To approve as a correct record the minutes of the meeting of the Audit Committee held on 24 June 2013 (copy attached). 

RESOLVED

that the minutes of the meeting of the Audit Committee held on 24 June 2013 be confirmed and signed by the Chairman as a correct record.

To receive from Members any declarations of interest.

None.

To receive any announcements from the Chairman and any matters of communication.

None.

To receive petitions from members of the public in accordance with the Public Participation Procedure as set out in Annex 2 of Part A4 of the Constitution.

No petitions were received from members of the public in accordance with the Public Participation Procedure as set out in Annex 2 of Part A4 of the Constitution.

To receive any questions, statements or deputations from members of the public in accordance with the Public Participation Procedure as set out in Annex 1 of Part A4 of the Constitution.

No questions, statements or deputations were received from members of the public in accordance with the Public Participation Procedure as set out in Annex 1 of Part A4 of the Constitution.

To present for approval the 2012/13 Statement of Accounts for Central Bedfordshire Council and the letter of representation to the external auditors.

The Committee considered a report by the Chief Finance Officer which presented the 2012/13 Statement of Accounts for approval.  The meeting was aware that the Accounts and Audit Regulations 2011 required local authorities to approve and publish their annual accounts together with the audit opinion and certificate by 30 September following the end of the financial year. 

In addition, auditing standards required an authority’s external auditor to obtain appropriate written representation from the council about the financial statements and governance arrangements.  The Committee was also asked, therefore, to approve a draft letter of representation to its external auditors, Ernst & Young LLP.

A copy of the annual accounts was attached at Appendix A to the report and a copy of the draft letter of representation to Ernst & Young at Appendix B.

Members were reminded that, as required by the 2011 Regulations, the Chief Finance Officer had certified the 2012/13 annual accounts in June.  A presentation on the annual accounts had been made to the Audit Committee and other Members at its last meeting on 24 June (minute A/13/55 refers) followed by a period of public inspection which had closed on 2 August.  The annual accounts had also been subject to an external audit validation by Ernst & Young and the resulting Audit Results Report, which formed item 8 on the meeting agenda, was considered immediately following the Chief Finance Officer’s report.

The Chief Finance Officer advised the meeting that any changes made to the annual accounts had been minor and had not required any material adjustment to the original Statement of Accounts.  The balance of General Fund Reserves was unaltered.  The audit had identified one error and this related to the reversal of a prior year adjustment.  The Ernst & Young Director present confirmed that this error did not affect the General Fund balance.

The Committee then turned to consider the Audit Results Report from the Council’s external auditor, Ernst & Young.  The report summarised the findings from the now completed 2012/13 audit and included the message arising from Ernst & Young’s audit of the Council’s financial statements and the results of work undertaken to assess the Council’s arrangements to secure value for money in its use of resources.

The Ernst & Young Director worked through the report highlighting various matters of note.  He advised the meeting that the external auditor was now in the final stages of its audit work and was checking amendments.  In connection with that part of his report dealing with audit risks in arrangements to secure economy, efficiency and effectiveness the Ernst & Young Director referred to the Council’s position in the lowest (worst) 10% of its nearest statistical neighbours for the average number of days taken to process both new claims and changes in circumstances for housing and council tax benefits.  In addition he referred to the number of cases in the last three years where benefits had been assessed incorrectly.  However, the Ernst & Young Director stated that he was also aware of the Council’s efforts to address these issues and  ...  view the full minutes text for item 66.

To receive an information paper on local government financial issues from Ernst & Young LLP.

The Committee received a sector information paper on local government financial issues from Ernst & Young LLP.

Arising from the inclusion of an article on the national Local Government Pension Scheme review a Member, who sat on the Pension Fund Committee administered by Bedford Borough Council, commented that, whilst Central Bedfordshire Council was able to receive updates on national developments in the Scheme, there was no opportunity available for the Council to receive reports from the Pension Fund Committee on local developments. 

NOTED

the Local Government Sector information paper.

RESOLVED

that consideration be given to the possibility of a regular report being submitted to Council on matters of interest arising from the deliberations of the Pension Fund Committee administered by Bedford Borough Council.

To consider an update on the progress of work by Internal Audit for 2013/14.

The Committee considered a report by the Chief Finance Officer which provided a progress update on the status of Internal Audit work for 2013/14 for the period up to the end of August 2013.

The report set out progress on the following 2013/14 Internal Audit plan matters:

• Managed Audits
• Other Audit Work
• National Fraud Initiative (NFI)
• Fraud and Special Investigations
• Schools
• Public Sector Internal Audit Standards
• Performance Management

The Head of Internal Audit and Risk introduced the report and advised the meeting that, with regard to the 2012/13 Managed Audit reviews, the final report for IT Disaster Recovery had now been issued and had received limited assurance.  She also drew Members’ attention to the approach to be taken for the 2013/14 Managed Audit reviews.  The meeting noted that this remained unchanged from previous years with the exception that, for each review, reporting would be in one phase rather than two.

NOTED

the progress made against the 2013/14 Internal Audit Plan.

To consider an overview of the Council’s risk position as at August 2013.

The Committee considered a report by the Chief Finance Officer which provided an overview of the Council’s risk position as at August 2013.

The Head of Internal Audit and Risk explained that, in order to ensure that the risk register remained appropriate and correctly worded, a detailed refresh of the strategic risk register was in progress.  As a result a detailed summary of the updated risks and their resulting risk scores had still to be developed and a dashboard summary had not been attached to the Head of Internal Audit and Risk’s report as was the norm.

Members noted that a detailed update reflecting the revisions outlined in the Head of Internal Audit and Risk’s report would be presented to the next meeting of the Committee.

NOTED

the overview of the Council’s risk position as at August 2013.

To consider a summary of high risk recommendations arising from the Internal Audit reports together with the progress made in their implementation.

The Committee considered a report by the Chief Finance Officer which summarised the high risk recommendations arising from Internal Audit reports.  The report also outlined how the recommendations would be monitored and progress made in implementing them.

The Head of Internal Audit and Risk advised Members that, of the two outstanding high priority recommendations made prior to April 2012, the recommendation relating to the 2009/10 Payroll Audit had now been addressed and the revised processes would be reviewed as part of the 2013/14 Audit Plan to provide assurance that the new procedures were robust.

With regard to the remaining high priority recommendation, which related to the 2009/10 SAP Access and Security (including IT Disaster Recovery), the meeting noted that work was in progress to address it.  Further, in order to enable the Committee to monitor the progress made, the recommendation had been broken down into a number of individual activities.  An update on the progress made would be provided at future Committee meetings.

In relation to the above issue the Chairman referred to Appendix A to the Head of Internal Audit and Risk’s report and requested that plain English be used in future reports.

NOTED

the report on the high risk recommendations arising from Internal Audit reports and the progress made in implementing them.