Agenda item
Statement of Accounts 2009/10 Annual Governance Report
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.
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. The Chair concurred with this suggestion, stating that this had already been agreed but needed to be acted upon. The Chair enquired whether sufficient responses had been provided to the Audit Commission in respect of issues concerning Adult Social Care and Housing. He also enquired whether there had been any response in respect of the 20 day period for statutory inspection of accounts. Councillor Van Kalwala asked what significance were the problems concerning Adult Social care and school bank accounts and payrolls and whether the introduction of the new council wide Financial Management System would provide longer term benefits.
In reply, Andrea White confirmed that the appropriate working papers had now been received in respect of Adult Social Care, Housing and Schools bank accounts and payrolls. However, she felt there was room for improvement in Adult Social Care and Housing and advised that work needed to be undertaken to show a clear audit trail for each individual transaction. Andrea White felt that the new financial system would help to improve tracking transactions.
Duncan McLeod advised that the unqualified audit opinion needed to be signed by the Chair of the Audit Committee, Clive Heaphy (incoming Director of Finance and Corporate Resources) and himself by the deadline of 30 September and the revised Annual Governance report would be circulated to Members on the same day. Duncan McLeod explained that under the new Financial Management System, all reporting on such matters needed approval by the Director of Finance and Corporate Resources, thus allowing him more direct control. However, the problems experienced related to the 2009/10 accounts and could not be attributed to the introduction of the new Financial Management System. Duncan McLeod advised that the Brent Pension Fund Sub-Committee had no comments to pass to the Audit Committee in respect of the pension fund. He felt that an independent pensions fund advisor was not necessary for the Audit Committee as the pension fund made up only a small part of the committee’s work programme. It was noted that there had been no representations made from the public in respect of the statutory 20 day period for inspection of accounts.
Clive Heaphy added that consideration with regard to the audit next year was underway, and a new process would be trialled in December prior, which if successful, would be implemented. He advised that it was not necessary to accelerate the internal audit programme and Members noted that school headteachers would be sent letters stressing the need to respond in timely fashion to the Audit Commission’s requests for paperwork. Clive Heaphy advised Members that adding an independent member to the Audit Committee was under consideration.
Members agreed to Councillor Van Kalwala’s request that concerns with regard to Adult Social Care and Housing be bought to the attention of the Director of Housing and Community Care and Andrea White agreed to provide Members with a briefing note in respect of this.
RESOLVED:-
(i) that the Annual Governance Reports from the Audit Commission and the letter of representations to the Audit Commission be noted; and
(ii) that it be noted that the accounting policies were correctly followed and that no issues arising from the financial statements and the audit needed to be brought to the attention of Full Council.
Supporting documents:
- statementofaccounts0910, item 4. PDF 69 KB
- annualgovernancereport, item 4. PDF 127 KB
- annualgovernancereport-pensionfund, item 4. PDF 229 KB