Agenda item

With a covering 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, Gerald Almeroth, introduced this report on the Council’s response to the Audit Commission’s annual Audit and Inspection letter. The annual Audit and Inspection letter was appended to the report. The key areas for action were set out in the report in the form of a table, along with the Council’s response and proposed actions. It was noted that the Council had been assessed at 3 star overall, with the direction of travel assessed as improving well. The report had been considered by the Cabinet on 22 April 2008.

Cllr Gorrie queried why ‘ensuring that costs are commensurate with performance levels’ had been identified as a specific improvement opportunity in the letter, when this seemed to be such a fundamental requirement that it did not need stating and was too vague to be practically useful as a recommendation. Cllr Gorrie felt that from this statement one could only conclude that the Audit Commission was indicating that costs were too high in relation to performance levels. Ms Hill responded that the annual Audit and Inspection Letter provided a summary of all the audit work carried out throughout the year. She reported that the statement in question was intended as a reminder that it was important to continue to focus on reducing costs and keeping expenditure under review, and that it contained no implication that costs were presently too high. Cllr Gorrie felt that the statement was not specific enough to be of use to the Council, as no  particular course of action was suggested. Mr Almeroth reported that the wording of the improvement opportunities in the Audit and Inspection letter flowed from the Use of Resources report, in which the Council had scored 3 out of 4 under the Value for Money theme. In comparison with other local authorities and in terms of performance levels the Council was achieving value for money, but it was important to maintain an effective focus on value for money issues across the organisation. Cllr Gorrie stated that he remained unconvinced as to the usefulness of including the statement in the Audit and Inspection Letter, but had no further comments.

The Chair referred Mr Almeroth to the two areas of potential risk being monitored as part of Grant Thornton’s audit and stated that the Audit Committee required a satisfactory resolution to these items; these were the operational conflict between the delivery of the Building Schools for the Future (BSF) programme and the existing schools PFI scheme and the operational and financial issues in respect of the management of Alexandra Park and Palace.

There being no further comments it was:

RESOLVED

i.                    That the letter be noted and that the response and actions as set out in the report be agreed.

ii.                  That the Council needs to resolve the potential risks relating to the operational conflict between the BSF programme and the existing schools PFI scheme and the management issues relating to Alexandra Palace and Park as identified by the External Auditors and in accordance with the advice and recommendations of the External Auditors, to safeguard the overall interests of tax-payers, as well as the Council.