audit is different, areas commonly reviewed include:
Financial Regulations and Standing Orders
Bank reconciliations
Budget monitoring
Internal controls
Risk management
Asset registers
Insurance arrangements
Minutes and decision-making
Website transparency requirements
Payroll processes
Procurement and contracts
Previous audit recommendations
Rather than reviewing every transaction, the auditor generally uses a sample-based approach to assess whether systems are working effectively.
Independence Matters
An internal auditor should provide an objective view.
That means they should not be involved in the council's day-to-day financial administration or decision-making.
Independence allows the auditor to review processes fairly and provide constructive recommendations where improvements can be made.
Recommendations Are Not Criticism
One of the biggest misconceptions surrounding internal audit is that recommendations indicate failure.
In reality, many recommendations relate to opportunities for improvement rather than significant concerns.
For example:
Updating an outdated policy.
Improving the wording of a Risk Register.
Strengthening procurement records.
Reviewing document retention procedures.
Enhancing evidence to support financial decisions.
These recommendations help councils build stronger governance over time.
Why Internal Audit Adds Value
A good internal audit doesn't just identify issues.
It helps councils:
Strengthen governance.
Improve financial controls.
Reduce organisational risk.
Prepare for external audit.
Demonstrate accountability.
Build confidence among councillors and residents.
Identify practical improvements that make day-to-day administration easier.
Many councils find that implementing small recommendations each year leads to significant long-term improvements.
Preparing for Internal Audit
Preparation doesn't need to be stressful.
Keeping records organised throughout the year makes the process far smoother.
Before your audit, consider whether:
Bank reconciliations are complete.
Minutes have been approved.
Policies are up to date.
The Risk Register reflects current risks.
The Asset Register is accurate.
Insurance documents are available.
Previous recommendations have been reviewed.
Good record keeping throughout the year is far more valuable than trying to prepare everything at the last minute but we all know last minute dot com happens more often than we like!
Internal Audit Is Part of Continuous Improvement
Governance is not static.
Legislation changes, councils evolve and new risks emerge.
Internal audit provides an opportunity each year to step back, review existing arrangements and identify practical improvements that support the council's long-term success.
The most effective councils don't see internal audit as a compliance exercise.
They see it as an opportunity to learn, improve and strengthen the way they work.
Final Thoughts
Internal audit isn't about finding fault.
It's about helping councils build confidence in their systems, improve governance and demonstrate responsible stewardship of public funds.
By approaching internal audit as a constructive partnership rather than a hurdle to overcome, councils can gain real value from the process and continue to develop year after year.
At Domino Council Services, we believe internal audit should be practical, proportionate and supportive. A good audit doesn't simply identify where improvements could be made, it helps councils understand why those improvements matter and how they contribute to stronger governance.