Minutes for Audit and Governance Committee meeting, Mar 25 2009, 3.00PM official page

Apologies for absence were received from Councillors Byrne, P. Dowd, Parry, Porter (Substitute Member) D. Rimmer, Blackburn (Substitute Member) and Tonkiss.

Members and Officers are requested to give notice of any personal or prejudicial interest and the nature of that interest, relating to any item on the agenda in accordance with the relevant Code of Conduct.

Member

Minute No.

Reason

Action

Councillor Robertson

35 - External Audit Progress Report

Personal - he is an employee of HM Revenues and Customs which is referred to in the report

Took part in the consideration of the item and noted thereon

Minutes of the meeting held on 17 December 2008

The Committee considered the minutes of the meeting held on 17 December 2008 and the Chair expressed concern that reports had not been submitted to this meeting on the issues raised under Minutes 22 (Discussion with PricewaterhouseCoopers on negligence issues in the External Audit Plan 2008/09) and 28 (Arvato’s Performance on Benefit Fraud Management).

RESOLVED:  That

(1)       the Minutes of the meeting of this Committee held on 17 December, 2008 be confirmed as a correct record;

(2)       the issue referred to in Minute 22 (Negligence Issues in External Audit Plan 2008/09) be considered further under Minute No. 35 below; and

(3)       the Finance and Information Services Director submit a report to the next meeting on the mechanism for the future reporting of Arvato’s performance on benefit fraud management to Sefton Council.

The Chair reported that he had agreed that the Committee would consider the following item of urgent business:

Annual Audit and Inspection Letter (Minute 33) which had been published by the Audit Commission following the publication of the agenda and there was a need for the Committee to consider the content.

A copy of the Annual Audit Inspection Letter for 2007/08 published by the Audit Commission is attached

Mr. P. Forrester from the Audit Commission presented the Council’s Annual Audit and Inspection letter, which had recently been published and provided an overall summary of the Audit Commission’s assessment of the Council.  It drew on the most recent Comprehensive Performance Assessment (CPA), the findings and conclusions from the audit of the Council for 2007/08 and from any inspections undertaken since the last Annual Audit and Inspection Letter, including the results of the most recent corporate assessment.

The key messages for the Council included within the letter were as follows:-

• Sefton Council has been rated as a four star Council under the C.P.A. process and is improving well.  It continues to deliver its priorities and improve its management and partnership arrangements to support further improvement.

• Good progress has been made in priority areas.  Physical regeneration schemes have improved parts of the borough and participation in cultural and leisure activities has increased.  Support for local businesses and improved job opportunities have contributed to increasing employment and reductions in benefit claims.  Crime levels and the fear of crime are reducing and resident concerns about anti social behaviour have fallen.  Council services for older people show improvement and hospital admissions have reduced.  Recycling levels have improved with the roll out of alternate weekly collections but the cleanliness of the local environment has deteriorated.

• Outcomes for children and young people were assessed as good and educational attainment has improved.  However, the staying safe theme for children and young people was assessed as adequate by Ofsted and is an area for improvement.

• The Council achieves good value for money with services that generally perform well at below average cost.  The major service review has been completed and is intended to improve efficiency and service delivery.

• The Council has good knowledge about local communities and engages well with more vulnerable residents.  It works well with partners and is making good progress in developing plans to deliver future improvement in the borough.  The Council is working on plans to improve supporting people and strategic housing which were found to have a number of improvement areas in inspections published in 2008.

• The Council’s accounts were prepared on time and met all the statutory reporting requirements; we were able to issue an unqualified opinion by the deadline.  The Council’s arrangements for ensuring value for money in the use of resources at its disposal were assessed as consistently above minimum requirements, the Council is performing well.  This enabled me to issue an unqualified value for money conclusion; and

• The public service inspectorates are currently developing a new performance assessment framework, the Comprehensive Area Assessment (CAA).  During 2009 CAA will provide the first holistic independent assessment of the prospects for local areas and the quality of life for people living there.

The letter indicated that the Council now needs to focus its efforts on:

• continuing to manage performance improvement in priority areas.

• ensuring that performance in areas such as cleanliness of the borough, strategic housing services and the issues identified in the Ofsted annual assessment around the staying safe theme for children and young people are addressed.

• continuing to work with partners to deliver the partnership priorities set out in the Sustainable Community Strategy and Local Area Agreement.  Progress on this will be assessed as part of the Comprehensive Area Assessment.

• rising to the challenge of the new Use of Resources Assessment through the demonstration of improvements in outputs, outcomes and achievements; and

• ensuring that its major service review delivers the efficiency and service improvement targets.

RESOLVED:-

That the Annual Audit and Inspection Letter - March 2009 be noted.

A representative from the Council’s External Auditors, PricewaterhouseCoopers will give a presentation on the Use of Resources Assessment process for 2009. A copy of the presentation slides is attached.

Ms. S. Parkinson and Mr. P. Chambers from the Council’s External Auditors, PricewaterhouseCoopers gave a presentation on the Use of Resources Assessment to be reported as part of the Comprehensive Area Assessment (CAA) in Autumn 2009 which would be based on three themes:

• Managing Finances
• Governing the Business
• Managing Resources

With a greater focus on achievements, outputs and outcomes and less focus on prescriptive arrangements and processes.

The use of Resource Assessment within the CAA framework would include an organisational assessment for Sefton Council and the Fire and Rescue Authority and the use of resources assessments for Primary Care Trust (PCT) and Police Authority will feed into the relevant performance assessment.

The performance of the Sefton Borough Partnership would be assessed as part of the Area Organisational Assessment.

Members of the Committee noted that the performances of the Council, Fire and Rescue Authority, PCT and Police Authority would be assessed as part of the CAA process and referred to the key role for the Overview and Scrutiny Committees in scrutinising the performance of the Sefton Borough Partnership and challenging Partner Organisations if they are under performing against the targets in the Local Area Agreement.

RESOLVED:

That the presentation be noted.

Report of the Council’s External Auditors, PricewaterhouseCoopers

Mr. P. Chambers from the Council’s External Auditors, PricewaterhouseCoopers presented a Progress Report on the work being undertaken under the various areas of the External Audit Plan 2008/09.

The Finance and Information Services Director reported that Management was in the process of agreeing a revised procedure in respect of all the control issues referred to in Appendix A of the report.

The Chair referred to the earlier discussions under Minute No. 31 above with regard to the negligence issues raised in the External Audit Plan 2008/09 submitted to the Committee on 24 September, 2009 and the Finance and Information Services Director reported that the Council had provided PricewaterhouseCoopers with Council-owned laptops to enable them to access the Council’s Internet Site and communicate electronically with Council staff.

RESOLVED:  That

(1)      the progress report be noted;

(2)      the External Auditors submit summary reports on unadjusted differences which are at the level of £10,000 and above;

(3)      the External Auditors arrange a meeting with the Chair of the Committee and the two Political Group Spokespersons to discuss the issues relating to fraud set out in the report;

(4)      it be noted that the External Auditors have been appointed to support the Council in carrying out an assessment of the quantum of any overpaid VAT in relation to cultural, sports and leisure income, as well as income relating to ‘led and directed’ sports courses and activities;

(5)      the Finance and Information Services Director and Legal Director submit a written report to the Cabinet Member - Corporate Services giving an assurance that the negligence issues raised in the External Audit Plan 2008/09 submitted to the Committee on 24 September 2008 had been resolved; and

(6)      the Assistant Chief Executive (Management) be requested to advise Strategic/Services Directors of the need for all reports requested by Committees to be submitted to the meeting specified in the minutes of meetings and if this is not possible, an explanation should be given to the Committee on the reason why the report could not be submitted to the meeting.

Letter from the Council’s External Auditors, PricewaterhouseCoopers attached

Mr. P. Chambers from the Council’s External Auditors, PricewaterhouseCoopers presented a letter which provided details of the total indicative audit fee for undertaking work for the Council during the 2009/10 financial year.

RESOLVED:

That the letter be noted.

Report of the Finance and Information Services Director

The Committee considered a report of the Finance and Information Services Director which incorporated a copy of the Treasury Management Policy and Strategy 2009/10 which had been approved by the Council on 26 February, 2009.

The report indicated that the Director was currently discussing with Sector, the Council’s Treasury Management Advisors, the possibility of providing a specific Member training event on the technical issue of Treasury Management.

The Committee discussed the risk assessment matrix and the current credit ratings available in respect of Banks and Building Societies set out in the report and noted the action to be taken in respect of the Council’s investments.

The Committee also discussed the proposals previously raised by the Council’s External Auditors, PricewaterhouseCoopers under Minute No. 14 of the meeting held on 24 September, 2008 for a training session to be held on the assessment of the Financial Literacy of Senior Councillors.

RESOLVED:  That

(1)      the Treasury Management Policy and Strategy 2009/10 be noted;

(2)      the Finance and Information Services Director in liaison with Sector, make arrangements for a dedicated training session on Treasury Management Issues to be organised for Members and substitute Members of the Committee; and

(3)      PricewaterhouseCoopers give a presentation at the next meeting on proposals for the Council to self-asses the Financial Literacy of Senior Councillors.

Report of the Finance and Information Services Director

The Committee considered the report of the Finance and Information Services Director on the introduction of the International Financial Reporting Standards and the subsequent implications for the Council in preparing the Statement of Accounts for 2010/11.

RESOLVED

That it be noted that:

(1)       the Council is required to comply with the International Financial Reporting Standards;

(2)       plans for a timetable are in place to ensure the achievement of the new Standards; and

(3)       further reports will be submitted to the Cabinet and this Committee on this issue.

Report of the Finance and Information Services Director

The Committee considered the report of the Finance and Information Services Director on the Internal Audit Annual Plan for the first six months of 2009/10 which had been drawn up in accordance with the CIPFA Code of Practice for Internal Audit.  The auditable areas in the Annual Plan had been identified for Departments/Services and an Audit Risk Assessment had been applied which assists in prioritising audit work relative to risk.

The report indicated that the structure and operation of the Internal Audit Section was currently under review and it was anticipated that this would be completed by May 2009.

RESOLVED:

That the Internal Audit Plan for the first six months of 2009/10 be approved.

To consider passing the following resolution:

That, under Section 100A(4) of the Local Government Act, 1972, the press and public be excluded from the meeting for the following item(s) of business on the grounds that it involves the likely disclosure of exempt information as defined in Paragraph 3 of Part 1 of Schedule 12A to the Act.  The Public Interest Test has been applied and favours exclusion of the information from the Press and Public.

RESOLVED:

That, under Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting for the following item of business on the grounds that it would involve the likely disclosure of exempt information as defined in paragraph 3 of Part 1 of Schedule 12A to the Act.  The Public Interest Test has been applied and favoured exclusion of the information from the press and public.

Report of the Finance and Information Services Director

The Committee considered the report of the Finance and Information Services Director which provided a summary of internal audit work undertaken during the period December 2008 to February 2009.  The Committee was required to be appraised of and review Internal Audit work as part of its review of the internal control environment and formulation and overall governance arrangements.

RESOLVED:

That the report be noted.

Report of the Finance and Information Services Director

The Committee considered the report of the Finance and Information Services Director updating the Committee on the Corporate Risk Register.

RESOLVED:  That

(1)       the updated Corporate Risk Register be approved; and

(2)       issues relating to risk management be reported to the appropriate Cabinet Members and Overview and Scrutiny Committees on a regular basis.