Meeting documents

AVDC Audit Committee
Tuesday, 18th September, 2007

Document: 2007-09-18 AUDIT COMMITTEE
 

PRESENT:- Councillors Mrs Bloom, Cadd, Kennell, Lambert, Mills, Ralph and Mrs Rowlands.  Councillor Mrs Morgan-Owen attended also as an ex-Officio Member.
 

APOLOGIES:- Councillors N Blake and Isham.
 

 
 

1.

PERMANENT CHANGE TO MEMBERSHIP
 

The Committee was informed that there had been a change to the Conservative membership of the Committee, with Councillor Mrs Bloom replacing Councillor Chilver.
 

2.

CHAIRMAN
 

In the absence of the Chairman and Vice Chairman, it was
 

RESOLVED –
 

That Councillor Cadd be elected Chairman, for this meeting only.
 

3.

MINUTES
 

RESOLVED –
 

That the Minutes of 25th June, 2007, be approved as a correct record.
 

4.

AUDIT COMMISSION GOVERNANCE LETTER / DRAFT STATEMENT OF ACCOUNTS
 

The Council's External Audit Manager submitted the Audit Commission's draft Annual Governance Report which provided a summary of the work carried out during the 2006/07 audit of accounts, the conclusions that had been reached and the recommendations made to discharge their statutory audit responsibilities.
 

Members attention was drawn to the following issues:-
 

(i)

that the Council was recommended to creator a debtor in their accounts for the amount due from the County Council relating to the Special Parking Area (SPA) in Aylesbury and Buckinghamshire.  The Committee was informed that this would be done, and that the Council had a legal agreement with the County Council covering the SPA.
 

(ii)

that the Council was recommended in future to ensure that the year end closing down procedures for the accounts was applied consistently across all financial systems.
 

(iii)

that the external auditors were working with Council officers to ensure that financial transactions relating to the housing stock transfer were recorded correctly.  It was explained that the auditors were not querying the amounts of value but rather exactly where they were entered in the accounts.  It was important that this work complied with recently revised accounting practices which had required major changes in the way financial information was presented in the accounts of the Council.
 

(iv)

that the external auditors believed that the Council was being overly prudent in their bad debt provisions.  Members were advised that all reserves would be reviewed as a part of the budget setting process.
 

(v)

that they were proposing to issue an unqualified audit opinion on 28 September.
 

(vi)

that, in their opinion, the Statement of Internal Control had been prepared in accordance with proper practice specified by CIPFA and was consistent with the findings of the audit report.
 

(vii)

that they were proposing to issue an unqualified conclusion on the use of resources on 28 September.
 

The external auditors advised Members that work on the financial statements was currently in progress and was expected to be completed in time to meet the accounts deadline of 28 September, 2007.  Should any further matters come to the auditors attention following this meeting that needed to be reported to those charged with governance, they would be discussed with the Head of Finance and the Audit Committee Chairman.

 

Members commented and sought clarification on the work that was involved in undertaking the work at (iii) above.
 

RESOLVED –
 

(1)

That the Annual Governance Report for 2006/07 be noted, along with the recommendations to improve the final accounts process, concerning which the Committee would seek formal assurances in due course that the issues highlighted were being dealt with appropriately.
 

(2)

That the representation letter be approved, on behalf of the Authority.
 

(3)

That any further matters that came to the auditors attention following this meeting that needed to be reported to those charged with governance, should be discussed with the Head of Finance and the Audit Committee Chairman.
 

5.

ANNUAL INTERNAL AUDIT PLAN 2007/08
 

The Internal Audit Manager submitted the draft Annual Internal Audit Plan 2007/08 regarding internal audit work to be undertaken relating to the Council.
 

Members were informed that the revised Code of Practice for Internal Audit in Government in the UK required the Plan to be developed having regard to the Council's risk management, performance management and other assurance processes.  Additionally, the Plan had been shaped by a number of other factors and cross cutting themes including corporate governance, strategic planning, the Gershon/efficiency agenda, pathfinder/enhanced two tier working, major projects/funding/capital programme and issues resulting from the transfer of the Council's housing stock.
 

The Plan covered work to be undertaken during the 2007/08 financial year, some of which had already started and progress would be reported to the Committee at this and future meetings.  In future years it was intended that the Annual Internal Audit Plan would be reported to the Audit Committee in March, prior to the commencement of internal audit work.
 

Members commented on the following:-
 

(i)

Planned Timing of Audit Work: Officers were asked to provide a more descriptive explanation of terms in this report column, particularly regarding the term 'annual'.
 

(ii)

Audit Resources: clarification was sought on the role that Deloittes would play in providing audit services.  It was explained that Bucks County Council and Aylesbury Vale, Chiltern and Wycombe District Councils had contracted Deloittes to provide specialist audit services to the Councils, with costs to be shared, and this would lead to overall cost savings and efficiencies for the service.  In addition, the Councils also did mutual support work for each other.
 

(iii)

Housing stock transfer: Members were advised that the terms of reference for a review of arrangements in housing following the housing stock transfer were currently being finalised.
 

RESOLVED –
 

That the Annual Internal Audit Plan for 2007/08 be approved.
 

6.

INTERNAL AUDIT PROGRESS REPORT
 

The Committee received a report informing them that good progress had been made to date on work identified in the current financial year's Audit Plan.  The report covered the period from April 2007 to the end of August 2007.  Some items from the Audit Plan for 2006/07 had still been in progress at the start of the year but had now been completed and formal reports issued where appropriate.  There were no additional significant matters to report apart from those already included in the Statement of Internal Control.
 

A full list of audit reports which had been formally issued in the last five months was included as an appendix to the report and this detailed the Audit opinion on the areas under review and the number of high priority recommendations that had been made.  Where significant issues had arisen and high priority recommendations had been made, these had been added to the audit tracker, which would be reported to the Committee at this and future meetings.  It was explained that while Officers would bring significant issues to Members' attention, the Committee could ask for reports and/or the attendance of Officers at a meeting to discuss issues that were of concern to Members.
 

Members commented on the following:-
 

(i)

that they were content for the current report format for reporting on internal audit progress.
 

(ii)

Officers were asked to provide a better description of the status of audit work, particularly regarding the terms 'ongoing' and 'in progress'.
 

(iii)

clarification was sought and provided on recently completed audit reports, including an explanation of how audit opinions were formed.
 

(iv)

that they would welcome receiving training at future meeting(s).
 

RESOLVED –
 

That the progress made to date on work identified in the current financial year's Internal Audit Plan be noted.
 

7.

AUDIT TRACKER
 

The Internal Audit Manager submitted the Audit Tracker update position as at September 2007 on the implementation of previous internal audit recommendations.  As part of its work, Internal Audit regularly followed up audit recommendations to confirm that agreed actions had been taken and highlighted areas where risks had been reduced.
 

The Committee was advised that Internal Audit would inform Members where the progress on implementing agreed recommendations was unsatisfactory.  At the time of this report there were no particular recommendations that needed to be brought to the Committee's attention.
 

Members commented on the following:-
 

(i)

Officers were requested to increase the font size on future tracker documents as it was difficult to read the small print in the report.
 

(ii)

that the most recent and relevant information should be highlighted at the front of tracker documents.
 

(iii)

that they were concerned that the Council's business continuity plans had still not been fully implemented and that the Council's plan was still not fully compliant.
 

RESOLVED –
 

(1)

That the Audit Tracker be noted.
 

(2)

That an update report on business continuity planning be submitted to the November meeting, to include information on whether the Council's Plan would be fully compliant by December, 2007 and, if not, to explain what actions were being taken to achieve compliance.
 

(3)

That a report on the management of casual staff be submitted to a future meeting.
 

8.

AUDIT COMMITTEE WORK PROGRAMME
 

Members were invited to discuss the Work Programme and to give direction on any topics for inclusion.
 

RESOLVED –
 

That the Work Programme be amended, after consultation with the Chairman, as follows:-
 

(1)

Where possible, training sessions be built into the Programme for future meetings.
 

(2)

That a report on risk management be submitted to a future meeting.
 

(3)

That an additional meeting of the Committee be held in late January or early February 2008.
 

9.

FUTURE MEETINGS
 

The next meeting of the Audit Committee would be held at 6.30 pm on the 7th November, 2007 in the Committee Room at the Gateway, Gatehouse Road, Aylesbury.