AUDIT COMMITTEE
MINUTES of a meeting held on 26th
September, 2007.
Present: Councillor N.P. Hodges
(Chairman); Councillors Ms. L. Burnett, J. Clifford, E.
Hacker, Mrs. M. Kelly Owen and C.L. Osborne.
Also Present: Mr. R. Harries and Ms. G. Lewis
(Wales Audit Office).
367 APOLOGY FOR
ABSENCE -
This was received from Councillor A.D.
Dobbinson.
368 MINUTES -
RECOMMENDED - T H A T the minutes of the
meeting held on 26th July, 2007 be approved as a correct
record.
369 DECLARATIONS OF
INTEREST -
No declarations were received.
370 AUDIT OF THE
FINANCIAL STATEMENTS - REPORTING TO THOSE CHARGED WITH GOVERNANCE
(DFICTP) -
The Statement of Accounts had been approved by
the Council on 27th June, 2007. The report of the
Wales Audit Office (WAO) to those charged with governance following
the audit of the Council’s Financial Statements for 2006/07
(undertaken in accordance with the International Standard on
Auditing (ISA 260)) was appended to the report, as was the
amended version of the 2006/07 Statement of Accounts following the
audit.
The provisional findings of the WAO on the
audit of the Financial Statements were:
·
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
control;
·
There were no other matters which needed to be reported as required
by other ISAs; and
·
There were no other audit matters of governance interest to
report.
Ms. Lewis in commenting on the document,
commended the officers of the Council for the high standard of work
undertaken during the exercise and that the Council should be
pleased with the findings of the report. In addition, she
commented on Appendix 2 of the report which related to a letter of
representation regarding Single Status and to equal pay
matters. The Council had undertaken an exercise to identify
whether a potential liability existed by undertaking a review of
its bonus schemes and obtained advice from its Legal Department as
to whether any differences in remuneration of similarly related
posts were related to the gender of the postholders and whether the
Council could be liable for claims under Equal Pay
legislation. This exercise had been concluded and the Council
was able to defend such claims in accordance with FRS12
(Provisions, Contingents Liabilities and Contingent Assets), any
transfer of economic benefits required to settle any liability was
not probable. She commented that in view of this, the Council
had made no provision to include arrangements within its
accounts.
In addition to the above matters, Mr. Harries
referred to the Summary of Corrections to the draft Financial
Statements. Those amendments of greater significance were
detailed as follows:
·
Debtors had been increased by £407k. as bad provisions in regard to
housing benefits and sundry debtors were overstated. The
Council’s year end deficit had reduced as a result of this
amendment;
·
Debtors had been over-provided within the draft accounts by
£148k;
·
A provision of £2.5m. had been included within the revised
Financial Statements in regard to the probable repayment of grant
funding to the WAG in respect of the Penarth Headland Link
scheme. The provision had been funded by a transfer from a
specific reserve that had been earmarked for this eventually, thus
this adjustment had a neutral impact on the Council’s general
reserves;
·
The insurance provision had been reduced by £678k. There had
however, been no impact on the Council’s year end position as the
reduction had been transferred to the earmarked insurance
reserve;
·
Fixed assets had been reduced by £2.1m. in regard to the
revaluation of the capitalised expenditure upon Penarth Headland
Link within infrastructure assets;
·
A creditor of £114k. had been reversed as it was identified on the
audit that no liability existed. This had resulted in a
decrease in the reported year end deficit;
·
As a result of the Audit it had been identified that the Council
had overpaid water rates to Welsh Water. A debtor of £34k.
had been set up within the HRA in regard to this matter and the
income recognised within the HRA Income and Expenditure Account
resulting in an increase of HRA reserves;
·
With the Post Ballot Sheet Events references had also been updated
in recognition of the recent flood damage caused to Council owned
assets.
It was also noted that the Contingent
Liability note contained within the Financial Statement had also
been updated to reflect matters regarding Equal Pay issues.
RECOMMENDED - T H A T the report of the WAO on
the Audit of the Council’s Financial Statements for the period
2006/07 including the Letters of Representation that had been
incorporated into the Financial Statements following the Audit
(Appendices 1 & 2) be endorsed and signed by those
authorised.
371 INTERNAL AUDIT
PLAN QUARTER 1 ACTUAL OUTTURN V PLANNED OUTTURN 2007/08 (DIFICTP)
-
The actual position for the first quarter of
the current financial year compared against the Plan was detailed
in the Appendix to the report.
The Plan had been based on an establishment of
18 full time employees which provided for a total of 4,680
days. In addition, and included within the Plan of Work for
2007/08 were 60 days for the bought in services of an IT Specialist
Auditor making a total of 4,740 days available for the year.
It had been noted that the Section had started
the year with 3 posts vacant and as a consequence there had been a
shortfall of 200 days in the first quarter.
Attached as Appendix A was the activities
report produced from the Audit Management System (APACE). In
addition, details were provided of the reviews commenced and not
completed during the period as well as those reviews completed
within the period.
Overall the reviews undertaken during the
first quarter of the financial year had not identified any
significant weaknesses in the system of internal financial control
with the exception of Llansannor Primary School. However, due
to the number of control weaknesses identified, it was the
intention to revisit the school during the third quarter of the
current financial year.
Auditors will continue to monitor progress
against improvements needed at the Leisure Centres and were in the
process of completing the most recent follow-up reviews which would
be reported to the next meeting of the Committee.
RECOMMENDED - T H A T the report on actual
audit performance for the first quarter be noted.
372 PURCHASING CARDS
IN THE VALE OF GLAMORGAN COUNCIL (DFICTP) -
A spend analysis carried out in 2005 had
identified that the Council processed nearly 80,000 invoices per
year which were worth under £100. Every year over 50,000
invoices were process for values of under £50 which amounted to
less than 2% of total expenditure.
It had been estimated by the National Audit
Office and the National eProcurement project that a saving of
between £28 and £33 per transaction could be made by using
technology to change procurement processes.
The Welsh Procurement Card (WPC) was a cost
effective way of purchasing low value, high volume goods and
services. The card was intended to speed up the procurement
processes by eliminating the need for requisitions, purchase
orders, invoice processing and payments. The card itself
operated in the same way as normal charge cards; insomuch as they
were issued to individuals who could use them over the telephone,
internet and/or in person. Cabinet at its meeting held on
16th November, 2005 (Minute No. C2175 refers), approved
the introduction of the WPC Mastercard on a phased basis.
An internal Audit had been undertaken to
review the Corporate Procurement Card pilot scheme (Chief
Executive’s Department and the Finance, ICT and Property
Directorate) with the purpose of ensuring that appropriate
financial systems and controls were satisfactory and that the
financial procedures and processes complied with the Council’s
Financial Regulations and Contract Standing Orders. The
result of the internal Audit concluded that the scheme was
performing satisfactorily. The overall findings were positive
and it was suggested that the scheme be progressed to the next
stage of development. Endorsement was now sought to extend
the use of WPC within the Council.
RECOMMENDED - T H A T the extension of WPC
Mastercard Purchasing Cards for the Council be endorsed and
implemented on a phased basis and the matter be referred to Cabinet
for approval.
Reason for recommendation
To allow efficiencies to be obtained in the
procurement processes in order that better and effective
procurement was delivered.