To receive apologies for absence.

There were no apologies.

To confirm the minutes of the meeting held on 5 July 2011 (attached).

Committee chairman, Cllr Birch, asked if Cllr Robinson, Cabinet Member for an Efficient Council and Planning Policy, had approached the county council regarding the feasibility of lending it money.

Cllr Robinson replied that he had and that the county council structures meant that there was no immediate possibility, but that was not to say the council should not pursue the possibility again in the future.

The minutes of the meeting held on 5 July 2011 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, but informed the committee that he and two other committee members had attended a training session at Stroud District Council. They agreed that it had been useful, but a little rushed and perhaps should have been spread over two days.

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.

Peter Barber, Audit Commission, to present.

Peter Barber, Audit Commission, reminded the committee that the commission was required to give an opinion on financial statements and value for money. It was good news that he had been able to give the council an unqualified opinion on financial statements. The council had arrangements to ensure value for money and overall good internal controls. The council had put in place the new International Financial Reporting Standards (IFRS) by the required date of 30 June 2011, which was not the case for all councils.

The accounts were true within the allowed thresholds, containing two errors that would not have an impact on the balance sheet or financial position.

He said that the council was not alone in classifying as an exceptional item the change of pension costs from the Retail Price Index to the Consumer Price Index (agenda page 27).

Returning to page 18, he was satisfied that the key risks were being addressed appropriately.

He said that the national non-domestic rates issue around empty property relief was not significant. The commission had agreed with council officers recommendations that would be checked in the following year.

In conclusion he said that the accounts were of a good quality, which reflected the work of the council's finance team. Governance was also good with the Corporate Leadership Team recognising risks and taking appropriate action. The budget reflected principles in the medium term financial plan, which addressed the significant challenges relating to cuts over the following two years. The council also had effective cash flow arrangements and had been proactive in working with partners to generate savings, enabling the commission to give a 'clean' value for money conclusion.

Cllr Birch thanked Peter Barber for his excellent report and for his opinion and conclusion.

Cllr Bill Evans asked which documents had shown that the council was working well with partners (page 22.2).

Alex Walling, Audit Commission, replied that she had obtained evidence from committee papers and discussions with senior officers and the finance team.

Answering a query from Cllr Connell, Peter Barber explained that the basis for the materiality level should be between one and two per cent of gross revenue expenditure. The council's level of reserves and status as a low-risk council also made the level appropriate at near two per cent.

Cllr Hogan commented that this annual governance report represented a significant turnaround for the council over the past few years. The committee agreed with his wish to congratulate those who had brought about this major achievement for the council.

Cllr Birch added that he was particularly pleased to see the words 'commend the council' on page 15.

The committee noted the report.

Group Manager for Finance and Property to present report F.129 regarding the statement.

The Group Manager for Finance and Property presented report F.129, explaining that the IFRS had changed the way in which the accounts had to be presented and reminding members that they had received training on the detail of IFRS and the statement itself. He highlighted that the council had a bigger under-spend than projected, which was explained on page 49. The council was analysing the under-spend on council tax benefit subsidies to understand the reasons.

He emphasised that pages 48 and 49 were the 'must read' to enable a sound grasp of the accounts, highlighting the new note under page 49 paragraph 5, concerning major influences.

He pointed out that the apparent under spend of £22 million on page 60 was accounted for by the pensions adjustment. He also thanked the Finance Manager for the clear presentation of expenditure by service group, so that it appeared in the same way as on the council's quarterly performance reports.

He asked members to keep in mind the contingent liabilities referred to on page 125, paragraph 60.

Cllr Birch thanked the group manager for his report and asked if there was a limit to the carry-over for staff leave.

The Finance Manager confirmed that staff members were allowed to carry over up to five days' leave into the next year, which explained the figure of £140,000 in the accounts.

The Finance Manager clarified for Cllr Connell that the intangible assets referred to on page 61 comprised software licences.

Cllr Birch asked for clarification of the adjustments on page 81 relating to Right to Buy and VAT Shelter receipts.

The Finance Manager explained that the Right to Buy receipts just represented the council's share.

RESOLVED -

a)      to formally approve the accounts.

b)      to approve the use of earmarked reserves disclosed in note 10 of the accounts.

c)      The Chair of the Audit Committee to sign the Statement of Accounts and the letter of representation.

Cllr Birch duly signed the Statement of Accounts and the letter of representation.

Alex Walling, Audit Commission to present.

Alex Walling presented the report, commenting that most had been covered by the annual governance report. She had reported her findings regarding the NNDR to the Corporate Governance Group. She ended by stating that the commission was due to meet all deadlines for its work plan.

Peter Barber updated the committee on the future of external audit. The Audit Commission would let contracts for three or five years in 2012/13, based on four regions with 'frameworks'. The council would not be in a position to engage its own choice of external auditor until after that time. The commission was asking for bids for frameworks from organisations by 16 December 2011. The council would be part of the South West framework. Current auditors working for the commission would be TUPE'd across to the organisations that were successful in their bids.

His priority was to ensure that the work for 2011/12 was completed to the commission's standard.

Cllr Hogan asked what the point of the re-organisation was if there were to be no efficiency or cost savings. He believed that central government should allow authorities to organise their own affairs to ensure value for money.

Peter Barber answered that the commission's expectation, as detailed in the bid documentation, was for an overall reduction of 10 per cent in fees for councils. However he added that some geographic areas would be more attractive than others to bidders in terms of size and location

The Head of Paid Service asked if fees would be based on the size of authorities or on historical fees for individual authorities. She reminded members that despite Peter Barber's successful bid to get the council's fees reduced this year, they were still based on the fees from previous years when extra work had been needed from the commission.

Peter Barber did not have a definitive answer but said he would expect the bid documentation to contain the basis for fee setting.

Cllr Winship asked if the format and processes of external audit would change.

Peter Barber answered that the commission had consulted on a number of qualitative aspects of performance, but that an overall opinion would still be given. He admitted that in the case of the Foundation Trusts (FT) people had been concerned at the lack of challenge in the high level opinions on accounts.

Cllr Winship believed that the £56,000 paid by the Foundation Trust with which she was involved seemed disproportionate to what the council paid in relation to the turnover.

Peter Barber confirmed that the FT fee level was based on a higher materiality level of £1 to 2 million.

The committee noted the report.

Ian Baker, SWAP, to present for consideration.

Ian Baker, SWAP, presented the report, commenting that he had submitted the audit plan at the committee's April meeting and that assurance levels were looking good. Even though there were a number of audits in progress the annual plan was still on track. He reported that the partnership’s disengagement from DeLoittes and an internal auditor vacancy would have little if any impact on the work undertaken for the council.

Cllr Birch asked when the disaster recovery exercise would take place.

The Head of Paid Service replied that she had sent an email to committee members informing them of the change in date due to the delay in the GO project. The secure link with other GO partners had recently been tested. She hoped that the full exercise would be completed before the end of March 2012.

Cllr Bill Evans asked what the benefits had been of using SWAP for internal audit.

The Group Manager for Finance and Property answered that the council had made a saving of £10,000 initially, but had also gained greater resilience and specialist knowledge through a wider staff base.

Ian Baker added that for all work that cut across all SWAP partner authorities, such as the annual governance report, the partnership shared best practice.

Cllr Frankie Evans asked if the council should review its policy in light of increased cash payments.

Ian Baker replied that the quarterly figure was not huge at £692, but he just wanted to alert the council to the trend.

Cllr Birch asked about the impact of resource issues mentioned on page 157.

Ian Baker replied that although the council had agreed to move some audits later in the year, he was still confident that the audit plan would be completed.

The committee noted the report.

The Group Manager for Finance and Property to present report F.131, high level audit recommendations for consideration.

The committee noted report F.131.

The Head of Paid Service to present report SD.77 for consideration.

The Head of Paid Service presented report SD.77, commenting that the plan identified areas for sustained focus as at page 168 paragraph 2.1. The plan now included recommendations from the Audit Commission's annual governance report and the Corporate Governance Group reviewed the action plan each time it met.

Cllr Birch asked if it were possible to include target dates for actions.

The Head of Paid Service said that project management was an evolving area of work for the council, but agreed to give indicative dates for completed  actions where possible.

Cllr Frankie Evans asked if there were any contracts nearing renewal.

The Head of Paid Service replied that the printing strategy would be ready for 2012 and that all upcoming contracts were published on the website to encourage companies to do business with the council. The group manager added that there was an internal audit of printing in progress.

Cllr Bill Evans said that at the Stroud training session it had been useful to examine different councils' annual governance statements (AGS). Members had been pleased that this council's statement had come out very well, particularly in terms of the way the council engaged with the public.

The Head of Paid Service informed the committee that there had been an internal audit of the AGS, so that the council could seek further improvements.

Cllr Birch asked for an update on progress toward the recommendation to close access to IT for departing staff.

The Head of Paid Service replied that while the system itself was robustly protected it had been important to close off access to departing staff promptly and that an improved process had been put in place in April.

The Group Manager for Finance and Property explained to the committee that progress on the NNDR issue reported on page 177 would not be picked up by the Audit Commission yet, because it gave its opinion annually.

The committee noted the report.

The Finance Manager to present report F.128 for consideration.

The Group Manager for Finance and Property presented report F.128, explaining the tabled spreadsheet of current investments, following recent advice on restricting long term lending to certain institutions. He said that the council was looking to lend to other councils to give better security. He added that the council was hoping to exceed the projected investment income, because it had invested more money.

The group manager clarified for Cllr Jones that the council had  £12 million invested for fixed terms, but total investments appeared on page 182, paragraph 3.1.

Cllr Frankie Evans asked if the council would keep its investment with LloydsTSB at the end of the fixed term.

The group manager replied that it probably would, but possibly for a shorter period, since it might need money to lend to other councils. He also said that he would circulate to committee members details of Close Brothers Ltd.

RESOLVED - to note report F.128 and recommend to Cabinet for approval.

The Risk, Insurance and Procurement Officer to present report F.130 for noting.

The Risk, Insurance and Procurement (RIP) Officer presented report F.130, commenting that A1.5 would no longer appear on the register, as Defra had confirmed the level of funding. He explained that the target date for implementing the single status project (risk B1.01) was now 31 March 2012, because additional pay modelling had been requested by the Trades Unions to ensure an outcome acceptable to all parties.  This had  needed a new person to undertake it, as the previous resource from Cheltenham Borough Council had been co-opted to the GO project. The next pay modelling workshop was on 28 September 2011.

The Head of Paid Service explained that the GO project had been delayed by one month to give time for the provision of training materials and a secure network line, which was now in place. The council would be the first to implement the project in December on a very tight schedule.

The RIP Officer explained that risk B3.01 regarding diversion of waste from landfill had an ambitious target, which would be helped by securing a bulking facility within the district to save on haulage costs. He confirmed that the wording for risk B3.05b regarding information security had been changed to make it easier to understand.

Cllr Bill Evans asked what would happen to any of the council's staff as a result of waste management changes and why internal HR resources had not been used for pay modelling.

The Group Manager for Finance and Property replied that a business case for joint working had yet to be presented to the Cabinet and the council employed just four members of staff to manage the contract. Single Status pay modelling needed specialist skills that the council did not have. The person from Cheltenham Borough Council had been excellent value for money in being able to manipulate the software with ease and giving an independent view. The Head of Paid Service added that South West Employers were also able to give objective HR advice based on how the exercise had been run in other councils in the region.

The committee noted the report.

All at 5.30pm with a training session at 4.30pm.

Thursday 26 January 2012

Thursday 17 May 2012

All at 5.30pm with a training session at 4.30pm.

Thursday 26 January 2012

Thursday 17 May 2012