| 343 | RECORD OF THE MEETING |
| | | The record of the meeting held on 26 June 2008 was signed by the Chairman as correct. |
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| 344 | URGENT MATTERS |
| | | It was reported that the Chairman had agreed to accept two items (2007/2008 External Auditors report and the Annual Governance Statement) as urgent items, as the Accounts and Audit Regulations 2003 required that both were considered before 30 September 2008. |
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| 345 | DECLARATIONS OF INTEREST |
| | | Councillor Griffiths declared a personal interest in any reference to the Medway Primary Care Trust, insofar as he is a non-executive director of the Trust.
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| Councillor Jarrett declared a personal and prejudicial interest in case during the consideration of any of the reports before the Committee reference was made to Medway Tunnel, insofar as he is a member of Rochester Bridge Trust. It is noted that there was no discussion on this matter. |
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| 346 | 2007/2008 EXTERNAL AUDIT REPORT |
| | Discussion: |
| | | Robert Grant, from the Council's external auditors (PKF), and the Chief Finance Officer provided an overview of the 2007/2008 external auditor's report. The main issues arising from the audit were set out and adjusted financial statements, reflecting the issues raised were attached to the report.
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| It was noted that the key financial systems were deemed to be adequate and that it was anticipated that an unqualified audit opinion would be issued on the Statement of Accounts. The Council's arrangements for securing economy, efficiency and effectiveness in its use of resources had also been found to be adequate and Members were reminded that the 2007/2008 Best Value Performance Plan had been given an unqualified opinion.
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| Due to ongoing work it was reported that an audit certificate would not be given on 30 September, instead a revised date of 31 October was anticipated.
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| Members asked various questions on the report. This focused on the duplicate payments identified by the internal audit of the creditors system, the adoption of a more systematic method of calculating social services bad debt and the implications of omitting expenditure from the accounts where there is an ongoing dispute with a contractor.
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| The Committee endorsed the need to strengthen arrangements for obtaining information from Councillors on related party transactions. The Chief Finance Officer undertook to write to the Group Whips with details of those Councillors yet to submit a disclosure. The Committee also recommended that to ensure all Councillors submit returns in the future, that forms are issued at a specific meeting of the Council where officers would be available to offer advice regarding their completion. |
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| | > External audit report (pdf file 550.8kb) |
| | Decision: |
| | | The Committee agreed:
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| | (a) | to note the issues raised by PKF, as presented in Appendix 1 of the report, and the proposed response as set out at Appendix A to the PKF report and summarised in the committee report;
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| | (b) | the changes to the Statement of Accounts as set in paragraph 4.6 of the report and reflected in the amended sections of the Statement of Accounts set out at Appendix 2;
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| | (c) | the Management Representations Letter, attached at Appendix B of the PKF report;
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| | (d) | that the Chief Finance Officer write to the Group Whips with details of those Councillors yet to submit a Related Party Transaction disclosure for 2007/2008;
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| | (e) | that in future, arrangements are made for Related Party Transactions Disclosures to be issued at a specific meeting of the Council, with officers available to offer advice regarding their completion. |
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| 347 | OUTCOMES OF AUDIT ACTIVITY |
| | Discussion: |
| | | The Audit Services Manager gave a brief introduction on the outcome of completed internal audit activity.
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| The Chief Finance Officer and Audit Services Manager responded to Members' questions on a number of audits. This included assurances that the Bankline cards, used by payroll for processing and authorising manual payments, had PIN safeguards and that there were lessons to be learnt on revenue budgetary control, in terms of enhancing awareness and acceptance of the responsibilities associated with a delegated budget management role.
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| In response to questions concerning the prevention of fraud and corruption audit, the Monitoring Officer advised that during the move of administrative offices some Member declarations of acceptance of office had been misplaced. The Committee was assured that all Members had signed a declaration and that the Monitoring Officer had made a statutory declaration to that affect. It was also reported that the Electoral Commission was satisfied with this course of action and that it was appropriate for the Monitoring Officer to be responsible for undertaking this duty. It was noted that in future such declarations would be scanned and stored electronically.
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| The Chief Finance Officer undertook to advise Members as to the current position regarding the appointment of the Senior Practioner identified within the adult disability care (service planning) audit and to liaise with the Group Whips concerning the additional risk management training sessions identified in the risk management audit.
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| In relation to the investigation on the operation of the housing maintenance contract, as reported to the Audit Committee on 26 June 2006, the Monitoring Officer undertook to respond in writing to all Members of the Committee on the potential recovery of the additional roofing payment of £35,027.56. |
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| | > Outcomes of audit activity (pdf file 150.8kb) |
| | Decision: |
| | | The Committee noted the outcome of Internal Audit's work. |
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| 348 | INTERNAL AUDIT ANNUAL REPORT |
| | Discussion: |
| | | This report informed the Committee of the overall opinion on control for 2007/2008 based on internal audit's work and it was noted that its findings would assist Members when considering the Annual Governance Statement.
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| Members were advised that the overall operation of financial control had been assessed as satisfactory, with none of the irregularity investigations having a material impact on the overall assessment. The system of corporate governance had also been found to be sound, with improvements to the risk management process continuing.
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| Details of internal activity during 2007/2008 were annexed to the report. |
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| | > Internal audit annual report (pdf file 103.9kb) |
| | Decision: |
| | | The Committee endorsed internal audit's opinions contained in the report and agreed to consider the summary of audit work, as set out at paragraph 3 of the report, when considering the Annual Governance Statement. |
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| 349 | REVIEW OF THE EFFECTIVENESS OF INTERNAL AUDIT SYSTEM |
| | Discussion: |
| | | The Chief Finance Officer introduced a report on the effectives of the internal audit system.
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| The Accounts and Audit Regulations required an annual review of the internal audit system. This formed part of the wider annual review of governance issues, leading to the approval of the Annual Governance Statement. It was noted that the review was conducted via self-assessment against the Code of Practice, the view of Council's external auditor and performance indicators.
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| It was highlighted that key areas for improvement related to the monitoring of audits deemed 'satisfactory' or 'good'; the capacity for audit activities; risk management and customer feedback. |
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| | > Review of effectiveness of the internal audit system (pdf file 93.0kb) |
| | Decision: |
| | | The Committee endorsed the approach of the review of the effectiveness of the internal audit system for 2007/08 and the outcome of the review in support of the Committee's consideration of the Annual Governance Statement. |
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| 350 | WHISTLEBLOWING ANNUAL REPORT |
| | Discussion: |
| | | This report advised Members of the number, nature and status of whistleblowing events, insofar as they related to fraud and corruption concerns received since 1 April 2007. This was reported in accordance with the requirements of the Council's Anti-Fraud and Corruption Policy.
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| Details of 6 cases were set out, which included two cases where investigations were ongoing.
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During the discussion of this item Members requested that in future the annual report is expanded, to include an analysis of the effectiveness of the whistleblowing policy. This would enable consideration of whether the policy was achieving its objectives and providing the appropriate safeguards for those raising concerns.
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|
| | > Whistleblowing annual report (pdf file 60.4kb) |
| | Decision: |
| | | The Committee agreed:
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| | (a) | to note the report;
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| | (b) | to consider it as part of their deliberations on the proposed Annual Governance Statement;
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| | (c) | that future editions of this report be expanded to enable a review of effectiveness of the Anti-Fraud and Corruption Policy.
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| 351 | ANNUAL GOVERNANCE STATEMENT AND CODE OF CORPORATE GOVERNANCE |
| | Discussion: |
| | | The Monitoring Officer introduced a report that presented the 2007/2008 Annual Governance Statement and a new Code of Corporate Governance.
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| Members were advised that the Council had a statutory duty to prepare an Annual Governance Statement. The statement (attached to the report) summarised Medway Council's governance framework, which was centred around six core principles of effective governance, together with the means of external and internal assessment to review effectiveness. It was noted that a number of areas had been identified for further focus and that management actions plans were in place for each one.
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| The Monitoring Officer also gave details of a new Code of Corporate Governance that had been developed in accordance with the CIPFA guidance 'Delivering Good Governance in Local Government'. As the new code would form part of the Constitution it would need to be referred to Council for approval. The Monitoring Officer undertook to ensure that the subsequent reports to Cabinet and Council would include an explanation as to the main differences between the Council's existing and the proposed new Code of Corporate Governance. |
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| | > Annual Governance Statement (pdf file 324.8kb) |
| | Decision: |
| | | The Committee agreed:
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| | (a) | that the Local Code of Corporate Governance, as annexed to the report, be recommended, via the Cabinet on 14 October 2008, to Council on 13 November 2008 for approval and incorporation into the Constitution;
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| | (b) | the contents of the Annual Governance Statement for 2007/08. |
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| 352 | INTERNAL AUDIT PROGRAMME |
| | Discussion: |
| | | Members were given a brief overview of the 2008/2009 internal audit work programme and the outcome of progress in achieving the 2007/2008 programme.
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| It was noted that the internal work programme was derived from a number of sources including the Council's risk identification process, internal audit's view of risk and requests from Members and officers. |
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| | > Internal audit programme (pdf file 119.3kb) |
| | Decision: |
| | | The Committee approved the 2008/09 programme and noted the completion of the 2007/08 internal audit work programme. |
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| 353 | OUTCOMES OF HOUSING BENEFIT COUNTER FRAUD INVESTIGATIONS |
| | Discussion: |
| | | The Audit Services Manager advised Members of progress in investigating allegations of housing and council tax benefit fraud during the period March to mid August 2008 and responded to Members' questions.
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| It was noted that since the last report to the Committee there had been 12 successful and four unsuccessful prosecutions. 16 cautions had also been issued. Details of these cases were set out in an appendix to the report. |
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| | > Outcomes of housing benefit counter fraud investigations (pdf file 101.2kb) |
| | Decision: |
| | | The Committee noted progress in investigating benefit fraud in accordance with the approved sanction policy. |
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