Agenda and minutes

Members are requested at the start of the meeting to declare any known interests in any matter to be considered, and are reminded that any such interest should also be declared at the start of an item or during any discussion of the matter concerned.

            The Chair reminded Members of the need to declare any known interests in any matters to be considered at the meeting. No declarations were made.   

See explanatory note below.  Please phone the Committee Officer whose name and number appears at the top of this agenda if you need further guidance).

            No questions were asked under Standing Order 28.  

To receive the minutes of the meeting held on 19^th September 2006

            Resolved -  That the minutes of the meeting held on 19^th September 2006 be confirmed and signed.

Certain items are expected to include the consideration of exempt information and the Sub-Committee is, therefore, recommended to resolve "That, in accordance with Section 100A(4) of the Local Government Act 1972, the public be excluded during the discussion of the matters referred to in the items listed below, on the grounds that they involve the likely disclosure of exempt information, as defined in the respective paragraph of Part 1 of Schedule 12A of the Act".

That, in accordance with Section 100A(4) of the Local Government Act 1972, the public be excluded during the discussion of the matters referred to in the items listed below on the grounds that they involve the likely disclosure of exempt information as defined in the respective paragraphs of Part 1 of Schedule 12A of the Act.

          Item No.     Paragraph No.      Minute No.

           8 and 9           3 and 7          35 - 36

The Committee received a report of the Group Director, Resources, on the outcome of the benchmarking exercise carried out by the Chartered Institute of Public Finance and Accounting (CIPFA) in relation to the Council’s Internal Audit Services, providing a comparison between actual performance in 2005/6 and planned performance for the current financial year and the performance of other Unitary Authorities.

            The Head of Internal Audit presented the report, briefly summarising the main sections of the benchmarking exercise, comparing performance with other authorities in relation to:

1. Cost Analysis – the analysis of audit costs for 2005/6 actuals and 2006/7 estimates
2. Audit Coverage – audit days per £m gross revenue turnover and the split by type of audit. The analysis of days spent on fundamental financial systems and audit days per £m gross revenue turnover by service and sample times on establishment audits.
3. Staffing – salary bandings and staff qualifications

In relation to the staffing comparison, the Committee noted that Internal Audit salaries were averaging £5k less per auditor than other authorities, whilst the spread of qualifications in the section were in the upper quartile.

Resolved – (1) That the report and the details of the CIPFA benchmarking exercise be noted.

(2) That this Committee recognises the high quality of service provided to the Council by Internal Audit Services and acknowledges that the service constitutes excellent value for money.

(3) That this Committee notes the comparison made in the report between the Council’s salary bandings and qualifications and those of other authorities and the potential risk that the Council’s better qualified staff might seek employment with authorities offering more attractive salaries. 

(4) That a report be submitted to a future meeting on the detail and operation of the Council’s policy and practice for the writing-off of debts across all service areas.

(Councillor Keith Williams made a non-prejudicial declaration of interest in relation to the Committee’s discussion of services that it is anticipated will be included in the Council’s Strategic Partnership.)

The Group Director, Resources, submitted a report advising the Committee of the Financial Management Standard in Schools (FMSiS) external assessment process and its likely impact on the workload of the Council’s Internal Audit section. The Head of Internal Audit introduced the report, explaining that it was a requirement of the Department for Education and Skills (DfES) that all secondary schools should be externally assessed on their achievement in meeting the Financial Standard by 31 March 2007. It was noted that all primary and special schools will also be externally assessed but the timeframe for this assessment had yet to be announced. No additional budget provision had been received from Central Government to cover the cost of Internal Audit conducting the assessments but these would be charged to the schools concerned. However, the External assessment assumes a recent audit has been completed for the school, therefore Internal Audit is required to reintroduce its cyclical audit of all schools. Members noted that there will be no additional funding for this work and nor was there scope to charge schools for this resource, which would amount to amount to more than I FTE auditor per year.

The Head of Internal Audit reported that, initially, the Director of Finance, in his role as the Council’s section 151 Officer, had requested that Internal Audit should carry out the external assessment of schools. However, additional guidance had since been received from DfES that all schools should be able to choose who will carry out their assessment. The Head of Internal Audit commented that the uncertainty regarding the requirements of the FMSiS assessments made it very difficult to plan ahead to ensure that the 2007/8 Internal Audit schedule can be adequately resourced.

Resolved – (1) That the process for the external assessment of Financial Management Standard in Schools (FMSiS) and the potential impact of the FMSiS Audit on staffing resources within Internal Audit  be noted.

(2) That representations be made to school governing bodies that, in order to ensure a level of consistency and reliability in the FMSiS assessment process, and to better accommodate Audit Planning and staffing arrangements, the Council’s Internal Audit Section be appointed to carry out individual schools’ assessments for the first period of the 3 year rolling programme.

(3) That Cabinet be advised of this Committee’s concern that the requirement to undertake the additional cyclical audit of schools for the external assessment of Financial Management Standard in Schools, a workload equating to one additional full time auditor post, will significantly impact on Internal Audit’s ability to adequately resource the 2007/8 Internal Audit plan or to guarantee audits of identified high risk areas.

            The Director, Partnership, Performance and Policy submitted a quarterly summary report on Risk Management within the Council. The Council’s Corporate Risk Manager presented the report, highlighting key developments in relation to the Council’s risk management status, including, most significantly, the introduction of the Corporate Risk Register, comprising the key risks identified by Corporate Board as being of critical significance to the Council. She advised that the Risk Register is reviewed regularly by the Corporate Board and that, as part of the overall review process, quarterly status reports would be submitted to the Audit Committee for consideration.

It was noted that, in addition to the Corporate Risk Register, Group Directorates and Service areas were making good progress in updating Risk Registers in line with the Council’s Business Planning arrangements. These Group and Departmental Risk Registers feed into the Corporate Risk Register and form an integral part of the gateway procurement process.

Resolved – (1) That the quarterly summary report on Risk Management within the Council be noted.

(2) That, with reference to the prescribed role of the Audit Committee in reviewing the Corporate Risk Register, it be noted that the 2007 Register will be submitted to this Committee in advance of its consideration by the Corporate in order to afford members the opportunity to comment on the level of risk assessment.

(3) That it be noted that, in order to assist members in developing the necessary skill-base to assess the effectiveness of the Council’s Risk Management, the Corporate Risk Manager would be producing a series of guidance documents and e-learning packages on different aspect of Risk Management.

(4) That this Committee congratulates the Corporate Risk Manager for the Council’s recent commendation at the Annual Risk Management Awards for its approach to Strategic Risk Management.        

The Sub-Committee received a report of the Group Director, Resources, summarising the main issues arising from Internal Audit reports finalised in September and October 2006 and advising on progress against the Internal Audit Plan. The report also commented on the considerable pressure on audit resources as a result of the DfES requirements for the External Assessment of schools.

Resolved – (1) That the summary of Internal Audit reports finalised in September and October 2006, and progress against achievement of the Internal Audit Plan, be noted.

(2) That the Internal Audit Report in respect of Housing benefits: System Control and Integrity be submitted to the Committee for consideration and that the Director of Revenues & Benefits be asked to attend the meeting to update the Committee on progress in implementing the recommendations of the audit report.