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Agenda and minutes

Audit and Risk Committee
Tuesday, 17th January, 2012 7.00 p.m.

Venue: Room 2, The Basildon Centre, St Martin's Square, Basildon SS14 1DL

Contact: Julie Batt on 01268 294429, email  julie.batt@basildon.gov.uk 

Items
No. Item

11.

DECLARATIONS OF INTEREST:

To receive any declarations of interest from Members in accordance with Part 2, Paragraph 9 of the Members’ Code of Conduct.

Minutes:

There were no declarations of interest.

 

12.

MINUTES: pdf icon PDF 168 KB

Confirmation of the Minutes of the meeting of the Audit and Risk Committee held on 28 September 2011.

 

Minutes:

The Minutes of the meeting of the Audit and Risk Committee held on 28 September 2011 were approved as a true record and signed by the Chairman.

 

(For voting see Appendix, Column 1.)

 

13.

Annual Audit Letter 2010/11: pdf icon PDF 64 KB

Additional documents:

Minutes:

The Committee considered the Annual Audit Letter for 2010/11, submitted by the Audit Commission.

 

Debbie Hanson of the Audit Commission, the External Auditor, presented the key elements of the letter to the Committee and Members of the Cabinet.  The Annual Audit Letter summarised the findings from reviews of the Council over the last year, including the opinion on the final accounts and the value for money conclusion.  The Annual Audit Letter also included an assessment of the Council’s plans for responding to current and future challenges.

 

Members of the Committee and Cabinet Members, who had been invited to attend the meeting for this item, were pleased to note the positive messages contained within the Annual Audit Letter.  The External Auditor had issued an unqualified opinion on the accounts for 2010/11 and, on value for money, had concluded that the Council had made proper arrangements to secure economy, efficiency and effectiveness in its use of resources.  The External Auditor commended the Council’s Finance Team on their proactive approach to the challenges presented by the introduction of International Financial Reporting Standards (IFRS).

 

However, Members were disappointed to note that an additional £40,000 in fees had been occurred as a result of dealing with queries from local electors during the year.  In considering these queries, the External Auditor concluded that there were areas for improvement in the Council’s governance arrangements in relation to the Golf Course but did not consider these issues to be sufficiently significant to impact on the overall value for money conclusion for 2010/11. It was noted that the External Auditor intended to issue a separate report on this matter to the Council, which would include more details on her findings.

 

Members reiterated previous concerns that such queries could relate to matters of policy rather than governance.  However, Debbie Hanson gave assurance that, whilst she had a statutory responsibility to consider comments and objections in terms of process and governance, and assess whether they would affect her conclusion, it was stressed to members of the public that the Auditor would not comment on Council policy.  It was suggested that any elector submitting enquiries should be advised at an early stage of the potential for their enquiry to incur additional costs that would be passed on to the Council Tax payer.  Debbie Hanson agreed to include a statement to this effect in her correspondence with electors.

 

The contents of the Annual Audit Letter were noted.

 

14.

Audit Commission - Update Report 2010/11: pdf icon PDF 50 KB

Additional documents:

Minutes:

Jonathan Wilson of the Audit Commission presented an update report to the Committee.  The purpose of the report was to provide the Audit and Risk Committee with an update on progress in delivering our responsibilities as the Council’s external auditors. The report also included an update on the externalisation of the Audit Practice.  In addition, the paper highlighted key emerging national issues and developments which may be of interest to Members.

 

Members stressed the importance of dealing with procurement fraud and it was noted that the 2012/13 Internal Audit Plan would include the allocation of some resources for proactive fraud work relating to procurement.

 

15.

Business Continuity Management - Progress Report: pdf icon PDF 53 KB

Additional documents:

Minutes:

The Committee received a progress report on Business Continuity Management within the Council, including the performance for the period July 2011 to November 2011.  Members recognised that the large resource that had been committed to Operation Cabinet had had an impact on the performance during this period, but were confident that it would improve for the next period.

 

16.

Corporate Governance Action Plan: pdf icon PDF 56 KB

Additional documents:

Minutes:

The Committee considered a quarterly report summarising the position as at January 2012 in respect of the Council’s Corporate Governance action plan, which provided an update on outstanding actions/recommendations and the progress being made towards their implementation. It was noted that recommendations arising from the Interim Report and Annual Governance Report from the External Auditor and SGCH’s Annual Governance Statement, which had been received by the Council since this Committee last received the quarterly report, had been incorporated into the action plan in order that there was a clear picture of all outstanding actions together with progress that was being made towards implementation.

 

Members discussed the format of the report and it was felt that it would be useful if the recommendations were grouped by where they were placed within the Six Core Principles of Good Governance, rather than by source document.  The Committee also considered whether ongoing actions should continue to be reported and it was agreed that it was important to track those matters, although not in such detail.

 

            RESOLVED:

            (1)       That action taken and programmed in response to recommendations arising from various external inspections and audit reports in connection with governance matters be noted, and completed actions removed from the action plan.

 

            (2)       That future quarterly reports be themed by principle rather than by origin.

 

(For voting see Appendix, Column 2.)

 

17.

Internal Audit Services Progress Report - 11 September 2011 to 13 December 2011: pdf icon PDF 54 KB

Additional documents:

Minutes:

The Committee considered and noted the latest in a series of regular in-year progress reports summarising the performance of the Internal Audit Service.  The report covered the period 16 September 2011 to 13 December 2011.

 

Members discussed how they could be assured that appropriate procedures and processes were in place across the Council to ensure good governance, with particular reference to the internal audit on fleet management.  It was noted that a number of checks were in place at a management level, including identification of “hot spots” and reference to internal audit, quarterly governance assurance statements and the Corporate Governance Group.  Concern was expressed that several matters relating to Street Scene and Depot Services had resulted in “limited” assurance and it was agreed that an information session be arranged for the Chairman of the Committee on those reports.

 

18.

Draft Treasury Management Arrangements for 2012/13 and mid year report for 2011/12: pdf icon PDF 89 KB

Additional documents:

Minutes:

The Committee received a report setting out proposals for the Council’s treasury management arrangements for 2012/13 together with the mid year report for 2011/12, covering the period April to November 2011.  All decisions on overall Treasury Management (TM) policy and the setting of annual TM Strategies are determined by Full Council and the Audit and Risk Committee is responsible for scrutiny of performance in this area.

 

It was noted that the major influencing factor on TM arrangements onwards from 2012/13 on would be the implementation of HRA self financing on 1 April 2012. This entailed the end of the subsidy system in return for a payment to Government of an estimated £53 million on 28 March 2012 and the resources to fund this payment would be borrowed. Moreover, from 1 April 2012 the General Fund (GF) and HRA debt would be split and managed separately. The ending of the subsidy system entailed a significant transfer of treasury risk from the Government to the Council since the cost of interest on HRA borrowing would no longer be met via subsidy.

 

Members noted that the Treasury Management arrangements for 2012/13 would be presented to Cabinet on 26 January 2012 and to Council on 3 February 2012.  The Committee endorsed the proposed strategy but recommended to the Cabinet Member for Resources that the following changes be made before its submission to Cabinet and Council:

 

·            A specific statement to be included in the Policy to say that the Council would not enter into derivatives.

·            A specific reference to the interdependency of the treasury and housing asset management strategies.

·            An explanation of the meaning of the term “coupon rates” on page 146

·            An explanation of the meaning of the term “basis point” on page 147

 

 

AUDIT AND RISK VOTING SHEET pdf icon PDF 34 KB