Agenda item

During the preparation and audit of the 2006/07 Statement of Accounts several weaknesses were found in the Council’s financial controls.  The Chief Finance Officer explained these in the Statement on Internal Control (pages 4 – 11) in the published Statement of Accounts.  The External Auditor qualified her Use of Resources Opinion (page 42) of the Statement of Accounts due to the cumulative effect of these weaknesses. 

At its meeting on 25 September 2007 (Minute AG.22(b)) the Committee recognised the importance of completing the remedial actions identified by the Chief Finance Officer in the Statement of Accounts.  The Committee requested that the Chief Finance Officer should give an update report to the next meeting. 

Progress against each of the actions is provided in the attached table. 

Recommendation

Members are asked to consider the progress made against the actions. 

The Committee received and considered an agenda report and appendix updating on progress made with the actions arising from the Statement of Accounts 2006/07.  During the preparation and audit of the Statement of Accounts several weaknesses had been found in the Council’s financial controls.  These were explained in the Statement on Internal Control, which formed part of the published Statement of Accounts.  The External Auditor had qualified her Use of Resources Opinion of the Statement of Accounts due to the cumulative effect of these weaknesses. 

At its meeting on 25 September 2007 the Committee had recognised the importance of completing the remedial actions identified by the Chief Finance Officer in the Statement of Accounts.  The Committee had requested an update report to its next meeting. 

The Chief Finance Officer gave a progress report against each of the four actions in the table appended to the agenda.  In relation to the first item - implementation of the new Agresso financial management system - he reported that the percentage of the project completed was his subjective assessment to illustrate the position and the work still needed to be carried out. 

A point of principle was raised that where the Council had contracted out a service, it must monitor the contract carefully.  In the case of the Agresso implementation the contractor, Capita, had responsibility to carry out controls.  Assurances were sought that these controls were being imposed by Capita.  It was agreed that contract monitoring was an important aspect of service provision.  In this case, periodic checks took place to monitor the controls required by Capita.  The officer agreed to investigate whether further spot checks could be made. 

The Chief Finance Officer gave an update on the progress with the implementation of the Agresso financial management system.  A fully trained project manager had been appointed before Christmas 2007 to manage the Vale-South Oxfordshire responsibilities in the implementation project.  The project manager was fully employed by the Council, not Capita.  The first task had been to list the tasks that needed to be carried out and order them based on relative dependencies.  An activity plan had been agreed with Capita and work was proceeding on this.  He hoped the implementation would be completed by the first week in April and hoped that the issues could be resolved without the need for contractual remedies.  In answer to a question from a Member, it was reported that the problems with the implementation had not affected the predicted shared service cash savings in terms of staff transfers and printing new stationery but there had been an from additional staff time required to implement the new financial management system. 

Members then reviewed the remaining three actions in the appendix.  In relation to the second item, it was noted that the documentation of the financial processes by Capita should be completed by April also.  In relation to the third item - updating of financial regulations following the introduction of shared financial services - the timing of this action was dependent on the financial management system being stabilised and processes harmonised with South Oxfordshire District Council.  It was hoped this would be carried out in 2008/09. 

The Committee asked that these actions arising from the Statement of Accounts 2006/07 should be kept under review and that an update was given to the next meeting of the Committee. 

RESOLVED

that the progress made against the actions resulting from the 2006/07 Statement of Accounts be noted and a further update be made to the next meeting of the Committee.