Agenda and minutes

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.

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 Laurel Symons. 

To adopt and sign as a correct record the Minutes of the meeting of the Committee held on 27 June 2007 (previously circulated with the Council’s Summons for a meeting dated 18 July 2007).  

The Minutes of the meeting of the Committee held on 27 June 2007 were adopted and signed as a correct record.

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.

None.

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. 

None.

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

None.

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

None.

In accordance with Article 8 of the Council’s Constitution – Regulatory and Other Committees, the membership of the Audit and Governance Committee will normally include a District Councillor from the Standards Committee, at least one Member of the Executive and at least two Members of the Scrutiny Committee.  The Article states that the meeting would not normally be chaired by the Member of the Executive. The current Chair is Councillor Tony de Vere, the Executive Member with responsibility for Finance.  In view of the advice set out in Article 8, Councillor de Vere has advised of his intention to resign as Chair before the next meeting of the Committee but remain as a Member of the Committee.   The election of a new Chair for the remainder of the 2007/08 Municipal Year will be the first item of business at the next scheduled meeting of the Committee on 15 January 2008.

The Committee noted that in accordance with Article 8 of the Council’s Constitution – Regulatory and Other Committees, the membership of the Audit and Governance Committee would normally include a District Councillor from the Standards Committee, at least one Member of the Executive and at least two Members of the Scrutiny Committee.  The Article stated that the meeting would not normally be chaired by the Member of the Executive. The current Chair was Councillor Tony de Vere, the Executive Member with responsibility for Finance.  In view of the advice set out in Article 8, Councillor de Vere had advised of his intention to resign as Chair before the next meeting of the Committee but remain as a Member of the Committee.   The election of a new Chair for the remainder of the 2007/08 Municipal Year would be the first item of business at the next scheduled meeting of the Committee on 15 January 2008.

Members will recall that at the last meeting of the Committee (Minute AG.13 refers), the External Audit and Inspection Plan 2007/08 was noted and in the absence of the External Auditor it was agreed to discuss the report further at this meeting.  A copy of the Plan is attached.

At the last meeting of the Committee (Minute AG.13 refers), the External Audit and Inspection Plan 2007/08 was noted and in the absence of the External Auditor it was agreed to discuss the report further at this meeting.  In presenting the report, the External Auditor apologised for being absent at the last meeting.  In considering the report, Members asked a number of questions, the answers to which are set out below:-

This Committee approved the draft 2006/07 Statement of Accounts at its meeting on 27th June. Since that date the External Auditor has been conducting her audit. This note provides the Committee with a progress report.

Under the closedown arrangements the statutory deadline for completing the Audit is 30 September 2007. The Audit will be completed by that date and the accounts will be finalised by the inclusion of the Auditor's signed audit report, including his opinion and certificate.

During the Audit a number of adjustments have been agreed with the Auditor to provide additional information or clarification. These adjustments will be explained by the Strategic Director and Chief Finance Officer at the meeting. 

A copy of the Statement of Accounts as now amended (report 64/07) has been circulated separately.

Recommendation

that the amended 2006/07 financial statements be approved and the imminent completion of the Audit process be noted. 

The Committee received and considered report 64/07 which detailed the Statement of Accounts 2006/07, updated following the audit undertaken by the External Auditor.  The Strategic Director and Chief Finance Officer explained in detail the changes that had been made to the Statement of Accounts since their initial consideration at the last meeting in June.

One Member asked the External Auditor whether any of the issues raised during her audit of the Statement of Accounts had given rise to any concern which might risk the Council’s finances. In response, the External Auditor explained that there was significant risk around some areas of the Council’s operations but she recognised that the Council had undertaken much work to mitigate that risk.  She confirmed that these matters would be kept under review and appropriate action taken if necessary.  In respect of the actions identified in the Statement of Accounts which the Council was committed to completing during 2007/08, the Strategic Director and Chief Finance Officer confirmed that he was confident that these would be completed.  Furthermore, Councillor Tony de Vere, the portfolio holder with responsibility for finance, explained that the Ridgeway Shared Services Partnership Board would be keeping this matter under regular review.

The Chair thanked the Officers for their hard work in producing the amended Statement of Accounts.

RESOLVED

(a)       that the amended 2006/07 financial statement be approved and that imminent completion of the audit process be noted;

(b)       that the Strategic Director and Chief Finance Officer report to the next meeting of the Committee giving an update on the actions identified in the Statement of Accounts which the Council was committed to completing during 2007/08.

As the Council's External Auditor, the Audit Commission has a duty to report to those charged with governance certain matters before an opinion is given on the financial statements. These matters are:

(a)       expected modifications to the Auditor's report

(b)       unadjusted misstatements

(c)        material weaknesses in the accounting and internal control systems identified during the Audit

(d)       views on the qualitative aspects of the accounting practices and financial reporting

(e)       matters specifically required by other Auditing Standards to be communicated to those charged with governance

(f)         any other relevant matters relating to the Audit.

This Committee is responsible for receiving the External Auditor's Management Letters and reports on Annual Corporate Governance matters and determining, on behalf of the Council, whether the Executive or an appropriate Committee or both should take action to respond to such matters.  A copy of the Annual Governance Report (65/07) is attached.

Recommendation

The Committee is asked to consider the External Auditor's 2006/07 Annual Governance report and the Chief Finance Officer's comments in order to determine whether any further adjustments are required to the financial statements; and whether any further actions are required in light of the Auditor’s comments.

The Committee received and considered report 65/07 which set out the Council’s External Auditor’s Annual Governance Report 2006/07.  In presenting the report, the External Auditor placed on record her appreciation at the work and assistance given by the Vale Officers in compiling the report and she confirmed that she expected all work to be completed by the statutory deadline of 30 September 2007.  She confirmed she was satisfied with the Council’s Statement of Internal Control and that the Council’s value for money conclusion was acceptable in the majority of areas although confirmation and clarification was being sought in some areas.  The External Auditor confirmed that the audit had been an improvement on the previous year and that the majority of papers requested to assist in the audit had been provided promptly.  However, in common with other local authorities, there had been some problems encountered in reducing the statement of total recognised gains and losses and some identified weaknesses in the Council’s systems of internal control, namely, journal entries into the main accounting system, the format of bank reconciliation and the annual insurance framework.

In response, the Strategic Director and Chief Finance Officer advised that the concern raised regarding journal entries and the need for the drafting of the journal and the checking to be undertaken by separate officers, was a problem in view of the current level of accountancy resource at the Council.  He hoped that the shared service with South Oxfordshire District Council which would provide greater resilience in the accountancy function would enable this weakness to be overcome.  However, he reminded the Committee that the Council had other internal controls in place to ensure that such matters were dealt with correctly.  In respect of the format of the bank reconciliation remaining inadequate, the Strategic Director and Chief Finance Officer expressed his frustration that this matter had still not been clarified and the reconciliation undertaken in accordance with external audit requirements.  It was hoped that once the Agresso 5.5 financial management system was operating effectively, responsibility for bank reconciliation might be transferred to Capita.

The External Auditor confirmed that the adequacy of the Council’s system of internal control would be kept under review and that further discussions would be held with the Strategic Director and Chief Finance Officer and that the outcome of those discussions would be reported to a future meeting of the Committee.

RESOLVED

that the External Auditor’s Annual Governance Report 2006/07 be received and that the External Auditor be requested to report further on the outcome of discussions with the Strategic Director and Chief Finance Officer on the adequacy of the Council’s system of internal control.

Introduction and Report Summary

The purpose of this report is:

·        to summarise the progress of Internal Audit against the 2007/2008 audit plan;

·        to set out the revised Internal Audit allocation and remaining audit plan for 2007/2008, and to explain the process used for re-calculating the resources available; and

·        to summarise the priorities and planned audit work for 2007/2008 Quarter 3.

The Contact Officer for this report is Adrianna Penn, Audit Manager for South Oxfordshire District Council and Vale of White Horse District Council, telephone (SODC) 01491 823544 and (VWHDC) 01235 547615.

Recommendations

(a)       that Members note the content of the report; and

(b)       that Members approve the revised Internal Audit allocation for 2007/2008.

The Committee received and considered report 61/07 of the Audit Manager which summarised the progress of internal audit against the 2007/08 audit plan; set out the revised internal audit allocation and remaining audit plan for 2007/08 and explained the process used for recalculating the resources available; and summarised the priorities and planned audit work for 2007/08 Quarter 3.  Referring to Appendix 2 to the report, the Audit Manager advised that the first column should read March 2008.  Referring to Appendix 2 and the proportion of chargeable days of 63%, the Audit Manager confirmed that national guidance would expect this figure to be approximately 79%.  However, this figure would be unrealistic for the current year due to work being undertaken on shared services.  However, she expected the figure to be closer to 79% in 2008/09.

In respect of the risk scores given to similar audits by the Vale and South Oxfordshire District Councils, it was noted that each authority used similar methodology for undertaking audits but that different weightings were given to elements of the audit.  However, now that the Audit Manager was in post it was hoped that this would provide a level of consistency across the two authorities.  Referring to the number of audit days remaining for the year, the Audit Manager explained that South Oxfordshire had more audit days compared to the Vale because it had carried a number of staff vacancies and undertaken additional unplanned audits during the year.  Furthermore, she explained that the Vale figure did not reflect the work undertaken as part of the flood review unplanned audit.

RESOLVED

(a)       that report 61/07 be received; and

(b)       that the revised internal audit allocation for 2007/08 detailed in Appendix 2 to report 61/07 be approved.

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 will be/has been taken where necessary.

The Contact Officer for this report is Adrianna Penn, Audit Manager for South Oxfordshire District Council and Vale of White Horse District Council, telephone (SODC) 01491 823544 and (VWHDC) 01235 547615.

Recommendation

thatMembers note the content of the report.

The Committee received and considered report 62/07 of the Audit Manager which summarised the outcome of recent internal audit activity.  Appendix 1 to the report set out the key points and findings relating to completed audits in respect of refuse collection and recycling.

The Committee discussed the importance of Executive Members being made aware of actions contained in internal audit reports.  Furthermore, it was recognised also that Governance Matters were not only the responsibility of the relevant portfolio holder but also a matter for the Audit and Governance Committee.  The Committee was reminded that at its last meeting it had recognised the importance of both auditee’s who had failed to respond to internal audit reports within the agreed timescale should be summoned to appear before the Audit and Governance Committee to give an explanation.  However, it was accepted that if an internal audit report was satisfactory and that the auditee had responded in accordance with the agreed timescale, then the auditee would not be expected to attend the Committee when the audit report was discussed.  It was suggested that the attendance of auditee’s at meetings of the Committee should be discussed at the pre-agenda meeting.  It was suggested also that the Opposition Members should be provided with copies of the internal audit report so that they could request the attendance of an auditee at a meeting of the Committee.

In respect of the two audits before the Committee, it was agreed that the portfolio holder with responsibility for waste management and recycling should be provided with a copy of the audit report and that such practice should be adopted by all Deputy Directors in the future in respect of audit reports.

RESOLVED

(a)       that report 62/07 be received;

(b)       that the attendance of auditees at meetings of the Committee when their respective internal audit reports are discussed be determined at pre-agenda meetings and that Opposition Members of the Committee be provided with copies of the report also so that they can request attendance of auditees;

(c)       that the internal audit reports relating to Refuse Collection and Recycling be forwarded to the portfolio holder responsible for these areas and that Deputy Directors be requested to ensure that all future internal audit reports are sent to the relevant portfolio holder.