| 248 | RECORD OF THE MEETING |
| | | The record of the meeting held on 29 June 2006 was signed by the Chairman as correct. |
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| 249 | APOLOGIES FOR ABSENCE |
| | | An apology for absence was received from Councillor Kenneth Bamber. |
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| 250 | URGENT MATTERS |
| | | Reasons for urgency for the report on the audit of the statement of accounts 2006/2006 were given in the report. No further items were declared urgent at the meeting. |
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| 251 | REPORT ON THE AUDIT OF THE STATEMENT OF ACCOUNTS 2005/2006 |
| | Discussion: |
| | | Janet Eilbeck, David Braithwaite and Chris Shepherd were present at the meeting from PricewaterhouseCoopers (PWC), the external auditor.
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| The Director of Finance and Corporate Services gave a brief introduction to the report and thanked PWC for their help and co-operation.
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| Concern was expressed at the position, identified by PWC, of the Revenues and Benefits Trading Account. PWC were critical that the Council had chosen not to write off this loss to the cost of services on the basis that a number of planned initiatives will reduce the loss and the cumulative deficit will be recovered in time. The anticipated recovery period had recently been extended by a further two years and it was felt that the Council should make provision for this in the event that the amount was not recovered. It was suggested that this could be done by allowing an amount of £50,000 each year.
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| The Assistant Director (Financial Management) explained the background to this issue and stated the reasons why the planned initiatives had not been successful so far. He was confident that measures were now in place to ensure that the position achieved a break even point by the end of the contract period. He said that it would not be possible to allow a smaller amount each year towards this loss, the only option would be to write off the full amount which was £541,000. Some Members were concerned in the event that the proposed management action was still not successful and felt that further details should be brought to the Committee at a later date.
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| A further issue, identified by PWC relating to the elements of expenditure for auditors fees, which PWC regard as chargeable to the 2005/2006 financial year, but for which the Council has a conflicting policy was discussed.
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| The Assistant Director (Financial Management) stated that only one quarter of the 2005/2006 charge was accrued on the basis that the work was substantially undertaken in 2006/2007.
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| Janet Eilbeck from PWC stated that after next year PWC would no longer be acting as the external auditor for the authority. This was because they had been unsuccessful in a recent bid for the work. The Audit Commission would be advising who will take over in due course. Janet Eilbeck had now completed her five years auditing in Medway and would be replaced, during the interim period, by David Braithwaite. She also requested that the Committee agree to the signing of the Management Representation letter, which was subsequently handed round to all Members.
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| The Director of Finance and Corporate Services thanked Janet Eilbeck for her work with Medway and wished her well for the future. |
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| | > Statement of accounts - appendix (pdf file 268.6kb) |
| | Decision: |
| | | | (a) | the issues raised by PWC and the proposed action and response summarised in the body of the report were noted;
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| | (b) | the changes to the Statement of Accounts set out in paragraph 5.1 of the report and reflected in the amended sections of the Statement of Accounts in Appendix 2 were agreed;
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| | (c) | the continuance of current policies as detailed in paragraph 5.3 be agreed and appropriate representations made to this effect;
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| | (d) | in relation to the MRBS (Medway Revenues and Benefits Section) issues identified by PWC that officers bring back, within two cycles, the proposed management action to reduce the identified potential outturn and any other matters relating to that.
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| | (e) | the Management Representation letter considered by Members was agreed for submission to PWC. |
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| 252 | OUTCOMES OF HOUSING BENEFIT COUNTER FRAUD INVESTIGATIONS |
| | Discussion: |
| | | The Audit Services Manager gave a brief introduction to the report on the outcomes of housing benefit counter fraud investigations and responded to Members' questions.
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| He stated that Medway was a member of a national anti-fraud network and they were trialling a national database which would make it easier to track people moving from this area that still owed the Council money because of fraudulent claims.
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| In response to a question he explained the reasoning behind the sanction relating to prosecution where it stated that the Council would consider prosecution only after weighing up a number of factors. One of these factors related to whether the individual had demonstrated genuine remorse and acknowledged what they did was wrong and another related to the individual suffering significant physical or mental harm if prosecuted. He stated that it was necessary to have these allowances in the sanction policy to allow him discretion in cases where it would not be in the public interest to pursue a case through prosecution. He gave instances where this had happened in the past and Members acknowledged that such allowances were necessary. |
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| | > Housing and council tax benefit investigations (pdf file 29.6kb) |
| | Decision: |
| | | Members noted progress in investigating alleged benefit fraud in accordance with the approved sanction policy. |
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| 253 | INTERNAL AUDIT WORK PROGRAMME 2006/2007 |
| | Discussion: |
| | | The Audit Services Manager introduced the internal audit work programme for 2006/2007 and responded to Members' questions. He stated that for internal audit the year had started at the beginning of July rather than 1 April 2006 as this allows post year end activity to be carried out on behalf of the external auditors. |
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| | > Internal work programme (pdf file 41.1kb) |
| | Decision: |
| | | The 2006/2007 internal audit work programme was agreed. |
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| 254 | OUTCOMES OF AUDIT ACTIVITY |
| | Discussion: |
| | | The Audit Services Manager gave a brief introduction to the outcomes of audit activity completed since the last meeting of the Audit Sub-Committee and responded to Members' questions. He undertook to look into an issue arising from an audit of supporting people and report back to Members outside of the meeting. |
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| | > Outcomes of Audit Activity (pdf file 13.5kb) |
| | Decision: |
| | | | (a) | the outcome of Internal Audit's work was noted;
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| | (b) | officers were asked to look at the possibility of sharing best practice outcomes with staff following an audit;
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| | (c) | officers were requested to look at leisure centres in more detail as part of the Audit Plan.
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| 255 | IRREGULARITY REPORT |
| | Discussion: |
| | | The Audit Services Manager responded to Members in relation to the irregularity report following a brief introduction. |
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| | > Irregularity Report (pdf file 10.2kb) |
| | Decision: |
| | | The Committee noted the outcomes of the irregularity investigations and the proposed actions. |
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