Agenda for Audit Committee on Tuesday, 16th December, 2008, 4.00pm
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Agenda, decisions and minutes
PDF 216 KBVenue: Committee Room 1, Hove Town Hall. View directions
Contact: Penny Jennings, Senior Democratic Services Officer
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Procedural Business
(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. Minutes: 50A. Declarations of Substitutes
50.1 Councillors Simson, Mrs A Norman and Pidgeon attended in substitution for Councillors Lainchbury, Smith and G Theobald respectively.
50B. Declarations of Interest
50.2 There were none.
50B. Declarations of Interest
50.3 The Committee considered whether the press and public should be excluded from the meeting during 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 5, Section100A(4)or100(1) of the Local Government Act 1972 (as amended).
50.4 RESOLVED - That the press and public be excluded from the meeting during consideration of Items66, Non-Public Minutes of the Previous meeting,67,Payroll Audit 2008 and Corporate Risk Management Action Plans : Focus –all Exempt under Paragraph 3. |
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Minutes of the Previous Meeting Minutes of the meeting held on 4 November 2008 (copy attached). Minutes:
51. MINUTES OF THE PREVIOUS MEETING
51.1 It was noted that the minutes should record that Councillor Mrs Ann Norman had been present at the previous meeting.
51.1 RESOLVED – That subject to the amendment set out above the minutes of the meeting held on 4 November 2008 be approved and signed by the Chairman as a correct record.
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Chairman's Communications Minutes:
Review of Effectiveness of Internal Audit Panel
52.1 The Chairman explained that following the last meeting of the Committee it had been agreed that Councillor Alford would serve as the Conservative Group Member for the first year. Representatives from other groups would rotate. Councillor Watkins had been appointed to serve for 2009/10. A Member from the Green Group would be appointed for 2010 /11.
52.3 RESOLVED –That the position be noted. |
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Petitions No petitions received by date of publication.
Minutes: 53.1 There were none. |
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Public Questions (The closing date for receipt of public questions is 12 noon on 9 December 2008).
No public questions received by date of publication. Minutes: 54.1 There were none. |
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Deputations (The closing date for receipt of deputations is12 noon on 9 December 2008).
No deputations received by date of publication. Minutes: 55.1 There were none. |
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Letters from Councillors No letters have been received.
Minutes: 57.1 There were none. |
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Written Questions from Councillors No written questions have been received. Minutes: 56.1 There were none. |
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Audit Commission Update Report of the Audit Commmission Report of the Audit Commission (copy circulated).
Decision: Contact Officer: Grahame Brown – Audit Commission Wards Affected: All
RESOLVED – The contents of the report summarising progress to date was noted. Work carried out on the 2007 /08 audit and inspection plan which was nearing completion was also noted.
Minutes: 58.1 The Committee considered a report of the District Auditor referring to the audit and inspection plan 2008/09 which had been presented to Committee at its meeting in June 2008.The report provided a summary of progress to date on the plan as this work was nearing completion (for copy see minute book).
58.2 Councillor Hamilton, the Chairman noted that a scored assessment on the use of resources for the 2007/08 financial year had been completed and that the commission’s detailed framework which focused on the Council’s arrangements to ensure that resources were available to support the Council’s achievement of its priorities and ability to improve its services had been used. It was anticipated that the scores would be published by the Commission in December 2008. A draft report had been presented to Officers and it was anticipated that this would form the subject of further report to the meeting of the Committee
58.3 Councillor Watkins considered that it was important to note that significant progress had been made since the last update and that therefore by its very nature the report represented a snapshot at a given moment in time rather than the most up to date position.
58.4 RESOLVED– That the contents of the report summarising progress to date was noted. Work carried out on the 2007 /08 audit and inspection plan which was nearing completion was also noted. |
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Audit Commission Audit and Inspection Plan 2008-09 - Update Oral report by representative(s) on behalf of the Audit Commission.
Decision: Contact Officer: Grahame Brown-Audit Commission Ward Affected: All
RESOLVED – That the content of the report be noted. Minutes: 59.1 Mr Brown of the Audit Commission explained that at the time the agenda had been put together it had been anticipated that this matter would form the subject of a separate report to Committee. It had however been possible to encompass that information within the report referred to at Item 58 above. This item was therefore withdrawn.
59.2 RESOLVED – That the position be noted. |
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Audit Commission Workforce Planning Review of Progress Report of the Audit Commission (copy attached).
Decision: Contact Officer: Grahame Brown – Audit Commission Ward Affected: All
RESOLVED - That the content of the presentation given by officers of the Audit Commission and the main conclusions to date set out the report be received and noted. The measures taken and work carried out by the Council’s own Officers in this respect also be noted. Minutes: 60.1 The Committee considered a report of the Audit Commission setting out the review of progress made against recommendations made within the Audit Commission’s Workforce Planning Report 2005/06(for copy see minute book).
60.2 Ms Shergill of the Audit Commission gave a presentation in respect of the main areas for improvement identified and referred to strategies being devised in concert with the relevant departmental heads in order to address them.
60.3 It was noted that the main conclusions were set out at Paragraph 8 onwards. Overall it was considered that the Council was putting in place the right building blocks to enable it to meet both present and future challenges. This work had taken some time and had yet to make an impact, but would mean that the Council would be in a stronger position to bridge identified skills gaps or shortages in a strategic way.
60.4 The Assistant Director Improvement and Organisation stated that work was already in train to effect changes across a number of areas with in consultation with Human Resources and that this work was significantly advanced .In addition further areas for improvement had been identified and structures were being put into place to make the necessary changes.
60.5 RESOLVED- That the content of the report be noted. |
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CAA/CPA Use of Resources Update and Actions Report Report of the Director of Finance & Resources (copy attached).
Decision: Contact Officer: Nigel Manvel l Tel: 29-3104 Ward Affected: All
RESOLVED - That the actions undertaken during 2007/08 and 2008/09 to improve the use of resources be noted.
Minutes: 61.1 The Committee considered a report of the Director of Finance and Resources which provided information concerning the arrangements for external assessment of the Council’s use of resources together with details of planned actions to improve the use of resources (for copy see minute book).
61.2 The Assistant Director, Financial Services explained that the level of progress made reflected that that Council had made significant improvements in its assessment procedures across a number of service areas. The Chairman stated that the improvements in respect of accounting procedures overall was encouraging. These comments were echoed by the Deputy Chairman, Councillor Watkins.
61.3 Councillor Randall whilst supporting the review considered that it was and would continue to become increasingly difficult to achieve further rationalisation of Value for money (VFM) targets year on year without this having a potential impact on service delivery. Councillor Kitcat enquired whether in view of the current financial down turn the authority would be able to meet its targets and the consequences should it be unable it do so. It was explained that the Council was unable to meet its targets. In answer to questions regarding the Icelandic Bank crisis it was confirmed that the Council had removed its investments some months before the bank’s recent difficulties .and that the Council had not therefore been exposed to risk. Councillor Mrs Norman considered that the skill of the Council’s financial services team in identifying and dealing with this matter should be fully acknowledged.
61.4 RESOLVED –That the actions undertaken during 2007/08 and 2008/09 to improve use of the Council’s resources be noted. |
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Targeted Budget Management Extract from the proceedings of the Cabinet meeting held on the 20 November 2008, together with a report of the Director of Finance & Resources (copies attached).
Additional documents: Decision: Contact Officer: Nigel Manvell Tel: 29- 3104 Ward Affected: All
RESOLVED – That the forecast outturn for the General Fun, Section 75 Partnerships and Housing Revenue Account (HRA) for 2008 /09 as at month 6 be noted . The recommendations approved by the Cabinet at their meeting of 20 November 2008 also be noted. Minutes: 62.1 The Committee received the report submitted to the meeting of Cabinet on 20 November 2008 by the Director of Finance and Resources setting out the forecast outturn position on the revenue and capital budgets at month 6 (for copy see minute book)
62.2 Councillor Randall referred to the fact that the Council’s capital receipts had fallen and might fall further and asked what measures were being taken to monitor this and to mitigate against this potential risk. The Risk and Opportunity Manager explained that this had been reflected in the refreshed Corporate Risk Register which was referred to at Item 65 later in the agenda. The Assistant Director, Financial Services stated that notwithstanding the on-going improvements made. It was anticipated that the Council’s budgets would become more difficult to manage and that constant re-evaluation would be necessary to maximise interest on its investments. The Council’s projected position for the current financial year remained unaffected. Measures were in place to seek to manage the developing situation during the next and subsequent financial years.
62.3 Councillor Kitcat sought confirmation regarding the targeted budget savings as set out. Councillor Alford sought clarification regarding why it had been decided that Hanover Housing Association would provide their own independent heating source at Patching Lodge. It was agreed that information would be provided to Councillor Alford.
62.4 RESOLVED– That the forecast outturn for the General Fund, Section 75 Partnerships and Housing Revenue Account (HRA) for 2008 /09 as at month 6 be noted .The recommendations approved by the Cabinet at their meeting of 20 November 2008 also be noted. |
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Audit and Assurance Services Progress Report Report of the Director of Finance & Resources (copy to follow).
Decision: Contact Officer: Ian Withers Tel: 29-1323 Ward Affected: All
RESOLVED - That the contents of the report, in particular the status of internal audit work carried out since the last meeting of the Committee be noted. Minutes: 63.1 The Committee considered a report of the Director of Finance and Resources detailing the outcome of internal audit work completed since the last meeting of the Audit Committee in November 2008. The report also set out the position regarding delivery of the Internal Audit Plan for 2008/09(for copy see minute book).
63.2 The Assistant Director, Audit and Assurance explained that the Accounts and Audit Regulations 2006 required every local authority to maintain an adequate and effective system of internal audit. Audit and Assurance Services carried out the work to satisfy this legislative requirement and part of its role was to report on outcomes to the Audit Committee.
63.3 The Chairman referred to the level of staff shortages and enquired whether this would affect the department’s ability to meet its target. In response the Head of Audit and Assurance explained that it was still anticipated that a level of at least 80% against a target figure would be reached. Councillor Watkins the Deputy Chairman enquired whether the Audit Commission regard this as a failure or whether current staff vacancy levels would be taken account of. Mr Brown, the Audit Commission stated that he was aware that provisions had been made for unplanned work. It was recognised that there were staffing issues outside the authority’s control. Assessments also took account of the quality of work produced. The Head of Audit and Assurance informed the Committee that the Annual Internal Audit Plan was in the process of being reviewed in terms of priorities and it was anticipated that a more comprehensive report would be made to the at its February meeting.
63.4 The Chairman enquired whether the Audit Commission required a requisite number of audits to be carried out within a specified period and whether if fewer were completed this would be criticised. The Head of Audit and Assurance responded that this would depend upon whether or not a reduction had been agreed with the Audit Commission.
63.5 In answer to questions by Councillors Alford and Randall it was explained that issues relating to difficulties in filling key posts identified were to be addressed as part of resources planning. Currently the team had two vacancies for auditors funding for one of which was carried under the arrangements in place with Deloittes.
63.6 RESOLVED- That the contents of the report, in particular the status of internal audit work carried out since the last meeting of the Committee be noted. |
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Annual Governance Statement Action Plan Report of the Director of Finance & Resources (copy to follow).
Additional documents: Decision: Contact Officer: Ian Withers Tel: 1323 Ward Affected: All
RESOLVED - That Committee note the progress made and are satisfied with the implementation of actions for improvement to the Council’s governance framework, identified in the Annual Governance statement 2007/08. Minutes: 64.1 The Committee considered a report of the Director of Finance and Resources setting out progress made in implementation of actions identified in the Annual Governance Statement 2007/08 (for copy see minute book).
64.2 It was noted that the Council had a statutory duty under the Accounts and Audit Regulations 2003 (amended 2006), to publish an Annual Governance Statement. For 2007/08 this had been reviewed and approved by the Committee at its meeting held in June 2008.Good progress had been made during 2008/09 in implementing the action plan which was 60% complete. The Council was considered to be on target to complete 15 of the individual actions by the end of March 2009.
64.3 Councillor Oxley stated that it was pleasing to the level of progress achieved.
64.5 RESOLVED- That the progress made is noted and the Committee has indicated that it is satisfied with the implementation of actions taken and proposed to improvement the Council’s governance framework as identified in the Annual Governance Statement 2007/08. |
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Risk and Opportunity Management (ROM) Update Report of the Director of Finance & Resources (copy attached).
Additional documents: Decision: Contact Officer: Jackie Algar Tel: 29-1273 Ward Affected: All
RESOLVED- That the Audit Committee note the Corporate Risk Register 2008/09 as updated by TMT on 12 November 2008 and contained in Appendix 1 to the report. Minutes: 65.1 The Committee considered a report of the Director of Finance and Resources detailing the six monthly update of the Corporate Risk Register, agreed by the Council’s Management Team (TMT), on 12 November 2008 (for copy see minute book).
65.2 The Risk and Opportunity Manager explained the TMT reviewed the Corporate Risk Register every six months, in May and November each year and that each time the Corporate Risk Register altered it would be reported to the next scheduled meeting of the Committee. Where two previously reported risks had been merged, the relevant risk maps had also been merged.
65.3 The Risk and Opportunity Manager detailed each of the individual risks indicating either that the level of risk remained unaltered at present or the rationale for any change. It was noted that two risks had been removed and that Corporate Risk 15 “Improving Contract Management and Compliance” had reduced from a “red” risk to “amber”.
65.4 Councillor Simson referred to the condition survey carried in respect of the Council’s housing stock and works required to meet the Decent Homes Standard (DHS) and whether the Audit Commission’s earlier comment relating to concern over accuracy of the data of houses which had not met the DHS could warrant a change in the Risk Score as set out in the Corporate Risk Register.
65.5 Councillor Randall enquired regarding the timetable for implementation of equal pay and whether money had been set aside for that purpose The Assistant Director, Financial Services explained that the financial implications had been reflected in the offer which had been made.
65.6 Councillor Randall also referred to major projects to be undertaken and stating that he considered that it was important to seek to ensure that empty properties e.g., the nurses home at Brighton General Hospital, were re-utilised as far as was practicable. Councillor Watkins referred to the current financial downturn enquiring whether that could have a significant impact on the Council’s finances. It was explained that there was a long term strategy in place to address these changes .Generally a “red” financial risk related to a matter where the risk could not be quantified or was unknown .The Risk and Opportunity Manager stated that it was impossible to remove all risks the key issue was that department’s were risk aware and that specified actions were in place in order to manage that risk
65.7 RESOLVED That the Committee note the Corporate Risk Register 2008/09 as updated by The Council’s Management Team (TMT) on 12 November2008 and contained in Appendix 1 to the report. |
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Part Two Minutes - Exempt Category 3 Non-public minutes of the meeting held on the 4 November 2008 (circulated to Members only).
Minutes: 66.1 RESOLVED–That the Chairman be authorised to sign the Non-Public minutes of the meeting held on 4 November 2008 as a correct record (for copy see minute book). |
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Payroll Audit 2008 - Exempt Category 3 Report of the Director of Strategy & Governance (copy to follow; circulated to Members only).
Minutes: 67.1 The Committee considered a report of the Director of Strategy and Governance in respect of Payroll and Audit 2008 and reporting on actions required (for copy see minute book).
67.2 Councillor Oxley referred to the main areas of concern which had been identified by internal audit and enquired regarding whether the difficulties identified had resulted in employees receiving payment twice. The Head of the People Centre, Human Resources explained that had not occurred but that there was a dependence on individual line managers n ensuring that they were not tardy in passing on up to date information relative to “leavers” and “starters”. In answer to questions it was confirmed that Internal Audit had indicated that the Council’s internal systems for payroll management were considered to be secure, neither Inernal nor External Auditors had found material errors in their testing of the system and payment of employees.
67.3 In answer to questions of Councillors Alford and Watkins the Assistant Director, Financial Services explained that in instances where overpayment had been made to an individual who had since left the Council’s employment the matter was pursued; monies were only written off in very exceptional circumstances. In instances where a larger sum was involved an arrangement could be made for monies to be paid back over a specified period of time.
67.4 Councillor Kitcat referred to the fact that names of Officers and Members continued to appear on the intranet for a period after they had left and that this needed to be addressed.
67.5 Councillors Alford, Oxley and Watkins stated that it would have been useful to receive more detailed information relative to the monitoring process and to the systems in place to pick up and address any short comings. It was important for the Committee to feel reassured that staff (particularly new starters) were paid the correct salary and on time and that where any errors did occur rigorous systems were in place to address any shortcomings. The Chairman concurred in that view.
67.6 Councillor Watkins enquired regarding arrangements in place in respect of the City’s schools and it was explained that they held their own databases recording information including payments during absence which were then forwarded. Councillor Simson referred to the fact that any overall financial loss to the Council had not been quantified by auditors. The Assistant Director, Financial Services confirmed that although issues relating to payroll management had been identified further tests carried out by auditors had indicated that although improvements were required they were not material and would not impact on the Council’s finances overall.
67.7 The Chairman indicated that this matter was a great concern to members and that the Committee need to be assured that internal audit were confident that the appropriate measures were in place A further report was therefore requested to the next scheduled meeting of the Committee and should form the subject of periodic review there after It was agreed that any outstanding payroll issues needed to be addressed in advance of single status being rolled out across the Council.
67.8 RESOLVED–That the content of the report be noted and that a further update report be provided to the next scheduled meeting of the Committee and subsequently thereafter.
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Corporate Risk Management Action Plans Focus - Exempt Category 3 Report of the Director of Finance & Resources (circulated to Members only).
Note: Members are requested to bring their copies of the Corporate Action Plans circulated for the meeting held on 30 September 2008 with them to the meeting.
Minutes: 68.1 The Risk and Opportunity Manager updated Members relative to further Corporate Risks selected by the Risk and Opportunity Manager and the accompanying Risk Management Action Plans (MAPS), this which Members had confirmed that it was their wish to continue to focus on different (MAPS) meeting by meeting and /or to receive updates as appropriate. The Assistant Director, Major Projects and Venues also gave a presentation relative to progress on the Council’s own proposed major schemes and those where the Council was working in tandem with other partners or developers to facilitate schemes.
CR11–A Deserved Reputation for Excellence & a Staff Culture to Deliver
68.2 The Risk and Opportunity Manager explained that this risk had remained at the same risk score. However, the forthcoming Use of Resources judgement would be directly relevant and might lead to re-evaluation.
CR17-Investing in the City’s Sustainable Future
68.3 It was explained that this was a new Corporate Risk. It was recognised that the authority needed to address this matter as it would be instrumental in helping to meet its LAA targets.
68.4 Councillor Randall considered that although the detail included was self explanatory there were a number of imponderables .The Risk and Opportunity Manager explained that further work was required relative to this particular MAP, it represented work in progress. Although there were clear risks (downside risks) there were allso opportunities relative to sustainability and these needed to be balanced against one another. In answer to questions it was explained that Southern Water were progressing plans for the waste treatment facility at Peacehaven and it was possible therefore that a prosecution might not need to proceed.
68.5 Councillor Kitcat referred to the need for developers to be more creative in their design solutions, particularly in respect of “grey” water re-cycling The Chairman and Councillor Randall concurred in that view but considered that aside from continuing to give clear planning guidance and encouraging innovative design, this was not within the Council’s gift to control.
CR9-Major Projects
68.6 The Assistant Director, Major Projects and Venues explained that in face of the current financial downturn and against the back-drop of falling land values re-prioritisation of projects was taking place. This would include re-examination of the viability of existing projects. This risk remained “red” and was anticipated to remain so for the foreseeable future.
68.7 Councillor Kitcat stated that notwithstanding that several major schemes which had been deemed inappropriate had been refused by the Planning Committee over recent months it was very important to continue to encourage development in the City, particularly affordable units for key workers; such accommodation continued to be in very short supply. Councillor Randall concurred also referring to the need to meet the Decent Homes Standard. The Assistant Director explained that the Planning Department was seeking to work closely with developers at the pre-application stage existing planning briefs were also subject to continuing review.
68.8 The Assistant Director explained that in addition to work on its own major projects, progress reports were made to a Member/Officer Project Board (which had an advisory status to Cabinet), officers of the Council were also working in partnership to secure government and other funding streams. The Risk Register was updated regularly and reports were forwarded to meetings of the Cabinet.
68.9 In answer to questions, the Assistant Director explained that work was continuing on the Circus Street scheme and that notwithstanding that a number of revisions had been made a redevelopment scheme for the Open Market was progressing. The Preston Barracks scheme was currently the subject of further discussions as a number of changes had been made not all of which the Project Board felt able to support at the present time. The Committee considered that it would be valuable for them to receive regular updates setting out progress on major projects. The Assistant Director explained that he was currently preparing a report for consideration by the Overview and Scrutiny Committee and that he could also provide copies of that to this Committee’s first meeting of the New Year. Members were in agreement that this would be beneficial. Members highlighted that they wished to receive information in respect of the following:
-The King Alfred; -Preston Barracks; -Brighton City College; -American Express, Edward Street; -Black Rock; -The i360; -London Road
68.10 RESOLVED- That the position be noted and that a further up-date report in respect of Major Projects be submitted to the next scheduled meeting of the Committee |