Minutes of a meeting held on 19th September, 2011.
Present: Councillor A.C. Williams (Chairman); Councillor J. Clifford (Vice-Chairman); Councillors J.F. Fraser and K. Hatton.
Also present: Councillors Mrs. E. Dodd and Mrs. C. Davies (Chairman and Vice-Chairman respectively of Bridgend County Borough Council's Audit Committee); Mr. J. Golding (Grant Thornton UK LLP) and Mr. S. Barry (Wales Audit Office).
375 APOLOGIES FOR ABSENCE -
These were received from Councillors Mrs. P. Drake, N. Moore and C.L. Osborne.
376 MINUTES -
RECOMMENDED - T H A T the minutes of the meeting held on 21st July, 2011 be approved as a correct record.
377 DECLARATIONS OF INTEREST -
No declarations were received.
378 ANTI-FRAUD AND BRIBERY POLICY (HARM) -
The Committee's approval was sought in regard to an updated and revised Anti-Fraud and Bribery Policy.
In referring to the report the Head of Accountancy and Resource Management indicated that the revised Policy summarised the Council's position with regard to fraud and corruption, building on the content of a number of corporate policy statements incorporated in the Council's Constitution, including the Members' Code of Conduct; Officers' Code of Conduct; Whistleblowing Policy; Financial Regulations and Contract Standing Orders. He indicated that it was imperative that Anti-Fraud Policies reflect the 'tone at the top' of an organisation making it clear that fraud and corruption would not be tolerated. In addition, he referred to the updated Anti-Fraud and Bribery Policy which was attached at Appendix A to the report and referred to specific elements of the Policy in particular relating to the following areas:
· detection and investigation
· awareness and training.
In referring to specifics of the Policy the Head of Accountancy and Resource Management indicated that there was a greater emphasis on employees of all grades at all levels to lead by example in matters relating to fraud and bribery. Employees were a vital element of the Council's stance on fraud and bribery and as such staff were encouraged and were expected to raise any concerns that they may have on such issues and where they were associated with Council activities. He went on to indicate that the Council's stance regarding such matters in all instances involved the police.
His attention then turned to the importance of raising staff awareness in regard to anti-fraud and corruption and to this end appropriate training was provided as part of the Council's Induction arrangements for new employees, in addition to the Internal Audit Section which offered tailor made programmes in fraud awareness training for staff. He also alluded to web based training modules being available on the Council's StaffNet.
Finally, he indicated that the arrangements as set out in the Policy signalled a move towards greater prevention with senior managers being made responsible for ensuring that employees were aware of their role they were expected to play in the Council's framework of internal control e.g. through induction and training courses, procedure manuals, intranet, internet etc. He reminded the Committee that the Council regularly reviewed its Standing Orders and Financial Regulations to ensure that appropriate arrangements were in place in regard to the duty on all Councillors and employees to act in accordance with best practice when dealing with the affairs of the Council.
At this juncture, brief discussion took place on current safeguarding measures in place to protect the Council's interests, fraud detection rates and arrangements in place to allow employees to raise issues which fell under the auspices of the Policy and other policies of the Council.
Having regard to the above and related issues it was
RECOMMENDED - T H A T the revised Anti-Fraud and Bribery Policy as set out in Appendix A to the report be endorsed and referred to Cabinet for adoption.
Reason for recommendation
To agree an updated and revised Policy prior to the matter being referred to Cabinet for approval.
379 UPDATED FORWARD WORK PROGRAMME (HARM) -
The report sought to apprise Members of the updated 2011/12 Forward Work Programme for the Committee. Set out in Appendix A was information in relation to all aspects of the Committee's core functions including progress made to date on each activity detailed in the Programme.
RECOMMENDED - T H A T the content of the report be noted.
Reason for recommendation
In acknowledgement of the updated information in regard to the 2011/12 Forward Work Programme.
380 INTERNAL AUDIT - OUTTURN REPORT - APRIL TO JUNE 2011 (HARM) -
The Committee was apprised of the actual Internal Audit performance against the 2011/12 Plan for the period 1st April to 30th June, 2011.
The actual position for the first three months of the year, compared against the Plan was set out in Appendix A to the report.
The figures showed that 460 actual productive days had been achieved which equated to 99.5% of the overall planned productive time available. This was considered an achievement when taking into account that staff had been relocated during the period to Bridgend and had to embrace new working practices such as agile working and hot desking.
With the two sections now combined, it was envisaged that staff would work alongside one another to ensure that both Council's Audit Plans were achieved in line with stated risks.
A summary of audits completed during the above period were detailed in Appendix B to the report. This showed the reviews which had been completed, together with an overall Audit Opinion that would support the annual audit opinion at the end of the financial year. For the period subject of the report, Internal Audit had made a total of 33 recommendations, 7 were categorised as significant, 26 merited attention and none being regarded as significant. Relevant Managers had provided written assurance that these would be addressed. Following each audit, satisfaction surveys were forwarded to the service recipients. Survey results revealed excellent customer satisfaction levels.
Overall the reviews completed during the first few months of the Plan had not identified any significant weaknesses in the system of internal financial control.
A number of specific points were raised in regard to information contained in Appendix A particularly in reference to the status of audits in regard to Jenner Park Primary School and Bryneithin EMI and these were clarified.
Mr. Golding, in referring to the eight assurance work reviews completed to date, sought clarification in respect of the reasons for the variations between the planned days taken compared to the actual days taken in relation to job numbers A16 and A28. Given that both of the reviews related to Adult Services he enquired if there were any underlying issues that should be brought to the attention of the Committee. In response the Principal Auditor indicated that there were various reasons for the outturn performance and proposed that a further report be submitted to the next meeting on these matters.
Having regard to the above and related issues, it was
(1) T H A T the actual Internal Audit performance during the three months of the financial year April to June 2011 be noted.
(2) T H A T a further report be submitted to the next meeting of the Committee in respect of assurance work reviews A16 and A28.
Reasons for recommendations
(1) In acknowledgement of work undertaken by the Internal Audit unit to date.
(2) To apprise the Committee of any issues in regard to internal financial controls.
381 AUDIT OF THE 2010/11 FINANCIAL STATEMENTS (DFICTP) -
The Council was responsible for the preparation of the Financial Statements that presents fairly its financial position as at 31st March 2011. Mr. Anthony Barrett of the Wales Audit Office in his capacity as Appointed Auditor was responsible for reporting whether, in his opinion, this was indeed the case. The audit itself was undertaken by Grant Thornton UK LLP, as the Council’s Engagement Lead, on behalf of the Appointed Auditor.
Mr. Golding, as the Council’s Engagement Lead representative, presented the draft Statement of Accounts for 2010/11. These had been prepared before 30th June 2011 in accordance with the statutory timeframe and reported previously to the Audit Committee in July 2010 (Minute No. 233 refers).
With the audit of these Financial Statements now substantially completed, he indicated that a report detailing the key matters arising from the audit must be reported by the Appointed Auditor to those charged with governance in accordance with the Internal Standards on Auditing (ISA 260). In line with the terms of reference, the Audit Committee represented the appropriate body to which this report must be communicated.
The report of the Appointed Auditor, together with the 2010/11 Statement of Accounts, incorporated all agreed amendments and final Letter of Representation was attached for signature by the appropriate nominated representatives of the Council. Mr. Golding, in referring to the Audit of Financial Statements Report, indicated that over the past few years significant changes had been introduced by the Code of Practice on Local Authority Accounting in the UK as to the presentation and content of the Statement of Accounts. He reminded the Committee that the 2010/11 Statement of Accounts had been prepared in accordance with the requirements of the International Financial Reporting Standards (IFRS). This was intended to provide comparable accounts across all accounting boundaries, public and private, national and international. He went on to allude that these changes had seen a significant increase in the information provided including new statement and changes to the layout as well as treatment of areas such as salaries and pensions, Government grants and contributions, fixed assets (property, plan and equipment) and leases. However, none of these changes impacted on the net expenditure and therefore, the Council tax of this Authority.
Mr. Golding highlighted that the provisional findings of Grant Thornton on behalf of the Appointed Auditor on the audit of the Financial Statements were that:
· they had concluded on all the risks in the Financial Audit Strategy
· there were no concerns with the qualitative aspects of the Council’s accounting practices and financial reporting
· there were no uncorrected misstatements
· there were no expected modifications to the standard Auditor’s Report
· the audit did not identify any material weaknesses in internal controls
· there were no other matters which needed to be reported as required by other ISAs and
· there were no other significant audit matters of governance interest to report.
Having regard to the above it was the intention of the Appointed Auditor to issue an unqualified audit report on the Financial Statements once the relevant Council officers had provided a signed Letter of Representation.
RECOMMENDED - T H A T the report of the Appointed Auditor on the audit of the Council’s Financial Statements for 2010/11 be approved and the Financial Statements including the final Letter of Representation be recommended for signature by those authorised subject to the Chairman of the Audit Committee being added to the list of authorised signatories.
Reason for recommendation
To ensure that those charged with governance had considered the results of the audit of the Council’s Financial Statements for 2010/11.
382 MATTER WHICH THE CHAIRMAN HAD DECIDED WAS URGENT -
RESOLVED - T H A T the following matter which the Chairman had decided was urgent for the reason given beneath the minute heading be considered.
383 WALES AUDIT OFFICE: IMPROVEMENT ASSESSMENT UPDATE (DFICTP) -
Urgent by reason of there being insufficient time to await the next meeting of the Audit Committee
The Committee had previously considered a report from the Wales Audit Office (WAO) at its meeting on 2nd June 2011 (Minute No. 85 refers) on the proposed Regulatory Programme for Performance Audit at the Council for the period April 2011 to March 2012. This process would provide the Committee with regular update reports on progress of various projects and studies and would inform the work of the Council’s Improvement Assessment. The last update previously considered by the Committee was at its meeting of 21st July 2011 (Minute No. 234 refers).
Submitted for consideration by the Committee was a further update of the WAO progress as set out in Appendix A to the report. This appendix detailed the intended work plan and a brief status report outlining the position as at 15th September 2011.
RECOMMENDED - T H A T the update on progress made by the WAO on their Improvement Assessment work be noted.
Reason for recommendation
In acknowledgement of progress made to date.