PAPER A

 

MINUTES OF THE AUDIT COMMITTEE HELD ON TUESDAY, 25 OCTOBER 2005 IN COMMITTEE ROOM 2, COUNTY HALL, NEWPORT, COMMENCING AT 6.00 PM

 

Present :   

Cllrs Anne Bishop (Chairman), Ivan Bulwer, Mike Cunningham, Jonathan Fitzgerald-Bond, Barbara Foster, Susan Scoccia

 

Apologies :    

Cllr Garry Price

 

Also in attendance: 

 

      Cllr David Williams

 

Officers Present:

 

Mr Gareth Hughes, Mr Stuart Fraser, Mr Ged Richardson, Mr Paul Thistlewood, Miss April West

 

Audit Commission Representatives:

 

Mr Alistair Rankine, Mr Nigel Smith

 

 


9.                  MINUTES

 

The Committee was asked to approve the minutes of the Audit Committee meeting held on 22 September 2005 and the minutes of the meeting of the Audit Panel held on 16 February 2005.

 

Cllr Mike Cunningham had chaired the Audit Panel meeting in question and advised Members that the minutes were a true record.

 

RESOLVED :

 

            THAT the minutes of the Audit Committee meeting held on 22 September 2005 and the Audit Panel meeting held on 16 February 2005 were confirmed and signed by the Chairman.

 

10.             DECLARATIONS OF INTEREST

 

There were no declarations of interest at this stage.

 

11.             REPORT OF THE AUDIT COMMISSION

 

Members received the tabled report following the audit of the Council’s financial statements for 2004/05.  It was noted that the capital financing regime for local authorities had changed for this period, resulting in a change to the basis for calculating the minimum revenue provision (MRP).   This is now based on the calculation of a Capital Financing Requirement rather than the Credit Ceiling, or net credit liability, which had previously been the case.

 

The committee was advised that the auditor was required to report on good governance to the Isle of Wight Council’s responsible body, in this case the Audit Committee, who could then take any necessary action.  The report examined four main elements of the authority’s accounts:

 

·      The proposed qualification of the accounts arising from a difference between the Capital Financing Requirement and the Credit Ceiling.

·      Misstatement of provision for doubtful debts

·      Matter of record for reporting material adjustments to the accounts adopted by the Council.

·      The quality of the Council’s capital accounting arrangements.

 

The most complex issue had been the calculation in relation to the Capital Financing Requirement. Under the new regulations, an unreconciled difference of £3.5 million had been identified.  Audit Commission advice was that unless this difference can be reconciled, it will result in a qualification of the accounts.  Members were advised that there would be no significant impact on the budget, and asked that the difference should reconciled as far as possible.  The Audit Commission had requested a response from officers by the end of October 2005 if it is to have an impact on the proposed qualification of the accounts.

 

It was envisaged that the final audit opinion would be issued by 31 October 2005.

 

The Audit Commission’s representative, Mr Alistair Rankine, thanked the Council’s Financial Services staff for their co-operation during the audit.

 

RESOLVED

 

THAT the report be noted and the Committee advised of any progress regarding reconciliation of the accounts before the end of October 2005.

 

12.             FUTURE AGENDA ITEMS

 

A report from the Audit Commission entitled External Audit Position Statement was circulated for Members’ information, which detailed audit work carried out over the past year together with future audit work planned.  This provided the Committee with background information and potential items for future agendas.

 

The Chairman expressed concern regarding the Council’s capital accounting and flagged this up as an area which may be looked at in a future meeting. It was suggested that discussions be deferred to allow Members more time to study the report.

RESOLVED

 

THAT the report be deferred for further consideration during training sessions and at future meetings.

 

13.             PROPOSED TRAINING

 

Members had received the report, Paper B, regarding proposed training and were invited to comment or make further suggestions.

 

Five potential areas of training had been identified:

 

·      External audit

·      Internal audit and internal control

·      Risk Management

·      Financial Management

·      Corporate Governance and the role of the Audit Committee.

 

Following discussion, it was suggested that some training could be scheduled to coincide with the next meeting, scheduled for 17 November 2005.

 

RESOLVED:

 

i.                    THAT the training proposals be approved.

 

ii.                  THAT an element of training be included with the next scheduled meeting on 17 November 2005.

 

 

 

The Chairman closed the meeting at 6.40 pm.

 

 

 

 

 

 

 

 

CHAIRMAN