Agenda and minutes

The Committee noted the attendance of the following substitute Member:

Councillor Mrs McCracken for Councillor Wade.

To receive any declarations of personal or prejudicial interests, and the nature of that interest, in respect of any matter to be considered at this meeting.

There were no declarations of interest.

To approve as a correct record the minutes of the meetings of the Committee held on 29 September 2011.

RESOLVED that the minutes of the meeting held on 29 September 2011 be approved as a correct record and signed by the Chairman.

To receive the Audit Commission’s Annual Audit Letter for 2010/11.

Phil Sharman, District Auditor, presented the Audit Commission’s Annual Audit Letter 2010/11 to the Governance and Audit Committee. The Annual Audit Letter focused on the Council’s financial statements and arrangements to achieve value for money in the use of resources. The Letter’s new format was designed to be accessible to the public on the Council’s website.

An unqualified opinion on the Council’s 2010/11 financial statements had been given on 30 September 2011. It was noted that the Audit Commission felt that the Council had prepared well for the transition to International Financial Reporting Standards but that it needed to improve arrangements for accounting for fixed assets.

An unqualified opinion on the Council’s arrangements for securing value for money had been given on 30 September 2011. It was noted that the Audit Commission felt that the Council had recognised that difficult decisions about priorities and services lay ahead and had set up a framework to decide and identify options for delivering priorities. It was also noted that the Audit Commission felt that the Council needed to maintain an emphasis on strategic policy changes and longer-run savings programmes to shift the balance away from an annual round of targets to balance the revenue budget.

The Annual Audit Letter contained three recommendations:

• Monitor implementation of recommendations made in my annual governance report on aspects of internal financial control including:
  • procedures for accounting for fixed assets
  • procedures for journal processing
• Maintain an emphasis on identifying policy options, and planning and delivering savings programmes which achieve long run financial sustainability for the Council
• In the context of broader changes to the Local Government financial regime, demonstrate the Council’s continuing financial resilience by updating the Medium Term Financial Strategy to reflect the impact of strategic policy changes and longer-run savings programmes.

Members asked for clarification on the accounting of fixed assets and the Committee were advised that CiPFA were currently consulting on changing the method of valuations for infrastructure assets. This would ensure that Central and Local Government were all using the same method. This would potentially mean a significant change in the way assets are valued.

The District Auditor confirmed that the 2010/11 Audit was now complete and thanked officers for their co-operation throughout the audit process and for their support over his four year term as District Auditor.

The Chairman welcomed Helen Thompson, the new District Auditor, who would be attending future meetings to present the Audit Commission’s findings. Catherine Morganti would remain the Audit Manager for the authority. 

RESOLVED that the Annual Audit Letter 2010/11, at Appendix A of the report, be noted.

RECOMMENDED to the Corporate Management Team that the recommendations set out in the Annual Audit Letter 2010/11 be reflected in the Corporate Services Service Plan for the coming year.

To receive a summary of Internal Audit activity during the period April to October 2011 covering work carried out by both internal audit contractors and the in-house team.

The Head of Audit & Risk Management presented the Internal Audit report which provided a summary of Internal Audit activity during the period April to October 2011.

It was reported that 34 audit reports had been issued in draft or finalised since the Annual Internal Audit Plan for 2011/12 was approved by the Governance and Audit Committee. Of the reports issued, limited assurance opinions had been given for 3 audits.

The Committee noted that 6 memos had been drafted or finalised and were produced in place of reports as these were targeted reviews on housing benefits following up previous recommendations and recording results of spot check visits rather than full systems reviews. The Head of Audit and Risk Management advised three spot check visits had been undertaken with the first two focussing on ensuring supporting documentation was in place and the third visit checking assessment calculations.  The outcomes had been positive from the targeted work and spot checks had identified only minor errors. The Committee noted, however, that it would take some time for these improvements to be reflected in the external audit.

The Committee noted that the limited assurance for Binfield CE Primary School was concluded overall for this audit due to one priority 1 recommendation being raised to address concerns that there were limited documented financial procedures in place and also because of the high number of priority 2 recommendations (16). These related to governance and financial management arrangements, inventory, the private fund, lettings income, school trips, imprest and ordering. The Committee was advised that the Local Authority continued to support and work with the school in addressing the weaknesses highlighted in the audit report. The Chief Officer: Performance and Resources had visited the school and found that they were making good progress with a number of recommendations already completed. The Client questionnaire had been ‘unsatisfactory’ and it was explained that in particular there had been an expectation that the scope of the audit was negotiable but that the approach taken with all schools was consistent. The Head of Audit & Risk Management agreed with the point raised in the client questionnaire that there had been a delay in preparing the report due to annual leave but did not support the comment that the assessments were too harsh. Members discussed the Diocesan support to voluntary aided schools in relation to financial matters and it was explained that they would only be involved in matters relating to capital interests.   

The Committee noted that the limited assurance for Headspace was concluded as five priority 1 recommendations were raised. These were to address weaknesses in the completeness of income collected and banked, recording of income, expenditure without supporting documentation and the fact that the bank account used for funding expenditure and banking income was outside of the Council’s accounting records. It was clarified that Headspace should have complied with the Council’s accounting processes and that despite the relatively low expenditure for 2010/11 of approximately £57k the Committee were concerned about the fundamental nature  ...  view the full minutes text for item 64.