To receive apologies for absence.

Apologies were received from Peter Barber, Audit Commission.

To confirm the minutes of the meeting held on 26 January 2012 (attached).

The minutes of the meeting held on 26 January 2012 were confirmed and signed as an accurate record.

The chairman to identify any items of urgent business.

The chairman identified no items of urgent business on this occasion.

He took the opportunity to thank George Healey, the independent member of the committee, for agreeing to continue in his role until May 2015. Since the committee had been interested in the matter, he announced that the first meeting of the council's GO Shared Service Inquiry would take place on Monday 2 July at 5.00pm.

To receive any declarations of interest in any matter to be discussed at the meeting.  Members and officers are requested to identify the nature of the interest and indicate whether it is personal or prejudicial.

No declarations of interest were made.

The chairman to sign the staff and member gifts and hospitality registers and the fraud and corruption register.

Cllr Birch, chairman of the committee, confirmed that he had inspected and signed the gifts and hospitality registers and the fraud register.

Kevin Henderson, Audit Commission, to present the report for consideration.

Kevin Henderson presented the report, highlighting that the Audit Commission had not needed to report on significant issues, since there were none. This was worthy of praise, which was not the case in many authorities.

He confirmed information from the previous meeting regarding the future of local public audit (agenda page 16), emphasising that councils would not be able to appoint their own external auditors until 2017/18. The Commission would remain for the next five years as a small residual body. Value for money opinion would continue, but the scope had not yet been determined. He drew members' attention to agenda page 17, which confirmed a significant reduction in external audit fees for 2012/13 to £61,650 from £102,350. Grant Thornton, the company that would be providing the external audit service for the next five years in the South West, had held an introductory meeting in 11 May, recognising that it covered councils spread over a wide area. Grant Thornton would arrange further opportunities after August 2012, when the Commission's consultation process ended.

He ended by asking the council if it had completed the annual fraud and corruption survey and if it had considered the implications of amendments to the capital financing regulations.

The Group Manager for Finance and Property confirmed that the council had completed and returned the survey on 14 May 2012. There were no implications for the council of capital financing regulation amendments, but he said that he would circulate to committee members a technical note on the matter.

Cllr Bill Evans asked how the £30 million reduction in audit fees proposed by Grant Thornton would be split.

Kevin Henderson replied that a similar reduction of between 30 and 40 per cent would be applied to every organisation.

Cllr Bill Evans then asked how much of the £650 million of fraud identified had occurred in the South West and in particular the district.

The Group Manager for Finance and Property referred members to the briefing tabled earlier, stating that the detail did not extend to district level.

Cllr Hogan expressed delight at the reduction in external audit fees, but concern about possible consequences on quality. He asked how the committee could be assured that the level of service would remain the same.

Kevin Henderson explained that the matter was managed by the Commission centrally. He reminded the committee that the Commission itself would shrink centrally. He would not know about changes in audit practice until he began working for Grant Thornton. He confirmed that some of the fees collected from authorities were used for national studies and other work undertaken by the Commission's central office, including quality control and regulation.

The Group Manager for Finance and Property added that the council had received national reports, from which it had been sometimes difficult to draw conclusions locally. He also agreed to circulate to committee members an explanation of the term 'securitisation'.

The committee noted the report.

Ian Baker, SWAP to present the charter for consideration.

Ian Baker, South West Audit Partnership (SWAP), reported that there had only been minor changes to the charter, which he had been bringing to the committee since 2009. He explained that SWAP was currently undertaking a self-assessment against the standards set by the Chartered Institute for Public Finance and Accountancy (CIPFA) and externally validated. The results in June 2012 would then inform a SWAP improvement plan. He confirmed that if agreed by the committee the charter would become active immediately.

The committee agreed the SWAP internal audit charter.

Ian Baker, SWAP, to present the plan for consideration.

Ian Baker presented the report, emphasising the work plan at appendix 1 on agenda page 33. He explained that the managed audits were fixed and SWAP attempted to align them with the external audit areas. In discussion with the Group Manager for Finance and Property, SWAP had decided to undertake more detailed audits of creditors and debtors, due to the implementation of new systems. In respect of governance audits, SWAP was considering higher-level risks across the partnership, and a summary of findings would bring benefits for councils through the opportunity for shared good practice. The IT audit plan had been formulated with input from the Group Manager for Customer Service. Many of the operational audits were new, because SWAP had only been working with the council for three years.

Cllr Bill Evans asked how SWAP would use the 20 days allocated to audit the GO Shared Service.

Ian Baker replied that the team would look at how the shared service was benefiting the council and whether it was delivering against the business case.

Cllr Connell asked if SWAP could give comparators for time usage.

Ian Baker replied that SWAP allocated resource using best judgement and experience. Time allocation became more detailed during the scoping part of the process. Because managed audits were fixed, time allocation was much firmer from the outset.

Cllr Birch asked about the progress of the disaster recovery audit.

Jacqui Gooding, SWAP, confirmed that the council was putting the plan in place, so a review audit would happen in quarter three of 2012/13.

Cllr Molyneux, Leader of the Council, asked how a typical audit was structured.

Ian Baker explained the stages as follows:

1. Background research
2. Initial meeting to agree the scope of the audit
3. Work and testing programme
4. Ground work (for example checking how invoice payment worked)
5. Discussion document for service manager
6. Wider draft report for comment
7. Final report with action plan.

He added that two to three days of each audit were spent in preparation and production of the report.

Cllr Molyneux asked how much officer time was required during the process.

Ian Baker replied that it would typically take two days, but not generally a single officer. He agreed that it equated to about 37 days across the plan.

The committee noted the report.

Ian Baker, SWAP, to present the report for consideration.

Jacqui Gooding presented the report, commenting that the leisure audit was at the draft stage and that the non-opinion audit of printing and photocopying was near completion. The third audit on risk management was currently underway at the testing stage. She explained that key control audits would normally take place in quarter three, but due to the implementation of new systems would happen in quarter four for 2012/13 (agenda page 40). She confirmed that the new SWAP specialist Information Technology (IT) Manager would undertake internal IT audits before the outturn report in June.

Cllr Birch asked how Development Control had been given reasonable assurance despite having fourteen level three and one level four recommendations. He also asked for detail regarding the street scene audit.

Jacqui Gooding replied that most were to do with housekeeping, where controls existed but could be improved. Other level three risks could be controls that were missing in areas that were not high-risk. She agreed to send him a copy of the street scene report.

Cllr Bill Evans asked about the weakness identified on agenda page 41 regarding the quality of information for complaints and which level of management the comment referred to.

Jacqui Gooding explained that SWAP was producing a crosscutting report across all partners that might help.

The Head of Paid Service and Group Manager for Finance and Property agreed that the report was also timely and useful, since the council's complaints policy would be reviewed at the end of the year. In the last two years performance management reports had been changed to focus more on the Council’s groups. Previously there had been a separate table detailing all complaints at level two and above. One audit recommendation was to reinstate that practice in order to be able to learn from mistakes. The Group Manager agreed to circulate to committee members a copy of SWAP's latest report covering all partners.

The committee noted the report.

The Group Manager for Finance and Property to present report F.155 for consideration.

The Group Manager for Finance and Property presented the reports concerning risks outlined on agenda pages 52 to 55. He reported that for risk SWAP005 the deadline had slipped but the lone working policy was being refreshed. He personally vouched for the work being done on SWAP035 regarding disposal of asset guidance. SWAP055, the contracts register, was also on target. SWAP065 relating to vehicle insurance would be picked up through annual performance development appraisals (PDA). SWAP066, relating to council tax and NNDR, referred back to the level three risks identified on page 41. It had been a temporary problem that was now in hand. He agreed to circulate to committee members the monthly figures for NNDR, which would be available in the following week. The Civica system allowed more detailed breakdowns, which appeared monthly.

Cllr Connell asked if the deadlines for SWAP035 and SWAP055 were realistic, being only six weeks away.

The Group Manager for Finance and Property explained that the contracts risk was a technical issue, involving transferring data the council already had to a spreadsheet format. Regarding the vehicle licensing risk all PDAs should be complete by the end of June and additionally the council's van drivers licences would be reviewed every six months.

Ian Baker clarified that SWAP identified actions that were a priority for services. However SWAP had identified no high level risks.

The committee noted the report.

The Group Manager for Finance and Property to present report F.156 for consideration.

The Group Manager for Finance and Property presented report F.156, commenting that the issue had been picked up from both Audit Commission and SWAP reports. He clarified that text in italics on pages 58 to 60 were quotes from the Commission's report and that text in normal font recorded his commentary.

George Healey asked if the new Agresso system could do an automatic write-off of items below 9 pence.

The Group Manager for Finance and Property answered that he did not know, but that he would investigate the possibility.

Cllr Bill Evans asked if the two debts of over £1000 had been written off before liquidation.

The Group Manager for Finance and Property replied that this was not the case and that generally in such circumstances the finance team would immediately notify the legal team, which would pursue the debt.

Cllr Birch asked if the finance team put a higher priority to chasing debts of higher amounts.

The Group Manager for Finance and Property replied that the team did not automatically place a high priority on those, but the approach was explained on agenda page 63 - the write-off memo. He explained that any debt over £10,000 would automatically be referred to the Cabinet.

The committee noted the report.

The Head of Paid Service to present report SD.90 for consideration.

The Head of Paid Service presented report SD.90, explaining that each year the council needed an annual governance statement which looked back over the previous year and forward to the following year. The Leader of the Council and the Head of Paid Service were required to sign the statement, which then formed part of the annual accounts for the Audit Committee to agree in September. The Corporate Governance Group formulated the statement based on many sources of evidence and written to a format promoted by CIPFA and SOLACE. It was slightly longer for this year, because SWAP had suggested measures to strengthen it.

The Cabinet had considered the draft statement and made no changes. The statement would be finalised after the council received the SWAP annual report and any comments from the committee would be added.

She emphasised that procurement remained an issue for focus in the coming year and that shared services were a priority, because of the GO project and others under discussion. She ended by saying that she would continue to bring the action plan arising from the statement to every Audit Committee meeting.

The Head of Paid Service explained for Cllr Birch that Prince 2 project management methodology (agenda page 82) was an established document based system to control projects and was particularly effective for building projects. However it was a little heavy handed for the kind of project undertaken by the council so had been customised. IT had used the tailored version to introduce systems and was helping others in its use.

The committee noted the report.

The Risk, Insurance and Procurement Officer to present report F.157 for consideration.

The Risk, Insurance and Procurement Officer presented report F.157. He had included risks taken off since the last meeting, which appeared in paragraph 2.1, agenda page 88. Referring to page 89, risk SR1.03, he emphasised that the council was continuing to deliver services with reduced capacity, which would be further stretched with the introduction of the Localism Act. The council was addressing risks SR1.04 and SR1.05 at training sessions focusing on how to continue to achieve fairness with change. The risk for SR2.01 was around different partner aspirations regarding leisure facilities and how the council could ensure future provision at all sites.

SR3.01, relating to Cinderford regeneration had been around for several years, but the current risk involved the need during the next phase for a wider range of knowledge and skills. The risk was being managed by using funding opportunities to obtain specialist staffing resources as needed.

Cllr Frankie Evans asked what kind of specialist staffing and how it would be funded.

The Head of Paid Service answered that in this phase the regeneration project required marketing and implementation skills to ensure delivery. The Group Manager for Finance and Property added that there had been £50,000 funding from the county council and the HCA had also been forthcoming.

Cllr Bill Evans commented that the Single Status project seemed to have halted and asked why it had been delayed.

The Head of Paid Service replied that the exercise was continuing with pay modelling and there would be an update at the Strategic Overview and Scrutiny Committee meeting on 31 May. There would no longer be a Cabinet report in June as it was still too early in the process to get a final decision.  She emphasised that the council was working to achieve a scheme that was as fair as possible, while remaining affordable and keen to continue this as a partnership project with the two recognised Trades Unions.

Cllr Birch asked for more detail on how the district's geographical location could be a block under the GO partnership.

The Group Manager for Finance and Property explained that the risk was less than at the beginning of the project, but both the Forest of Dean and West Oxfordshire were at geographical extremities of the GO area. He said that he was part of the client officer group, which included the other Section 151 Officers and he was sending a strong message to the partnership about this district's aspirations for the Creditors, Payroll or Human resources function to be based at this council's offices. He would have discussions with the HR and other teams to find out what might influence decisions regarding the physical location of services. He added that there could still be a problem for staff members needing to travel between the Forest and West Oxfordshire.

He confirmed for Cllr Birch that the council was pushing the fact that it had accommodation for one or more of the services, even with the Police moving into the building.

The Head  ...  view the full minutes text for item 13.

All meetings at 5.30pm with a training session at 4.30pm (unless otherwise stated)

Thursday 21 June 2012                  Thursday 27 September 2012

Thursday 24 January 2013

All meetings at 5.30pm with a training session at 4.30pm (unless otherwise stated)

Thursday 21 June 2012                  Thursday 27 September 2012

Thursday 24 January 2013