Archived decisions

Hampshire County Council

Cabinet

26 March 2007

Annual Audit & Inspection Letter Response

Report of the Chief Executive and County Treasurer

Item 7

Contact: Gary Smith, ext 7691 email: [email protected]

With the concurrence of the Chairman under Section 100B (4)(b) of the Local Government Act 1972, this matter has been included on the agenda to ensure that the most up-to-date information is made available to Members.

1. Summary

1.1 Each year the District Auditor compiles an Annual Audit and Inspection Letter to Members which summarises the conclusions and significant issues arising from the Audit Commission's audit and inspection of the Council.

1.2 The letter predominantly covers the 2005/06 financial year but significant evidence and changes since that time have, in places, been incorporated. In relation to the use of resources section the letter only refers to the 2005/06 financial year. The letter is usually presented to Cabinet in January following a CPA (Comprehensive Performance Assessment) score announcement in December. This year the timetable has been put back with the CPA star rating announced in February in order to include satisfaction performance indicator results.

1.3 It is considered useful to have the Council's response at the same time. This paper highlights the main points from the 2006 letter and identifies areas for action. It is important to ensure audit recommendations are followed up as this forms an essential part of CPA, in terms of responding to external feedback and evaluation.

1.4 This letter sets the context for the Corporate Assessment in May, the District Auditor's findings will inform the inspection activity of the Corporate Assessment inspection team.

2. Recommendation(s)

NB: (also to appear on the decision sheet as the decisions being sought)

(a) That Cabinet receives the comments by the District Auditor and approves the approach laid out in appendix one as the County Council's formal response to the Annual Audit and Inspection Letter 2006.

3. Auditors recommendations

3.1 The District Auditor recommended six specific actions for the Council to address:

1. Seek to ensure that management arrangements across the organisation consistently match those of the best departments.

2. Enhance budget monitoring to link it more closely with non-financial indicators and particularly any that should correlate closely with spend.

3. Develop indicators that link cost and performance to facilitate the monitoring of value for money, and have particular regard to the quality and level of adult social care service during the period of the recovery plan.

4. Ensure that asset records are comprehensive and consistent, so that decisions on asset management are based on appropriate information.

5. Ensure that Councillors have the information they need to make judgements on the risks facing the Council and how they are being managed.

6. Ensure the Governance Committee role encompasses all the responsibilities of an Audit Committee.

3.2 While Cabinet will continue to receive separate reports on these areas, this paper provides an overview bringing all the relevant areas of activity together in response to the Audit Commission's recommendations. Appendix one lists the specific actions, lead officer and timescales. The actions have not come from the Audit Commission, they identify actions the Council is taking in relation to the auditor's recommendations - many of these are plans already in place.

4. Conclusion

4.1 Formally responding to audit and inspection recommendations is an important part of good management. Given all services scored three out of a possible four there are no service specific recommendations. Instead the recommendations mostly concern specialist corporate issues for which a schedule of actions (appendix one) has been compiled.

4.2 However, it is also important to note the implicit areas for action which feature within the body of the audit letter in order to achieve continual improvement and increase the direction of travel judgement as well as maintain and improve service block scores. Chief Officers and departmental performance leads should consider the auditors' observations as part of their general planning and reporting cycle.


LINK(S) TO CORPORATE STRATEGY
	Yes	No
Hampshire safer and more secure for all

Maximising well-being

Enhancing our quality of place

Indirect links to all three Corporate Strategy priorities	X

Section 100 D - Local Government Act 1972 - background documents

The following documents discuss facts or matters on which this report, or an important part of it, it based and have been relied upon to a material extent in the preparation of this report.

NB: the list excludes:

1. Published works

2. Documents which disclose exempt or confidential information as defined in the Act.

(Quote list of documents here: either "none" if 1 or 2 above apply; or list the relevant letters, memos, etc and their location).

Appendix one - 2006 Annual Audit & Inspection Letter response

Recommendation	Actions	Lead officer	Target date	Progress
1. Seek to ensure that management arrangements across the organisation consistently match those of the best departments.	a. The Corporate Management Team (CMT) with support from the Corporate Performance and Efficiency Group (CPEG) will take action on any areas of concern or where improvements have been identified.	a. Peter Robertson and Chris Lawrence-Pietroni	a. Ongoing	a. Departmental restructuring is well under way in Children Services, Adult Services and Environment. Human Resources has merged with the Chief Executive's Department and is being reviewed to ensure optimum configuration/service using an external consultant. `Leading Success' was a development programme for all the County Council's senior managers, set around a set of leadership competencies. These have now been refreshed to form the new management competencies which have been launched and are being rolled out across the organisation. Treasurer's Consultency have an annual programme of work which takes them into departments to conduct ongoing and specific pieces of work, as part of this they promote corporate policy and best practice.
2. Enhance budget monitoring to link it more closely with non-financial indicators and particularly any that should correlate closely with spend.	b. Review the current non-financial indicators to identify how they can be further developed to be more useful.	b. Nick Gibbins	b. September 2007	b. Non-financial indicators were introduced into the 2006/07 budget monitoring arrangements. Trend data is reviewed within the Adults Services recovery plan and, where relevant, is included in budget monitoring reports. Work is underway to further develop the trend and forecast information in budget monitoring.
3. Develop indicators that link cost and performance to facilitate the monitoring of value for money, and have particular regard to the quality and level of adult social care service during the period of the recovery plan.	c. Integrated Planning and Reporting Steering Group to consider how to facilitate departments to develop value for money PIs and benchmarking. d. Further develop the resource (finance and human) information in the revised Corporate Strategy Business Plan. e. Further develop the Medium-Term Financial Strategy for 2007/08 to include three year forecasting of activities/pressures; benchmarking; and efficiency plans.	c. Sarah Pook and Gary Smith d. Gary Smith e. Sarah Pook and Nick Gibbins	c. December 2007 d. December 2007 e. February 2008	c. There are a lot of good examples of benchmarking across the Council but this could be made more consistent. In addition, all Departments provided commentaries on the 2005/06 Audit Commission Hampshire County Council profile which benchmarked against other County Councils. The Council is also developing options with the South East Centre of Excellence (SECE) and external consultants to conduct a wide ranging unit cost/benchmarking excercise. d. The new Corporate Strategy Business Plan for the first time contains resource information (finance and human), introducing integrated planning (service, finance and workforce) at the strategic level. e. The medium term financial strategy was reviewed in the February budget report to Cabinet. Cabinet will review it in May when looking at the coming three year budget period and a fundamental review will be carried out in February 2007 following the local government finance settlement. The Adults Services Financial Recovery and Modernisaton Group was set up in 2006, meets regularly and closely monitors the recovery plan for Adult Services.
4. Ensure that asset records are comprehensive and consistent, so that decisions on asset management are based on appropriate information.	f. Comprehensive and consistent asset records are already in place but these will be further improved with the introduction of a new SAP module (real estate) which will integrate land and property records.	f. Karen Murray	f. August 2007	f. This is well underway. A review highway land holdings is also underway to ensure the best use of assets and value for money by working with district councils to access their records.
5. Ensure that Councillors have the information they need to make judgements on the risks facing the Council and how they are being managed.	g. The reporting of risk management to Governance Committee is currently being reviewed. h. Improve the link between the Corporate Strategy, Budget and the Risk Management Plan.	g. Michelle Smith h. Nick Gibbins and Michelle Smith	g. March 2008 h. March 2008	g. The risk management framework has been argreed with the Governance Committee. h. An annual Financial Risk Assessment is already reported to Cabinet as part of the Budget. There have been briefings to Member of the Governance Committee on risk.
6. Ensure the Governance Committee role encompasses all the responsibilities of an Audit Committee.	i. Conduct a self-assessment of the Governance Committee against Cipfa guidance. j. Review the committee make-up at the Full Council meeting in May.	i. Ejner Knudson j. Jeff Pattison	r. May 2007 s. May 2007	i. A previous self-assessment was carried out in 2006 but further changes will be required to meet the new harder test which will be reviewed with the Chairman of the Governance Committee, the Chief Executive and the County Treasurer.

This content is archived