Archived decisions

AT A MEETING of the AUDIT COMMITTEE of the COUNTY COUNCIL held at The Castle, Winchester on 25 June 2009.

PRESENT:

p Councillor K. Evans (Chairman)

Also in attendance: Councillor C. Thomas and Councillor R. Perry (by invitation from the Chairman)

1 APOLOGIES FOR ABSENCE

Councillor B. Dash submitted his apologies for absence.

2 DECLARATIONS OF INTEREST

All Members who believed they have a personal or prejudicial interest in any matter to be considered at the meeting were asked to declare that interest and, having regard to the circumstances described in paragraphs 9, 10, 11 and 12 of the County Council's Code of Conduct, consider whether to leave the meeting whilst the matter is discussed, save for exercising any right to speak in accordance with paragraph 12 of the Code. The declaration should be made at the time of the relevant debate.

3 MINUTES OF THE (FORMER) GOVERNANCE COMMITTEE

The Minutes of the meeting were noted.

4 CHAIRMAN'S ANNOUNCEMENTS

The Chairman welcomed Members to the first meeting of the newly established Audit Committee. The Chairman also welcomed Mr. Alistair Rankine from the Audit Commission and invited Mr. Rankine to briefly explain the role of the Audit Commission in relation to the Audit Committee.

Mr. Rankine circulated brief notes explaining the framework in which the Audit Commission operated, key duties of the District Auditor and relevant legislation. The scope of the Auditor's work in respect of the County Council covered not only the audit of financial statements, but also arrangements to secure the economic, efficient and effective use of resources.

Mr Rankine further explained that part of the District Auditor's role would be to monitor the County Council's reporting of financial statements to ensure that they complied with statutory requirements and that proper practices had been observed in compiling the accounts. Mr. Rankine added that the Audit Commission would wish to liaise with the Audit Committee and its members to establish that they were satisfied regarding the adequacy of accounting and internal control systems and that the County Council's Statement of Accounts had been properly and thoroughly prepared.

With the Chairman's permission, Mr. Rankine also submitted a progress report (dated June 2009) outlining issues that had been included within the 2008/09 Audit Plan. The progress report indicated the status of a variety of matters relating to the use of resources which the Audit Commission had either monitored, or asked County Council Officers to monitor.

The Committee welcomed the progress report and the absence of concerns relating to the Council's performance in promoting and ensuring probity and propriety in the conduct of its business. As such the progress report was received and noted.

5 DRAFT ANNUAL GOVERNANCE STATEMENT

The Committee considered the report of the Monitoring Officer and the County Treasurer (Item 5 in the Minute Book). The Monitoring Officer explained that the County Council was required under the Accounts and Audit Regulations 2003 (as amended in 2006) to produce a broad based Annual Governance Statement. She also explained the methodology that had been used in relation to the preparation and production of the Statement.

Members noted that the statement projected into the future to cover action taken before the 2008/09 accounts were finalised but asked that future statements distinguish more clearly between in-year and relevant post balance sheet events.

In response to questions, Audit Committee Members indicated they would wish to be made aware of the format and content of the departmental corporate governance questionnaires referred to in the report in advance of any future circulation, as well as the summary of responses contained in the statement itself. (Members were reminded that questionnaires were sent out every second year and as such the next occasion which they would have the opportunity to see them would be in 2010).



RESOLVED:

(a) That, subject to the correction of any minor typographical errors within the draft, the Audit Committee approves the draft Annual Governance Statement for signature by the Leader of the County Council and the Chief Executive.


(b) That, in future, Members of the Audit Committee be provided with an opportunity to see both the proposed format and content of the corporate governance questionnaires in advance of the inclusion of a summary of responses within part of the Annual Governance Statement.

6 DRAFT STATEMENTS OF ACCOUNTS 2008/09

The Committee considered the report of the County Treasurer (Item 6 in the Minute Book). The County Treasurer circulated amendments to the report to reflect issues arising after agenda distribution and a brief explanation of the amendments. These affected pages 2, 4, 38, 39, 40, 41, 44, 60, 62, 76, 78, 79 and 85 respectively.

Questions on a range of issues were raised by Members and these were responded to by the County Treasurer. The topics covered included the valuation of the County Council's assets and the technical reasons for the substantial deficit on the income and expenditure account, which principally related to a revaluation of assets. (Asset revaluations can see asset values increase or decrease but have no direct impact on the council tax). Members also considered the implications of the pension scheme liability, calculated in accordance with financial reporting standards , and concluded that this was a theoretical calculation based on a set of assumptions that were unlikely to occur in the public sector and therefore of limited relevance. Members did, however, note that any increase in employer costs could have a potential impact on the council tax.

The Committee also considered the prospect of being able to recover any potential Hampshire County Council losses arising from the investment fraud perpetuated by Mr. Bernie Madoff (a USA Fund Manager) and the level of school balances. Members also noted the explanation in respect of the "Notes to the core financial statements" relating `employers liability, public liability and professional indemnity'.

RESOLVED:

That the Statement of Accounts for 2008/09 be approved, subject to the inclusion of the amendments circulated by the County Treasurer.

7 ANNUAL INTERNAL AUDIT OPINION 2008/09

The Committee considered the report of the County Treasurer (Item 7 in the Minute Book). Questions on a number of issues were raised by Members and these were responded to by the County Treasurer. Topics covered included whistle blowing, the most appropriate ways in which Members could raise concerns themselves, documentation of worker profiles for agency staff and enhancing the working relationship between departments and Internal Audit.

Comments by the County Treasurer in respect of the progress of management actions being undertaken were noted. Members asked that they be given an opportunity to review and agree the annual planned programme of audit work and also asked that any work necessary for the documentation of CRB checks and worker profiles for agency staff be undertaken at the earliest opportunity.

At the end of a detailed discussion, Members concluded that the County Council had an appropriate framework of control which provides reasonable assurance regarding the effective, efficient and economic achievement of the County Council's objectives.

RESOLVED:

(a) That the internal audit assurance statement for 2008/09 detailed in Appendix A of the report be accepted.


(b) That progress of management actions to resolve the issues in paragraph 7.4 to 7.19 of the report be reported mid year to the Audit Committee.

8 EXCLUSION OF PRESS AND PUBLIC

RESOLVED:

That the press and public be excluded from the meeting for the following item of business as it is likely, in view of the nature of the business to be transacted or the nature of the proceedings, that if members of the public were present, there would be disclosure to them of exempt information within Paragraph 7 of Part 1 of Schedule 12A to the Local Government Act 1972, being information relating to the County Council's business or financial affairs which should not be disclosed for the reasons set out in the report.

9 ANNUAL INTERNAL AUDIT OPINION 2008/09 (EXEMPT APPENDIX)

The Committee considered the exempt appendix to the County Treasurer's report (agenda item 7) and included it within their formal resolution in relation to that report, i.e.



RESOLVED:

(a) That the internal audit assurance statement for 2008/09 detailed in Appendix A of the report be accepted.


(b) That progress of management actions to resolve the issues in paragraph 7.4 to 7.19 of the report be reported mid year to the Audit Committee

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