Minutes of a meeting held on 2nd
Chairman: Councillor A.C.
Williams (Chairman); Councillors Mrs. P. Drake, K. Hatton and C.L.
Also present: Mr. J. Golding and
Ms. C. Thomas (Grant Thornton UK LLP) and Mr. S. Barry (Wales Audit
APOLOGIES FOR ABSENCE -
These were received from Councillors J.
Clifford, J.F. Fraser and N. Moore.
RECOMMENDED - T H A T the minutes of the
meeting held on 9th May, 2011 be approved as a correct
DECLARATIONS OF INTEREST -
No declarations were received.
EXTERNAL AUDITORS INTERIM REPORT AND UPDATE TO FINANCIAL AUDIT
STRATEGY 2010 - 2011 (DFICTP) -
Committee were presented with the Council's
External Auditors Interim Report and update to the Financial Audit
Strategy for 2010 - 11.
The report summarised the findings from the
interim stage of Grant Thornton's work, where the following had
the effectiveness of the internal audit function
Internal Audit's work on the Council's key financial systems
a review of closedown procedures in preparation for the final
accounts under International Financial Reporting Standards
review of financial reporting controls
review of Information Technology controls
prior year recommendations.
Overall, Grant Thornton had concluded the
There had been no changes to the overall audit approach as set out
in the Financial Audit Strategy 2010/11.
No new risks facing the Council had been identified other than the
audit risks outlined in their Financial Audit Strategy 2010/11.
The design effectiveness of internal controls over the financial
reporting process had been evaluated through a combination of
enquiry and observation procedures, and, where appropriate, systems
walkthroughs (two recommendations had resulted from the review of
controls, shown at Appendix B to the Grant Thornton's Report).
The Internal Audit Service continued to provide an independent and
satisfactory service to the Council and that assurance could be
taken from their work in contributing to an effective internal
control environment at the Council.
The review identified that the Council continued to make progress
in its transition to IFRS. It was acknowledged that there was
still some work being undertaken by the Council to collate and
review all relevant information. Grant Thornton would review
this work during the final accounts audit.
RECOMMENDED - T H AT the contents of the
report be noted.
Reason for recommendation
To facilitate monitoring of the audit
REGULATORY PROGRAMME FOR PERFORMANCE AUDIT APRIL 2011 TO MARCH 2012
Committee considered the draft Regulatory
Programme for Performance Audit for the period April 2011 to March
The range of performance audit work that the
Auditor General and relevant regulators were to carry out was
detailed in the Work Plan and Timetable attached to the report at
Appendix A. This reflected the Council's improvement planning
arrangements, was aligned to its improvement objectives and was
Through his improvement assessment work, the
Auditor General would be seeking to answer the question: Is the
Council likely to comply with the statutory duty to make
arrangements to secure continuous improvements? In order to
answer this question, improvement assessment work would
corporate assessment work to review arrangements that the Council
has put in place to secure continuous improvement, and
performance assessment work to review performance, and to track
improvements over time.
RECOMMENDED - T H A T the contents of the
report be noted.
Reason for recommendation
So that the Committee are aware of the report
to be undertaken on behalf of the Auditor General.
2010/11 ANNUAL INTERNAL AUDIT OPINION (HARM) -
Committee received the Head of Accountancy and
Resource Management Annual Opinion Report on the overall adequacy
of the Council's internal control environment.
Committee received a brief description of the
role of Internal Audit, the control environment within which
Internal Audit operated and also a summary of work carried out
during the year to 31st March, 2011. A statement
of overall opinion on the internal control environment was also
provided in support of the Annual Governance Statement which the
Council was required to include within the Statement of
The control environment comprised the
organisation's policies, procedures and operations in place to:
establish, and monitor the achievement of, the organisation's
identify, assess and manage the risks to achieving the
facilitate policy and decision making
ensure the economical, effective and efficient use of resources
ensure compliance with established policies, procedures, laws and
safeguard the organisation's assets and interests from losses of
all kinds, including those arising from fraud, irregularity or
Attached at Appendices A and B to the report
were detailed reports (including the outturn for 2010-11) on the
work undertaken by Internal Audit during the financial year
2010/11. The purpose of the report was to satisfy the
requirements of the Accounts and Audit (Wales) Regulations 2005 as
amended and the Head of Internal Audit's annual reporting
requirements set out in the CIPFA Code of Practice for Internal
Audit in Local Government in the United Kingdom 2006. The
Code specifies that the following information should be
include an opinion on the overall adequacy and effectiveness of the
organisation's control environment
disclose any qualifications to that opinion, together with the
reasons for the qualification
present a summary of the audit work from which the opinion was
derived, including reliance placed on the work by other assurance
draw attention to any issues the Head of Internal Audit judges
particularly relevant to the preparation of the Annual Governance
compare the actual work undertaken with the planned work and
summarise the performance of the internal audit function against
its performance measures and targets
comment on compliance with the Standards of the Code
communicate the results of the internal audit quality assurance
The opinion contained within the report
related to the system of internal control at the Council and the
overall control environment in place. The system of internal
control was designed to manage risk to a reasonable level rather
than to eliminate the risk of failure to achieve corporate/service
policies, aims and objectives. It could therefore only
provide reasonable and not absolute assurance of
effectiveness. Attached at Appendix C to the report was the
supporting evidence which listed all those assignments which had
been completed during the year when an audit opinion had been
On the basis of internal audit work undertaken
in 2010/11, and taking into account all available evidence it was
the opinion of the Head of Accountancy and Resource Management that
a substantial assurance level could be applied to standards of
internal control at the Vale of Glamorgan Council for the year
ended 31st March, 2011.
The Head of Accountancy and Resource
Management spoke of Shared Services, and advised Committee that the
sharing of the Audit function between the Vale of Glamorgan Council
and Bridgend County Borough Council would be the first such venture
The Vale Audit Section had relocated to the
Innovation Centre, Bridgend on 23rd May, 2011.
The next phase of the venture would be to
fully integrate the two services, with all staff to be employed by
one single Council, possibly from April 2012. This would
involve the harmonisation of working practices and development of
Mr. J. Golding congratulated staff for the
work undertaken to date, and the Chairman suggested that a future
meeting of the Committee be held in the new offices in
(1) T H A
T the report on the 2010/11 Annual Internal Audit Opinion be
(2) T H A
T the meeting of the Audit Committee scheduled for 19th
September, 2011 be held in the Audit Offices, Innovation Centre,
Reasons for recommendations
keep the Audit Committee informed.
view the new office accommodation.
DRAFT ANNUAL GOVERNANCE STATEMENT 2010 - 2011 (HARM) -
Committee received the draft Annual Governance
Statement for review and to consider recommending its adoption by
the Leader of the Council and the Chief Executive.
The Annual Governance Statement related to the
mechanism used to demonstrate that, during the financial year ended
31st March, 2011, the Council had an adequate governance
regime in place and that all business was conducted in compliance
with the existing arrangements. However, significant events
or developments relating to the Annual Governance Statement that
occurred between the balance sheet date and the date on which the
Annual Statement of Accounts was signed by the responsible
financial officer should also be reported.
Information to be included in the Annual
Governance Statement was more detailed that the Statement on
Internal Control, and required information to be provided on wider
governance arrangements in addition to internal controls and key
risks. The Council had already taken a more holistic approach
in producing the Statement of Internal Control, which already met
the reporting requirements of producing an Annual Governance
Statement in many respects.
A draft Annual Governance Statement for the
2010/11 financial year relating to the activities of the Council
was attached at Appendix A to the report. It had been drawn
up with regard to the Code of Practice on Local Authority
Accounting in the UK; a Statement of Recommended Practice. It
also had regard to guidance issued by CIPFA/SOLACE in its
publication 'Developing Good Governance in Local Government' and
the Council's Code of Corporate Governance.
The overall Annual Governance arrangements
within the Vale of Glamorgan Council for the financial year 2010/11
were considered to be substantial. However, issues relating
to the continuing challenges facing the Council due to reductions
in Welsh Assembly Government funding was reflected in Section 11 -
Significant Governance Issues of the draft Annual Governance
It was reported that the wording in Paragraph
10.5 of the draft Annual Governance Statement 2010/11 reading
'receives the Appointed Auditors ISA 260 report' be amended with
the words 'receives the Appointed Auditors Annual Report to the
RECOMMENDED - T H A T the draft Annual
Governance Statement for 2010/11 be recommended for adoption by the
Leader and Chief Executive.
Reason for recommendation
To provide for a review of governance
framework and a system of internal control, which has been in place
within the Council for the year ended 31st March,
AUDIT COMMITTEE - FORWARD WORK PROGRAMME (HARM) -
Committee received the 2011/12 Forward Work
RECOMMENDED - T H A T the 2011/12 Forward Work
Programme as attached to the report at Appendix A be approved.
Reason for recommendation
To keep the Audit Committee informed.