Audit Panel minutes - 21 October 2004

9. MINUTES

The minutes of the meeting held on 29 July 2004 were confirmed.

10. DECLARATIONS OF INTEREST

There were no declarations at this stage.

11. AUDITOR’S REPORT ON THE 2004/05 ACCOUNTS TO THOSE CHARGED WITH GOVERNANCE

The Audit Manager from the Audit Commission circulated a report on the Council’s Accounts for 2004/05. This was required in accordance with the Statement of Auditing Standard (SAS) 610. He referred to two areas which required the attention of the Council.

The first area related to a weakness in the accounting and internal control systems in connection with capital expenditure. In the Audit Commission’s report on the 2003/04 accounts concern had been expressed on the reconciliation of the asset register with the financial accounts. Although action had been taken by the Council to rectify this problem there was still an adjustment required in accounting procedures to overcome some further errors that had been identified. Officers were looking at software systems and associated training needs to enable compliance with the recommendations of the Audit Commission.

The other area requiring action by the Council was an improvement to the accompanying notes to the financial accounts. This would ensure greater clarity and compliance with Statements of Recommended Practice.

The Panel noted that the Audit Commission had nearly completed its audit of the Council’s accounts. It was anticipated that all relevant work would be finished by 5 November 2004. Any further issues would be raised with the Chairman of the Panel.

ACTION TO BE TAKEN BY THE HEAD OF SELECT COMMITTEE AND BEST VALUE SUPPORT

An item be included on the agenda for the next meeting enabling an oral update on the action being taken in respect of the Audit Commission’s comments.

12. ETHICAL AND FRAUD AWARENESS

The Panel was advised of a proposal by the Audit Commission to hold a workshop focussed on ethical and fraud awareness. This would involve senior and middle management and leading members. The two workshops, to be held in January and March 2005, would be facilitated by external and internal audit staff.

The Panel was aware that there would be a need to arrange a further workshop following the Council elections in May 2005 for the benefit of new members.

Discussion took place on the codes of conduct for both officers and members and the differences in these. Additionally the Panel was reminded of the role of the Audit Commission in reporting procedures.

ACTION TO BE TAKEN BY THE CHIEF INTERNAL AUDITOR AND AUDIT COMMISSION AUDIT MANAGER

A report giving feedback from the ethical and fraud awareness workshops be submitted to the Panel in the spring of 2005.

ACTION TO BE TAKEN BY THE HEAD OF SELECT COMMITTEE AND BEST VALUE SUPPORT, HEAD OF LEGAL AND DEMOCRATIC SERVCIES AND CHIEF INTERNAL AUDITOR

Arrangements be made for relevant training to be given to new members after the May 2005 Council elections.

13. INTERNAL AUDIT PROGRESS REPORT

The Panel considered the report of the Chief Internal Auditor outlining activities completed since the last meeting. Additionally he submitted details of audits undertaken on the Council’s Corporate Governance arrangements and its risk management framework.

Members were made aware of difficulties being encountered in progressing the work contained in the Internal Audit Plan for 2004/05. They were reminded that, at the last meeting of the Panel, reference had been made to the staffing resources available for undertaking the full range of activities expected of it. The Panel had drawn this to the attention of the Portfolio Holder for Resources. One area that was of particular concern related to the capacity of the audit resources available to assist with GAGS and deal with ICT audit project assurance and partnership work. The staffing element allocated for the full year had been fully utilised in the first six months. This meant that a range of options had to be considered as a way forward. These ranged from the withdrawal from certain projects, delay of other work or appointment of additional staffing resources. The Chief Internal Auditor highlighted the risks involved to the Council if key areas of the Internal Audit Plan were not fulfilled. There was a need to ensure project management and partnership working had involvement of all relevant sections and not left to the Audit Section to deal with.

The Audit Manager of the Audit Commission indicated that it was essential that the Council demonstrated its ability to implement sound audit of its ICt systems. If deficiencies were found then one measure available to the Audit Commission would be to take over responsibility for this work and charge the Council accordingly.

The Panel then debated the introduction of local performance indictors for the Audit Section. Members considered that these were necessary to measure the effectiveness of the Section in delivering its objectives and would also help highlight any inadequacies. Members indicated that there was also a need to standardise the measurement for risk assessments.

An update was given on progress being made with the Corporate Governance Action Plan and it was noted that several actions had been completed ahead of the target dates.

ACTION TO BE TAKEN BY THE RESOURCES SELECT COMMITTEE

The role of Internal Audit in Project Management and Partnership working be considered.

ACTION TO BE TAKEN BY THE CHIEF INTERNAL AUDITOR

(a) A standardised measurement for risk management be adopted in all reports.

(b) Draft local performance indicators for use by Internal Audit be reported to the next meeting.

CHAIRMAN