Agenda and minutes
Venue: Boardroom - Brent Brent Civic Centre, Engineers Way, Wembley, HA9 0FJ
Contact: Joe Kwateng, Democratic Services Officer 020 8937 1354, Email: joe.kwateng@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.
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Deputations Minutes: None. |
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Minutes of the previous meeting held on 26 June 2014 PDF 81 KB Minutes: RESOLVED:-
that the minutes of the previous meeting held on 26 June 2014 be approved as an accurate record of the meeting. |
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Matters arising Minutes: ISA 260 for 2012/13 It was noted that the Chief Finance officer had circulated the ISA 260 to all members, as requested.
Section 106 legal agreement. Members noted that the breakdown of the Council’s receipts for Section 106 legal agreements had not been circulated and requested that the Operational Director of Planning and Regeneration be reminded to do so. |
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Statement of Accounts 2013/14 and External Auditor's Report PDF 77 KB This report is intended to identify any changes to the accounts, unadjusted mis-statements or material weaknesses in controls identified during the audit work. It also provides the overall value for money conclusion for the year. The accounts and the ISA260 report, reflecting the current position, are attached as appendices 1 and 2 to this report. Based on the current position KPMG intends to give unqualified opinions on the Council and Pension Fund accounts and a clear value for money conclusion.
Representatives from KPMG will attend the meeting to provide an update on the audit and respond to any matters raised by the Committee. Additional documents:
Minutes: The Committee considered a report that summarised the key findings arising from the audit work by KPMG (external auditors) of the Authority’s 2013-14 financial statements, Brent Pension Fund Scheme administered under the Local Government Pension Scheme and KPMG’s 2013-14 conclusion on the Authority’s arrangements to secure economy, efficiency and effectiveness in its use of resources (‘VFM conclusion’).
Phil Johnstone, Director of KPMG stated that KPMG anticipated issuing an unqualified audit opinion on the Authority’s financial statements by 30 September 2014 and an unqualified audit opinion in relation to the Pension Fund’s financial statements. KPMG also expected to report that the wording of Authority’s Annual Governance Statement (AGS) accorded with their understanding. He reported that a material adjustment of £28.7 million to the primary financial statements which related to the valuation of additions to Council dwellings was identified. In addition five other non trivial audit adjustments and a small number of trivial presentational adjustments were identified. He emphasised that these did not impact on the General Fund balance.
He informed members that KPMG worked with officers throughout the year to discuss the significant audit risk area identified arising from the triennial valuation of Brent Pension Fund. In his view, the Authority addressed the issues appropriately. The standard audit risk of management override of controls and the audit testing of journal entries, accounting estimates and significant transactions outside the normal course of business or unusual were considered but did not identify any issues. The Director added that the changes by the Authority to the format of the financial statements this year to help make them reader friendly for interested parties was a welcome approach and demonstrated considerable thought. Phil Johnstone found that the financial statements were prepared to a good standard with working papers ready for the start of the audit and that officers dealt efficiently with audit queries. He continued that the Authority’s organisational control environment was effective and that no significant weaknesses in controls over key financial systems were identified.
Phil Johnstone drew members’ attention to two recommendations made in relation to strengthening the Authority’s control environment both relating to Plant, Property and Equipment and clarified them as follows; on the revaluation of Council dwelling additions, the Authority’s surveyor should review the amount spent and calculate the increase in market value of Council dwellings as part of the closedown process for 2014/15; on the valuation of the Civic Centre, the components of the Civic Centre should be separately included in the fixed asset register and depreciated over their respective estimated useful lives. He added that management response to both recommendations was positive with anticipated completion date of March 2015.
A member observed that the statement of accounts did not mention payments to the current Chief Executive and enquired as to the reasons for the non-disclosure. He also enquired as to whether the Council’s Private Finance Initiative (PFI) contracts represented value for money. In responding to the Chief Executive’s salary, the Chief Finance Officer stated that the amount paid was ... view the full minutes text for item 5. |
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2014/15 Mid year treasury management PDF 149 KB This report updates Members on treasury activity during the 2014/15 financial year Minutes: Members received a report from the Chief Finance Officer that provided an update on treasury management for 2014/15, in accordance with the ‘CIPFA Code’ which recommended that members be informed of treasury management activities at least twice a year. Mick Bowden (Operational Director of Finance) advised the Committee that the Council continued to seek opportunities to minimise current and longer-term costs, commensurate with the overriding need to safeguard the Council’s resources. With that in view, the successful identification, monitoring and control of risk were central to the Council’s treasury management strategy.
The Operational Director drew members’ attention to the Public Works Loan Board (PWLB) rates and added that due to its simplicity affordability and ease, PWLB represented a strong advantage over other sources of long term funding. Members heard that through the Council’s adopted cautious and considered approach no loans have been raised so far this year. He continued that officers had complied with its Prudential Indicators for 2014/15, which were set in March 2014 as part of the Council’s Treasury Management Strategy Statement (TMSS) and confirmed that the Council’s treasury management activity during the current financial year had been in accordance with the strategy and budget approved by the Council for 2014/15.
In his closing remarks, Operational Director informed the meeting that a member training session on treasury management to be delivered by Arlingclose was being organised prior to the start of the next meeting which would be held on 24 November 2014. The training session would commence from 5.00pm.
On behalf of the Committee, the Chair expressed appreciation to KPMG, the Chief Finance Officer and his team for an excellent treasury management progress report.
RESOLVED:-
that the 2014/15 mid year treasury management report be noted. |
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Internal audit progress report 2014/15 PDF 175 KB This report provides an update on progress against the internal audit plan for the period 1st April 2014 to 31st August 2014. The appendix to the report also summarises those reports from the 2013/14 plan which have been finalised since the last committee meeting. The report also provides a summary of counter fraud work for 2014/15. Additional documents: Minutes: Members considered a report which provided an update on progress against the internal audit plan for the period 1 April 2014 to 31 August 2014. The report also provided a summary of counter fraud work for 2014/15 and the appendix to the report summarised those reports from the 2013/14 plan which had been finalised since the last committee meeting.
Simon Lane Head of Internal Audit and Investigation informed members that of the Internal Audit Plan for 2014/15 of 1,200 days, 905 days would be delivered by Mazars and a further 295 days would be delivered in-house. In setting out the key points, he stated that there were 78 projects on the current plan (excluding follow up and advisory work) and that work had commenced on 39 of them. 6 projects were removed from the original agreed plan which had been replaced with 4 others and that 10 projects had been delayed at the request of management from quarters 1 or 2. 18 projects had been completed to draft or final stage of which 14 had an audit opinion associated with them; 11 substantial and 3 limited. The other projects were grant certifications which did not have an assurance rating attached to them.
Simon Lane drew members’ attention to the list of limited assurance reports together with recommendations made and deadlines for implementation. Members noted that limited assurance report was issued for the marketing of space available for hire at the Civic Centre, sickness absence management, adult social care, millennium centre, demolition of properties in South Kilburn and Children and Young People which could impact on the council’s funds. He pointed out that 3 further limited assurance reports (Adolescence, IT contracts between departments and BHP former tenants arrears) issued did not impact on the council’s funds. Members welcomed a team from Children and Young People Gail Tolley (Strategic Director, Children and Young People), Graham Genoni (Operational Director, Social Care) and Nigel Chapman (Head of Placements) who were in attendance to brief the Committee on actions taken by the department to address limited assurance report issued .
Gail Tolley (Strategic Director, Children and Young People) in setting out the context stated that the Frameworki financial system had been introduced in early 2014. The fieldwork for this audit was undertaken in February 2014 with a draft report completed in May 2014 with a final version issued in September 2014. Following the fieldwork, prompt actions were taken to address issues raised in the report. Members heard that actions had been taken in the following priority areas; (i) Document retention system was now in place and firmly established and that a framework agreement was in place with all fostering agencies using the West London Alliance framework. (ii) Care plans were being completed on time, signed off by a manager with an additional tracking system for monitoring in place. (iii) Statutory time frames for Looked After Children (LAC) were being met and improved monitoring system was in place following the appointment of a new ... view the full minutes text for item 7. |
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This report presents the council’s current Corporate Risk Register. An appendix to the register is also attached.
Additional documents: Minutes: The Committee received a report that provided an update on the Council’s current corporate risk register. Simon Lane (Head of Audit and Investigations) informed members about changes to the scoring of financial impacts with limits increased by 50% for different categories so as to make it easier to differentiate between levels of risks. Members also heard that there had been a number of changes since the Committee last reviewed the risk register in March 2014 which he clarified.
Each strategic risk had now been linked to an existing Borough Plan theme, the key objectives for the council with a number of updates made to reflect the current position. He continued that Operational Risks within Regeneration and Growth had been promoted from the departmental register onto the corporate register due to high risk scores. These included the risk of lack of business investment in the borough resulting in reduced National Non Domestic Rate (NNDR) receipts; customer service transformation; and Employment training initiatives.
He advised members on the following risks which had been removed due to reduced risk scores; (i) assaults within the Civic Centre that due its low risk scores; (ii) recycling target not being met by March 2014 and mobilisation of public realm contract within Environment and Neighbourhood; (iii) fraud risk; failure to produce medium term financial strategy; Pension fund position and IT systems failure within Finance and IT. A new risk concerning data security was added however; (iv) all existing risks within the Assistant Chief Executive’s Department although two new risks concerning public health were added.
Councillor Warren queried whether the Troubled Families Programme was considered a risk. Simon Lane responded that there were financial risks attached to non achievement of the programme. Councillor Warren also commented that there were risks also to those families identified as being troubled families if the council did not deliver on the programme.
RESOLVED:-
that the Council’s updated Corporate Risk Register be noted. |
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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: None. |
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Date of next meeting The next scheduled meeting of the Audit Committee is scheduled to be held on 7 January 2015 at 7.00pm Minutes: Members noted that an additional meeting had been scheduled to take place on 24 November 2014 and that a training session on treasury management by Arlingclose would commence from 5.00pm. |