Meeting documents

To sign the Minutes of the meeting held on 23 June 2010, previously circulated.

The Minutes of the Audit Committee held on 23 June 2010, copies of which had been previously circulated, were agreed by the Committee and signed by the Chairman as a correct record.

There were no declarations of interest.

Note: Councillor R J Barber entered the meeting at 6.32pm.

Legislation required that the external auditors reported certain matters to those charged with governance - the Audit Committee - before giving an opinion on the Council’s financial statements.  The accounts needed to be signed off by the external auditors and published by the statutory deadline of 30 September 2010.  Mick West from the Audit Commission, the Council’s appointed external auditors, was in attendance to present the report and answer questions.

Financial Statements

Mick West advised that work on the financial statements was nearing completion.  No material errors had been found, and he anticipated giving an unqualified opinion by the statutory deadline.

A few small errors had been found in the financial statements - one of which was now resolved - and the Audit Committee proceeded to review these.

The Council had chosen not to correct an overstatement of the Council’s share of the long-term liability of the pension reserve.  Mick West advised that in his opinion an error had been made in calculating the apportionment between the Council and the Chilterns Crematorium Joint Committee.  The Chief Executive advised that the issue had been highlighted in the accounts of the Chilterns Crematorium.  The Committee noted that this was related to a subjective apportionment between accounts, which had no material impact on the financial statements and no adjustment was deemed necessary.

The external auditors had also identified an unexplained balancing entry in the statement of recognised gains and losses. Mick West advised that it could indicate that there were errors in other parts of the Council’s financial statements.  However, he added that the Council’s attention was only being drawn to the error, there was no need to comment on it in the letter of representation; it was not material and external audit would still issue an unqualified opinion. The Head of Financial Services added that the figure had reduced from the previous year.  It was not considered an appropriate use of the Council’s resources to find and correct the error, when little would be gained, and it had no material impact. The Committee endorsed this view. 

The Council were required to agree to adjust the errors found by the external auditors, or set out the reasons for not doing so.  The Chairman read out the Council’s proposed response to the two errors outlined above.  These responses were agreed by the Committee.

Mick West advised of a balancing item in the Cashflow Statement which was probably due to the changed accounting arrangements in respect of local taxation. The Head of Financial Services advised that this might also be the result of the change in methodology for calculating net cash flow - from the direct method of reporting in 2008/09, to the indirect method in 2009/10.  It was emphasised that the balancing entry related to the Cash Flow Statement; it was an accounting error not a physical ‘cash’ error. 

Mick West added that further clarification was being sought regarding the valuation of land leased to the Council for the Chiltern Pools and Chesham Leisure  ...  view the full minutes text for item 14.

The report before the Committee detailed the work of the Internal Audit Section for the period April to September 2010.  It detailed the planned audits completed, corporate work undertaken, Internal Audit resources and performance, variations to the Internal Audit Plan, and a list of recommendations that remained unimplemented by agreed dates.

Internal Audit gave an assurance rating for each completed audit, ranging from Full Assurance, where a sound system of control was in place; to No Assurance where the system was open to significant error / abuse.  No audits had received a rating of ‘No Assurance’ or ‘limited assurance’.

The Head of Financial Services advised that the number of audits completed during the period had been reduced due to the long-term absence of the Senior Auditor.  As a result there would be a shortfall in Internal Audit resources for 2010/11.  A report would be going to the Council’s Management Team to agree on a risk basis which audits would be deferred to the following year. 

The Committee proceeded to review those internal audit recommendations which had not been implemented by agreed dates.

Regarding data security, it was noted that one Councillor had refused to agree / sign the Council’s ICT Security Policy, stating that he did not use any Council equipment.  Regarding sanctions if he continued to refuse to sign, the Chief Executive advised that ultimately it would be a Standards Committee issue.  The Committee agreed that it was appropriate for all Members to sign up to the ICT Security Policy, noting that even if they did not use the Council’s equipment, all Members had access to it and a Chiltern email address.  As a result, it was further agreed that the Member in question be asked to reconsider his position and sign the Council’s ICT Security Policy.

It was noted that since the expiry of the memorandum of understanding there remained no formal contract between Aylesbury Vale and Chiltern District Council regarding payroll services.  The Head of Financial Services advised that the delay was due to capacity issues but the work was under way.  The Committee acknowledged the importance of the contract and requested a finalisation date.

Regarding the clarification of contract terms with Nexus, it was noted that this was at an advanced stage.  Members were reminded of the role of the Chiltern Leisure Advisory Board in monitoring the leisure contract.  Reports were also regularly submitted to the Council’s Community and Environment Overview Committee.  It was hoped that the recently announced merger between Nexus and Greenwich Leisure Limited would afford greater investment in the Chiltern Leisure Centres.

Following a question from the Committee, the Head of Financial Services agreed to circulate the reasons for the change in the level of assurance - from Full to Substantial - for Members Allowances and the Chilterns Crematorium.