Meeting documents
Venue: Large & Small Committee Room, Council Offices, King George V Road, Amersham
Contact: Richard Harris 01494 732010; email: rharris@chiltern.gov.uk
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Election of Chairman To elect a Chairman of the Committee for the remainder of the Council year. Minutes: It was proposed by
Councillor A Dibbo and seconded by Councillor A K Bacon that Councillor D W
Phillips be elected as Chairman of the Committee for the remainder of the
Council year, following which it was RESOLVED - That Councillor D W Phillips be elected Chairman of the Committee for the remainder of
the Council Year. Note: Councillor D W Phillips in the chair. |
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Election of Vice-Chairman To elect a Vice-Chairman of the Committee for the remainder of the Council year. Minutes: Due to the
infrequency of meetings it was agreed that a Vice-Chairman would not be
appointed. |
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Minutes To sign the Minutes of the meeting held on 18 March 2010. Minutes: The Minutes of the
Audit Sub Committee held on 18 March 2010, copies of which had been previously
circulated, were agreed by the Committee and signed by the Chairman as a
correct record. |
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Declarations of Interest Minutes: There were no
declarations of interest. |
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Audit & Inspection Fee 2010/11 PDF 30 KB Minutes: The
Chairman welcomed Mick
West (District Auditor) and Jon Barlow (Audit Manager) from
the Audit Commission, the Council’s appointed external auditors. Mick
West, advised that the fee discussions for 2009/10 had
not yet been completed. An opinion would
be given on the 2010/11 accounts based on International Financial Reporting
Standards (IFRS) principles. Recent
announcements by central government regarding the abolition of the
Comprehensive Area Assessment (CAA) regime and its
related Use of Resources work would have an impact on the level of external
audit fees for both 2009/10 and 2010/11.
Mick West suggested that there was likely to be
a reduction in both years, although details were not yet available. Mick
West clarified that the CAA
and its related Use of Resources formed one strand of statutory work. The Audit Commission Act 1998 also required
external audit to ensure that the Council had made proper arrangements for securing
economy, efficiency and effectiveness in its use of resources, producing a
Value for Money conclusion. To prevent
duplication, the Audit Commission had utilised the Use of Resources work to
help inform the Value for Money conclusion.
This made it difficult to determine the impact on fees of the abolition
of the CAA and its related Use of Resources
assessment. The Committee
expressed significant concerns about the annual audit and inspection fees
applied to the Council. It was felt that
the fees were not proportionate and did not take account of local
circumstances; the ‘light touch’ which was meant to be applied to efficient
councils such as Chiltern, was not happening.
Chiltern were bracketed with other districts which had far larger
populations and more complex activities and therefore carried greater
risk. In light of the government’s
emergency budget and the ever-increasing financial constraints facing the
Council, it was felt that it would be more appropriate for fees to be frozen or
reduced. Mick West suggested that the fee was proportionate, with 2008/09
used as a baseline. Local circumstances
were also recognised. When the Audit
Commission had taken over from Grant Thornton as the appointed auditors, their
fee had been used as a starting point.
However, a review had revealed that that fee had not been sufficient,
and it had been indicated that an increase in the fee would be sought. Members made reference to the meeting held on 28 September 2009 (Minute 9 refers) when Mick West had stated that the Audit Commission had been unable to secure the Use of Resources background information and system documentation from Grant Thornton. Concern was expressed that the Council had been charged an additional audit fee since the Audit Commission claimed it had been unable to obtain information from Grant Thornton - who the Audit Commission had themselves appointed as the Council’s External Auditor. Local authorities should not be charged for the failings of the Audit Commission. The Chairman reminded Mick West that he, the Chairman, had had it confirmed by the Commission’s Head of Operations ‘that the information provided ... view the full minutes text for item 5. |
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Internal Audit Section Annual Report 2009/10 PDF 30 KB Minutes: The report before
the Committee detailed the work of the Internal Audit Section for the financial
year 2009/10. It included the planned
audits completed, Internal Audit resources, variations to the Internal Audit Plan,
agreed recommendations, and those recommendations that had not been implemented
by agreed dates. The vast majority
of audits had resulted in an audit opinion of either ‘full’ or ‘substantial’
assurance, meaning a sound system of control was in place. No audits had received ‘No Assurance’. It was confirmed
that the Internal Audit section continued to work well with the External
Auditors. Mick West
noted that the Council were required to have an effective internal audit system
in place. If the External Auditors could
not rely on Internal Audit, more work would be required which would be
reflected in the audit fee. It was noted
that it was more economically beneficial to the Council for Internal Audit to
undertake work in areas such as payroll, as opposed to the External
Auditors. Mick West
confirmed that utilising Internal Audit, when resources permitted, would reduce
the audit fee; however, there were limits on the finance work that Internal
Audit could undertake. Internal and
external audit shared test plans, and the External Auditors had requested that
Internal Audit review benefit claims which, if done, would help keep the
Council’s external audit fees down. It was suggested
that it would be useful to include the percentage of recommendations which had
not been implemented by agreed dates.
The Audit Manager confirmed that the number was relatively small. Due to the lack of resources, those that were
low risk did not tend to be followed up. The Committee
proceeded to go through the outstanding recommendations. It was noted that risk management training
for new Cabinet members should take place in the summer. There had been a hold-up due to lack of
resources in the legal section regarding the issue on the payroll contract. The Chairman requested an update on the three
Members who had not signed up to the ICT Security
Policy.
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Statement of Accounts PDF 70 KB Minutes: The Committee were
asked to consider and approve the draft Statement of Accounts and Annual
Governance Statement for the financial year 2009/10. A
supplement to the report was circulated at the meeting detailing the cash flow
statement and providing some minor amendments. The accounts were
subject to inspection by the Council’s appointed external auditor
and further amendments might be required as a result of their findings. It was
anticipated that the Council’s external auditors would report the results of
their audit to the Audit Committee on 23 September 2010. The Head of
Financial Services proceeded to introduce the Statement of Accounts taking the
Committee through the following sections as detailed in the report: Ø
Explanatory
Forward, Accounting Policies and Statement of Responsibilities Ø
Core
Financial Statements §
Income
and Expenditure Account §
Statement
of Movement on the General Fund Balance §
Statement
of Total Recognised Gains and Losses §
Balance
Sheet §
Cash
Flow Statement Ø
Collection
Fund Ø
Annual
Governance Statement The key points
highlighted for 2009/10 were: (a)
A
revenue budget underspend of £459k or 4.2% of the
approved budget (b)
A
significantly improved position on the General Fund balance. (c)
A fall
in income from investments as a result of the impact of the recession on
interest rates. (d)
Capital
expenditure during the year of £1.6 million. (e)
A
decrease in the Council’s net worth of £12.8 million mainly attributable to an
increase in the council’s net liability on the pension fund. (f)
99.2%
of Council Tax and 98.4% of Non Domestic Rate income due for the year was
collected. Regarding the Statement of Recognised Gains and Losses, the Committee noted that the decrease in the authority’s overall net worth was mainly attributable to an increase in the Council’s net liability in the Pension Fund. It was explained that this represented an accounting valuation calculated at a point in time in accordance with accounting requirements and that it was not a cause for alarm. In the longer term the Council’s financial position was unaffected as the deficit would be made good by ongoing contributions into the fund over the remaining life of employees. Employers’ actual contributions into the Pension Fund were determined through the triennial actuarial valuation which was calculated on a different basis. The last valuation was carried out as at 31 March 2010 although any change in contribution rates would not impact until 2011/12. It was also noted that the Council’s current pension contribution rate was already high. The Head of Financial Services advised that rather than opt for a reduction in contribution levels, the Council had adopted a more prudent approach and kept contribution levels constant, shortening the recovery period from 20 to 17 years. This meant that at the next review, there was flexibility to again adjust the deficit recovery period and avoid any increase in contribution rates. The Committee also noted that due to national concerns over the sustainability and affordability of public sector pension schemes that the new coalition government had ... view the full minutes text for item 7. |
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Conversion to International Financial Reporting Standards (IFRS) - Progress Update PDF 35 KB Minutes: The
report before the Committee outlined progress on the requirement for local
authorities to convert to International Financial Reporting Standards (IFRS) from 2010/11.
An updated project plan was included together with a high level
implementation timetable. It was confirmed
that the External Auditors would review progress in restating the 2009/10 UK GAAP accounts to an IFRS basis in
October / November. The Head of
Financial Services confirmed that despite the additional work
involved, Chiltern was on course to meet the IFRS
requirements.
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Audit Committee Work Programme PDF 29 KB Minutes: The
Committee considered the work programme detailed in the report, which took account
of the requirements of both Internal and External Audit, previous requests made
at Audit Committee meetings, and ad hoc items.
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Exclusion of the Public To resolve that under Section 100(A)(4) of the Local Government Act 1972 the public be excluded from the meeting for the following item(s) of business on the grounds that they involve the likely disclosure of exempt information as defined in Part I of Schedule 12A of the Act Minutes:
Note: The relevant paragraph number from
Part 1 of Schedule 12A is indicated at the end of the Minute heading. |
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CORRESPONDENCE FROM THE AUDIT COMMISSION (Paragraph 3) Minutes: The
Chairman outlined correspondence he had been engaged in with the Audit
Commission regarding audit fees and the issues surrounding the Audit
Commission’s replacement of Grant Thornton as the Council’s appointed external
auditors - as mentioned in Minute 6. Neil
Childs had replied to confirm that the Council had not incurred an additional
fee as a result of the handover, and that Grant Thornton had supplied the
information they had been required too.
The Chairman added that a meeting would be held with Neil Childs and Jo Smaill from the Audit Commission on 28 June. The Committee proceeded to discuss the issues
that could be raised at the meeting and the Council’s relationship with its
appointed external auditors. It was
noted that as a small district council, Chiltern’s risks were considerably less
than neighbouring authorities; this should be reflected in the audit fees
imposed - proportionality was required.
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