Agenda and minutes

To note any apologies for absence.

There were no apologies for absence.

The Chair announced that he had heard that this would be the last meeting of the Audit Committee attended by Tim Fisher, Deputy Head of Benefits and Local Taxation, who was leaving the Council. The Committee thanked Mr Fisher for his work for the Committee.

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 15 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 matter 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.

There were no declarations of interest.

To confirm and sign the minutes of the Audit Committee held on the 30 July 2009.

RESOLVED

That the minutes of the meeting of the Audit Committee held on 30 July 2009 be approved and signed by the Chair.

There were no deputations or petitions.

Report of the Chief Financial Officer to update the Committee on the final outcome of the annual audit for 2008/09 and to agree the Council’s response to the action plan proposed by the Council’s auditors following their audit of the accounts.

Kevin Bartle, Corporate Finance, introduced the report on the Audit of Accounts 2008/09. It was noted that the final report on the Audit and the accounts 2008/09 had been approved by the General Purposes Committee, and the Audit Committee was asked to agree the management responses contained in the action plan. Graham Oliver, Corporate Finance, reported that the accounts had been signed off by the auditors on 25^th September 2009, five days in advance of the statutory deadline of 30^th September, and that the auditors had given an unqualified audit opinion. The Committee was advised that there were 14 recommendations from the audit, all of which had been agreed with the Council. Grant Thornton confirmed that they were satisfied with the management responses provided.

In relation to recommendation 2 on fixed asset accounting, the Committee asked about the Major Repairs Allowance, and whether this had any impact on revenue such as to affect council tax. Mr Oliver confirmed that this was completely separate and would have no impact on council tax. The Committee asked about related party transactions and the number of declarations that were not returned, in response to which Mr Oliver reported that all the declarations not received at the start of the audit had been returned by completion of the audit. Mr Oliver reported that measures were being put in place to address the number of declarations outstanding at the start of the audit. In response to a question from the Committee regarding the number of outstanding related party transaction returns relating to Members, Mr Oliver agreed to supply this information outside the meeting. Committee members suggested that Members should be provided with more information about related party transaction declarations, in order to fully understand their importance.

In response to a question from the Committee regarding the recommendation on fixed asset accounting and capitalisation, Mr Oliver confirmed that the auditors had needed to request additional evidence in this area and the recommendation was to highlight the need to strengthen the audit trail to ensure that all the necessary evidence was provided. Grant Thornton confirmed that in line with the new accounting standards coming into practice for the 2010/11 accounts, clarity was needed in relation to capitalised expenditure and it was important that there was a clear audit trail. It was confirmed that this applied to all areas of the Council and would have no budget implications.

The Committee asked when the accounts had been available for public inspection, and it was reported that this had been for a four week period from 2 August 2009, and had been publicised in advance.

The Chair thanked officers for their achievement in obtaining an unqualified audit opinion and thanked the auditors. Referring to the executive summary of Grant Thornton, the Chair requested that, in order to establish best practice and transparency of process, officers exercise their professional judgement in making calculations to ensure as far as possible that subsequent adjustments were not necessary. The Chair emphasised the importance  ...  view the full minutes text for item 128.

Report of the Chief Financial Officer to inform the Committee of the auditor’s assessment of the Council’s Use of Resources and the Council’s intended actions to implement auditor recommendations.

Gerald Almeroth, Chief Financial Officer, reported that the Council’s overall Use of Resources score was 3 out of 4, the same as for the previous year. Scores for managing other resources were positive, especially in the area of making effective use of natural resources. Particular concern had been identified in respect of the use of data, which had obtained a score of 1.

Grant Thornton introduced their report. It was reported that, as a component of the new Comprehensive Area Assessment, the scope of the Use of Resources had expanded. The Council’s scores were reported as follows: Managing Finances - 3, Governing the Business - 2 and other resources – 3. The Committee was advised of the high priority actions that had been identified in relation to demonstrating improving outcomes, articulating the benefits of Haringey Forward and core efficiency programmes, demonstrating the improvement in commissioning and data quality arrangements with regard to inter agency child protection practice, addressing weaknesses in data quality management and reporting in child protection and developing data quality checking mechanisms for housing and council tax benefits claims. Management responses to these were contained in the action plan.

The Chair expressed satisfaction that a score of three had been attained. In response to a question from the Committee, Grant Thornton explained the basis on which the scores were calculated. The Chief Financial Officer reported that work to improve the areas identified in the action plan had been going on for some time, and that named officers had been identified with responsibility for each action. It was reported that there were specific action plans in place to address the data quality issues in child protection as part of the Joint Area Review action plan and in benefits and local taxation. The Committee suggested that there should be a single senior officer with overall responsibility for all the actions, who would act as the point of contact for the Audit Committee on these issues.

In respect of the data quality issues, Grant Thornton confirmed that the concern of the auditor was a lack of confidence in the accuracy of the information being provided. It was reported that follow up audit work would include data quality in benefits and local taxation and child protection, as well as other areas for testing. The Committee emphasised that if problems had been identified relating to quality of data, it was essential that this be put right. The Chief Financial Officer advised that the action plan included information on what had been done to address the issues raised, and the further work that was planned, and confirmed that further reports on progress could be produced if required by the Committee.

In response to a question from the Committee regarding the other areas that were tested in respect of data quality, Grant Thornton confirmed that these were listed in the report under data quality spot-check results. For the majority of the areas tested, no significant concerns had been raised.

In response to the Committee’s suggestion  ...  view the full minutes text for item 129.

Grant Thornton presented their audit progress report to the Committee. It was noted that the full annual audit plan for the forthcoming year and an update against the 2009/10 audit plan would be presented at the next meeting of the Committee.

RESOLVED

That the Committee note the content of the report.

Report of the Chief Financial Officer to advise and update Members on the Counter Fraud performance of the Benefit and Local Taxation Service from the 1^st July 2009 – 30^th September 2009.

Tim Fisher, Deputy Head of Benefits and Local Taxation, presented the update on the Counter Fraud performance of the Benefit and Local Taxation Service from the 1 July 2009 to 30 September 2009. It was reported that 19 sanctions had been issued for the second quarter, which compared favourably with the previous year, where 10 sanctions had been issued in the second quarter. Year to date, 30 sanctions had been issued in comparison with 34 the previous year, and it was noted that 21 cases had been referred for prosecution. It was reported that £496,997 in overpaid benefit had been identified, against £499,835 the previous year. The Committee requested that comparisons with the previous year be incorporated into the reports to the Committee in future.

Mr Fisher reported that the National Fraud Initiative was one of the main activities for the Benefits and Local Taxation team, and that 2,977 of the referrals received from the Audit Commission had been identified as of interest and would be looked into over the course of the year and forwarded for investigation as appropriate. It was reported that the Fraud Investigation Team were working with the DWP on the National Fraud Initiative, and that partnership working with Job Centre Plus was also increasing.

The Committee congratulated officers for the increase in cases going to prosecution, and welcomed that this increase had been publicised. In response to a question regarding some of the report descriptions used in the table of priority areas relating to data matching – Mr Fisher explained that the descriptions consisted of the source of the data being compared, for example licensing details for taxi drivers, and the quality of the data in identifying potential fraud cases, for example high quality would mean that there was a high likelihood that a match in this area warranted further investigation.  The Committee noted that the number of cases referred for further investigation following comparison with the borough payroll was a concern.

In response to a question regarding the use of the electoral register, Mr Fisher reported that the electoral register was used in the course of the team’s enquiries, but not as part of the national fraud initiative. The Chief Financial Officer advised that, as the register was updated less frequently than other sources of data, more up to date sources of information were considered to be of higher quality, although the electoral register was cross-checked as part of counter fraud activities. It was reported that the Audit Commission was currently focussing on fraud, especially tenancy and single-person discount issues, and that the auditors would be examining the Council’s arrangements in this respect as part of their audit work for 2009/10.

RESOLVED

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

Report of the Head of Audit and Risk Management to inform the Audit Committee of the work undertaken during the second 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 second quarter. It was reported that significant progress had been made on the implementation of outstanding audit recommendations, and it was reported that 100% of Priority 1 recommendations reviewed during quarter 2 (17 recommendations) had been completed by the follow up audit and only 2 recommendations from previous years remained outstanding.

The Committee welcomed the progress on the implementation of recommendations. In response to a question regarding the recommendations relating to external storage and whether these matters had already been covered in a previous report on this issue, it was agreed that Ms Woods would look into the recommendations and actions taken following the incident when records had been found in a disused property in the borough some years previously, and why these issues had been identified as still requiring action.

The Committee expressed concern regarding the limited assurance in relation to the Decent Homes Standard. It was reported that management responses had been obtained from Homes for Haringey and from the Council as client, and the Committee emphasised the importance of ensuring that no actions fell between the two bodies and were not followed up as a result. The Head of Audit advised that as all recommendations were due for implementation before the end of November, that Internal Audit complete a follow up review and present the findings at the next meeting of the Audit Committee. The Committee agreed the suggested approach.

The Chair expressed satisfaction at the progress in implementing Priority 1 recommendations, and thanked the Chief Financial Officer and Head of Audit and Risk Management for this achievement.

RESOLVED

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

ii)                  That progress and responses received in respect of outstanding audit recommendations be noted.

iii)                That the actions taken during quarter 2 to address outstanding recommendations be confirmed as appropriate.

Report of the Chief Financial Officer to inform the Audit Committee of the current position on risk management implementation across the Council.

Anne Woods, Head of Audit and Risk Management, presented the report on the current position on risk management implementation across the Council. It was reported that risk registers for every business unit and department were now loaded onto the Covalent electronic system and, as at the review at the end of September, these were all completed and up to date. As a result of organisational changes, the number of risk registers had reduced from 34 to 32, all of which were reviewed in line with the risk management strategy and Covalent system.

The Chair noted that the corporate risk register was reviewed on a quarterly basis by the Chief Executive’s Management Board, and asked whether there was any feedback from the last meeting at which this was considered. Ms Woods reported that there were no significant changes to the key risks, but that the separation of risks relating to children’s services and adult services had been highlighted, as recommended by the Audit Committee. The main change had been an increase in the impact of the risk relating to the recession. In response to a question from the Chair, the Chief Financial Officer confirmed that it was his opinion  that risk management arrangements were adequately managed, including for the Haringey Strategic Partnership.

RESOLVED

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

Report of the Chief Financial Officer to advise the Audit Committee of the follow up audit work completed following the original review of corporate governance and internal control arrangements at Alexandra Palace and Park Charitable Trust and Alexandra Park Trading Limited.

Anne Woods, Head of Audit and Risk Management, presented a report on the follow up audit work completed following the original review of corporate governance and internal control arrangements at Alexandra Palace and Park Charitable Trust and Alexandra Palace Trading Limited. As a result of the findings of the follow up audit work, changes in management had taken place at Alexandra Palace, and the changes to the management response reflected this. It was reported that positive progress was now being made and that the Trust and trading company had now appointed their own internal auditors. The Committee was advised that some of the items on the management response remained partly achieved and that progress on these would be covered as part of the internal audit progress reports and in the annual governance assurance process and would be reported to the Audit Committee.

The Committee expressed concern that progress in implementing recommendations had been so slow, particularly in relation to contract management; while it was noted that arrangements were now compliant, concern was expressed that issues had remained unaddressed for so long. The Committee asked whether there were any legacy issues as a result of previous tendering arrangements and Ms Woods reported that the new management were in the process of reviewing all contracts. Ms Woods had met with the new internal auditors for the Palace to discuss the risks relating to the Trust and the trading company, and a new audit programme had been developed up to the end of the next financial year. In response to a question from the Committee regarding how progress would be reported to the Audit Committee, it was confirmed that a further follow up review would be carried out by the new internal auditors and a report provided to the Committee. It was reported that management had accepted the recommendations and timescales. A further review would be carried out in March 2010 and would be reported back to the Audit Committee following the results of that review.

Grant Thornton reported that when the International Financial Reporting Standards came into force for the 2010/11 accounts, it was expected that the accounts for Alexandra Palace and Park Trust and APTL would need to be incorporated into the Council’s accounts. The Trust and APTL would be covered by the Annual Governance Statement and, as with the ALMO, the auditors would expect proper governance processes to be in place. If these expectations were not met, the issues would be raised by the auditors and would be reflected in the Annual Governance Statement and an action plan would need to be in place to address the concerns identified.

The Committee asked what the implications of grouping the accounts would be for the Council. The Chief Financial Officer advised that there were issues that would need to be resolved in preparation for the application of the International Financial Reporting Standards, of which the Trust’s debt would be the primary issue.  The Committee requested a report on the options for addressing  ...  view the full minutes text for item 134.

Report of the Head of Audit and Risk Management to advise the Audit Committee of the operation and progress made in investigating potential data matches across the Council as part of the National Fraud Initiative (NFI).

Anne Woods, Head of Audit and Risk Management, presented the report on progress made in investigating potential data matches across the Council as part of the National Fraud Initiative (NFI). Ms Woods reported that of the 31,594 potential data matches notified to the Council as part of the NFI, 2,130 had been recommended for further investigation by the Audit Commission. It was reported that half of these investigations had been carried out to date, the highest number of these relating to housing and council tax benefits, and the Council was on track to complete all investigations by the end of 2009 in accordance with the Audit Commission deadline.

The Committee asked what the cost to the Council was of undertaking these investigations as part of the NFI. It was agreed that the Committee would be provided with an estimate of the costs involved. The Chief Financial Officer confirmed that the Council had raised the issue of resources required to participate in the NFI with the Audit Commission directly, particularly as the Council also already undertook proactive work in this area. Grant Thornton advised that the Audit Commission was likely to increase activities of this nature, as a significant amount of fraud was detected in this way nationally, regardless of the fact that very few cases had been identified in Haringey to date.

A Committee member suggested that if a significant amount of fraud had been identified, the Committee would have been expressing concerns regarding the high figures and how this could be addressed, but that as only small numbers had been identified, concern was instead being raised regarding the resources required with little outcome. It was felt that the fact that the amount of fraud detected was very low in the borough should be welcomed.

It was agreed that as a statutory requirement of the Audit Commission, the work on the NFI had to be done, but that it was essential to know what the cost to the Council was, in order to assess whether value for money was being achieved. The Committee advised that it was necessary to ensure that no duplication of effort was happening in the course of the NFI work.

The Chief Financial Officer advised that it was the Council’s duty to detect fraud and any potential control issues, and that the Council took a proactive approach to this work. It was agreed that the cost of this work should, however, be calculated and compared to the value of fraud uncovered.

RESOLVED

That the contents of the report be noted.

Report of the Head of Audit and Risk Management to advise the Audit Committee of the revised Corporate Anti-fraud and Corruption Strategy, Fraud Response Plan and Whistle-blowing Policy.

Anne Woods, Head of Audit and Risk Management, presented the report on the revised Corporate Anti-fraud and Corruption Strategy, Fraud Response Plan and Whistle-blowing Policy. It was reported that these were reviewed on a regular basis to ensure that the corporate policy was consistent with best practice. Ms Woods reported that the main changes were the inclusion of specific strategies for the Haringey Strategic Partnership and Homes for Haringey.

The Committee requested that changes to documents be indicated as track changes in the reports, for ease of reference in future.

RESOLVED

That the revised Corporate Anti-fraud and Corruption Strategy, Fraud Response Plan and Whistle-blowing Policy be approved.

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

There were no new items of urgent business.

Monday, 1 February 2010 at 7.30pm.

Monday, 1 February 2010 at 19:30hrs.

The meeting closed at 21:55hrs.