Agenda, decisions and minutes

There were no declarations of interest. 

To confirm the minutes of the meeting held on 29 June 2009 as a correct record.

The Minutes of the meeting held on 29 June 2009 were approved as a correct record for signing by the Chairman, subject to a reference to ‘peak oil’ being inserted as part of Minute 13 (Strategic Risk Register) in place on ‘neat oil’.

In respect of the review of network security, referred to under Minute 5, the Committee was advised that this item would be considered at the next meeting in December 2009. 

The Committee considered the Internal Audit Quarterly report for the period ending 30 September 2009, summarising the outcome of work completed against the annual audit plan.

Chris Harris (Bentley Jennison) presented the report, drawing the Committee’s attention to the schedule of final reports issued since the last meeting, and to reports in respect of the ICT Review, General Ledger, Capital Expenditure and Asset Management, which were currently at the draft stage.

Members of the Committee and other Members present asked questions and made comments on the following issues arising from the report and appendices:

Housing Futures – This issue had been included in the original plan; the reallocation of time to other work areas following the conclusion of the project would be subject to discussions with the Chief Executive and Executive Director (Corporate Services) (EDCS).

Anti Money Laundering Policy – The Committee agreed with the Council’s response that, given that no large amounts of cash were received, the priority was not ‘Fundamental’ and there were no proposals to widen the scope of the policy.

Security – The EDCS was requested to reinforce the message that this area related to the security of premises not individuals, through discussions with the Facilities Manager.

The Committee expressed concern at recommendations within the appendix for which there were no responses by the Council and felt that every effort should be made to provide timely responses for inclusion in future reports.

The Committee NOTED the report.

The report, which incorporates Data Quality and Use of Resources will be available on Tuesday 20 October.

The Committee RESOLVED

(a)            That the contents of the Annual Governance Report be noted,

(b)               That the Executive Director (Corporate Services) be authorised to issue a Letter of Representation as requested at Appendix 4 to the Annual Governance Report, the letter to set out the Committee’s decision not to adjust the misstatement in the accounts identified in Appendix 3 to the report, with reasons, the final letter to be circulated to Members of the Committee for information,

(c)               That the Chairman of the Committee and the Executive Director (Corporate Services) be authorised to approve a final Statement of Accounts for publication, incorporating the adjusted amendments set out in Appendix 2 to the report,

(d)               That the Leader of Council and the Chief Executive be invited to re-sign the Annual Governance Statement within the accounts, following revision to cover the issues raised within the audit,

(e)               That the revised accounts be presented to the next meeting,

(f)                 That any proposed responses to the Action Plan as set out at Appendix 6 to the Annual Governance Report be considered at the next meeting, and

(g)               That a report be submitted to a future meeting regarding amendments to Financial Reporting Standards.

The Committee received the District Auditor’s Annual Governance Report (AGR).

Alex Colyer, Executive Director (Corporate Services) (EDCS) introduced the report and recommendations, advising that the Audit of the Council’s accounts had highlighted some discrepancies in the way housing assets had been recorded between the various housing databases. The discrepancies existed in previous year’s accounts, but had not been identified by the previous auditors. The EDCS drew the meeting’s attention to a revised Appendix 2, tabled at the meeting, providing figures for the adjusted accounts to replace the pro forma set out at page 21 of the AGR. The Committee was advised that recommendation 10(c) should be altered to make clear that the final Statement of Accounts should incorporate these changes.

Debbie Hanson (DH), District Auditor, introduced the key elements of the AGR as follows:

Key messages – The financial statements submitted for audit were complete; however, they had contained a number of material errors requiring attention. Subject to the outstanding matters being addressed, an audit report would be issued including an unqualified opinion on the financial statements. The draft audit report was set out as Appendix 1 to the AGR.

The meeting was advised that, as a result of the additional work undertaken, described in paragraphs 7-10 of the report, an additional fee would be levied over and above the level of £8,521 notified to the Chief Executive in June 2009. DH advised that the total amount, incorporating the above amount, was likely to be in the region of £20-30,000.

DH drew the meeting’s attention to the next steps identified on page 7 of the AGR; the EDCS stated that these matters had been taken into account in the recommendations to the Committee, set out in his covering report.

Financial Statements

Neil Gibson (representing the District Audit Service) introduced the Financial Statements set out on pages 8-14 of the AGR. This section set out details of the material disclosure errors identified within the financial statements along with recommendations to address them. The non-trivial errors which had been amended related to the following matters:

·         Revaluation Reserve: Opening balance overstated by some £3.424 million following a failure to allocate the Major Repairs Allowance and capital expenditure to beacon groupings during 2007/08.

·         Failure to reconcile the fixed assert register, housing maintenance database and housing rents database.

·         Incorrect classification on block garages in the Balance Sheet as Council dwellings rather than land and buildings;

·         The Fixed Asset register not meeting good practice guidelines, and including assets which were fully depreciated. The Committee was advised that the introduction of International Financial Reporting Standards (IFRS) would add requirements for fixed asset registers. Members requested a report summarising the key implications of IFRS at a future meeting.

The non-trivial error which management had decided not to amend related to the valuation of the Pension Fund assets, which had been understated by £0.536 million. Following a short debate, the Committee agreed to support the management position on the grounds that the error, whilst non-trivial within auditing definitions, was  ...  view the full minutes text for item 19.

The Committee considered a report setting out proposed revisions to the Anti-Theft, Fraud and Corruption Policy. Members welcomed the ongoing review of the document, noted the proposed changes and their later submission for formal Member approval.

The Chief Executive introduced this item, advising that information regarding the pension fund had been requested by Councillor Burkitt at a previous meeting. Given Councillor Burkitt’s absence, the Committee agreed that the report be DEFERRED to the next meeting. 

The Committee considered a report providing quarterly reviews of the strategic risk register, action plans to address risks above the tolerance line, and those to achieve risk management targets.

It was considered that there were additional risks relevant to the Making Cambridgeshire Count project relating to accountability for future pooled budgets.

The Committee agreed to DEFER detailed consideration of the strategic risk register to the next meeting, at which the review of the Risk Management Strategy would also be brought forward ahead of the timescale envisaged in paragraph 3 of the report.

Debbie Hanson, District Auditor, drew the meeting’s attention to a publication entitled ‘Protecting the Public Purse’. It was AGREED that copies of this publication should be circulated to the Chairman of the Committee and Executive Director for Corporate Services for information. 

Meetings of the Committee have been scheduled to take place on the following dates:

• 23 December 2009
• 6 January 2010 (Provisional)
• 31 March 2010 

All meetings to be held at 9:30am.

It was AGREED that the next meeting take place on 23 December 2009 at 10.00am, with a briefing for Members of the Committee to take place at 9.30am.