| 79 | RECORD OF THE MEETINGS |
| | | The record of the meetings held on 24 March 2009 and 6 May 2009 (Joint Meeting of all Committees) were signed by the Chairman as correct. |
|
| 80 | APOLOGIES FOR ABSENCE |
| | | An apology for absence was received from Councillor Reckless. |
|
| 81 | URGENT MATTERS |
| | |
| 82 | 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.
|
| 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, as he is a member of Rochester Bridge Trust. It is noted that there was no discussion on this matter.
|
|
|
| 83 | STATEMENT OF ACCOUNTS 2008-2009 |
| | Discussion: |
| | | The Chief Finance Officer presented the Council's Statement of Accounts for 2008/2009, which were required under the Accounts and Audit Regulations 2003 (as amended).
|
| The Chief Finance Officer detailed the contents of the accounts and responded to Member questions. Members were advised that the accounts detailed a revenue underspend of £3.5m for 2008/2009 and reported that capital expenditure for 2008/2009 amounted to £60.49m. Summary financial positions for both the Housing Revenue Account and Delegated Schools Budget were also given, as were the principal variations to agreed budgets. It was noted that the Cabinet on 23 June 2009 had approved the actions taken in producing the Statement of Accounts and recommended to the Audit Committee that it approve the statements as submitted.
|
| Members discussed the contents of the accounts. Members considered the council's potential exposure to risk through deposits with banks and financial institutions, the levels of both reserves and deficits held by schools, and the future implications of pension costs. The need to understand the nature and any possible trends associated with the disability services budget variance was also stressed.
|
| A revision to Note 41 to the 'Notes to the Core Financial Statements' was tabled at the meeting, which amended the analysis of outstanding debtors as shown on page 37 of the accounts, and during the discussion on this item a number of corrections to the accounts were noted.
|
| It was noted that the council's accounts were currently prepared using UK Generally Accepted Accounting Practice (UK GAAP) and that International Financial Report Standards (IFRS) would replace these. The report identified the main issues arising from the introduction of IFRS and noted that the Chartered Institute of Public Finance and Accountancy was preparing a new Code of Practice on Local Authority Accounting.
|
| The Statement of Accounts would now be subject to scrutiny by the external auditors. Interested parties also had the right to inspect the accounts and make representations to the auditor.
|
|
|
| | > Statement of accounts 2008-2009 (pdf file 945.6kb) |
| | > Revised note to the Core Financial Statements (pdf file 1.0Mb) |
| | Decision: |
| | | The Committee approved the draft Statement of Accounts for 2008/2009 subject to the revision to Note 41 of the Core Financial Statements tabled at the meeting and revisions to the tables on pages 19 and 37 of the accounts, to correct the "£'000" headings as appropriate, and to correct the percentage of tenant arrears included in the table on page 48 of the accounts.
|
| The Committee noted the implications of the introduction of Internal Financial Reporting Standards as outlined in Section 9 in the report.
|
|
|
| 84 | INTERNAL AUDIT ANNUAL REPORT |
| | Discussion: |
| | | This report informed the Committee of the overall opinion on control for 2008/2009 based on internal audit's work. It was noted that the findings would assist Members when considering the Annual Governance Statement.
|
| It was noted 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.
|
| Details of internal activity during 2008/2009 were annexed to the report.
|
|
|
| | > Internal audit annual report (pdf file 107.0kb) |
| | 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. |
|
| 85 | REVIEW OF EFFECTIVENESS OF THE INTERNAL AUDIT SYSTEM |
| | Discussion: |
| | | The Chief Finance Officer introduced a report on the effectives of the internal audit system.
|
| 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.
|
| The key issues arising from the 2008/2009 review were annexed to the report.
|
| Members commented on the challenges for the internal audit system, arising from greater partnership working, and the work undertaken with embedding risk management.
|
|
|
| | > Review of effectiveness of the internal audit system (pdf file 84.6kb) |
| | Decision: |
| | | The Committee endorsed the approach of the review of the effectiveness of the internal audit system for 2008/2009 and the outcome of the review in support of the Committee's consideration of the Annual Governance Statement. |
|
| 86 | 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 2008. This was reported in accordance with the requirements of the Council's Anti-Fraud and Corruption Policy.
|
| Details of 5 cases were set out, which included one case where investigations were ongoing.
|
| The Monitoring Officer advised Members that as a consequence of a recent employment tribunal the whistleblowing procedure would be reviewed to ensure it was sufficiently robust and provided protection for the employee as well as the employer. The Committee also requested that the review ensure that all whistleblowing cases were reported to the committee in future, rather than just concerns raised on fraud and corruption issues
|
| Members requested that a report on the number, nature and status of all whistleblowing events received since 1 April 2008, reflecting the wider remit beyond fraud and corruption concerns, be submitted to a future meeting of this committee.
|
|
|
| | > Whistleblowing annual report (pdf file 62.2kb) |
| | Decision: |
| | | The Committee noted the report and agreed to consider the whistleblowing annual report when considering the Annual Governance Statement.
|
| The Committee requested the Monitoring Officer to review the whistleblowing policy and bring it to this Committee for approval.
|
|
|
| 87 | ANNUAL GOVERNANCE STATEMENT |
| | Discussion: |
| | | The Monitoring Officer introduced a report that presented the 2008/2009 Annual Governance Statement. A 'Good Governance Checklist', providing evidence for the findings contained within the Annual Governance Statement was tabled at the meeting.
|
| 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 and key elements of internal control and the sources of assurance; a review of the effectiveness of those governance and internal controls and a requirement to identify significant governance issues. It was noted that the Corporate Management Team had considered and endorsed the Annual Governance Statement on 17 June 2009.
|
| Members discussed the contents of the Annual Governance Statement, in particular those areas where future action/focus was needed to strengthen the Council's corporate governance arrangements. This included the importance and improved visibility of links between financial and performance information, the costs associated with the housing maintenance contract investigation and the role and purpose of public consultation.
|
|
|
| | > Annual governance statement (pdf file 261.4kb) |
| | > Evidence of Good Governance Checklist (pdf file 152.9kb) |
| | Decision: |
| | | The Committee noted the comments made and approved the Annual Governance Statement. |
|
| 88 | OUTCOME 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 quarter ending 31 March 2009.
|
| It was noted that since the last report to the Committee there had been 13 successful and 1 unsuccessful prosecutions. 5 cautions had also been issued. Details of these cases were set out in an appendix to the report.
|
|
|
| | > Outcome of housing benefit counter fraud investigations (pdf file 107.5kb) |
| | Decision: |
| | | The Committee noted progress in investigating benefit fraud in accordance with the approved sanction policy. |
|
| 89 | OUTCOMES OF AUDIT ACTIVITY |
| | Discussion: |
| | | The Audit Services Manager gave a brief introduction on the outcome of completed internal audit activity.
|
| The Chief Finance Officer and Audit Services Manager responded to Members' questions on a number of audits. This included confirmation in relation to the Corporate Governance audit that there had been one "call-in" during 2008/2009 and assurance as to the need to ensure the quick implementation of recommendations arising from the corporate credit card and trade cards audit.
|
| Members discussed the findings of the Customer First Performance Measures audit and the identified risks associated with the performance indicators.
|
| The Audit Services Manger agreed to notify Members of the implementation dates associated with the audits contained within this report and agreed that future audit activity reports include timescales for the implementation of management action. |
|
| | > Outcomes of Audit activity (pdf file 179.7kb) |
| | Decision: |
| | | The Committee noted the outcome of Internal Audit's work. |
|
| 90 | INTERNAL AUDIT PROGRAMME 2008-2009 |
| | Discussion: |
| | | This report provided an overview of the 2008/2009 internal audit work programme. Items added to and removed from the year's programme were highlighted in the report.
|
| 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, requests from Members and officers and predeteremined audits that form part of an agreed arrangements with the external auditor.
|
|
|
| | > Internal audit programme 2008-2009 (pdf file 102.2kb) |
| | Decision: |
| | | The Committee noted that all key audit assurance work set out in the 2008/2009 programme had been completed. |
|
| 91 | INTERNAL AUDIT PROGRAMME 2009-2010 |
| | Discussion: |
| | | This report advised Members of the 2009 - 2010 work programme.
|
| Progress of audits would be reported to the Committee during the course of the municipal year, as well as any changes to the plan. It was noted that work on main financial systems, work carried out on behalf of the external auditor, fraud and corruption, corporate governance and the annual assurance programme for schools were considered key activities and would be given priority when resources are allocated.
|
|
|
| | > Internal audit programme 2009-2010 (pdf file 132.3kb) |
| | Decision: |
| | | The Committee approved the 2009 - 2010 Audit programme as set out at annex A to the report. |
|
| 92 | ANNUAL REVIEW OF TERMS OF REFERENCE |
| | Discussion: |
| | | The Audit Services Manager introduced a report on a review of the terms of reference for the Committee. He explained that it was good practice for the Committee to annually review the terms of reference to see whether any amendments were needed.
|
| Further to the decision to review the whistleblowing policy, to ensure that all whistleblowing is reported to this committee (as set out at decision 86/2009), it was recommended that the committee's terms of reference be amended to clarify that the committee would consider all whistleblowing in line with the revised policy.
|
|
|
| | > Annual review of terms of reference (pdf file 80.4kb) |
| | Decision: |
| | | The Committee confirmed that the current terms of reference meets its current and expected future needs, subject to clarification as to the wider whistleblowing remit. |
|
| 93 | IRREGULARITY REPORT |
| | Discussion: |
| | | This report and supporting exempt appendix set out details of an irregularity investigation and explained the actions taken to deal with the situation. |
|
| | > Irregularity report (pdf file 63.7kb) |
| | Decision: |
| | | The Committee noted the outcome of the irregularity investigation and the actions taken. |
|