Agenda and minutes
Venue: Committee Room 4, Brent Town Hall, Forty Lane, Wembley, HA9 9HD. View directions
Contact: Toby Howes, Senior Democratic Services Officer 020 8937 1307, Email: toby.howes@brent.gov.uk
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Declarations of personal and prejudicial interests Members are invited to declare, at this stage of the meeting, any relevant financial or other interest in the items on this agenda. Minutes: None declared. |
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Minutes of the previous meeting held on 15 June 2010 PDF 100 KB The minutes are attached. Minutes: RESOLVED:-
that the minutes of the previous meeting held on 15 June 2010 be approved as an accurate record of the meeting. |
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Matters arising Minutes: None. |
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Statement of Accounts 2009/10 Annual Governance Report PDF 69 KB The Audit Committee has responsibility for reviewing the annual statement of accounts to ensure that appropriate accounting policies have been followed and, where required, that concerns arising from the financial statements or from the audit are brought to the attention of the Council. The basis for this consideration is the Annual Governance Report. Additional documents: Minutes: Duncan McLeod (Director of Finance and Corporate Resources) gave a brief introduction to the report, explaining that although the accounts had been approved by the General Purposes Committee on 29 June 2010, the Audit Committee’s role involved responsibility for reviewing the annual statement of accounts to ensure that appropriate accounting policies had been followed and where necessary, concerns arising from the financial statements or from the audit are bought to the attention of the council. Members noted that the Audit Commission were in the process of completing the audit of 2009/10 accounts and the committee was requested to respond to an action plan put together by the Audit Commission.
Andrea White (District Auditor, Audit Commission) then addressed the committee and advised that work had continued on the Annual Governance report since the draft version provided to Members and that it was almost complete. Members noted that one final check was required to ensure the necessary changes to the account was needed and the unqualified opinion would be submitted on 30 September. Andrea White stated that overall the council’s papers were sound with just a few issues of some concern. Members heard that because of slow or incomplete responses to requests for working papers from Adult Social Care and Housing, the additional work required by the Audit Commission in these areas meant that the audit fee would increase by £15,000. The committee noted that there had been difficulties in respect of schools bank accounts and payrolls and an update concerning their assurances would be included in the final report that would be sent to Members to approve.
Paul Viljoen (Audit Commission) commented that additional work had been required on the Housing PFI following queries raised and revised accounting entries were awaited. He confirmed that the council had corrected entries in respect of £12.7m of bad debt write offs and the query with regard to £200,000 of expenditure for repairs had now been resolved. The issue with regard to the Willesden Leisure Centre PFI remained under review and would be subject the council’s own revaluation of the property.
Paul Viljoen then referred to the Annual Governance report in respect of the council’s pension fund. He confirmed that the review of the Pension Fund annual report had been completed, however £3,000 was to be added to the audit fee based on additional work to resolve issues and to follow up matters where working papers were not complete. Members noted that errors in relation to investment values had now been amended in the financial statements.
During Members’ discussion, Councillor Cummins sought assurances that inadequate working papers or late responses would not recur, especially as it resulted in additional charges for the council and whether the internal audit programme needed to be accelerated. He also enquired whether problems experienced were due to the introduction of a new Finance Management System. Councillor Cummins suggested that an external pension fund adviser be appointed to advise the Audit Committee and the Brent Pension Fund Sub-Committee on such matters. ... view the full minutes text for item 4. |
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Audit Commission review of Council arrangements in respect of Copland School PDF 64 KB This report introduces the Audit Commission’s report on the council’s arrangements in respect of Copland School both prior to and subsequent to receipt of allegations of financial mismanagement. This report provides some additional background to the arrangements and sets out the council’s response to the recommendations made. Additional documents: Minutes: Duncan McLeod introduced the report which included the Audit Commission’s review of the internal audit carried out in respect of Copland School. The Audit Commission had made a number of recommendations in respect of this and Duncan McLeod then referred to the council’s responses to these as set out in the report.
Andrea White then presented the Audit Commission’s report on the review of Council arrangements in respect of Copland School. Members were provided with the background to the Copland School case and the approach taken by the Audit Commission in reviewing arrangements. Andrea White then highlighted some of the weaknesses identified in the review, which included the fact that although there were checks to ensure compliance with council’s scheme for financing schools, Copland School did not have satisfactory internal audit coverage and so this control had not worked in practice. However, once the council was alerted to Copland School’s failings, it acted swiftly and decisively to ensure that those responsible were held to account and suitably replaced. Members noted the recommendations made by the Audit Commission in the report. Andrea White advised that the Audit Commission were not issuing a public interest report as matters were already in the public domain. In addition, the council had recognised that its arrangements did not work effectively and was taking action to strengthen these arrangements.
Simon Lane added that as a foundation school, Copland School had chosen the option of being audited by an external provider rather than the council. All schools that had decided to use an external provider were provided with guidance as to what would be required of them. However, the external auditor for Copland School had failed to identify problems and Simon Lane acknowledged that the council had not monitored such schools as closely as they may have done. He advised that the recommendations of the Audit Commission had been taken on board and all foundation schools were now required to be audited internally.
During Members’ discussion, Councillor Cummins, in acknowledging that all foundation schools were now internally audited, enquired whether problems at other schools had been identified and would such anomalies now be spotted more rapidly. Councillor Cummins also enquired about the possibility of asking schools to introduce a skills matrix when appointing governing body members to ensure that those appointed had the necessary skills with regard to auditing issues. Councillor Van Kalwala referred to paragraph 30 of the Audit Commission’s report and suggested that the council should have requested a copy of the audit engagement letter or written reports produced by the external auditor in order to be able to check more thoroughly for any anomalies. He asked for timeframe details in respect of implementing the Audit Commission’s recommendations.
The Chair enquired whether a record of Copland School’s payroll was retained by the council and he suggested that the accountant for each school should receive training every six months.
In reply, Andrea White stated that she was content with the council’s responses to the Audit Commission’s ... view the full minutes text for item 5. |
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Audit Commission documents PDF 52 KB This report includes a number of documents produced by the Audit Commission in their role as the Council’s external auditors. Additional documents:
Minutes: Andrea White updated Members on other Audit Commission documents, including a high level review of the council’s One Council project. Andrea White reported that good progress had been made and strong leadership and a highly visible champion for change had been demonstrated through the Chief Executive. Some concerns had been raised in respect of demonstrating how members played a role in scrutinising the project, the impact of shortening delivery timescales on capacity and how the financial implications of individual projects are being monitored.
Paul Viljoen advised that in respect of the joint review of the council and NHS Brent in respect of Health Inequalities, both organisations had shown a strong commitment to tackle health inequalities and demonstrated strong leadership. In addition, there had been a number of actions taken to tackle rising diabetes and Tuberculosis in Brent.
Andrea White also advised that the Audit Commission had revised the approach to value for money and an update on guidance would be provided at a future meeting. She confirmed that the Audit Commission was to be abolished as of 2012, however she would remain as the council’s district auditor until this time, when subject to legislation, the council would appoint its own auditor. The committee, the Chief Executive and the Director of Finance and Corporate Resources would be updated of any further arrangements in respect of this.
RESOLVED:-
that the report on Audit Commission documents be noted. |
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Internal Audit terms of reference and strategy PDF 53 KB This report sets out the Internal Audit Terms of Reference and Strategy for 2011 to 2013. Additional documents: Minutes: Simon Lane presented the report, stating that an Audit Terms of Reference was required by local authorities in accordance with the CIPFA Code of Practice on Internal Audit in the United Kingdom. The Code also requires the Head of Audit to produce an audit strategy outlining the objectives, outcomes and delivery methods which must be approved by the Audit Committee. The strategy proposed was set out over a two year period. Simon Lane then referred to internal audit terms of reference as set out in appendix one of the report.
RESOLVED:-
that the Terms of Reference and Strategy for Internal Audit be approved. |
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Internal Audit progress report PDF 59 KB This report sets out a summary of the work of Internal Audit for the period from 1st April 2010 to 31st August 2010. The attached report at Appendix 1 provides detail, together with the assurance ratings and priority 1 recommendations of those audits for which the final reports have been issued since April 2010. Additional documents: Minutes: Simon Lane updated Members on progress with the internal audit and provided a summary of progress from 1 April to 31 August 2010. Members noted that as of end of August, a total of 331 days had been delivered against the overall plan, representing about 28% plan, although more had been completed since then. Simon Lane then drew Members’ attention to the summary table of audited items. Whilst a number of items had obtained a substantial assurance opinion, there were a few achieving only limited assurance, such as Internal Financial Controls – Children and Families, which was of some concern.
During Members’ discussion, Councillor Cummins enquired how far below the substantial assurance the Internal Financial Controls – Children and Families item was and how was this situation being addressed.
Simon Lane responded that in respect of the Internal Financial Controls – Children and Families, the five priority one recommendations made meant that there needed to be significant improvement. In particular, it was the importance rather than the number of issues raised that was cause for concern. It was noted that Children and Families had attached deadlines to carry out the recommendations and this would be followed up by the Audit Team. In addition, the anomalies had occurred prior to the Finance Modernisation project and it was anticipated that changes since then would indirectly benefit this item. In response to comments from Clive Heaphy, Simon Lane acknowledged that all cash and cheques needed to be stored in a locked safe and that an update in respect of the Ark Academy, where a response was yet to be received, would be provided to Members.
Phil Lawson (Deloitte) advised that there had been an improvement in the ratio of substantial to limited assurances since June 2010 from approximately 50%/50 % to 63%/37%.
RESOLVED:-
that the progress made in achieving the 2010/11 Internal Audit Plan be noted. |
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2010 Treasury Annual report PDF 135 KB This report attaches the 2010 Treasury Annual report that was approved by Full Council on 13 September, and updates members on recent treasury activity. Minutes: Duncan McLeod presented the report and advised Members that the lending list continued to remain very restrictive because of the economic circumstances. The list would continue to be reviewed subject to changing market conditions.
RESOLVED:-
that the 2010 Treasury Annual Report and recent treasury activity be noted. |
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Date of next meeting The next scheduled meeting of the Audit Committee is scheduled for 16 December 2010. Minutes: It was noted that the next meeting was scheduled to take place on Thursday, 16 December 2010 at 7.30 pm. |
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Any other urgent business Notice of items to be raised under this heading must be given in writing to the Democratic Services Manager or his representative before the meeting in accordance with Standing Order 64. Minutes: Duncan McLeod
On behalf of Members, Councillor Cummins thanked Duncan McLeod for his contribution to the committee and the council overall and wished him well for the future upon leaving the council on 1 October. |