AUDIT OPINION - ASSURANCE STATEMENT 2002/03

1. The Code of Practice on Local Authority accounting requires the County Treasurer to sign a statement on the system of internal financial control as a note to the published accounts. To that end the Chief Internal Auditor provides an independent opinion on the adequacy and effectiveness of the system of internal financial control operating in the County Council, and an overall statement of assurance. The Committee has considered a detailed report on the audit opinion, which is that Hampshire County Council has an effective framework of control which provides reasonable assurance regarding the effective, efficient and economic achievement of its objectives. Audit testing has shown controls to be generally working in practice. Where improvements to controls were required, appropriate action had been taken by relevant managers and any shortcomings would be resolved appropriately.

2. The positive assurance statement of Audit opinion assumes even greater importance in the context of the County Council's corporate governance arrangements. National regulations require Local Authorities to develop their own codes of corporate governance and to monitor the effectiveness of their corporate governance arrangements during the year. This responsibility is being undertaken by the Standards Committee on behalf of the County Council; the links between audit and corporate governance are clearly apparent. The Committee considers that the regime of audit, both internal and external (Audit Commission) has provided an element of challenge which has facilitated Hampshire County Council's improvement and its achievement of excellent status under the Comprehensive Performance Assessment.

3. Whilst the assurance statement summarised in paragraph 1 above is encouraging, it can never be absolute. However, there is reasonable assurance that there are no major weaknesses in the system of control.

P.A. PIERCE

Chairman

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