AUDIT COMMITTEE

 

MINUTES of a meeting held on 5th June 2008.

 

Present:  Councillor A.C. Williams (Chairman); Councillor J. Clifford (Vice-Chairman); Councillors Mrs. P. Drake, J.F. Fraser, K. Hatton, N. Moore and C.L. Osborne.

 

Also Present: Mr. J. Golding (External Auditor - Grant Thornton).

 

 

20        MINUTES -

 

RECOMMENDED - T H A T the minutes of the meeting held on 24th January 2008 be approved as a correct record.

 

 

21        DECLARATIONS OF INTEREST -

 

No declarations were received.

                       

 

22        AUDIT COMMITTEE TERMS OF REFERENCE (SCRUTINY - CORPORATE RESOURCES) -

 

The report outlined the Audit Committee’s Terms of Reference as set out in the Council’s Constitution and which were attached at Appendix A to the report.  The Terms of Reference had been reaffirmed at the Council’s Annual General Meeting on 21st May 2008.  The Committee were also advised that the Terms of Reference were consistent with the core functions as recommended by CIPFA (The Chartered Institute of Public Finance and Accountancy).             

 

RECOMMENDED - T H A T the Audit Committee’s Terms of Reference as set out at Appendix A to the report be noted.

 

Reason for recommendation

 

To ensure that all relevant areas of audit activity are subject to review.

 

 

23        INTRODUCTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) INTO THE PUBLIC SECTOR (SCRUTINY - CORPORATE RESOURCES) -

 

The Chancellor of the Exchequer had announced in the budget speech of 2007 that the annual accounts of central government departments and related public bodies, together with the UK Whole of Government Accounts (WGA) would be produced from the 2008/09 financial year using International Financial Reporting Standards.  Her Majesty’s Treasury was currently considering how this could be achieved and the Audit Committee was advised that it was probable that local government bodies would be required to provide additional information to HM Treasury on the aspects of their accounts that were likely to be most affected by the introduction of IFRS e.g. highways valuations.  The responsible financial officer would be required to ensure that appropriate arrangements for the conversion to IFRS were in place and it was also understood that CIPFA / LASAAC plan to finalise IFRS based SoRP in September 2009.  Local authorities would have the opportunity to develop project plans which could incorporate lessons arising out of the experiences of central government and National Health Service bodies who had to introduce IFRS based accounts by 2008/9. The Audit Committee would also have an important role to play during the process in terms of advising on the project plan, the suitability of accounting policies and in monitoring progress.  

 

RECOMMENDED - T H A T the content of the report be noted.

 

Reason for recommendation

 

To inform the Committee.

 

 

24        MATTERS WHICH THE CHAIRMAN HAD DECIDED WERE URGENT -

 

RESOLVED – T H A T the following matters which the Chairman had decided were urgent for the reasons shown beneath the minute headings be considered.

 

 

25        INTERNAL AUDIT PLAN ACTUAL OUTTURN 2007/08 (SCRUTINY - CORPORATE RESOURCES) -

Urgent by reason of the need for the report on actual Internal Audit performance during the year 2007/08 to be noted.

 

The report advised the Committee of the actual internal audit performance against the 2007/08 Plan.  The actual position for the financial year 2007/08 compared against the Plan for the year was detailed at Appendix A and B to the report.  The following table showed an analysis of work that had been completed in relation to the original Plan.

 

 

Work Area

2007-08

Full Year Plan Days

2007-08

Qtr. 4

Actual Days

Variance in Days

Assurance

1,050

1,063

13

Anti-Fraud & Corruption

900

928

28

Governance

270

302

32

Performance Management

270

118

(152)

Risk Management

450

361

(89)

Value for Money

360

272

(88)

TOTAL PRODUCTIVE DAYS

3,300

3,044

(256)

Audit Overheads

1,440

1,374

(66)

TOTAL

4,740

4,418

(322)

 

A summary of the audits that had been undertaken during the period April 2007 to March 2008 were detailed at Appendix C to the report.

 

For all reviews undertaken in the year, Internal Audit was able to give “well controlled” or “adequately controlled” assurances on the internal control environment.  Overall, the reviews undertaken did not identify any significant weaknesses in the system of internal control.  However, the issue of Social Services overspend is still to be fully resolved and this is reflected within the draft Statement on Internal Control.

 

RECOMMENDED - T H A T the report on actual Internal Audit performance during the year 2007/08 be noted.

 

Reason for recommendation

 

To facilitate monitoring of the audit function.

 

 

26        DRAFT STATEMENT ON INTERNAL CONTROL 2007/08 -

Urgent by reason of the for the Draft Statement on Internal Control for 2007/08 to be adopted.

 

The Draft Statement on Internal Control was submitted with the recommendation that it be adopted by the Leader of the Council and the Chief Executive.  Section 4(2) of the Accounts and Audit (Wales) Regulations 2005 required every Welsh local authority to conduct a review, at least once in a year, of the effectiveness of its system of internal controls and to include a Statement on Internal Control with its Annual Statement of Accounts. 

 

Appendix A to the report detailed a Draft Statement on Internal Control (SIC) 2007/08 and attached Appendix B was the Internal Audit report in support of the SIC and compliance with the guidance. The report highlighted that the overall system of internal control within the Vale of Glamorgan Council for the financial year 2007/08 was considered to be satisfactory, it being noted that the issue of the Social Services overspend was still to be fully resolved. It was noted that a great deal of progress had been made during 2007/08 with the formulation of a comprehensive Change Plan intended to transform Social Services, enabling the Council to set the Directorate a target of £6m. in savings over 3 years, to reduce spending within base budget, with an expectation that revenue expenditure be reduced by £2m. in each year from 2007/08.  It was also reported that the budget for Social Services was currently projected to outturn with a deficit of £231,000 which had been achieved by stringent budget monitoring underpinning the delivery of the Change Plan and the resultant savings achieved from the Plan, improved income generation and a comprehensive programme for improvement.

 

RECOMMENDED - T H A T the Draft Statement on Internal Control for 2007/08 be recommended for adoption to the Leader and Chief Executive.

 

Reason for recommendation

 

To provide for a review of the system of internal control for 2007/08.

 

 

27        INTERNAL AUDIT OPERATIONAL PLAN AND STRATEGY DOCUMENT 2008/09 (SCRUTINY - CORPORATE RESOURCES) -

 

The Council’s 2008/09 Operational Plan and Strategy Document was attached at Appendix A and B to the report.  The Plan had been based upon six main areas of audit coverage across each Directorate i.e. Corporate Governance, Performance Management, Risk Management, Anti-Fraud and Corruption, Assurance and Value for Money.  Appendix C to the report was the Operational Plan as extracted directly from the Audit Planning and Control Environment management system.

 

RECOMMENDED - T H A T the 2008/09 Operational Plan and Strategy Document be approved.

 

Reason for recommendation

 

To facilitate monitoring of the Internal Audit function.

 

 

28        EXCLUSION OF PRESS AND PUBLIC -

 

RESOLVED - T H A T under Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting for the following items of business on the grounds that they involve the likely disclosure of exempt information as defined in Part 4 of Schedule 12A (as amended) of the Act, the relevant paragraphs of the Schedule being referred to in brackets after the minute headings.

 

 

29        THOMPSON STREET COMMUNITIES FIRST PARTNERSHIP (EXEMPT INFORMATION PARAGRAPHS 12 AND 13) (SCRUTINY - CORPORATE RESOURCES) -

 

Thompson Street Communities First Partnership

 

Thompson Street Communities First Partnership was one of two Communities First Partnerships Boards which had been established within the Vale of Glamorgan with the following objectives:

 

·           To represent all residents within designated areas of Thompson Street Estate,

            including Belvedere Mews, Merthyr Street, Fryatt Street, Kingsland Crescent and

            Coronation Street, Barry.  The report also advised that the area had been

            significantly extended to encompass the Castleland Ward.

·           To work with residents and other relevant bodies to maintain and improve the

            quality of life for all residents.

·           To undertake all activities without prejudice in respect of race, age, gender, or

            any discriminatory grounds other than those justifiable by law.

·           To provide services / activities in consultation with members and to the benefit of

            the Thompson Street Estate and surrounding areas.

 

The Audit Committee was advised that previous internal audits undertaken in respect of the Thompson Street Communities First Partnership had identified a number of issues and, as such, the matter had been referred to the Council’s External Auditor, Grant Thornton, for further review.  The External Auditor’s report was attached at Appendix A which identified the scope of the review, the methodology undertaken and its findings.  Also attached was a draft action plan detailing the Council’s proposed response to each of the External Auditor’s recommendations.  Members noted that the report had recommended that further work be undertaken by Internal Audit and that this was currently being progressed and also suggested additional areas of work to be incorporated into this brief.

 

During consideration of the report Members expressed the importance of the need for the Partnership to ensure they were meeting their aims and objectives and that the review findings and draft action plan be presented to not only the Cabinet but to all the members of the Partnership Board for consideration / action.  Members were keen to ensure that these were forwarded as soon as possible in order that the Partnership complied with the appropriate guidance.

 

RECOMMENDED –

 

(1)       T H A T the findings of the External Auditor’s report and the draft action plan be endorsed and presented to the next scheduled meeting of Cabinet for acceptance. 

 

(2)       T H A T subject to (1), the report and action plan be forwarded to all the Members of the Thompson Street Communities First Partnership Board for consideration / action as soon as possible.

 

(3)       T H A T Cabinet be requested to ensure that reviews of all  Communities First areas Partnership Boards are undertaken in order that the Council can be satisfied that the appropriate guidance is complied with.

 

(4)       T H A T the ongoing internal audit work be noted and that all ensuing reports in respect of the Partnership Boards be presented to the Audit Committee and Cabinet.

 

Reasons for recommendations

 

(1-4)    To ensure that any issues identified are considered and addressed.