Meeting documents

Audit Committee
Tuesday, 23rd February, 2010 7.00 pm

Date:
Tuesday, 23rd February, 2010
Time:
7.00pm
Place:
Meeting Rooms A & B, Town Hall
 

Attendance Details

Present:
Councillor S P Penketh (in the Chair);
Councillors I Ahmed, K Audin, J Harris and A Isherwood.
Co-opted:
Mr K Wainwright, Co - opted Member
Heather Garrett from KPMG
Apologies for absence:
Councillors A J Garner, S Hurst and M J Wiseman
Buttons
Item Description Decision
Open
AU.620 DECLARATIONS OF INTEREST
 No declarations of interest were made at the meeting.
AU.621 PUBLIC QUESTION TIME
 There were no members of the public present to ask questions at the meeting.
AU.622 Minutes of the Meeting held on Tuesday, 8th December, 2009 7.00pm
 Delegated decision:

That the Minutes of the meeting of the Audit Committee held on 8 December 2009 be approved as a correct record and signed by the Chair.
AU.623 MEMBER TRAINING - BUDGET SETTING, FORECASTING AND MONITORING
Preamble for item AU.623
Delegated decision:

1. That the Director of Finance and E-Government be thanked for his informative presentation.

2. That a report setting out the annual cost to the Council of membership of outside bodies/associations be reported to a future meeting of the Audit Committee.

AU.624 FINANCIAL AND PERFORMANCE MONITORING REPORT - APRIL 2009 TO DECEMBER 2009
Preamble for item AU.624
Delegated Decision:

That the contents of the report be noted.
AU.625 QUARTERLY GOVERNANCE STATEMENT OCTOBER TO DECEMBER 2009
Preamble for item AU.625
Delegated decision:

1. That the contents of the report be noted

2. That the Audit Committee would continue to receive updates on a quarterly basis.
AU.626 GIFTS AND HOSPITALITY
Preamble for item AU.626
Delegated decision:

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

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

3. That the declarations made to date be noted.
AU.627 CERTIFICATION OF GRANTS AND RETURNS 2008/2009
Preamble for item AU.627
Delegated decision:

That the contents of the report be noted.
AU.628 2009/2010 AUDIT PLAN
Preamble for item AU.628
Delegated decision:

That the contents of the report be noted.
AU.629 PROGRESS STATEMENT FOR THE EXTERNAL AUDIT PROGRAMME
Preamble for item AU.629
Delegated decision:

That the contents of the report be noted.
AU.630 EXCLUSION OF 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.631 INTERNAL AUDIT ANNUAL PLAN 2010/2011
  • (Attachment: 8)A report from the Head of Internal Audit
  • |
    (Attachment: 9)Appendix A
  • |
    (Attachment: 10)Appendix B
 
AU.632 INTERNAL AUDIT PROGRESS REPORT
  • (Attachment: 11)A report from the Head of Internal Audit
  • |
    (Attachment: 12)Appendix A
  • |
    (Attachment: 13)Appendix B
  • |
    (Attachment: 14)Appendix C
  • |
    (Attachment: 15)Appendix D
 
AU.633 INTERNAL AUDIT REPORTS - MEMBERS' FEEDBACK
  • (Attachment: 16)A report from the Head of Internal Audit
 
The meeting started at 7.00 pm and ended at 8.40 pm

Preamble

Preamble
ItemPreamble
AU.623Mike Owen the Director of Finance and E-Government gave a 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 2010/2011
•Projected budget deficits 2011 - 2014
•Income from the Council Tax
•Budget Monitoring

Members were given the opportunity to ask questions on the information given and the following points were raised:-

• Councillor Harris asked whether there were any issues with the Agresso system.

Mike explained that there had never been any problems with the system itself but there had been a few issues initially with the way that the system was being operated. Mike explained that the Agresso system enabled quick and easy access to all past and present transactions including orders that had been made but not yet delivered.

• Councillor Audin referred to the 0% pay rise for employees and asked whether staff increments had been built into the forecasts.

Mike confirmed that the increment payments had been included in the budget forecasts.

• Councillor Isherwood asked whether the Council employed anyone on the minimum wage.

Mike stated that the issue of an increase in the minimum wage would not affect any employees of the Council.

• Councillor Penketh asked how many outside bodies/associations the Council was a member of and at what cost to the Council annually. Councillor Penketh asked that this information be reported to a future meeting of the Audit Committee.
AU.624Mike Owen, the Director of Finance and E-Government presented a report updating Members of the 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 £0.949m for the year based on spending and income information as at 31 December 2009. Whilst the projected overspend 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.

There were particular ‘hotspots’ that needed to be addressed relating primarily to recessionary pressures on income budgets.

AU.625Stephen Kenyon, Head of Strategic Finance presented a report providing Members with a quarterly update on the Annual Governance Statement which had been approved by the Audit Committee at its meeting on 25 June 2009.

The report gave an update on the continuous monitoring that was carried out and highlighted any relevant issues with regards to Risk Management, Business Continuity, Budget Monitoring, the work of Internal Audit, Review of Ethical Governance, the work of the Governance Panel, changes to the Annual Governance Statement 2009/2010, Gifts and Hospitality and the Local Pay Review.

It was reported that the governance panel had met six times since its inception in November 2008, and was proving a value arena to exchange information and concerns regarding the Council’s governance arrangements including Ombudsman Report and Data Loss risks.

There had been no significant internal control issues during the period covered by the report and the control environment would continue to be monitored throughout the year with updates being provided on a quarterly basis.

It was also reported that in June 2009, CIPFA had launched its Statement on the Role of Chief Financial Officer in Public Service Organisations. The Statement sets out five principles that define the core activities and behaviours that belong to the role of Chief Financial Officer (CFO) and the governance requirements needed to support them:-

The CFO in a public service organisation:

• Is a key member of the leadership team, helping it to develop and implement strategy and to resource and deliver the organisation’s strategic objectives sustainably and in the public interest
• Must be actively involved in, and be able to bring influence to bear on, all material business decisions to ensure immediate and longer term implications, opportunities and risk are fully considered, and alignment of the organisation’s financial strategy.
• Must lead the promotion and delivery by the whole organisation of good financial management so that public money is safeguarded at all times and used appropriately, economically, efficiently and effectively.

To deliver these responsibilities the CFO:

• Must lead and direct finance function that is resourced to be fit for purpose
• Must be professionally qualified and suitably experienced

Steve explained that the authority had liaised with CIPFA in the drafting of the new requirements and will assist CIPFA with a full overhaul of the Annual Governance Statement, commencing summer 2010.

AU.626Steve Kenyon, Head of Strategic Finance presented a report giving Members an update on the system to declare, monitor and report gifts and hospitality offered to and received by staff.

The report set out a summary of declarations made for the period October to December 2009.

Paragraph 2.6 of the report included an analysis of the declarations by Department of the Council and gave the lowest, highest and the average value of the gifts or hospitality.
AU.627Heather Garrett, representing KPMG, presented a report setting out the results of work on the certification of the Council’s 2008/2009 grant claims and returns.

For 2008/2009, 8 returns were certified with a total value of £121m.

Heather reported that KPMG had issued unqualified certificates for 5 grants and returns but 3 cases had required qualification.

It was explained that although there had been a number of amendments and qualifications, they mainly related to underlying records rather that the Council’s arrangements for preparing its grants and returns. KPMG concluded that the Council had good arrangements for preparing its grants and returns and supported the certification work.
AU.628Heather Garrett, representing KPMG, presented a report setting out the way in which KPMG will deliver their audit work in relation to Use of Resources and Financial Statements for Bury Council for the 2009/2010 financial year.

The statement set out KPMG’s responsibilities and provided a summary of the work that would be undertaken in four key stages:-

Planning
Control Evaluation
Substantive procedures
Finalisation

Heather also reported that the Audit deadline had been brought forward to early September at the request of Council Officers. This would require all of the work to be completed a month earlier than the statutory deadline.
AU.629Heather Garrett, representing KPMG presented the Committee with the Progress Statement for the External Audit Programme 2009/2010.

Details of the ongoing work and when that work would be completed and reported to the Committee were included in the report with comments on progress.