To approve as a correct record the Minutes of the meeting of the Audit Committee held on 27 July 2009. 

RESOLVED

that the Minutes of the meeting of the Audit Committee held on 27 July 2009 be confirmed and signed by the Chairman as a correct record.

A request was made that a note be brought to the next full meeting of the Committee to confirm the process followed for any amendments noted to Minutes.

To receive an update from the Audit Commission on the progress todate with the signing off of the three legacy authorities Statement of Accounts, in advance of the special meeting to be held on 19 October 2009 for the final findings and sign off.

At the meeting of the Audit Committee held on 27 July 2009, it was noted that the Audit Commission had planned to audit the draft accounts during August and September and report their findings, if possible, at the September meeting.  The Audit Commission had largely completed their audits of the Bedfordshire County Council Pension Fund and Mid Beds District and Bedfordshire Council Councils’ draft accounts, and were in a position to report draft Annual Governance Reports to the Committee in respect of these. 

The Audit Commission reported that the audit of South Beds District Council was a little further behind.  They attributed this to staff reductions relating to Reorganisation, and the inherent complexities associated with capital accounting in housing authorities.  South Beds District Council was the only one of the legacy authorities which had a housing stock.

Bedfordshire County Council Pension Fund

The Audit Commission had reviewed the Bedfordshire County Council Pension Fund and their findings were due to be presented to the  Pension Panel that afternoon.  There had been no problems or concerns raised as a result of the review.  It was noted that the Audit Commission were required to highlight any issues which exceeded their 1% materiality figure.  This figure had been a higher percentage in past years.  It was noted that a difference in the investment fee charged by the fund managers versus the estimate had resulted in a discrepancy of £82k.  This figure was not material but had to be mentioned because of the change in percentage of the materiality figure.

Assurance had been given to the Commission that the monthly returns with contributions listed were correct.

Members noted a number of matters which had occurred because the last year had not been a normal year due to the Local Government Reorganisation.  The Risk Register had not been reviewed since May 2008 until now.  An explanation was given as to why it had not been possible to review it in May 2009.

The Committee and the Director of Corporate Resources requested minor amendments be made to the letter of representation due to the unique circumstances surrounding the last year.  The Audit Commission confirmed they would be happy to discuss the wording with the Director of Corporate Resources outside of the meeting. 

Bedfordshire County Council

The Audit Commission had reviewed the Bedfordshire County Council draft accounts and their findings were still to be finalised.  A question had arisen in relation to the impairment factor that Mouchel had used to calculate the decrease in value on fixed assets in schools.  Mouchel had used a percentage of 50% whilst the Audit Commission had used a percentage of 35%.  This had created a difference of £66m.  Mouchel had been requested to provide clarification on how they had decided on a 50% decrease percentage.  The information was due to the Audit Commissions valuers by the end of the week.  It was noted that as fro the Pension Fund, the Audit Commission were required to highlight any issues which exceeded their 1%  ...  view the full minutes text for item 37.

If any

The Chairman informed the Committee that he would be varying the order of the items of business to consider next  the Audit Needs Assessment – Progress Report in advance of the 2009 -10 Audit Plan.

This report outlines the approach adopted for undertaking the Audit Needs Assessment for Central Bedfordshire in order to develop a Three Year Strategic Audit Plan for future years.

The Committee received and considered the report of the Director of Corporate Resources which outlined the approach adopted for undertaking the Audit Needs Assessment for Central Bedfordshire in order to develop a Three Year Strategic Audit Plan for future years.  The Audit Committee at their meeting held in April 2009 had outlined the approach they wished to be used.  The Head of Audit confirmed that approximately 200 entities had been evaluated and that the service area risk registers were still outstanding.

The Head of Audit provided Members with two examples of completed risk assessment sheets, one was for Housing and Council Tax Benefits and one  for Payroll Managed Audit.  The information was currently being loaded onto a database (Galileo) which provided the potential to sord data using a number of criteria.  Housing and Council Tax Benefits was scoring higher than normal due to the Local Government Review (LGR) and new systems being used.  It was anticipated that less audit resources would be required in future years for some areas once the initial system changes had bedded in.

The Committee noted that the Three Year Strategic Plan would include a rolling programme of work on the following:

·        Core systems (managed audits)

·        Systems reviews of service areas, processes and activities (including governance arrangements)

·        Reviews of key contracts and partnership arrangements to ensure compliance with the Council’s Financial Procedures, Codes of Practice and Contract Procedures.

·        Information Communication and Technology activities across the whole council

·        Pro-active Fraud work, including investigations

·        Sustainability and Climate Change

·        Follow up work to ensure implementation of the Internal Audit recommendations.

The above work had highlighted the following four themes as risk areas:

• Fundamental systems, including Payroll and Cash and Banking (income)
• Contract Issues, including specifications, management and monitoring arrangements
• Partnership arrangements
• Commissioning

The Committee congratulated the Audit Team for their excellent work to date.

RESOLVED

that the progress made to date as indicated in the Audit Needs Assessment Progress Report of the Director of Corporate Resources, be noted.

This report outlines the approach adopted for creating the audit plan for Central Bedfordshire for 2009/10, and outlines work undertaken to date.

The Committee received and considered the report of the Director of Corporate Resources which outlined the approach adopted for creating the audit plan for Central Bedfordshire for 2009/10, and outlined work undertaken to date.

The Assistant Director of Audit and Risk informed the Committee that the Audit Plan was built on the Audit Needs Assessment.  A brief overview of the work to date highlighted that three teams had been brought together, new software was being used, and all of the audit teams were being relocated to Bedford.  These factors had all impacted on the amount of resource which was available in the first year of Central Bedfordshire Council. There would be 63% productive Audit days.  In future years it was anticipated that this would  increase to between 75 – 80% productive Audit days.

Appendix A of the report showed the areas which would be covered by the Managed Audits. The Committee noted that updates of all the work undertaken throughout the year would be brought to future meetings.

It was noted that the first performance management report would be presented to the committee in January and it was recognised that the Audit Plan had to be flexible.

In response to a question from Members it was noted that the Audit staff were considerably fewer than originally employed by from the three legacy authorities but to cover our statutory duties, if more resources were needed to carry out the plan then this would be reviewed.

RESOLVED

1.      that the 2009/10 Audit Plan as detailed in the report of the Director of Corporate Resources be approved;

2.      that the progress made to date as detailed in the report of the Director of Corporate Resources be noted.

To note items to be considered at future meetings.

The Assistant Director Audit and Risk informed the Committee that the next meeting would be the special Audit Committee Meeting to deal with the signing off of the three legacy authorities accounts.

RESOLVED

that the future work programme including for the special meeting as described above be approved.

To propose the holding of a Special meeting of the Audit Committee on Monday 19 October 2009 to receive the reports of the Audit Commission in relation to the Statement of Accounts for the three legacy authorities.

The Committee were informed by the Audit Commission that the proposed date for the Special Audit Committee meeting (19 October 2009) would need to be changed due to a scheduling conflict.  It was agreed that the Democratic Services Officer would liaise with the Chairman, Officers and the Audit Commission to arrange a suitable alternative.  The Committee would be notified as soon as the date was known.

It was noted that at the Council meeting to be held on 24 September 2009, that changes might be made to the composition of the Committee resulting in the removal of Cllr D Bowater, Cllr Mrs A Barker and Cllr Mrs C Turner from the Committee due to a conflict of interest because of their membership of another committee.  If this was the case, substitutes would be asked to attend the special Audit meeting if replacements had not been appointed by then.