Agenda and minutes

To note any apologies for absence.

The Chair welcomed Cllrs Meehan and Butcher as new members of the Audit Committee.

Apologies for absence were received from Cllr Gorrie.

The Chair will consider the admission of any late items of urgent business. (Late items will be considered under the agenda item where they appear. New items will be dealt with at item 11 below).

There were no new items of urgent business.

A member with a personal interest in a matter who attends a meeting of the authority at which the matter is considered must disclose to that meeting the existance and nature of that interest at the commencement of that consideration, or when the interest become apparent.

A member with a personal interest in a matter also has a prejudicial interest in that matter if the interest is one which a member of the public with knowledge of the relevant facts would reasonably regard as so significant that it is likely to prejudice the member’s judgement of the public interest and if this interest affects their financial position or the financial position of a person or body as descirbed in paragraph 8 of the Code of Conduct and/or if it relates to the determining of any approval, consent, licence, permission or registration in relation to them or any person or body described in paragraph 8 of the Code of Conduct.

There were no declarations of interest.

To confirm and sign the minutes of the Audit Committee held on the 23 April 2009.

RESOLVED

That the minutes of the Audit Committee held on 23 April 2009 be approved and signed by the Chair.

There were no deputations or petitions.

Report of Grant Thornton.

Grant Thornton presented their report on progress since the previous Audit Committee meeting. The Committee was advised that the International Financial Reporting Standards (IFRS) report had been drafted and would be presented to the Audit Committee once input had been received from officers. It was also reported that it was anticipated that Grant Thornton would receive the Council’s accounts in advance of the deadline, and the Chief Financial Officer and his team were thanked for this positive achievement.

The Chair thanked Grant Thornton for their report, and welcomed the news that no significant issues had been identified as a result of the interim audit of the accounts.

RESOLVED

That the content of the report be noted.

Report of the Head of Audit and Risk Management to:

i)                    Inform the Audit Committee of the requirements of the statutory Annual Governance Statement (AGS) and provide a draft statement relating to 2008/09 for review and approval

ii)                  Inform the Audit Committee of the supporting information used to produce the draft AGS and provide a copy of the management assurance and self assessment statement, which will be completed and submitted by Directors and ACEs, for information.

The Head of Audit and Risk Management, Anne Woods, presented the report on the draft Annual Governance Statement (AGS) for 2008/09. The Committee was advised that it was a statutory requirement for the AGS to be published as part of the Council’s statement of accounts and that it was the responsibility of the Audit Committee to review the draft document. Ms Woods reported on the way in which the AGS had been compiled by a core group of key officers and on the format of the AGS, which was prescribed by CIPFA. The Committee was advised that key changes in 2008/09 were the introduction of a local code of corporate governance and the implementation of recommendations from the previous year’s AGS. Actions required to address any gaps in assurance or evidence were detailed in the matrix of supporting evidence appended to the report, as well as in the more detailed AGS action plan and other external action plans. Progress against all the action plans would be reported to the Audit Committee on a regular basis.

Committee members expressed concern that the evidence required under the CIPFA guidance was documentary in nature, and did not include information on how procedures were implemented in practice. Whistle-blowing was raised as an example of an area where policy was in place, but the report did not clearly demonstrate that this had been acted on and the Committee emphasised that it was essential to have greater information on how policies such as this were used in practice. Ms Woods reported that the in the previous year the external auditors had looked at the extent to which the documentary evidence could be relied upon for assurance and that, where it was found that there was a risk of policies not being followed, this was addressed by an action plan. It was also reported that the local code of corporate governance had been developed as a way of drawing together all the existing policies, in line with CIPFA and SOLACE guidance. 

Concern was expressed that the draft AGS did not fully reflect the position relating to internal control procedures in the course of the previous year, and suggested that as a result of the significant events of the year, further work on self-assessment and checking was necessary. Ms Woods reported that risk and data quality, which were key areas in this regard, were covered in both the internal and external audit plans for the forthcoming year. Committee members expressed particular concern regarding the wording under paragraph 4.7 of the draft AGS that “no significant issues were identified during 2008/09 by the Audit Committee”. On this point, the Chair commented with example that the wordings were not correct. Following clarification by Ms Woods that this referred specifically to the work programme of the Audit Committee, it was agreed that this wording be amended.

The Chair advised the Committee that he had requested from officers that additional reports on non-financial activities be reported to the Audit Committee to ensure  ...  view the full minutes text for item 97.

Report of the Head of Audit and Risk Management to inform Members of the requirements of the Accounts and Audit (amendment) (England) Regulations 2006 and the action taken to address these.

The Head of Audit and Risk Management presented a report on the review of the effectiveness of the system of internal audit. It was reported that, in line with the Accounts and Audit Regulations 2006, reciprocal peer group reviews had been established in order to monitor compliance with CIPFA standards and that the group of peers had been expanded this year to include more members across London councils. Ms Woods reported that Haringey had this year assessed and been assessed by the London Borough of Havering.

The Committee asked what the outstanding action was under the heading of performance, quality and effectiveness and Ms Woods reported that this was the CIPFA recommendation that service users’ assessment of the quality of the internal audit service be obtained. Ms Woods reported that this was in progress; a number of questions had been compiled for sending to senior managers, who would then submit their feedback as a further source of assurance regarding the effectiveness of the service.

The Committee asked where the recommendation in the management action plan, “that the Head of Audit and Risk Management should arrange to review the quality, performance and effectiveness of the service as a whole” had arisen from. Ms Woods reported that among the list of 70-80 self-assessment questions set out by CIPFA was one asking whether the service had reviewed the quality and effectiveness of the service as a whole, which had not been completed. The Committee requested a note providing the details of the actions that would be taken to address this issue and how these would be followed up.

In response to a question from the Committee regarding Regulation 6, it was confirmed that this did not differ from the existing CIPFA guidance.

RESOLVED

i)                    That the findings of the review of the effectiveness of the system of internal audit be noted.

ii)                  That the action plan to address the identified areas for development be approved, and a that note be provided on the details of the actions that would be taken to address the issues raised and how these would be followed up.

Report of the Head of Audit and Risk Management to advise Members of the changes to the Terms of Reference for the Internal Audit Service and provide an updated terms of reference for approval.

The Head of Audit and Risk Management presented a report on the changes to the terms of reference for the Internal Audit Service. In line with CIPFA guidance, the Committee received a report on the Internal Audit service terms of reference for approval on an annual basis. The Committee was advised that the only changes to the terms of reference from the previous year were updated references to the Council’s Constitution.

RESOLVED

That the updated Terms of Reference for the Internal Audit Service be approved.

Report of the Head of Audit and Risk Management to inform Members of the overall adequacy and effectiveness of the system of internal control and risk management operating throughout 2008/09 and present a summary of the audit work undertaken to formulate the opinion, including reliance placed on work by other bodies. The report also fulfils the requirements of the Audit Committee terms of reference.

The Chair reported that he had corresponded with the Chief Financial Officer in advance of the meeting regarding this item, and it had been agreed that the Chief Financial Officer Comments section of the report would be amended to read: “The Chief Financial Officer notes the contents of this report and confirms that the key controls are in place to mitigate risks facing the Council and that they are being appropriately managed under section 151 of the Local Government Act 1972, to provide him with the assurance he has been using the audit, both internal and external, to mitigate risks facing the Council”. The Chair noted that both the Council’s internal and external auditors advised that they did not have responsibility for the management and monitoring of the Council’s internal control systems, but assisted in providing assurance.

The Head of Audit and Risk Management presented the annual audit report and assurance statement 2008/09, which formed part of the terms of reference of the Audit Committee and was required under the 2006 CIPFA Code of Practice. The Committee was advised that the form and general content of the report was recommended by CIPFA, but that the detailed assessment was completed by the Council. A summary of internal audit work over the past year was appended to the report.

In response to a question from the Committee regarding the lack of information on the outcome of investigations in the report, Ms Woods reported that these were reported to the Committee on a quarterly basis as part of the Internal Audit Progress Report and that a monthly report was also circulated to Members. The Committee asked about the involvement of external agencies in investigations, and Ms Woods reported that cases were in general referred to the Housing Benefits Service by the Department for Work and Pensions, and that Housing Benefits then passed them on to Internal Audit for investigation. Full details were provided in the quarterly reports.

Concern was expressed that the wording of paragraph 17.2 of the report, referring to other sources of assurance, gave the impression that no issues had been identified as a result of external inspections and it was agreed that this wording would be amended to clarify that this was not the case.

It was noted that as a document referring back to the previous year, no new additions could be made to the key areas covered, but for future reports the Chair requested that child protection and safeguarding adults be added to the key areas of corporate governance, as the CAA assessment depended upon these key areas. The Chief Financial Officer noted the request of the Chair, but reported that the key areas listed in paragraph 19.4 of the report were not specific service headings, but areas that related to every service, and so both child protection and safeguarding adults were already included. It was reported that the new Director of the Children and Young People’s Service would have examined all the key areas listed in the  ...  view the full minutes text for item 100.

Report of the Head of Audit and Risk Management to inform Members of the Committee’s proposed annual work plan for the 2009/10 municipal year.

The Head of Audit and Risk Management presented a report on the proposed annual work plan for the 2009/10 municipal year. The work plan included the standard quarterly items presented to the Committee, and also incorporated other pieces of work that were already planned during the course of the year. The report demonstrated the link between the work planned and the terms of reference of the Committee.

The Chair expressed concern that the plan did not currently include the periodical update on progress with recommendations from all external audits and inspections, as requested by the Committee, and it was agreed that this would be added to the work plan.

The Chair requested that, in addition to the planned work detailed in the work plan, the Committee must be advised by the Chief Financial Officer of any issues arising that the Committee needed to be aware of in the fulfilment of its duties.

Following the discussion earlier in the meeting regarding the draft AGS, it was requested that an update on this item be added to the Committee agenda for the 30 July meeting and added to the work plan.

The Committee requested that a central record should be kept of all the requests and recommendations made by the Audit Committee, giving details of the action requested, the officer responsible for the action and a deadline for completion, as this would facilitate the management and monitoring of actions requested by the Committee. This list should be monitored by the Committee on a quarterly basis to ensure that follow up action was being taken.

The Committee had resolved at a previous meeting that, where audit recommendations had not been implemented within the deadline set, the relevant Heads of Service would be required to attend the Committee meetings to explain the reasons for this. The Committee also discussed the possibility of requiring Heads of Service to attend on regular basis in order to answer questions from Committee members on audit issues such as priority 1 recommendations not being completed on time. Concern was expressed that implementing a regular programme of officers attending the Committee may be beyond the remit of the Audit Committee but it was felt that it would be useful for Members to be able to ask relevant officers questions regarding key areas of governance. It was suggested that, where a significant internal or external inspection report had been completed, the relevant officer should attend the Committee to address the issues raised by the report and also to answer questions from the Committee on other audit and governance arrangements within their Service. It was agreed that, as an update report on Environment was on the agenda for the next meeting, the Director of Urban Environment should attend. This would be in addition to any Heads of Service attending the Committee.

The Committee raised the issue of it not being possible for the Committee to approve the revised version of the AGS prior to submission due to the dates of the meetings.  ...  view the full minutes text for item 101.

To consider any new items of urgent business admitted at item 2 above.

There were no new items of urgent business.

Thursday, 30 July 2009 at 19:30hrs.

Thursday, 30 July 2009 at 7.30pm.

The meeting closed at 21:20hrs.