Agenda item

Report of the Head of Audit and Risk Management to advise the Audit Committee of the work completed to review 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 the report on the work completed to review corporate governance and internal control arrangements at Alexandra Palace and Park Charitable Trust and Alexandra Palace Trading Limited, which had been requested by members of the Committee. The Committee was advised of the scope of the reviews for both organisations, and the key findings and recommendations made.

The Committee asked whether all contracts entered into had been reviewed as part of this work. The Head of Audit and Risk Management confirmed that this had been done and that, where items were not highlighted in the key findings of the report, acceptable controls had been found to be in place. In response to a query from the Committee, it was confirmed that the reviews by Internal Audit had been carried out concurrently with the independent review into the circumstances surrounding the granting of a licence to Firoka (Alexandra Palace) Ltd. The Committee asked about the extent of the advice provided by Internal Audit to the Alexandra Palace and Park Charitable Trust and Alexandra Palace Trading Limited. The Head of Audit and Risk Management confirmed that Internal Audit provided advice regarding good practice and recommended that suitable frameworks should be adopted but did not give direction on how this should be achieved. It was confirmed that it was for individual organisations to determine how to ensure that appropriate frameworks were established, according to their specific organisational requirements.

The Chair stated that it was essential for the Chief Financial Officer and the Audit Committee to be satisfied that appropriate structures were in place at these organisations, and for these to be reviewed, approved and monitored accordingly. It was reported that the relevant strategies and policies formulated in response to these reviews would be reported to and monitored by the Alexandra Palace and Park Charitable Trust Board, who were responsible for adopting and implementing the recommendations. It was also reported that, as part of the audit process, a follow-up report would be carried out, the findings of which would be presented to the Audit Committee.

The Committee expressed concern that the Alexandra Palace and Park Charitable Trust and Alexandra Palace Trading Limited did not have an adequate risk management structure in place. As reported previously to the Committee, every council business unit and department had its own risk register, and Alexandra Palace and Park was included on the council’s Corporate Risk Register (ref: CEMB15, Corporate Risk Register 07/08). It was agreed that Alexandra Palace and Park Charitable Trust and Alexandra Palace Trading Limited should be asked to implement all the audit recommendations by 31 March 2009. The Committee also discussed how this could be followed up to ensure that action was taken.

The Committee enquired regarding the responsibilities of the Chief Financial Officer in relation to the Alexandra Palace and Park Charitable Trust and Alexandra Palace Trading Limited. In response, the Chair quoted from a report of 26 September 2008, entitled “Independent review into the development of a licence to operate”, specifically the Monitoring Officer’s comments that the section 151 Officer, or the Chief Financial Officer (CFO), had responsibility for the proper administration of the financial affairs of the council as a whole, including the finances of the Alexandra Park and palace Trust. The Monitoring Officer had further advised that this responsibility covers systems to ensure that financial transactions are properly authorised, recorded and reported. As such, it was noted that it was the duty of the Chief Financial Officer to ensure that appropriate systems of financial control were in place in the Alexandra Park and Palace Trust and to report on these to the Audit Committee, but not to determine how the systems should be implemented.

The Committee was advised that the accounts of the Alexandra Palace and Park Charitable Trust had been audited by the Trust’s external auditors, and as such had been subject to independent audit opinion.

RESOLVED

i)                    That the contents of the report and the actions agreed and being taken to address the findings and recommendations be noted.

ii)                  That the Alexandra Palace and Park Charitable Trust and Alexandra Palace Trading Limited be asked to implement all the audit recommendations by 31 March 2009.