Agenda item

Before receiving these reports the Chair informed the meeting, that as outlined in Haringey Council’s constitution, this Committee had been entrusted to receive the Annual Audit Letter and to make any appropriate recommendations to the Council or the Executive in respect of these matters.

As Item 6 is the Audit Letter and Item 7 is the response from the Chief Executive and the Director of Finance, the Chair stated both the items would be taken together.

The District Auditor and the officers present agreed to these arrangements.

Then the District Auditor (Mr. Haworth-Maden) presented the Audit Commission’s Annual Audit and Inspection letter to the Committee.

He informed Members that the Council’s overall performance assessment rating had improved. It had attained 3 stars. Seventy-five percent of BVPIs (Best Value Performance Indicators) had shown improvement.

On Value for Money Mr. Haworth-Maden mentioned that spend was generally high in comparison to the Council’s near-neighbours. He said there was a mixed picture when assessing whether this spend was commensurate with the performance levels attained.

The District Auditor stated that on 31^st October qualified approval had been given to the accounts. The qualification related to Alexandra Park & Palace finances and action had been taken to resolve this for future years. He informed the Committee that there were no significant issues relating to standards of financial conduct.

Mr. Haworth-Maden stated that one matter he would like to draw attention to was failures of corporate governance with relation to Tech Refresh. A key issue for the Audit Commission was that an action plan needed to be drawn up by the Council to prevent recurrence of the problems experienced. A report had already been received by the Executive and this would be presented to the Audit Committee at its next meeting.

Then at the invitation of the Chair, Mr Almeroth, Head of Corporate Finance presented the report in response to the letter to the Committee.

Section 8.6 of the report laid out how the four main issues raised by the Audit Commission would be dealt with. These had been presented to the Executive and had been approved by that body.

 At this point Chair invited the members present to make queries/ questions to the reports.

Cllr Bloch asked a number of questions to officers and to the representatives of the Audit Commission. He asked what prompted their investigation into Tech Refresh, the rationale behind their wording of paragraph 47 relating to the termination of the employment of the previous Chief Executive and raised concerns about the NDC and mortuaries.

The representative of the Audit Commission (Ms. Mounfield) replied. She informed Members that the Council had asked for the Audit Commission to investigate Tech Refresh. Paragraph 47 was phrased in the way it was because the Audit Commission did not want to go into detail about individual cases and because they had no need to exercise their formal powers on the matter.

Ms. Mounfield confirmed that the NDC and mortuaries issues had been raised with them. These issues were still under investigation.

Then the Chair, highlighted that the Audit Committee had a duty to act independently of the Executive and Scrutiny with relation to matters brought before it.

Accordingly  after thanking the Audit Commission for their independent work , the Chair noted with satisfaction the positive points of the report, as mentioned in Paragraphs 1, 3, 7, 9, 14, 17, 19, 30 and 36 of the Audit Commission’s letter and commented that it was a source of pride for all members and officers that the Council had achieved overall CPA ratings 3 out of 4 but  he was concerned about Paragraphs 2 and 38.

Paragraph 2 stated that the Council’s spend was high compared to its near-neighbours. The Chair suggested that one significant means of tackling this would be to investigate zero-based budgeting as a budgetary strategy.

He pointed out that this procedure was suggested  on page 271 of CIPFA’s “Councillors Guide to Local Government Finance”.(2005)

Accordingly  he was confident that zero-based budgeting could apply to most areas of Council expenditure, with the exception of staffing costs.

As regards, paragraph 38 relating to Tech Refresh, the Chair was very concerned when looking at the headline of the report as to whether it happened due to a significant failure of Councils’ corporate governance arrangement and whether the structure in operation for financial management was ineffective . A full report on the Tech Refresh issue would be presented to the next meeting of the Committee.

RESOLVED:

1.      That in addition to the 4 recommendations, ( in point 8.6 of the Report 7)) the Council take emergency action, so that the significant failures that have occurred in Tech Refresh Project do not recurr anywhere at the Councils’ Services, pending the full action plan and that in the full action plan itself Council’s constitution and procedure be reviewed in the light of the findings of the report.

2.      To investigate zero-based budgeting as a budgetary approach for future years.

3.      To thank members and officers for their achievement in obtaining a 3-star rating for the Council