Meeting documents

Audit Committee
Tuesday, 23rd September, 2008 7.00 pm

Date:
Tuesday, 23rd September, 2008
Time:
7.00pm
Place:
Town Hall, Bury
 

Attendance Details

Present:
Councillor S P Penketh (in the Chair);
Councillors I Ahmed, J Harris, S Hurst, A K Matthews, K Rothwell and M J Wiseman
Co-opted:
No members of the public attended the meeting
Apologies for absence:
Councillors K Audin and A J Garner and A Loynes (Independent Member)
Buttons
Item Description Decision
Open
AU.317 DECLARATIONS OF INTEREST
 Councillor Rothwell declared a personal interest in Minute AU.321 (Finance and Performance Monitoring 2008/2009), Minute AU.323 (External Audit Programme) and Minute AU.324 (International Standards on Audit), in relation to any reference to Council Housing as a tenant of a Council property.
AU.318 PUBLIC QUESTION TIME
 There were no members of the public present to ask questions at the meeting.
AU.319 MINUTES OF THE LAST MEETING
 Delegated decision:

That the Minutes of the meeting of the Audit Committee held on 26 June 2008 be approved as a correct record and signed by the Chair.
AU.320 ANNUAL BUDGET-SETTING PROCESS
Preamble for item AU.320
Delegated decision:

That the Director of Finance and E-Government be thanked for his informative presentation.
AU.321 FINANCE AND PERFORMANCE MONITORING 2008/2009 - MONTH 3
Preamble for item AU.321
Delegated decision:

That the Director be thanked for his informative report.
AU.322 GIFTS AND HOSPITALITY
Preamble for item AU.322
Delegated decisions:

1. That this Committee re-affirm its support for the importance of registering gifts and hospitality.

2. That this Committee endorses the current approach for declaring offers of gifts or hospitality.

3. That the declarations made to date, be noted.
AU.323 EXTERNAL AUDIT PROGRAMME - PROGRESS STATEMENT 2007/2008
Preamble for item AU.323
It was agreed:

That the External Auditors be thanked for the Progress Statement.
AU.324 INTERNATIONAL STANDARDS ON AUDIT - REPORT TO THOSE CHARGED WITH CORPORATE GOVERNANCE
Preamble for item AU.324
Delegated decision:

That the findings of the Audit Report be accepted.
AU.325 FINAL STATEMENT OF ACCOUNTS 2007/2008
Preamble for item AU.325
Delegated decisions:

1.That the amendment to the Accounts recommended by KPMG, be approved.

2. That the final version of the Statement of Accounts for the financial year 2007/2008, incorporating the relevant pages to the Accounts reflecting the amendments attached at Appendix A to the report submitted, be approved in line with the provisions of the Accounts and Audit Regulations 2003; and

3. That the matters and issues arising from the Audit and contained within the ISA (UK+1) 260 Financial Statement Report, be noted.

4. That this Committee place on record its gratitude to KPMG for the professional support throughout the Audit.

(Note: this item which was not included on the Agenda was allowed by the Chair to be considered at this meeting on the grounds that an urgent decision was required on the amendments to the Accounts.)
AU.326 SECURITY OF COUNCIL INVESTMENTS
Preamble for item AU.326
Delegated decision:

That the report be received.

(Note: This report which was not included on the Agenda, was allowed by the Chair to be considered on the grounds that an urgent status report was required to be given to the Committee.)
AU.327 EXCLUSION OF THE PRESS AND PUBLIC
 Delegated decision:

That in accordance with Section 100(A)(4) of the Local Government Act 1972, the press and public be excluded from the meeting during consideration of the following items of business since they involved the likely disclosure of exempt information, relating to any action taken, or to be taken in connection with the prevention, investigation and prosecution of crime.
Exempt
AU.328 INTERNAL AUDIT REPORTS - MEMBERS' FEEDBACK
  • (Attachment: 11)A report by the Head of Internal Audit
  
AU.329 INTERNAL AUDIT PROGRESS REPORT 2008/2009
  • (Attachment: 12)A report by the Head of Internal Audit
  • |
    (Attachment: 13)Appendix A - Thematic Breakdown of Reports
  • |
    (Attachment: 14)Appendix B - Audit Reports Outstanding
  • |
    (Attachment: 15)Appendix C - Final Audit Reports Issued
  • |
    (Attachment: 16)Appendix D - Internal Audit Performance Indicators
 
The meeting started at 7.00 pm and ended at 9.00 pm

Preamble

Preamble
ItemPreamble
AU.320The Director of Finance and E-Government gave a PowerPoint presentation on the Council’s Annual Budget-Setting processes.

The Presentation was separated into the following elements:-

 Background to the Council’s annual expenditure and sources of funding
 Details of the Local Government Settlement with comparative figures locally and nationally
 Budgetary challenges
 The Budget Strategy
 The Budget formula
 Budgetary Assumptions for 2008/2009 financial year
 Budget Summary 2008/2009
 Project Budget deficits 2009/2010 - 2011/2012
 The Council’s Savings Strategy involving the identification of on-going, sustainable and based on operational efficiency
 Income from the Council Tax
 The Budget timetable 2009/2010 - the Director submitted a detailed Budget Timetable including all the critical dates leading to the approval of the Budget and Council Tax for 2009/2010.

Members of the Committee raised the following issues:-

 Financial implications of the Pay and Grading Review
 Financial implications of Equal Pay Claims against the Authority in 2009/2010
 Re-development Schemes - Non-domestic Rates and additional domestic properties where these are included in the development
 The effects of the National and Global economic conditions
 Capping of Council Tax levels by the Government
AU.321The Director of Finance and E-Government presented a report updating Members of this Committee on the Authority’s financial and performance position in line with the Committee’s Statement of Purpose to ‘provide independent scrutiny of the Authority’s financial and non-financial performance to the extent that it affects the Authority’s exposure to risk and weakens the control environment.’

The report indicated that the Authority was projecting an overspend of £233,000 for the year based on spending and income information as at 30 June 2008. This projected overspending was regarded as a matter of concern, however, it could be accommodated within the General Fund balances without breaching the ‘Golden Rules’, as a consequence of which, the estimated position was not seen as a major risk to the achievements of the Authority’s Ambitions and Priorities.

The critical budget pressure areas were identified as Learning Disability Services, Leisure Services and Land Charges income for which monitoring action plans had been put in place to bring these budgets under control. It was acknowledged that the overspendings in these areas may not be eradicated in the current year.
AU.322Further to Minute AU.290 of the meeting of this Committee held on 19 September 2007, the Head of Strategic Finance presented a report updating the Committee on the system installed to enable employees to declare, monitor and report gifts and hospitality offered in the course of their duties.

The report included a summary of declarations made over the period 1 January - 30 June 2008.

Paragraph 2.6 of the report included an analysis of the declarations made for the same period broken down to identify declarations by Department of the Council and the average value of the gifts or hospitality.
AU.323Adrian Lythgo and Rashpal Khangura, representing KPMG the Council’s External Auditor, presented a report updating the Committee on the following elements of the External Audit:-

 Service Prioritisation Review
 Alternative Service Provision - Corporate and Transactional Services
 Local Area Agreements Review
 Capital Projects
 Social Needs Transport Review
 Financial Statements
 Use of Resources Judgment
 Data Quality and Comprehensive Performance Assessment Specified Indicators
 Assurance Framework
 Best Value Performance Plan

The Statement included comments against each element of the Audit and an undertaking was given that feedback would be given on each element later in the Audit Cycle.
AU.324Adrian Lythgo and Rashpal Khangura, representing KPMG the Council’s External Auditor, presented a revised report at the meeting, summarising the key issues identified during their Audit and the Financial Statements for the year ended 31 March 2008.

The findings were divided into these sections:-

 Use of resources
 Accounts and Annual Statement of Governance
 Exercise of other Powers.

KPMG was required to certify that the Audit had been completed in accordance with the requirements of the Audit Commission Act 1998 and the Code of Audit Practice. The Audit Report indicated that there were no issues that would cause any delay to the issue of the Certificate of Completion of the Audit.

Appended to the Audit Report were:-

 The proposed Audit Report
 Audit Differences
 Accounts Recommendations
 Prior-year Recommendations
 Audit Report produced in 2008
 ISA 260: Declaration of Independence and Objectivity
 Draft Management Representation Letter
 The Audit Fee

AU.325Further to Minute AU.118 of the meeting of this Committee held on 26 June 2008, the Director of Finance and E-Government submitted a report detailing a small number of amendments which had been made following the completion of the Audit by KPMG, the Council’s External Auditor, and the relevant pages of the Accounts, reflecting these amendments, were attached to the Report. (Appendix A.)

The Audit Committee was required to consider the Report in conjunction with the ISA 260 set out in Minute AU.324 above.

The Director submitted at the meeting a copy of his letter to KPMG setting out the Council’s response to their Audit of the Financial Statements for the Council for the year ended 31 March 2008.

AU.326The Director of Finance and E-Government briefed the Members of the Committee on the status of the Council’s investments in the light of uncertainty in national and international financial markets.

The Treasury Management Strategy, including the list of bodies in which the Council invests, have been reviewed.

The possible implications of the current financial uncertainty on future development projects in the Borough, were discussed.