Agenda for Audit Committee on Thursday, 26th June, 2008, 4.00pm

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Agenda and minutes

Venue: Committee Room 3, Hove Town Hall. View directions

Contact: Penny Jennings, Senior Democratic Services Officer 

No. Item


Procedural Business

    (a)  Declaration of Substitutes - Where Councillors are unable to attend a meeting, a substitute Member from the same Political Group may attend, speak and vote in their place for that meeting.


    (b)  Declarations of Interest by all Members present of any personal interests in matters on the agenda, the nature of any interest and whether the Members regard the interest as prejudicial under the terms of the Code of Conduct.


    (c)  Exclusion of Press and Public - To consider whether, in view of the nature of the business to be transacted, or the nature of the proceedings, the press and public should be excluded from the meeting when any of the following items are under consideration.


    NOTE:  Any item appearing in Part 2 of the Agenda states in its heading the category under which the information disclosed in the report is exempt from disclosure and therefore not available to the public.


    A list and description of the exempt categories is available for public inspection at Brighton and Hove Town Halls.



    Declarations of Substitutes


    Substitute Councillor                                            For  Councillor

    Mrs A  Norman                                                    Oxley

    Older                                                                   G Theobald

    Smart                                                                   Lainchbury

    West                                                                    Randall



    Declarations of Interest


    There were none.


    Exclusion of Press and Public


    The Committee considered whether the press and public should be excluded from the meeting during the consideration of any items contained in the agenda, having regard to the nature of the business to be transacted and the nature of the proceedings and the likelihood as to whether, if members of the press and public were present, there would be disclosure to them of confidential or exempt information as defined in Schedule 12A, Part 5A, Section 100A(4) or 100 1 of the Local Government Act 1972 (as amended).


    RESOLVED - That the press and public be not excluded from the meeting.



Chairman' s Communications



    The Chairman welcomed  all  Members  to  the  meeting and  confirmed  that  the  next  scheduled  meeting  of  the  Committee  would  take  place  on  30  September and that would  training  session  would  take  place  for Members  prior  to  that.  A  separate  letter  would  be  sent  to  Members confirming  the  dates/  timing  of  the  training  session and in  respect  of  the  meeting  itself . He  stated that one  of  the  key purposes  of  the  meeting would  be  to  sign  off  the  Council’s Statements  of  Accounts.






    It  was  agreed  that all  items  set  out on  the  agenda would  be  discussed . 



Public Questions

    (The closing date for receipt of public questions is 12 noon on 19 June 2008)


    No public questions received by date of publication.



    There were none.



Written Questions from Councillors

    No written questions have been received.



    There were none.




    No petitions received by date of publication.



    There were none. 




    (The closing date for receipt of deputations is 12 noon on 19 June 2008).


    No deputations received by date of publication.



    There were none. 



Letters from Councillors

    No letters have been received.



    There were none. 



Notices of Motions referred from Council

    No Notices of Motion have been received.



    There were none. 



Audit Committee: Terms of Reference and Ways of Working pdf icon PDF 48 KB

    Report of the Director of Strategy & Governance (copy attached).



    Councillor  Alford  sought  clarification regarding  the  respective  roles  and responsibilities  of  the  Overview  and Scrutiny Committee in  respect  of  Finance .  The  Chairman responded  that discussions  as  to  the  precise  roles  of  each of  these  respective  bodies  was still being discussed ( as Chairman  he  would  be  involved  in  that process)  and  that  it  was anticipated  that a  report  would  be  submitted  to  the  September  meeting of  the  Committee.      


     The  Committee  considered  a  report of  the  Director  of  Strategy  and  Governance (for  copy  see  minute  book).


    RESOLVED - That the contents of the report be noted.



Audit Commission: Audit and Inspection Plan 2008/09 pdf icon PDF 57 KB

    Report of the Director of Finance & Resources and Director of Strategy & Governance (copy to follow).



    The  Committee considered  a  report  of   the  Director  of  Finance  and  Resources summarising the  work to  be  carried  out  by  the  external  auditor  for  the  2008  / 09 audit  year (for  copy  see  minute  book).


    The  newly  appointed  District  Auditor, Mrs  Helen Thompson introduced  herself   and  referred  to the  changes  to  the  assessment    procedures  which  had recently  taken place.  She explained  that she  would be  working  closely  with  the  relevant officers  within  the  Council  and  internally.  In  answer  to  questions  she  explained  that changes  had  been  made to  the manner  in  which the  Government  required  data  to be  collated  and  recorded.   


     Councillor Mrs  A  Norman   sought  confirmation regarding how fees for  the  work  carried  were  allocated stating that in  the  past  Members  had also sought  clarification  regarding  this  matter expressing  concern  at the  time  that it  sometimes took  in  order  for  the  respective  accounts  to  be  audited  and  signed  off.  Councillors   Simpson and Watkins also enquired in respect of this matter. It  was  explained  that  the  level  of  checking  currently  required by central  government  was  more  complex  than  had previously  been the  case.  These requirements  had  arisen in  response to financial irregularities or unacceptable  exposure to  risk  which  had  occurred  in  the  private  sector ,  however  the  same level  of  assessment was  now  required of  the  public  sector  /  local  authorities. A  “complete” regime was  now  in  place which  went  far  beyond  localised  assessment   of  risk  this  was also reflected in  the  costs  of  carrying out  the  independent  audit  process.              


    Members  welcomed  the undertaking given  that  as far  as  practicable  they  would  receive  regular on-going  reports throughout  the  year which  would  act  as  an  early  warning  system  should any  areas  of  risk  or  potential  overspend be identified. 


     In  answer  to  questions  the  Director of  Adult Social  care  and  Housing confirmed  that as  soon  as  the most  recent performance    indicators for  housing  were  available  a  report  would  be  put  forward  to  the  Committee.  It  was  anticipated  that this  would  come  forward as  a report  to  the September Committee meeting and  that  areas of weakness previously identified had seen significant improvements  .    


    RESOLVED – (1) That the contents of the report be noted.



Statement of Accounts 2007/08 pdf icon PDF 119 KB

    Report of the Director of Finance & Resources (copy to follow).



    The Committee  considered  a  report  of  the  Director  of  Finance  & Resources setting out  the  draft  Statement  of  Accounts  for  2007  / 08.  (For copy see minute book).  


     It  was noted  that the  accounts  were  presented  in “draft”  format  as  they  had  yet  to  be audited  by  the District Auditor .  It  was  expected  that  the  District  Auditor would  present  an  annual  Governance  Report  to  the  September meeting  of  the  committee  on  the  conclusion  of  the  audit  of  the  2007  / 08  financial  statements . 


    It  was also explained that it  was a  requirement  of  the  current  Accounts and Audit  Regulations  that the  Council’s  Statement  of  Accounts should  be  approved  by   Members  and  signed  off  by  the  Chairman of  the  Committee in  concert  with  the  Chief  Executive  and  the  Director  Finance & Resources by  30  June  2008. 


    Details  of measures  undertaken in  order  to  make  prudent  additions  to  the  Council’s  existing  reserves were explained and noted. The  representative present  from  the  District  Auditor’s Office explained  the  terminology  used   as  well  as  the  role  and  responsibilities  of  the  Committee in  approving  and the  accounts  and  authorising  the  Chairman  to  sign  them  off in  concert  with  the  Chief  Executive  and  Director  of  Finance  and  Resources.  In  answer  to  questions  it  was  explained  that individual  Members did  not  carry  any  personal  liability where the  accounts   had  been  accepted  and  signed  off  in  good  faith.    


    RESOLVED -   (1) That  the  Statement  of Accounts  for  2007 /  08  be  approved   and that it  be noted  that these  will  be  subject to  audit ;  


    (2) It  be  noted  that the  actual  revenue  outturn  for  the  Council  for  2007  /  08  was  an  underspend of  £0.244  million;


    (3) That   the  allocations  from the  general  Reserves  approved  by  the  Cabinet at  its  meeting  on  12  June  2008  be  noted  ; 


    (4)  That   it  be  noted  that the  individual  overspendings   and underspendings would  not  be  carried  forward  to  2007  / 08  and  that the  £0.244  million  underspend  had  been transferred  to  General  Reserves ;   


    (5)  That the  surplus  /  deficit  on  the  Housing  Revenue  Account  for  the  year of  £1.439  million,   which  had been transferred  to  the  HRA  balances,  be  noted  ;  and    


    (6)  That  the  provisions  and  contingent  liabilities  included  in  the  accounts  be  noted  . 



Shoreham Airport Statement of Accounts April - June 2006 pdf icon PDF 75 KB

    Report of the Director of Finance & Resources (copy attached).



    The  Committee considered the  Statement  of  accounts  to  30  June  2006,  which  represented  the  revised  Statement  of  Accounts  for  that period.  It  was  noted  that the  accounts  had  first been  submitted  to  the  Policy  and  Resources  Committee  on  28  June  2007 but  had  now  been  revised following  advice  from the  external  auditors (Audit  Commission)(for  copy  see  minute  book). 


     It was  noted  that Shoreham  Airport  had  been sold  to  the  Erinaceous  Group  plc  on 30  June  2006 and  the  accounts  before  the  Committee  would  therefore  be  the  last  set produced  and that  they  covered the  period  1  April  2006  to  30  June  2006.  The  Balance sheet as  a at  30  June  2006  showed  nil  balances  following distribution  of  residual balances  to  the  Council  and Worthing  Borough  Council (the  other  owning  authority) in  the  proportion  of  2/3rd  to  1/3rd  respectively .


    Councillor  Alford  queried  the  whether  the  dates  set  out  in  the  report  relative  to land  raising  were  correct. It was  explained  that they  were correct and  that a  scrutiny  exercise  had  subsequently  been  carried out relating specifically  to  that activity .   


    RESOLVED – (1) That the  contents of  the  report  be  noted ;  and  


    (2) That the draft management representation letter be approved.



Shoreham Airport Annual Governance Report

    Report of the Director of Finance & Resources (copy of report to follow).



    The  Committee  considered the  Annual  Governance report  prepared  by the  Council’s  external auditors (District  Audit)(for  copy  see  minute  book).


    The  representative  present  from  District  Audit  explained  that a  qualified  opinion  had  been issued on  the  financial  statements on the  grounds that there  had  been  limited  scope  for  them  to  carry  out  their  work .  This  is  because  it  had  not  been  possible to  confirm  some  of  the  entries  in  the Income  and  Expenditure  Account,  primarily  on  the  basis  that that  there  had not  been  access  to  all  records and explanations needed for  the  3  months  to  30  June 2006 in  the  period immediately prior  to  the  airport  being  sold .  This  qualification  had  been  discussed  with  Officers of  both  Brighton  &  Hove  City  Council  and  Worthing  Borough  Council.    


    RESOLVED -   That the content of the report be noted.



Audit & Assurance Annual Report and Opinion 2007/08 pdf icon PDF 63 KB

    Report of the Director of Finance & Resources (copy attached).

    Additional documents:



    The  Committee considered  a  report  of   the  Director  of  Finance  and Resources  relative  to  the  Audit  and  Assurance  Annual  report  2007  / 08  (for  copy  see  minute  book).


    The report  summarised  the internal  audit  activity  which  had taken place  during 2007  / 08 and  based  on this an  assurance  opinion on  the  internal  control  environment which was  set  out  in  full  in  Appendix 1 to  the  report.  The  opinion  as set  out  in  the  report contributed  to  the annual  review  of  governance  arrangements  required  by  the  Accounts and  Audit  Regulations  2006.   


    In  answer  to  questions  put by  Councillors Older  and  Simpson  it  was  explained that further  update  reports  would  be  provided  throughout  the  year  . The  purpose  of  the  reports  was  to  ensure that the  Committee  were fully  aware  of  the on  -  going  work  being carried out ,  the  rationale  for  it  and  the  action taken  where any  weakness  or  areas  for  improvement   had  been  identified. Councillor  Alford  sought  and  was  given  assurances  that the  Council’s systems  were  considered  to  be sufficiently robust overall and were subject to continuous monitoring .     


    RESOLVED  - That  the  internal  audit  activity  and  opinion on  the  control environment  for  2007 ./  08  be  noted . 



Annual Governance Statement pdf icon PDF 60 KB

    Report of the Director of Finance & Resources (copy attached).

    Additional documents:



    The Committee  considered  a  report  of  the  Director  of  Finance  and  Resources  setting  out  the  Council’s  Annual Governance  Statement  in  accordance with  its statutory  duty  under  the  accounts  and  Audit Regulations  2003 (amended  2006) to  publish  an  annual  Governance  Statement (for  copy  see  minute  book). 


    It  was  explained  that the  purpose  of  the report  was  to  present  Members  of  the  Committee for  comment,  challenge  and  approval the  assessment  of  the  City  Council’s corporate governance  arrangements  and  Annual Governance  Statement . It  was  explained  in  answer  to  questions  that the  actual assessment  which formed  the  basis of the actual assessment was set  out  in Appendix  1  to  the  report.  Noted that further  up date  reports  would  be provided  to  future  meetings of  the  Committee.   


    RESOLVED  - (1)  The  annual  assessment  of  the  City  Council’s corporate  governance  arrangements  be  approved ;


    (2) The  Annual Governance  Statement  be  approved  for  inclusion with  the  Statement  of  Accounts  ;  and


    (3) The  continuing  improvements  being  made  to  the  City  Council’s governance  arrangements  be  noted.



Targeted Budget Management (TBM) Revenue Outturn 2007/08 pdf icon PDF 204 KB

    Report of the Director of Finance & Resources (copy attached).



     The  Committee  received  the  report  of  the  Director  of  Finance  and  Resources which  had  been  considered  and  approved  by  Cabinet  at  its  meeting  held  on  12  June 2008  (for  copy  see  minute book).


    The  purpose  of  the  report  was  to  set  out  the  revenue  outturn  for  2007  /  08  for  General  Fund,  Section  75  partnerships  and  Housing Revenue  Account  (HRA)  as  at  31  March  2008. it  was  noted  that  these  figures  were  still subject  to audit .     


    In answer to questions from  Councillors  West  and  Kitcat it  was confirmed  that the  recommendations contained  in  the  report  were  those  which  had  been  agreed  by  Cabinet  at  their meeting  of  12  June. The  report  had   been forwarded  to the  Audit  Committee for  its  information  only as  had  item  18  referred  to below.  .  


    RESOLVED -    That the  content  of  the  report  approved  by  the  Cabinet  at  its meeting held  on 12 June 2008  be  noted .



Targeted Budget Management (TBM) Capital Outturn 2007/08 pdf icon PDF 177 KB

    Report of the Director of Finance & Resources (copy attached).



    The  Committee  considered  a   report  of  the  Director  of  Finance  and  Resources  which had  been considered  and  approved by  Cabinet at its  meeting  held  on  12 June 2008  (for  copy  see  minute  book). 


    RESOLVED -   That the  content  of   the  report  approved  by  the  Cabinet  at its  meeting  held  on  12  June be  noted . 



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