AUDIT COMMITTEE
MINUTES of a meeting held on 24th January, 2008.
Present: Councillor N.P. Hodges (Chairman); Councillor A.D. Dobbinson (Vice-Chairman); Councillors Ms. L. Burnett, E. Hacker, Mrs. M. Kelly Owen and C.L. Osborne.
Also Present: Ms. G. Lewis (Relationship Manager), Mr. R. Harries (Outgoing Audit Manager), Mr. J. Golding (Grant Thornton), Ms. C. Thomas (Grant Thornton) and Mr. J. Verity (Wales Audit Office).
740 MINUTES -
RECOMMENDED - T H A T the minutes of the meeting held on 26th September, 2007 be approved as a correct record.
741 DECLARATIONS OF INTEREST -
No declarations were received.
742 WALES AUDIT OFFICE (WAO) ANNUAL LETTER 2006/07 (REF) -
Cabinet on 23rd January, 2008, received a report which advised of the views of the Wales Audit Office on the overall position of the Council in relation to audit and inspection work.
A copy of the Council’s Relationship Manager (R.M.) Annual Letter, published in December 2007, had been attached at Appendix 1 to the report.
In previous Annual Letters, the Relationship Manager had commented favourably on the Council’s position in relation to its improvement journey to date. The Annual Letter was again positive about the continuing improvements being made by the Council.
Matters of note included the following:
· the Council’s resources were, in all material respects, properly used and accounted for;
· the Council had satisfactory arrangements in place to help it achieve economy, efficiency and effectiveness, and the Improvement Plan had been delivered appropriately;
· the Council’s arrangements for OneVale had been effective in the short term with procurements achieving significant efficiency savings. The impact of changes to OneVale projects needed to be fully assessed against the original Business Case;
· the Council had recognised the importance of project management and continued to strengthen its internal processes;
· the Council had engaged with the Wales Audit Office initiatives to promote improvement to shared learning and the Good Practice Exchange;
· the Council was making good progress in implementing the Making the Connections agenda and had created a momentum for change that augured well for future progress;
· delayed transfers of care had not been tackled in a whole systems way by the Cardiff and Vale Health and Social Care community;
· the Council was committed to achieving the Welsh Housing Quality Standard and was making progress to improving the arrangements required to achieve successful delivery of improvements although some high risks still remained;
· the Council was making progress in developing its Business Community arrangements;
· the Council was making good progress in delivering its target to reduce CO2 emissions in domestic housing;
· the Council had continued to increase its level of compliance with the Freedom of Information Act, putting in place appropriate and robust arrangements to manage its Information Governance requirements, although there were some areas where there remained some work to be completed;
· the Council had developed a number of effective security measures to protect its key information systems, but some areas still needed to be addressed.
Cabinet had
RESOLVED -
(1) T H A T the Annual Letter be accepted.
(2) T H A T the Letter be referred to the Scrutiny Committee (Corporate Resources) and the Audit Committee.
(3) T H A T officers of the Authority be thanked for their considerable efforts during the period in question.
Audit Committee, having been given an opportunity to discuss the contents of the Annual Letter with the Relationship Manager and representatives of the Wales Audit Office and Grant Thornton
RECOMMENDED - T H A T the contents of the Wales Audit Office Annual Letter 2007/08 be noted.
743 REGULATORY PLAN 2007/08 (CX) -
Committee were presented with a copy of Council’s Regulatory Plan, produced annually by the Wales Audit Office.
The Regulatory Plan was the product of negotiation between the Council’s Relationship Manager and the other regulators of various services. Committee noted however that some regulatory agencies continued to request inspections that were not contained within the Plan. Whenever this occurred, the regulators were asked to seek the advice of the Relationship Manager, as snap inspections could seriously obstruct previously agreed work programmes.
RECOMMENDED - T H A T the Regulatory Plan for 2007/08 be endorsed.
Reason for decision
In order to progress the Regulatory work programme.
744 RISK MANAGEMENT - CORPORATE RISK REGISTER REVIEW 2007/08 ANNUAL REPORT (CRMG) -
Audit Committee received the final results of the review of the Corporate Risk Register for consideration following a detailed analysis of Service Plans for 2007/08.
The analysis of the Service Plan risks had now been completed. Service Heads had identified a total of 122 risks and, where appropriate, these had been linked to a Corporate Risk definition. The incorporation of mandatory cross-cutting objectives that matched 7 of the main Corporate Risks had also ensured that these risks were given full consideration in order that their impact on both a service and Council-wide perspective could be easier assessed.
The results of the exercise had been condensed by the Corporate Risk Management Group into a list of the top 10 risks currently facing the Council. These are shown below together with their related Corporate Risk “themes”:
· Impact of job evaluation and equal pay conditions on work force planning (workforce planning, business continuity, equalities, funding)
· Inability of Social Services to meet requirements of the Change Plan (funding, project management, sustainability, collaboration)
· Failure to deliver the School Investment Strategy (funding, project management, sustainability)
· Failure to meet Welsh Housing Quality Standards and a sustainable solution for the Housing Revenue Account (funding, project management, sustainability)
· Failure to meet the national Waste Sustainability agenda and targets (funding, collaboration, project management, sustainability)
· Inability to recruit key staff with the appropriate skills (workforce planning, business continuity, funding)
· Impact of sickness absence on service continuity (sickness absence, business continuity)
· Failure to deliver services / projects collaboratively (collaboration, funding, project management)
· Impact of transitional change on the ability to deliver information management and OneVale outcomes (e-government, information management, project management)
· Impact of St. Athan development on long term service provision (social inclusion, sustainability, funding, equalities).
The process of distilling risks from the Service Plans had been subject to review by the Wales Audit Office and had been viewed as a positive step forward in the development of the joint risk assessment that informed the Regulatory Plan. The Corporate Risk Management Group would continue to assess the controls and implementation of necessary counter-measures to mitigate the risks.
Of particular note, was the fact that this process had allowed the development of a tangible Corporate Risk Register that had regard to the underlying Corporate Risk themes and reflected the views of senior management across all services. It was therefore proposed that, as part of the development of Service Plans for 2008/09, emphasis would be placed on the consideration of each risk theme in turn. To facilitate this, a further consolidation of the number of Corporate Risk themes had been undertaken with the resulting 10 themes now being:
· Business continuity
· Collaboration
· Sustainability (including social inclusion)
· Health and safety
· Workforce planning
· Sickness absence
· Equalities
· Information management (including e-government)
· Project management
· Financial management (including funding and efficiencies).
RECOMMENDED -
(1) T H A T the 2007/08 Corporate Risk Register be approved.
(2) T H A T the further consolidation of the Corporate Risks themes be agreed and used as the basis for developing service and Corporate Risks as part of the 2008/09 service planning process.
Reasons for decisions
(1) To finalise the Corporate Risk Register for 2007/08.
(2) To further integrate risk management into the service planning process.
745 INTERNAL AUDIT PLAN QUARTER 3 ACTUAL OUTTURN VS PLANNED 2007/08 (DFICTP) -
Committee received a report which informed of the third quarter outturn performance against the 2007/08 Plan.
The actual position for the third quarter of this Financial Year compared against the Plan for the year was detailed at Appendices A and B to the report.
The Plan was based on an establishment of 18 full time employees (FTE) 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 three vacant posts and although these positions had been filled by June, a further four staff had left in November and these posts had yet to be filled. As a consequence, the shortfall of days could be attributed to vacant posts.
It was reported that the work completed to date had, in the main, been in line with the Plan, although there had been some slippage. Areas of Assurance, Anti-Fraud and Corruption and Governance represented a high risk and therefore received a priority in terms of the audit resources applied. It was envisage that all high risk areas would be completed within the year and during the last quarter of the year greater emphasis would be placed on Value for Money reviews.
Overall the reviews undertaken had not identified any significant weaknesses in the system of internal financial control with the exception of four areas where the overall audit opinion had concluded that the effectiveness of the internal control environment was deemed to be weak. These were:
· Llansannor Primary School
· YOT Services
· Public Protection - seized goods
· Governance - Trustees / Appointeeships.
It was the intention that Internal Audit would undertake follow-up reviews in these areas before the end of the Financial Year to ensure that the weaknesses identified had been addressed.
Committee were pleased to note that the latest follow-up reviews undertaken at the Council’s Leisure Centres had identified that significant improvements had been made and as a result of this progress it was not considered necessary for it to be reflected in the Statement on Internal Control.
RECOMMENDED - T H A T the report on actual audit performance for the third quarter April 2007 to December 2007 be noted.
Reason for recommendation
To facilitate monitoring of the Audit function.
746 PROGRESS REPORT - LEISURE AND TOURISM - FINANCIAL MANAGEMENT OF THE COUNCIL’S LEISURE CENTRES
The meeting of the Audit Committee held on 14th May, 2007 had been provided with a report relating to the financial management of the Council’s leisure centres which detailed progress made to date since the matter had last been reported to Committee.
The Committee had noted the significant improvements made to date on the internal control environment within the Council’s leisure centres, but felt that they should be kept apprised of progress until such time as all significant matters had been resolved.
Internal Audit had commenced their follow-up reviews in August 2007, with further reviews being undertaken in October 2007 and January 2008.
The audit reports issued during 2002/03 had identified fundamental weaknesses in the systems of financial control at all six leisure centres. A total of 240 recommendations had been made by the Internal Audit Section, each recommendation being designed as either high or medium risk, with the majority (204) classed as high priority. Since March 2005, the Internal Audit Section had undertaken frequent system based audit follow-up reviews to monitor progress and reported on progress to the Audit Committee.
The meeting of the Audit Committee held on 14th May, 2007 had been informed that at the conclusion of the follow-up reviews undertaken in February 2007 it had been found that whilst significant improvements had been made to date, the audit’s continued to identify certain weaknesses. A number of issues had been identified that cut across several centres and consequently had adversely affected the overall audit opinion rating. As a result, the ongoing position with the leisure centres would continue to be reflected in the Statement of Internal Control and the remaining issues would be reviewed as part of the 2007/08 Internal Audit Plan until such time as all significant matters had been resolved.
The report outlined relevant issues relating to:
· catering and bars
· Penarth Leisure Centre
· Barry Leisure Centre
· Cowbridge Leisure Centre
· Llantwit Major Leisure Centre
· Holm View Leisure Centre
· Colcot Sports Centre
· senior management.
Having considered the report, Members noted that significant improvements across all Council’s leisure centres had now been achieved. As a result of progress, it was no longer considered necessary for the issue of weaknesses in financial control of the Council’s leisure centres to be reflected in the Statement on Internal Control. Internal Audit Section would continue to monitor the centres to ensure continued compliance with the agreed procedures by undertaking spot checks during 2008/09.
RECOMMENDED -
(1) T H A T the improvements made within the financial control environment of the Council’s leisure centres be noted, and the proposal to reflect this in the Council’s Statement of Internal Control for 2007/08 be endorsed.
(2) T H A T the results of the spot checks to be undertaken during 2008/09 be reported back to a future meeting of the Audit Committee.
Reason for recommendations
(1&2) To ensure that the background and reasons relating to the improvements in the financial management of the Council’s leisure centres have been fully considered by the Audit Committee and are reflected in the Statement on Internal Control.