Agenda item

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 audit at the Council and its effectiveness, the Chair asked the Joint Head of Finance to comment on the quality of the service.  In response, the Joint Head of Finance advised that it was difficult to comment as he had only been responsible for the service since 1 April 2007.  However, one initial concern was the current staffing numbers within the section, although this was currently being addressed.  The Joint Head of Finance advised that the work undertaken in establishing a joint service with South Oxfordshire for internal audit had not impacted on the quality of the service but there had been an impact on the output in terms of the number of audits undertaken.  However, he was hopeful that the shared service would be able to share the good practices across each of the Councils to provide a much improved service.

 

One Member referred to report 23/07 – Annual Report on Internal Audit (2006/07), and expressed disappointment that only 8 audit feedback surveys had been returned out of the 32 audits undertaken during the year.  The Member suggested that Auditee’s should be encouraged to complete and return the feedback forms to give a better indication of the level and quality of service provided by Internal Audit.

 

RESOLVED

 

(a)        that the Statement of Internal Control be approved subject to the amendments detailed above;

 

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

 

Supporting documents: