Agenda and minutes

An apology for absence was submitted by Mr Stewart.

To note any changes in membership.

Mr Wilson had replaced Mr Stewart as a member of the Committee for this meeting only.

To disclose any personal and prejudicial interests relating to any item on the agenda.

NB The following is a summary of what constitutes a personal interest and a personal and prejudicial interest. Please seek advice or refer to the Code of Conduct (paragraph 8) for full definitions.

PERSONAL INTERESTS

You have a personal interest if the issue being discussed in the meeting affects the well-being or finances of you, your family or your close associates more than most other people who live in the Electoral Division affected by the issue.

Personal interests are also things that relate to an interest you must register.

N.B. If the personal interest arises because of your membership of another public body, you only need to declare it if you intend to speak.

A personal interest should be declared as follows:

I have a personal interest in agenda item […] regarding the report on […] because I am […].

PERSONAL AND PREJUDICIAL INTERESTS

If you have a personal interest in a matter you will also have a prejudicial interest in that matter if the interest is one which a member of the public, with knowledge of the relevant facts, would reasonably regard as so significant that it is likely to prejudice your judgement of the public interest. If you have a personal and prejudicial interest you must withdraw from the meeting room for that item, unless you are there to make representations and the public have the same opportunity to do so

NB You only have a prejudicial interest if the matter

·        affects your financial position or that of your family, close associate, employer etc or it

·        relates to a regulatory matter

There were no disclosures of interest.

To consider whether the press and public should be excluded from the meeting during consideration of any item on the agenda.

There were no items on the agenda for which the press and public should be excluded.

To confirm as a correct record the minutes of the meeting of the Committee held on 18 March 2011 (copy enclosed).

RESOLVED, that the minutes of the meeting of the Committee held on 18 March 2011 be confirmed as a correct record and signed by the Chair.

To consider a report by the Assistant Director – Public Protection (copy enclosed).

Members considered a report which provided a summary of the improvement activities being planned and prioritised to improve the County Council’s organisational resilience. Comprehensive improvement plans were being developed in line with organisational priorities and an ever changing risk landscape. These plans were currently being updated to take account of the re-structurings taking place across directorates and should be finalised by July. Further details on this would be reported to a future meeting.

It was clarified that the business continuity arrangements were underpinned by the principle of continuous improvement.

RESOLVED, that the contents of the report and the direction of travel be noted.

To consider a report by the Assistant Director – Public Protection (copy enclosed).

Members considered a report which provided an update on the management of corporate risks identified for 2011 as at March 2011.

The Committee were advised that where mitigation measures had been put in place, risk ratings were not changed until it could be demonstrated that mitigation had been effective.

With regard to the Risk Management Improvement Plan, the Committee had asked at its last meeting for clarification of timescales to be reported to this meeting. The report contained some information and members were assured that any actions with an “ongoing” timeframe would be completed within the next few months.

RESOLVED, that the report be noted.

To consider a report by the Corporate Director – Safer and Stronger Communities (copy enclosed).

Members considered a report which outlined the use of covert surveillance techniques and covert human intelligence sources by the County Council during the period 1 April 2010 to 3 March 2011.

The Committee welcomed the report and the good work that was being achieved.

RESOLVED, that the report be noted.

To consider a report by the Corporate Director – Environment (copy to follow).

The Committee considered a report which provided members with the background to the Communities and Local Government (CLG) Article 16 Audit of the Barrow Waterfront Access Road and Key Infrastructure project.

In response to questions, members were advised that there was the potential for further Article 16 Audits in relation to this scheme to take place in  2011//12. Also, as some of the figures were still disputed the commitment made in the accounts for £54,560.20 could increase.

It was clarified that, in accepting the audit findings, the Committee would not be authorising any expenditure as this was not within its remit.

RESOLVED, that

(1)         CLG Article 16 Audit Findings 1, 6 & 8 amounting to £30,137.50 of ineligible expenditure requiring a repayment of European Regional Development Funding totalling £15,068.75 be accepted

(2)         clarification be sought from the North West Development Agency (NWDA) that Audit finding 5 has now been agreed as eligible expenditure

(3)         given North West Development Agency’s involvement in the decision to acquire the land and buildings which is the subject of Audit Finding 7, a formal response be sought from the NWDA.

To consider a report by the Assistant Director – Policy and Performance  (copy to follow).

Members considered a report which highlighted the main lessons learnt in the Council’s approach to managing key elements of the access to information regime – specifically the Freedom of Information Act (FOIA) 2000 and the Environmental Information Regulations (EIR) 2004.

Although responsibility for this issue was now with the Chief Executive’s Office, the Corporate Director – Adult and Local Services and the Assistant Director – Local Services were in attendance as the report related to the period for which they had been accountable.

Members asked for an estimate of the total cost incurred by the Council in responding to FOIA requests and how much the Council recovered in fees charged. In reply it was stated that the information needed to identify the cost to the Council was not captured but the total cost was likely to be very significant. No charge could be made for any request where it took less than 18 hours to collate the response.  Above that charges were at the discretion of the Council but were exceptional, if they happened at all. Efforts were made to ensure excessive amounts of time were not spent on responding to requests. In order to charge, it was necessary to say at the outset that a request would take more than 18 hours to respond to and this was very difficult as there was often a need to obtain information from more than one directorate.

The point was made by members that better document management systems across the Council would make it easier to retrieve information and therefore quicker to respond to requests. In addition, it was also noted that it was impossible to say how many potential FOIA requests were not made due to the information sought being accessible on the Council’s web site or published as part of the transparency requirements.

Members discussed the decision notice issued by the Information Commissioner regarding the handling by the Council of one specific FOIA request. Officers advised this was a complicated case and the Council had been deficient in terms of processes followed rather than the content of the response. Decision notices such as this were very much the exception and procedures were being strengthened as a result.

RESOLVED, that

(1)         the annual report and service performance for the year ended 2010 be noted

(2)         the actions proposed in the annual report for implementation in 2011 in order to continually improve the service be noted.

To consider a report by the Audit Commission (copy to follow).

Members considered a report from the Audit Commission which updated the Committee on the audit for 2010/11.

With reference to the figures in Appendix 2 which showed total spending per head of population in comparison with other similar County Councils, it was clarified that the Council used this information as a starting point when considering budgets. Although the data appeared to show that the Council was high spending in comparison with some other areas, the reasons behind this were not explained here. It was suggested it might be helpful if an explanation was included in the Council Plan.

RESOLVED, that the report be noted.

To consider letters from the Audit Commission (copy enclosed).

The Committee considered two letters from the Audit Commission regarding the annual audit fee for 2011/12 in respect of the Council and also the Cumbria Pension Fund.

RESOLVED, that the letters be noted.

To consider a report by the Audit Commission (copy enclosed).

Members considered a report from the Audit Commission regarding their Audit Plan for 2010/11 which set out the work to be done to meet their responsibilities under the Code of Audit Practice. The latter required the Commission to consider the annual accounts in relation to the Cumbria Local Government Pension Fund and whether they presented fairly the Pension Fund's financial position.

RESOLVED, that the report be noted.

To consider a report by the Audit Commission (copy to follow).

Members considered a draft report from the Audit Commission regarding their Audit Plan for 2010/11 which set out the work to be done to meet their responsibilities under the Code of Audit Practice. The latter required the Commission to consider the annual accounts in relation to the Council and whether they presented fairly the Council’s financial position.

It was clarified for members that this was an exception report and therefore areas which did not present any difficulties were not mentioned.

With reference to paragraph 29 (IT Risk Management) the Senior Manager – IT advised that there were business continuity plans in place for all the Council’s key IT systems but not any IT risk management processes. He undertook to ensure that the IT risk register would be provided to the Audit Commission.

The draft report which was subject to finalisation was discussed, however, the final report would be presented at the September meeting. In relation to the system reconciliations performed, the control issues would be clarified as part of the finalisation of this report.

RESOLVED, that the report be received.

To consider a report by the Senior Manager – Audit (copy enclosed).

Members considered a report which provided a review of the work of Internal Audit for 2010/11. It set out for the Committee Internal Audit’s conclusions on the system of internal controls as a result of its audit work in 2010/11 in accordance with the requirements of the Accounts and Audit obligations. This provided an opinion on the adequacy of the Council’s control environment as a contribution to the proper, economic, efficient and effective use of resources by the Council and supported the preparation of the Council’s Annual Governance Statement for 2010/11.

Reference was made to a paper that had been prepared on lessons learned from the Capita Transition. This would be circulated to members of the Committee.

RESOLVED, that

(1)       progress achieved in 2010/11 in delivering the audit plan and

the impacts arising from audit reports, set out in Appendix 1 to the report, be noted

(2)       the overall assurance provided as regards the operation of internal controls and the arrangements for ensuring delivery of value for

money be noted

To consider a report by the Senior Manager – Audit (copy enclosed).

Members considered a report which presented the Audit Strategy and Terms of Reference for Internal Audit, together with the final Audit Plan for 2011/12 following the submission of a draft plan to the March 2011 Audit and Assurance Committee.

The Chair reported that it had been hoped that a paper on CRB checks in schools would be submitted to this meeting. Disappointingly, that had not happened but was expected for the September meeting.

In response to a question about responsibility for pensions deficits and academies, members were advised that responsibility for historical deficits rested with the Council but future deficits were a matter for the academies. There was a national debate ongoing about who would guarantee pension deficits in respect of academies.

RESOLVED, that

(1)        the draft audit strategy and terms of reference for Internal Audit (Appendices 1 and 2 to the report) be agreed

(2)       the planned audit days for the shared service and the final audit plan for the County Council for 2011/12 (Appendices 3 and 4 to the report) be noted

To consider a report by the Chair (copy enclosed).

The Committee considered a report which provided a review of the work of the Audit and Assurance Committee in undertaking its work programme in 2010/11. Members also considered an analysis of how the Committee matched best practice as set out in CIPFA guidance.

The Chair commented that she would highlight this report at the September Council meeting. To ensure that substitute members were clear about the purpose of the Committee consideration would be given to including the Committee’s terms of reference on the agenda sheet.

RESOLVED, that the report be noted.

To consider a report by the Assistant Director – Finance (copy enclosed).

Members considered a report which provided an assessment of the effectiveness of internal audit in 2010/11.

The District Auditor commented that, once the Audit Commission ceased to exist, so would the requirement for the Commission to review the Council’s internal audit service. The Council would need to consider other appropriate external challenge, such as peer review. The Senior Manager - Audit commented that the shared internal audit service would allow greater scope for challenge on internal audits. In addition the Chairs of the Audit Committees covered by the shared service would meet at least annually to discuss common issues etc.

RESOLVED,  that the report and the overall positive assessment of Internal Audit’s work be noted.

To consider a report by the Senior Manager – Audit (copy to follow)

Members considered a report which provided an overview of the key proposals made by the Department for Communities and Local Government for the future of local public audit following the abolition of the Audit Commission.

In summary the Government’s proposals were:

• To require the National Audit Office to prepare codes of audit practice, which would prescribe the way in which auditors were to carry out their functions.
• A register of audit firms suitably qualified to undertake audit work in local public bodies would be constructed
• Principal local authorities would appoint their own auditors from those firms on the register. The decision would be made by full council, taking into account the advice from a new independently chaired audit committee.
• Smaller public bodies (such as parish councils) would be subject to less onerous requirements.
• Local authority pension funds would be subject to the new local public audit framework.
• Joint committees would remain subject to audit
• Local bodies would be able to commission additional services from their auditors, for example, value for money studies
• Grant certification, the National Fraud Initiative and the auditor function of the Whole of Government Accounts returns would continue “in some form”.

Although there was not a clear consensus from members in terms of their views on these issues the following points were made:

·        Some merit could be seen in the idea of ensuring the Audit Committee had an Independent Chair and Vice-Chair. This would ensure a degree of independence from the Council and re-assure the public.

·        External audit should not dilute their efforts and effectiveness by undertaking non audit work as suggested.

·        It was not good value for money for several authorities in the same area to appoint external auditors independently and it would be better if there was just one auditor for each area.

·        The idea that independent people were needed to appoint the auditor undervalued the important role of elected members.

Members agreed that it would be useful if Group Leaders and Cabinet members’ views on the consultation proposals were sought before the response was finalised.

RESOLVED, that

(1)         the proposals for the future of public audit  be noted

(2)         the draft response and covering letter for submission by 30 June 2011 be noted

(3)         finalisation of the response be delegated to the Assistant Director - Finance, in consultation with the Chair and Vice Chair, taking into account the comments expressed at the meeting and any further comments received from Group Leaders and Cabinet members.

To consider a report by the Senior Manager – Audit (copy enclosed).

Members were asked to approve the Annual Governance Statement. The governance issues for consideration that were considered to be significant were set out in paragraph 33 of the report, together with an action plan.

It was suggested that more examples should be included of where feedback had been received from service users.

RESOLVED,  that the draft Annual Governance Statement and proposed governance issues for 2011/12 be approved.

To consider a report from the Senior Manager – Audit (copy enclosed).

Members considered a report which provided an update of the work programme for the Audit and Assurance Committee together with the latest position in respect of the Committee’s monitoring of previous decisions.

The dates for future meetings would be circulated to members.

The Chair asked for updates to be obtained in respect of progress against actions which had been outstanding for several months. 

RESOLVED, that the updated draft work programme and monitoring report be noted.