Agenda and minutes

Venue: Guildhall, Abingdon

Contact: Carole Nicholl, Democratic Services Officer, telephone 01235 547631 

Items
No. Item

1.

Notification of Substitutes and Apologies for Absence

To record the attendance of Substitute Members, if any, who have been authorised to attend in accordance with the provisions of Standing Order 17(1), with notification having been given to the proper Officer before the start of the meeting and to receive apologies for absence.

Minutes:

The attendance of a Substitute Member who had been authorised to attend in accordance with the provisions of Standing Order 17(1) was recorded as referred to above with an apology for absence having been received from Councillor Tony de Vere. 

 

2.

Declarations of Interest

To receive any declarations of Personal or Personal and Prejudicial Interests in respect of items on the agenda for this meeting. 

 

In accordance with Part 2 of the Local Code of Conduct and the provisions of Standing Order 34, any Member with a personal interest must disclose the existence and nature of that interest to the meeting prior to the matter being debated.  Where that personal interest is also a prejudicial interest, then the Member must withdraw from the room in which the meeting is being held and not seek improperly to influence any decision about the matter unless he/she has obtained a dispensation from the Standards Committee.

Minutes:

None.

3.

Urgent Business and Chair's Announcements

To receive notification of any matters, which the Chair determines, should be considered as urgent business and the special circumstances, which have made the matters urgent, and to receive any announcements from the Chair. 

Minutes:

The Chair sought the agreement of the Committee to re-order the agenda and discuss the agenda items in the following order – Agenda item 10, 9, 7,6,8,11 and 12.

4.

Statements and Petitions from the Public Under Standing Order 32

Any statements and/or petitions from the public under Standing Order 32 will be made or presented at the meeting.

Minutes:

None.

5.

Questions from the Public Under Standing Order 32

Any questions from members of the public under Standing Order 32 will be asked at the meeting.  

Minutes:

None.

6.

Approval of the 2006/07 Statement of Accounts

To receive and consider report 21/07 of the Strategic Director and Chief Finance Officer.

 

The Council has a statutory duty to publish annual audited accounts.  The accounts must be signed by the Chief Finance Officer and approved by the appropriate committee of the Council. 

 

Under the Council’s Constitution the Audit and Governance Committee has the responsibility “to consider and determine on behalf of the Council all aspects of the Accounts of the Authority including the approval of the Statement of Accounts”.

 

Officers have prepared the draft accounts which are included in the agenda.  If there are any amendments made to the draft accounts between circulation of the agenda and the meeting, the Chief Finance Officer will explain these at the meeting.

 

The Audit Commission will carry out an onsite audit of the approved accounts in order to provide an opinion on their accuracy and completeness.  This may result in amendments to the accounts, which will be reported at the September meeting.

 

Recommendations

 

(a)       That the Committee approves the 2006/07 Statement of Accounts, subject to subsequent amendments agreed with the external auditor;

 

(b)               That the Chair of the Committee signs and dates the Statement of Accounts.

 

Minutes:

The Committee received and considered report 21/07 of the Strategic Director and Chief Finance Officer which presented the draft Statement of Accounts for 2006/07.  The Council had a statutory duty to publish annual audited accounts, which must be signed by the Chief Finance Officer and approved by the appropriate Committee of the Council.  In accordance with the Council’s Constitution, the Audit and Governance Committee had the responsibility to consider and determine on behalf of the Council all aspects of the accounts of the Authority, including the approval of the Statement of Accounts.  Prior to considering the report, the Strategic Director and Chief Finance Officer circulated amendments to the Statement of Accounts, a copy of which is attached to these Minutes.

 

The Joint Head of Finance explained how the Statement of Accounts 2006/07 had been compiled and reminded the Committee that its remit was to be satisfied that the Council had the necessary processes in place to provide satisfactory accounts for the Authority.  The Committee considered the Statement of Accounts in detail and asked a number of questions, as follows:-

 

Question

 

Answer

 

Can the Officers explain the reason for the increase in net expenditure for highways, roads and transport services?

 

The increased net expenditure is primarily due to the concessionary fares scheme.

 

Why has provision for bad debts been specified in the accounts?

 

Provision for bad debts has now been included in the income and expenditure account at the request of the external auditor who had required the Council to take a more robust line in the reporting of the level of sundry debtors.

 

Does the “surplus arising on revaluation of fixed assets” relate to the Council’s investment portfolio?

 

The surplus figure is made up of revaluations and restatements in respect of operational, non-operational and intangible assets owned by the Council.  The revaluations and restatements relate mainly to the Old Gaol in Abingdon which had previously been down valued as a result of a dispute regarding legal ownership but this had now been resolved satisfactorily and the value of the asset increased accordingly.

 

Why has there been a big increase in the level of debtors?

 

Increase in arrears on Council Tax and Business Rate payments due to changes in the collection systems.  Central Government behind in reimbursing the Council on Housing Benefit payments.

 

Is the level of debtors a “sign of the times” regarding the economy?

 

Yes, and this is acknowledged in the accounts.  The Vale continues to perform well in collecting both Business and Council Tax.

 

In the cash flow statement 2006/07, what were the “other capital grant payments”?

 

 

 

 

A grant from the Heritage Lottery Fund towards the Abbey Grounds project and renovation grants.

 

Which fixed asset was sold during 2006/07?

 

Challow Depot.

 

 

Are the Council’s ear-marked reserves adequate?

 

 

The adequacy of ear-marked reserves is a matter for the budget setting process.  The role of this Committee in approving the Statement of Accounts is to be satisfied as to the accuracy of the accounts.  However, it should be noted that  ...  view the full minutes text for item 6.

7.

Continuation of the Meeting

Minutes:

At 9.30pm and during consideration of the next item, which had been discussed later in the meeting following the re-ordering of the agenda, it was proposed by the Chair and

 

RESOLVED

 

that the meeting do continue for a further 30 minutes to complete the business on the agenda.

8.

The Statement on Internal Control

To receive and consider report 22/07 of the Strategic Director and Chief Finance Officer.

 

Introduction and Report Summary

 

The Council has a statutory duty to conduct a review of its internal control system at least once a year.  In addition it must publish a Statement on Internal Control (or ‘SIC’) with its annual financial statements.  These duties are contained within the Accounts and Audit Regulations 2003.

 

This report invites the Audit and Governance Committee to critically review the SIC (which is appended to this report) and make recommendations on improvements to the SIC, any supporting documentation and the compilation process.

 

The Contact Officer for this report is Steve Bishop, Strategic Director and Chief Finance Officer (01235 540332).

 

Recommendations

 

Members are asked to:

 

(a)               Critically review the Statement on Internal Control (SIC) and either approve the SIC; or, identify any changes needed to the SIC, the supporting documentation and the process of compiling the SIC;

 

(b)               Confirm that the system of internal audit appears to be effective.

 

 

Minutes:

The Committee received and considered report 22/07 of the Strategic Director and Chief Finance Officer which invited the Committee to critically review the Statement of Internal Control (SIC) and make any recommendations on improvements to the SIC, any supporting documentation and the compilation process.  The Committee noted that the mechanisms for managing internal control were set out in paragraph 3 of the Statement on Internal Control set out in the draft Statement of Accounts 2006/07 as discussed in Minute 6 above.  The Committee considered each of the mechanisms in turn and made the following comments:-

 

Mechanism for Managing Internal Control

 

Comment

 

1 –       Adoption of a comprehensive constitution which sets out how the Council operates, its decision making process and procedures.

 

The Constitution Working Party to meet at least once a year.

 

6 –       Adoption of clear corporate priorities to focus resources into the most important activities. 

 

Annual review required, was there an annual review undertaken in July 2006?

 

12 –     Authority’s objectives are communicated to staff and stakeholders. 

 

The Business Breakfast Consultation with Local Businesses was a statutory requirement.

 

14 – Each services contribution to the corporate priorities is regularly assessed through the service planning and reporting process.

 

Service Plans should be validated and signed off on an annual basis.  Should this now read July 2006?

 

26 -      A range of committees are able to suggest or formulate new policies including the Executive;  the Scrutiny Committee;  the Personnel, Regulatory and Appeals Committee;  the Strategic Review Committee – all of which have to be approved by full Council.

 

To note that the Council approved the establishment of the Audit and Governance Committee in 2006 but the first meeting of the Committee was not held until June 2007.

 

29 -      Consultation with stakeholders on priorities/objectives.

 

Need to include Vale Voice Panel.

 

41 -      Service Plan objectives cascade to individuals’ Service and Personal Plans.

 

Confirm the date of the last periodic audit and update if necessary.

 

54 -      Financial Regulations have been adopted and are enforced by management.

 

Check the date of the last periodic review and update if necessary.

 

59 -      A Procurement Strategy has been adopted which requires managers to assess more cost effective options for delivering services.

 

Check date of the last annual review.  Note that the Procurement Strategy is put into the public domain as part of the budget setting process in February each year, however, it should be noted that work on this commences in November of the previous year.

 

80 -      External specialist advice is brought in when in-house expertise is insufficient for a particular task.

 

The review mechanism as stated is not a review mechanism.

 

99 -      Role of internal audit.

 

100 -    Role of external audit.

 

Need to make reference to the Audit and Governance Committee which now has responsibility for reviewing these areas of service.

 

135 -    Training programmes.

 

Training forms to be signed off by Line Manager and Deputy Director to provide two forms of control.

 

Referring to the system of internal  ...  view the full minutes text for item 8.

9.

Completion of the 2005/06 Audit

The Accounts Committee approved the audited Statement of Accounts at its meeting on the 27th September 2006 following a satisfactory audit by the Audit Commission.  In accordance with Regulation 18(4) of the Accounts and Audit Regulations 2003 the Responsible Financial Officer hereby notifies the Audit & Governance Committee that the Statement of Accounts was certified by the external Auditor with an unqualified opinion.  This formally completes the audit process.

 

Recommendation

 

Members are asked to note the formal closure of the 2005/06 audit process.

 

Minutes:

The Committee received and considered an agenda report which advised that in accordance with Regulation 18(4) of the Accounts and Audit Regulations 2003, the Statement of Accounts for 2005/06 had been certified by the external auditor with an unqualified opinion.  This formally completed the audit process.

 

RESOLVED

 

that the formal closure of the 2005/06 audit process be noted.

 

10.

Annual report on Internal Audit 2006/07

To receive and consider report 23/07 of the Head of Finance.

 

Introduction and Report Summary

 

The purpose of this report is: to summarise the performance of Internal Audit in terms of both achievement of targets and the quality of the service provided to users

 

The Contact Officer for this report is William Jacobs, Head of Finance for Vale and South Oxfordshire District Council; telephone 01235 540455.

 

Recommendations

  

To note the content of the report.

 

 

Minutes:

The Committee received and considered report 23/07 of the Head of Finance which summarised the performance of Internal Audit in terms of both achievement of targets and the quality of service provided to users.  It was reported that the shared service was currently in the process of appointing to the vacant auditor post.

 

In considering the report, the Committee made the following comments/observations:-

 

·                     Good performance by the Internal Audit staff despite carrying a vacant post for the year.

·                     Internal Audit staff and auditee’s to be commended for the quick responses to audit reports and the agreement of action plans.

·                     Why was there no action plan agreed for three of the planned audits – Benefits, Treasury Management, Proactive Anti-Fraud and one unplanned audit relating to Concessionary Fares?

·                     Disappointing that only 8 out of 32 audit feedback survey forms had been returned.

·                     Had Officers been made aware that those audits undertaken were reported to the Committee irrespective of whether a response had been received from the Auditee?

 

In response, the Officers reported as follows:-

 

Action Plans had not been agreed in respect of the planned audits relating to Benefits, Treasury Management, Proactive Anti-Fraud and the unplanned audit relating to Concessionary Fares because no recommendations had been made in respect of these audits.  Furthermore, it was noted that in respect of the Concessionary Fares unplanned audit, this work had been undertaken to support work being undertaken by the Strategic Director and Chief Finance Officer to reconcile expenditure against the scheme.  It was confirmed that Officers were made aware at the beginning of the audit process that audit reports would be reported to the Audit and Governance Committee irrespective of whether a response to the audit had been received.  Under these circumstances, it was suggested that Auditee’s should be summoned to the Committee to give an explanation for the non-response.

 

RESOLVED

 

that report 23/07 be noted.

 

11.

Internal Audit Reports 2006/07

To receive and consider report 24/07 of the Head of Finance.

 

Introduction and Report Summary

 

The purpose of this report is to summarise the outcomes of recent internal audit activity for the Committee to consider.  The Committee is asked to review the report and the main issues arising, and seek assurance that action has been or will be taken where necessary.

The Contact Officer for this report is Harry Oliver, Senior Auditor; telephone 01235 547615

 

Recommendation

  

To note the content of the report.

Minutes:

The Committee received and considered report 24/07 of the Joint Head of Finance which summarised the outcome of a recent internal audit report relating to staff allowances.  In respect of the two recommendations not agreed with the Auditee (report reference 4.5.4 (details of user’s cars and adequate insurance is maintained) and 4.6.4 (review of essential car user allowance), the Senior Auditor advised that in both cases internal audit had been satisfied with the response of the Auditee and that both matters were being kept under review.  In respect of report reference 4.6.4, the Committee considered that the allowance applicable to a post should not only be reviewed when the post became vacant, but that a review was automatically undertaken after a three to five year period.  In response, the Head of Human Resources considered this a sensible suggestion and in the case of reviewing the allowance payable when a post became vacant, it was the responsibility of the relevant Director to agree the level of allowance applying to the post.

 

In respect of the Council’s Car Leasing Scheme, it was reported that the final leases were due to expire during 2008/09.  One Member suggested that this might be an appropriate time to review those staff eligible for an Essential User car allowance.  The Head of Human Resources reminded the Committee that the criteria used for determining whether a post was eligible for an Essential User car allowance, was as follows:-

 

·                     High mileage.

·                     Contractual requirement to have a car available for work.

·                     Car required for work to provide a responsive service.

·                     Director/Deputy Director.

 

One Member expressed concern that report reference 4.1.5 (Allowance to Newly Appointed Staff Claim Form) related to a previous recommendation which had not been implemented.  In response, the Head of Human Resources apologised for the oversight and confirmed that this recommendation had now been actioned and implemented.

 

Reference was made to the Council’s Green Travel Plan which stated what type of transport should be used by Officers in certain cases and confirmation sought that the Council’s Travel and Subsistence Policy had been amended to reflect this.  In response, the Head of Human Resources confirmed that the Policy had not been amended to reflect the requirements of the Green Travel Plan but confirmed that there were checks in place to ensure that Officers used the appropriate form of transport when undertaking official duties.  Furthermore, Line Managers were expected to ensure that their staff undertook their duties in accordance with the requirements of the Green Travel Plan.

 

Members considered that outcomes in response to recommendations made by Internal Audit, should be made public, although it was accepted that anonymity should be retained.  In the event that during an audit investigation, it was evident that the action of a member of staff might lead to a criminal prosecution/disciplinary action, the Senior Auditor confirmed that in this instance the audit would be stopped and the matter referred directly to the Council Section 151 officer for advice.  In respect of recommendations relating to  ...  view the full minutes text for item 11.

12.

Internal Audit Plan 2007/08

To receive and consider report 25/07 of the Head of Finance.

 

Introduction and Report Summary

 

The purpose of this report is:

·                     to set out the proposed internal audit plan for 2007/08, and

·                     to explain the process for setting the audit plan and for calculating the resources available.

The Contact Officer for this report is Harry Oliver, Senior Auditor; telephone 01235 544615.

 

Recommendation

  

That Members approve the one year Strategic Internal Audit Plan for 2007/08.

Minutes:

The Committee received and considered report 25/07 of the Head of Finance which set out the proposed Internal Audit Plan for 2007/08 and explained the process for setting the Plan and for calculating the resources available.  It was noted that South Oxfordshire District Council had agreed the Plan at the meeting of its Audit and Governance Committee on 26 June 2007.

 

Referring to the proposed joint audit on elections, it was intended to produce a single report and for the same Officers to undertake the audit in each authority to provide a level of consistency.  It was noted that the risk scores applied by each authority to elections were different and the Senior Auditor explained that this was historical but confirmed that both authorities applied similar methodology to determine risk scores.

 

In response to a question regarding increasing the number of chargeable days as part of the Audit Plan, the Senior Auditor advised that the chargeable days identified was a conservative estimate as this was the first year of the Shared Service.  Risk scores had not been applied by South Oxfordshire to the Proactive Anti-Fraud and Post Implementation Review – Revenues Joint Audits, as these had not been previously audited.  Furthermore, it was noted that by using identical methodology across each authority in determining risk scores, this was likely to bring scores for similar services across each authority closer together.  Furthermore, allowing a single Auditor to undertake similar audits across each authority would allow a true comparison to be made, enable the spread of good practice and increase the experience of the individual auditor.  In respect of the number of audit days allocated to each audit set out in the plan, the Joint Head of Finance confirmed that the external auditor was content with the number of days allocated despite the Vale being smaller than South Oxfordshire in terms of population.  Finally, it was accepted that in the event that an audit made recommendations beyond normal audit recommendations, it might be necessary for the Scrutiny Committee to consider the issue matter.

 

RESOLVED

 

that the one year strategic Internal Audit Plan for 2007/08 be approved.

13.

External Audit and Inspection Plan 2007/08

There is a statutory requirement for the Council to be externally audited and inspected.  The external auditors are appointed by the Audit Commission.  Across the country the Commission appoints a mixture of private sector auditors and Audit Commission auditors, rotating them periodically.  The Council's current auditors are the Audit Commission.

 

Each year the external auditor issues her 'Audit and Inspection Plan' which sets out her intended activity over the forthcoming year.  The latest Plan for 2007/08 (report 26/07) is attached for the Committee to approve.  The Plan has been discussed and agreed in principle by the Chief Executive and Directors.  Members are invited to consider the Plan and raise any questions at the Committee meeting.  By approving the Plan, the Committee will be endorsing the auditor's approach which will improve the effectiveness of the audit and inspection process.

 

Members are asked to note the following 'highlights' of the Plan:

 

  • CPA (page 5) – In 2003 the Council was judged to be 'Fair' using the national Comprehensive Performance Assessment framework

 

  • Value for Money (pages 6-7) - The Council is currently judged to score a '2' out of 4 (1 being inadequate, 2 being adequate, 3 being performing well and 4 being performing strongly) using the national 'Value for Money' assessment.  The rules are being tightened which could result in the score slipping unless additional criteria are met.  The auditor has provided details of significant VFM risks in appendix 1 (pages 16 - 17)

 

  • Risk assessment (page 9) - The auditor assesses the various risks as part of his planning exercise.  The two new risks identified for 2007/08 are the significant changes in Vale's and SODC's financial systems as a result of creating the shared service; and, changes to the statutory accounting requirements.

 

  • Audit fee (page 13) - The audit fee has increased slightly, from £93.5k for 2006/07 to £97.1k for 2007/08.  The grant certification fee has also increased, from £27,000 for 2006/07 to £31,000 for 2007/08.  Full details are provided in Appendix 2 (page 18).  The Council is addressing the cost-reduction suggestions made on page 20.

 

  • Planned outputs (page 15) - Each of the auditor's reports will be formally reported to Members.

 

Note:  This (external) Audit and Inspection Plan should not be confused with the separate (internal) Audit Plan which is produced by the Internal Audit Section.

 

Recommendation

 

that the 2007/08 External Audit and Inspection Plan be approved.

 

Minutes:

The Committee received and considered report 26/07 which set out the external audit and inspection plan for 2007/08.  It was noted that the Plan had been discussed and agreed in principle by the Chief Executive and the Directors.  The Plan noted a number of highlights as follows:-

 

  • CPA (page 5) – In 2003 the Council had been judged to be 'Fair' using the national Comprehensive Performance Assessment framework

 

  • Value for Money (pages 6-7) - The Council was currently judged to score a '2' out of 4 (1 being inadequate, 2 being adequate, 3 being performing well and 4 being performing strongly) using the national 'Value for Money' assessment.  The rules were being tightened which could result in the score slipping unless additional criteria was met.  The Auditor had provided details of significant VFM risks in Appendix 1 (pages 16 - 17)

 

  • Risk assessment (page 9) - The Auditor assesses the various risks as part of his planning exercise.  The two new risks identified for 2007/08 are the significant changes in Vale's and South Oxfordshire’s financial systems as a result of creating the Shared Service; and, changes to the statutory accounting requirements.

 

  • Audit fee (page 13) - The audit fee had increased slightly, from £93,500 for 2006/07 to £97,100 for 2007/08.  The grant certification fee had also increased, from £27,000 for 2006/07 to £31,000 for 2007/08.  Full details were provided in Appendix 2 (page 18).  The Council was addressing the cost-reduction suggestions made on page 20.

 

  • Planned outputs (page 15) - Each of the Auditor's reports would be formally reported to Members.

 

The Strategic Director and Chief Finance Officer reported the apologies of the External Auditor, who was unable to attend the meeting.

 

The Joint Head of Finance reported that South Oxfordshire District Council’s Audit and Governance Committee had met the previous evening and resolved to note the report and stated that questions would be asked of the External Auditor at its next meeting.

 

The Strategic Director and Chief Finance Officer reported that the decision to appoint external auditors to local authorities was a matter for Central Government although it was possible for a local authority to petition the Government to change its External Auditor.  In respect of the audit fees charged, he advised that these were set nationally.

 

One Member asked whether consideration had been given to the specific actions identified which the Council could take to reduce its audit and inspection fees.  In response, the Joint Head of Finance advised that the Council would endeavour to provide good working papers to assist the Inspectors but it had been recognised that entering the first year of shared services increased the level of risk which might increase the audit fee.  The Strategic Director and Chief Finance Officer explained that the Council had been identified as being weak in three areas which could potentially result in extra audit days and that flow charting techniques would take time to implement.

 

It was agreed that the External Auditor should be invited to the  ...  view the full minutes text for item 13.

Exempt Information Under Section 100A(4) of the Local Government Act 1972

None.

 

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