Agenda and minutes

To note any apologies for absence.

Apologies for absence were received from Cllr Gorrie, for whom Cllr Winskill was acting as substitute, Cllr Mughal, for whom Cllr Scott was acting as substitute and from Cllr Butcher.

Apologies were also received from Cllrs Dobbie and Meehan as they were required to leave the meeting early to attend another Council meeting.

The Chair welcomed Cllr Dobbie as a new member of the Committee, and also welcomed Cllrs Winskill and Scott as substitute members for the meeting.

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 12 below).

There were no 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 existence and nature of that interest at the commencement of that consideration, or when the interest becomes 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 described 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.

Cllr Winskill declared a personal interest as a Haringey leaseholder.

To confirm and sign the minutes of the Audit Committee held on the 2 June 2009.

RESOLVED

That the minutes of the meeting of the Audit Committee held on 2 June 2009 be approved as a correct record and signed by the Chair.

There were no such items.

Report of Grant Thornton.

Grant Thornton presented the audit progress report to the Committee and outlined the key points raised in the report. It was confirmed that the draft accounts had been provided by the Council early to enable review work to commence early, and officers were thanked for making this possible. The audit of the accounts had begun on 6 July 2009, and to date no major issues had been identified.

It was reported that good progress had been made with the preparations for the implementation of the International Financial Reporting Standards. It was also reported that a high-level review of Member and senior officer expenses and allowances would be carried out by Grant Thornton as part of their work on use of resources. All local government auditors were required by the Audit Commission to look at how local authorities had responded to the recommendations arising from research by the Audit Commission into investment in Icelandic Banks; the outcome of this work would be reported to the General Purposes Committee in September 2009.

In response to a question from the Committee regarding the review of expenses and allowances, Grant Thornton reported that this would be a high-level review focussing on the policies and procedures in place, and whether these were being complied with. Comparison would also be carried out with other London Boroughs.

The Committee requested that a brief note on the review of the Council’s arrangements for member expenses and allowances and senior officer allowances be circulated to the Group Whips.

The Chair welcomed the report that no significant issues had been identified in the audit of the accounts so far, and noted the forthcoming reports to Members arising from Grant Thornton’s work.

RESOLVED

That the content of the report be noted.

Report of Grant Thornton.

Grant Thornton presented the audit strategy document for the year ending 31 March 2009, and provided details on the key accounting and business risks as set out in the report. It was noted that the Annual Governance Statement, which was discussed in length at the previous meeting of the Committee, would be kept under review to ensure that it was fully reflective of the issues identified in the course of the audit of the accounts. Grant Thornton would also be following up on the recommendations made in the previous year to verify the progress made in implementing these.

In response to a question from the Committee regarding the valuation of land and buildings mentioned in the report, Grant Thornton reported that they would be checking that the valuations currently held were accurate and that assets had been valued using the appropriate valuation methods. It was also reported that, other than housing assets, which were re-valued annually, the Council’s assets were re-valued on a five-year rolling programme, and that the impact of inflation or deflation would be taken into account at the time of valuation. Specific areas may be re-valued outside of the rolling programme, where a significant fluctuation had been identified. The Chair noted that the professional discretion of the Section 151 officer was necessary in determining the best course of action regarding the sale of the Council’s assets.

The Chair asked whether the risk of land and buildings being overvalued, as mentioned in the report, would have any impact on service delivery, and it was confirmed by Graham Oliver, Corporate Finance, that there would be no impact on the Council’s service delivery. The Chair requested further details on the error identified within the previous Fixed Asset Register, and it was agreed that this would be provided.

The Chair asked for clarification of materiality in respect of the financial statements. Grant Thornton reported that the calculation was based on revenue expenditure, on which basis any error reaching the threshold of £6.5m would be classified as material and result in the Council’s accounts being qualified. Any identified errors greater than £124k, as 2% of materiality, would be reported in the financial statements. In response to a question from the Committee regarding issues identified beneath the £124k threshold, it was clarified that these were brought to the attention of officers for action, but were not reported to Members as part of the financial statements. The Chair expressed concern that matters below the threshold of £124k were not reported in the financial statements.

The Chair requested a copy of the trial balance, presented to the auditors on the commencement of fieldwork, for information.

In response to the request in the report for the Committee to provide input on any areas of concern within the Council, the Chair identified controls over management issues with the Alexandra Palace and Park Board and Alexandra Palace Trading Limited, the safeguarding of children and engagement with the Council’s partners as key concerns. A member of the Committee expressed  ...  view the full minutes text for item 110.

Report of Grant Thornton.

Grant Thornton presented the report on Grant Claims and Returns Planning, which outlined the grants protocol for 2008-9 and the estimated cost of the certification of grants claims and returns. As the number of grants exceeding the threshold for certification had reduced, it was anticipated that the fee would be lower than for the previous year, by approximately £17k.

The Committee expressed concern that 88% of claims were submitted on time, given the substantial amounts of funds involved, and that a third of claims were qualified and/or amended. The Committee requested from officers that 100% of claims should be targetted to be submitted on time, and that there should be far fewer claims requiring amendment. Grant Thornton reported that progress for the current year to date did seem more positive. In response to a question from the Committee regarding whether any losses were incurred as a result of late submission or qualification of claims, it was confirmed that no grant income had been lost as a result of these issues. Members welcomed the fact that no grant income had been lost, but emphasised that there was potential for loss when claims were not submitted on time or required amendment, which was why it was important to improve performance. The Chief Financial Officer confirmed that officers were focussed on improving performance and that, whenever a claim was qualified, this was re-examined to identify why this occurred and to correct the process for the future.

In response to a question from the Committee on whether the Council was making all the claims it was entitled to, the Chief Financial Officer reported that where claims were made, these were always for the full amount possible and that an external funding forum was in place to discuss and work together across Council departments to apply for relevant grants. It was also confirmed that all Government announcements were actively monitored by the Council for information on new grants available, in addition to the routine grants which were applied for each year. The Council had requested a comprehensive list of grants available from the Government, but such a list was not available.

Graham Oliver, Corporate Finance, clarified for the Committee that not all grants required certification, only those where this was a statutory requirement.

In response to a question from the Chair regarding the inclusion of specific work on grant claims and returns testing in the Internal Audit Plan, it was confirmed that this was included for the 2009/10 Internal Audit Plan, and that the external auditors and Internal Audit were liaising to discuss this issue further.

RESOLVED

That the content of the report be noted.

Report of Grant Thornton.

Grant Thornton presented a report on Information Technology Controls, the purpose of which was to provide assurance regarding controls in those areas of information technology that may impact on the Council’s financial statements. The assessment had covered areas including security, administration, access and the implementation of new systems. The report concluded that the Councils controls were suitably designed. Two low priority recommendations had been identified, the requirement of all staff to acknowledge their understanding of the security policy and procedures and the introduction of controls within SAP to prevent common or predictable passwords. It had been agreed that both recommendations would be implemented by December 2009. In response to a query from the Committee regarding why it would take until December 2009 to implement the recommendations, Grant Thornton reported that they had been advised that this was due to the length of time required to introduce a new table for passwords into SAP.

The Committee asked whether more sensitive systems, for example those in social services, had been looked at in relation to the complexity of passwords. It was confirmed that 100 days of audit work on the Council’s IT systems was carried out as part of the yearly Internal Audit Plan. The Committee requested that a report be presented to the next Committee meeting on whether the issue of password complexity had been specifically looked into in sensitive areas, such as children’s services.

The Committee expressed a view that all staff should be expected to understand the policies and procedures as part of their work, and should be asked to confirm their acceptance of the relevant procedures in writing. The Committee requested that an explanation be provided of why the advice from HR was that it was not always appropriate to obtain this confirmation in writing.

The Committee discussed the scope of the report, and Grant Thornton confirmed that the report was only on those key controls relating to the Council’s financial statements, and not the IT systems overall. If as a result of this work, however, broader recommendations relating to IT were identified, it was confirmed that these would be reported. It was reported that dedicated IT audit work was carried out on an ongoing basis on the Council’s systems, as a result of which any adverse findings would be reported and followed up, and the implementation of all recommendations relating to IT systems was monitored. The Chair noted that it was the role of the Audit Committee to ensure best practice, and asked the Chief Financial Officer to advise whether a further detailed audit review of all the Council’s IT systems was necessary or whether to accept the scope of the review as set out by the external auditor. The Chief Financial Officer recommended that the guidance of the external auditor be taken and the scope of the review as reported on be accepted.

RESOLVED

That the content of the report be noted.

Report of the Chief Executive and Chief Financial Officer to consider the Council’s response to the issues set out in the Audit Commission’s annual audit and inspection letter.

The Chief Financial Officer presented the report on the Annual Audit and Inspection Letter 2009, which set out the response of the Cabinet. Appended to the report was the full report of the Audit Commission and the Use of Resources judgement. Four key areas for action were identified in the report, and these had been approved by the Cabinet. The areas identified were: to address the findings and recommendations made by Ofsted in the Special Joint Area Review, to accelerate the pace of improvement in environment (recycling) and homelessness, to maintain sustained focus on addressing staff sickness levels and recruiting key personnel and to ensure Treasury Management strategy continues to form a robust member led process for protecting the Council’s financial assets.

The Chair reported that, although the report had already been considered by the Cabinet, as per the responsibilities given to the Committee by the Council as set out in the terms of reference of the Committee, it was within the remit of the Audit Committee and accordingly the comments of the Committee in relation to the report should be placed on the formal record for action.

The Committee accepted that, as set out in the report, there were issues with recruitment  to certain posts across London and the South East, but felt that it was complacent to state that the Council was not too different from many other London boroughs, given the unique challenges faced by the Council in relation to recruitment in areas such as the Children and Young People’s Service. The Committee requested that these circumstances specific to the Council be taken into consideration and addressed as part of the Council’s actions to maintain a sustained focus on addressing staff sickness levels and recruiting key personnel. The Chief Financial Officer confirmed that a number of actions to address the issues of recruitment and retention were ongoing.

In response to a question from the Committee regarding whether the Council’s existing policy on reducing the number of agency staff should be reviewed in light of the likely reduction in public spending in the next two years, the Chief Financial Officer reported that this issue was under consideration as part of the forward planning process. The Chief Financial Officer confirmed that, while use of agency staff did provide greater flexibility in the management of resources, this also needed to be balanced with the needs of those services which benefited significantly from the employment of staff on a permanent basis. It was noted that the Overview and Scrutiny Committee had requested a Leaders’ Conference on the issue of the contraction of public spending, and it was suggested that this item might be included on the agenda.

The Chair noted that as part of the forthcoming CAA assessment process, the Council would be required to submit evidence of improvement, and asked whether any evidence for improvement in Children’s Services was currently available. The Chief Financial Officer responded that evidence for improvement would be gathered as part of the monitoring of the  ...  view the full minutes text for item 113.

Report of the Chief Financial Officer.

Tim Fisher, Benefits and Local Taxation, presented the report outlining the performance of the Fraud Investigation Team for the first quarter of 2009/10. It was reported that 11 sanctions had been made in the first quarter, and that although this was below the expected profile, it was anticipated that the target for sanctions would be met for the year as a whole. There had been a recent focus on data-matching activities including the National Fraud Initiative and Housing Benefit Matching Service referrals, and a more detailed report on these activities would be presented at the next meeting of the Committee.

The Committee felt that it would be helpful to include a comparison with figures from the previous year in the performance reports, and Mr Fisher agreed that this would be incorporated in future reports. The Committee asked about the difference between the cost of the team, and the amount of overpaid benefits identified. Mr Fisher reported that the amount of overpaid benefits identified in this quarter had been particularly low, but would increase later in the year. It was reported that an article on successful prosecution in relation to benefit fraud would be appearing soon in Haringey People, and that there would also be an article on the national Fraud Initiative and how to report suspected fraud. Mr Fisher clarified for the Committee that all the activities referred to in the report related to fraud, and did not include overpayments due to error.

RESOLVED

That the report and the work being carried out by the Benefits and Local Taxation Service in relation to Counter Fraud activity be noted.

The Chair welcomed Phil Harris, Assistant Director Strategic and Community Housing, to the Committee to present the report on progress in response to the Audit Commission’s inspection recommendations for allocations and lettings. Mr Harris reported that improvement work was ongoing, and that progress against the action plan was monitored formally on a fortnightly basis. Since the Audit Commission’s report of October 2007, numerous changes had been made to address the issues raised, including changes in personnel, the development of a multi-organisational homelessness strategy, a comprehensive housing strategy, increased activity with the temporary accommodation user forum and the involvement of service users on interview panels. It was reported that the percentage of temporary staff employed had reduced from 29% to 20% during the implementation of the new structure, and that no redundancies had been made. The issue of temporary accommodation remained a priority, and the number of households in temporary accommodation had reduced from around 5,400 to 4,336 and was likely to have reduced further to less than 3,500 by the end of November 2009. It was the aim of the Service to have reduced this further to 2,600 by the end of 2010.

Mr Harris reported that, from a very challenging starting point, the Service was moving in the right direction and that all the recommendations raised by the Audit Commission in their report would have been addressed within the next 12 months.

The Committee asked about the issues relating to households placed outside the borough, and how these could be addressed. Mr Harris reported that the number of households placed outside the borough had reduced since 2003/04 from around 100 to around 30 families. In future, it was proposed that any leases procured or renewed would not be further than 1.5 miles beyond the borough boundary, and that the Council was working to dispose of leases held outside of that area. The Committee asked about the situation with households housed temporarily within Haringey by other London boroughs, and it was reported that the Council was looking to reduce the number of households being housed in the borough from other boroughs by means of procurement processes.

The Committee asked about the voluntary London Agreement to address the issue of private landlords abusing the system, and was informed that this was no longer in operation, as it had not been possible to obtain the transparency required. It was reported that the Council was continuing to work with private landlords, however, and it was hoped that this relationship would continue to develop. In response to a question from the Chair, Mr Harris confirmed that the situation had improved significantly, and that meetings with private landlords were now being held on a regular basis.

The Chair noted that a number of the recommendations contained in the action plan were ongoing, and asked how these ongoing actions were being monitored. Mr Harris reported that robust monitoring strategies were in place, with lead officers and a number of service improvement groups were tasked with carrying  ...  view the full minutes text for item 115.

Report of the Head of Audit and Risk Management to inform the Audit Committee of the work undertaken during the first quarter by the Internal Audit Service in completing the annual audit plan and any responsive fraud investigation work. In addition, the work of the Council’s personnel division in supporting disciplinary action taken across all departments by respective council managers.

Anne Woods, Head of Audit and Risk Management, presented the Internal Audit progress report for the first quarter of 2009/10, and advised the Committee that 80% of the planned Internal Audit programme for quarter 1 had been completed. Ms Woods reported that no new referrals for investigations had been received during quarter 1, but a number had been submitted in the first 3 weeks of quarter 2. Work was being carried out to ensure that nominated officers were fully trained for the National Fraud Initiative, as a number of new areas had been introduced, including parking, freedom passes, blue badges and care homes.

The Chair advised the Committee that the revised deadlines for the implementation of audit recommendations in the report had been revised with the agreement of the Chair, on the basis of advice from the Chief Financial Officer. The Chair confirmed that these deadlines were final, and would not be extended any further. Any failure to meet the final deadlines would necessitate the attendance of the relevant Head of Service at the subsequent meeting of the Audit Committee to explain to the Committee why the deadline had not been met, in accordance with the decision previously made by the Committee.  

The Committee welcomed the full assurance level given to Pension Fund Investment, and asked why some other areas had only been given an assurance level of substantial, even when no recommendations had been made. Ms Woods reported that, where further improvement could be made but this was already covered by existing action plans, no further recommendations were made, to avoid duplication. The Chair expressed satisfaction with the progress made on the implementation of outstanding priority 1 recommendations, and expressed thanks to officers for this achievement.

RESOLVED

i)                    That the audit coverage and progress during the first quarter 2009/10 be noted.

ii)                  That the progress and responses received in respect of outstanding audit recommendations, and the fact that any failure to comply with the final revised deadlines for implementation would require the appropriate Head of Service to attend a meeting of the Committee to explain the reasons for this, be noted.

Report of the Head of Audit and Risk Management to provide a final version of the statutory Annual Governance Statement, and supporting evidence matrix relating to 2008/09 for information.

Anne Woods, Head of Audit and Risk Management, presented the report on the final Annual Governance Statement, which had been amended to take into account all of the comments made by the Committee when the draft Annual Governance Statement had been considered at the previous meeting. It was reported that final version of the statement had been presented to the General Purposes Committee for approval.

The Chair commented that, as the final version had been approved, there was no scope for any further changes to be made to the statement, but noted that appendix 2 had been erroneously duplicated in the paperwork and that the duplicate version should be disregarded. The Chair also noted that the statement would need to be signed off finally when the audit of the accounts was finalised, and could be amended to reflect any new issues arising between now and the final sign-off on 30 September 2009.

The Chair noted that the statement recognised that the scope of the internal audit plan included non-financial systems as well as financial systems, and added, in respect of paragraphs 4.7 and 4.9 of the report, that the Audit Committee was responsible for ensuring that all recommendations were implemented, not just those at priority 1, in order to ensure best practice. The Chair requested that officers consider amending the wording to reflect this in paragraphs 4.7 and 4.9 of the statement, if any opportunity to modify the wording arose.

RESOLVED

That the final version of the Annual Governance Statement and supporting evidence matrix for 2008/09 be noted.

Report of the Head of Audit and Risk Management to inform the Audit Committee of the current position on risk management implementation across the Council and provide a revised risk management strategy for consideration and approval.

Anne Woods, Head of Audit and Risk Management, presented a report on the current position on risk management. Ms Woods advised the Committee of progress in inputting risk registers onto the new performance management system, and reported that risk registers from Corporate Resources, PPP&C and ACCS had been uploaded in the first quarter and officers trained in the use of the system. By the end of quarter 2, the risk registers for all departments would be uploaded onto the new system and officers would have received training. Ms Woods noted that as a result of structural changes within the Council, the risk register for the Enforcement business unit was now contained within Frontline Services, and the risk register for Neighbourhood Management was now incorporated into Safer Communities. In response to a question from the Chair, it was confirmed that these structural changes were the reason for the total number of risk registers having reduced from 34 to 32.

The Chair noted that, in the audit report for Area Based Grants, it was reported that there was no risk register for the HSP and asked for further details regarding this. Ms Woods responded that it had been found that, while a risk register was in place for each of the underlying HSP Thematic Boards, there had been no risk register for the HSP Board as a whole. Ms Woods reported that an overall HSP Board risk register had now been produced and approved by the Performance Management Group, and would be ratified by the HSP Board at its next meeting.

Referring to the annual Audit and Inspection letter, the Chair asked for a response on the comment that the Council’s corporate risk register did not include the risk of fraud occurring. Ms Woods responded that the risk of fraud had been formally included on the Council’s corporate risk register since January 2009.

The Chair urged that it was essential for the Chief Financial Officer’s comments on the report to confirm that Risk Management was being adequately managed in the Council, and it was agreed that this would be reflected more explicitly in future reports. 

RESOLVED

That the implementation of the risk management strategy across the Council be noted.

Report of the Head of Audit and Risk Management to advise the Audit Committee of the operation and use of the Council’s Whistleblowing policy.

Anne Woods, Head of Audit and Risk Management, presented a report on the operation and use of the Council’s whistleblowing policy, which was in place to enable staff within the Council to raise concerns. Ms Woods advised the Committee that staff received reminders of the whistleblowing policy twice each year via team briefs and Smart Talk, and that in addition to this every member of staff was written to individually every two or three years to ensure that all staff were aware of the policy. Ms Woods reported that the formal whistleblowing process was employed infrequently, and that concerns tended to be directed anonymously to the Head of Audit and Risk Management.

In response to a question from the Committee regarding whether bullying was also covered by the policy, Ms Woods reported that bullying was dealt with by other specific policies designed to address this issue. Training on bullying was carried out with senior managers on a periodic basis, but it was confirmed that there was no regular training programme on this issue.

The Chair asked whether the Council was complying with best practice in this area, in comparison with other London boroughs. It was reported that Haringey was generally in line with other London boroughs in terms of its whistleblowing policy.

Concern was raised that a review of the policy may be needed, and that the Audit Committee should discuss this, consider the evidence available and also examine specific scenarios. It was noted by the Chair, however, that the policy had been examined by Internal Audit and that the responsibility for the implementation of the policy lay with officers and was not within the remit of the Audit Committee. As agreed previously by the Audit Committee, monitoring of the use of the policy was the role of the Leader and Chief Executive. The suggestion was made that a whistleblowing role-playing exercise could be undergone involving staff, as a means of training and identifying any issues in practice.

RESOLVED

That the content of the report be noted. 

Report of the Head of Audit and Risk Management to advise the Audit Committee of the proposed report to Full Council in respect of the work undertaken by the Audit Committee during 2008/09.

Anne Woods, Head of Audit and Risk Management, reported on the proposed report to Full Council on the work of the Audit Committee during 2008/09.

The Chair noted that, in the section referring to the Audit Committee’s receipt of the report on the internal audit of governance arrangements at Alexandra Palace and Park (paragraph 5.2 of the report), no mention was made of the Committee’s decision that all recommendations should be implemented by a deadline of 31 March 2009. The Committee agreed that the report should be amended to include this point.

RESOLVED

i)                    That, with the addition of the point that a deadline of 31 March 2009 was imposed by the Committee for the implementation of all recommendations arising from the internal audit report of governance arrangements at Alexandra Palace and Park, the draft report on the work of the Committee during 2008/09 be approved.

ii)                  That the final version of the report be presented to the next available Full Council meeting for information.

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

There were no new items of urgent business.

Thursday, 5 November 2009 at 19:30hrs.

Thursday, 5 November 2009 at 19:30hrs.

The meeting closed at 21:50hrs.