Agenda item

(a)               Annual Audit Letter

(b)               Annual Audit and Inspection Fee 2010/11

(c)               Compliance with International Auditing Standards

(d)               Progress Report – March 2010

External Audit – Annual Audit Letter

Mr Peter Smith of the Council's External Auditors presented the Audit Commission's Annual Audit and Inspection Letter 2008/09.  Mr Smith summarised the work undertaken by the External Auditors during the 2008/09 Financial Year and highlighted the key messages of the Audit Commission's assessment of the Council’s performance.

Resolved – (1) That the Audit Commission's Annual Audit and Inspection Letter 2008/09, and the positive key messages set out in the report in relation to the assessment of the Council’s arrangements to secure value for money in its use of resources, be noted and welcomed.

(2) That, in respect of the recommendations contained in the Annual Audit Inspection Letter, it be noted that:

·             the risk of the ongoing economic downturn will remain on the Council's Corporate Risk Register and will therefore be monitored by both the Audit Committee and the Corporate Board; and

·             the Director of Finance and the Cabinet Member for Finance and Resources had given the Audit Committee assurances that suitable resources would be made available for the implementation of International Financial Reporting Standards in 2010/11.

Annual Audit and Inspection Fee 2010/11

Mr Peter Smith of the Council's External Auditors submitted the Audit Commission's Annual Fee Letter, setting out the framework of the indicative fees for work to be undertaken at Swindon Borough Council in 2010/11.

Resolved – That the Audit Commission's Annual Fee Letter, setting out the framework of indicative fees for work to be undertaken at Swindon Borough Council in 2010/11, be accepted.

Compliance with International Auditing Standards

Mr Peter Smith of the Council's External Auditors introduced this item regarding the necessity for the External Auditors, in compliance with International Standard on Auditing (UK and RI) 2040, to obtain an understanding of how those charged with governance exercise oversight of management processes for identifying and reporting the risk of fraud and possible breaches of internal control within the Council.  The report asked that the Chair should confirm:

·             how the Audit Committee oversees management processes to identify and respond to such risks, and

·             whether the Chair had knowledge of any actual suspended or alleged fraud affect the Council.

The Chair responded that the Audit Committee oversees management processes via regular reports to the Committee by the Head of Internal Audit, the regular Audit Reports the Committee chooses to verify, it considers the Corporate Risk Register on a number of occasions throughout the year and also, of course, receives the Audit Letter from the Council's External Auditors, the Audit Commission.  He added that in addition, he regularly met with the Head of Internal Audit, preceding meetings of the Audit Committee.  With reference to his having knowledge of any alleged fraud affecting the Council, the Chair said that he was not aware of anything material, and suggested that, in order to best comply with the Audit Commission's request, the Head of Internal Audit should keep him advised of any actual or alleged cases of fraud within the Council.

            Resolved – (1) That the Chair’s response the Audit Commission’s request for confirmation of the Council’s oversight of processes for identifying and reporting the risk of fraud and possible breaches of internal control (see above) be noted. 

(2) That a presentation be made to the Committee in advance of a future meeting on the subject of changes to the International Financial Reporting Standards.

External Audit Progress Report

Mr Peter Smith of the Audit Commission presented the May 2010 External Audit Progress Report summarising the External Auditor's delivery against the Audit Plan.

Resolved (1) That the External Audit Progress Report for the period to May 2010 be noted.

            (2) That, with reference to Mr Smith's comments regarding the Audit Commission's completion of work on the Authority's use of resources, up to the stage of submitting indicative scores, and the decision that, following the abolition of the CAA, these would not be formally reported, the External Auditor be invited to report to the next meeting of the Committee, summarising the indicative scores that would have been submitted in relation to the Authority's use of resources and highlighting issues arising where remedial action might have been recommended.