Agenda and minutes

Venue: Norfolk Room, Conference Suite, Elizabeth House, Dereham

Contact: Committee Services  01362 656870

Items
No. Item

14.

Minutes (Agenda item 1) pdf icon PDF 126 KB

To confirm the minutes of the meeting held on 15 February 2013.

Minutes:

(1)         Annual Audit Fee Letter (Minute No. 5/13)

 

The Annual Audit Letter should read from Ernst & Young and not the Audit Commission.

 

(2)         Quarter 3 Governance Report Risks (Minute No. 7/13)

 

Should read: “Page 31 – BC/SH-EH-OP 04 instead of BC/SH-EH-07 04

 

(3)         Minutes

 

Subject to the above amendments, the Minutes of the meeting held on 15 February 2013 were confirmed as a correct record and signed by the Chairman.

15.

Apologies (Agenda item 2)

To receive apologies for absence.

Minutes:

None.

 

16.

Declaration of Interests (Agenda item 4)

Members are no longer required to declare personal or prejudicial interests but are to declare any new Disclosable Pecuniary Interests that are not currently included in the Register of Interests. Members are reminded that under the Code of Conduct they are not to participate and must leave the room, for the whole of an agenda item to which they have a Disclosable Pecuniary Interest. 

 

In the interests of transparency, Members may also wish to declare any other interests they have in relation to an agenda item, that support the Nolan principles detailed within the Code of Conduct.

Minutes:

None.

 

17.

Non-members wishing to address the meeting (Agenda item 5)

To note the names of any non-members wishing to address the meeting.

Minutes:

Mark Kiddle-Morris.

 

18.

Training (Standing item) (Agenda item 6)

To note if there are any training issues/ requests.

Minutes:

Nothing to report.

 

19.

Annual Report on Complaints under the Localism Act 2011 (Agenda item 7) pdf icon PDF 62 KB

Report of the Assistant Director of Democratic Services.

Minutes:

The Assistant Director for Democratic Services/Monitoring Officer and the Standards Officer were in attendance and updated Members on the work undertaken since July 2012 following implementation of the new standards regime.  The update provided the number of complaints received and the present position in relation to the receipt of Disclosable Pecuniary Interests (DPIs) forms from Breckland Councillors and Town and Parish Councillors.

 

Since the new arrangements the number of complaints had reduced; most had been classed as petty complaints and had been quashed.  Only thirteen complaints had been received and none had been upheld.  The Standards Officer highlighted the fact that out of the thirteen complaints, eight had been in relation to one parish councillor.

 

There were three outstanding complaints under the old regime and all had been difficult to deal with. All three complaints had been investigated by an independent Investigating Officer; no breach had been found on two of the complaints. A failure to declare an interest had been found on the third complaint and the Subject Member had subsequently issued an apology.

 

Referring to the DPI forms, 53 were still outstanding and no forms at all had been received from five parish councils.   The Chairman asked if there were any penalties in place for non-compliance.  Members were informed that upon election the Act stated that forms must be submitted and reminders were still being sent.  It was classed as an offence if councillors failed to declare their DPIs which could end up being a Police matter; however, a number of Councils had already been down this route and the Police had shown no interest and had not been willing to pursue.  A single point of contact with the Police had since been established.

 

Mr Stevens asked a question in relation to the Code of Conduct.  The Monitoring Officer explained that most Parish Councils had adopted Breckland’s Code of Conduct; otherwise, it was presumed that the National Association of Local Councils (NALC) Code had been adopted.  The Standards Officer had to check which version had been adopted on submission of complaints.

 

A Member asked if there was anywhere else councillors could submit their complaint.  Members were informed that the next course of action would be to contact the Ombudsman who could then challenge the process of the decision.

 

The Chairman appreciated all the work that had been carried out since the implementation of the new arrangements.  He asked if the Independent Person had been involved with any of the thirteen complaints. Members were informed that she had been involved with all of them and the process was explained.

 

The report was otherwise noted.

 

20.

RevActive Project Risk Monitoring Report (Agenda item 8) pdf icon PDF 1 MB

Report of the Economic Development Manager.

Minutes:

The Portfolio Holder for Assets & Strategic Development reported that the REV ACTIVE project had proved to be a great success and had more than exceeded its targets.  The launch of the Grants4Growth project had ensured that SMEs still had access to support.  Breckland Council had engaged directly with the region’s LEPs to deliver efficient, responsive services that were aligned to real business demand and need.

 

Members’ attention was drawn to the DCLG Audit email which the Portfolio Holder read aloud, quoting the excellent outcome of REV ACTIVE that represented best practice and governance structures.

 

The Economic Development Manager highlighted the achievements mentioned under section 3.1.3 on page 17 of the report.  He pointed out that beneficiary SMEs had already invested over £2m that had given businesses the confidence to invest in the market.

 

The reasons for the recommendations and the risk and financial implications were highlighted.

 

Mr Ludlow asked when the project was expected to end. He also asked about the MCIS system. The Funding Support Officer advised that the practical completion date was September 2013 and March 2014 for the final audit.  In response to the latter, Members were informed that MCIS was a recording and payments system.

 

Mr Ludlow had noticed that a percentage had been charged for capital and revenue and asked if the ERDF had agreed these figures.  He also asked who had paid for internal audit.  The Funding Support Officer advised that the figures had been agreed and would be backdated.  Referring to the question relating to internal audit, Members were informed that South Norfolk Internal Audit Team had been procured and the fees had been funded through the project.

 

The Vice-Chairman asked for the Grants4Growth programme timeline.  It was noted that the timeline for this programme was approximately 24 months from April 2013.

 

RESOLVED that:

 

(1)   the current internal and external REV ACTIVE monitoring and oversight regime as set out in the report and accompanying documentation be endorsed; and

 

(2)   a further update be provided to the Audit Committee upon completion of the final external audit due to take place in March 2014.

 

21.

Local Government Sector Update (Agenda item 9) pdf icon PDF 837 KB

External Audit, Ernst & Young.

Minutes:

Rob Murray, Director for Ernst & Young presented the Audit Committee briefing.

 

It was a succinct report that contained links at the end of the document where Members could find out more detail about any of the articles listed.

 

It was noted that the Audit Bill update had featured in the Queen’s speech.

 

The Briefing paper was otherwise noted.

 

22.

Annual Review of the Effectiveness of Internal Audit for 2012-13 (Agenda item 10) pdf icon PDF 80 KB

Report of the Head of Internal Audit.

Additional documents:

Minutes:

The Internal Audit Consortium Manager presented the report which primarily sought to confirm that proper arrangements had been made to comply with the statutory requirements and to present evidence to Members that the system of Internal Audit at Breckland Council was effective, and that the assurances provided in the Internal Audit Annual Report and Opinion could be relied on and used to inform the Council’s Annual Governance Statement.

 

The Accounts and Audit Regulations 2011 stated that a Council the size of Breckland must undertake an annual review of the effectiveness of its internal audit function, and that this review be undertaken by the same body that reviewed the effectiveness of the system of internal control.

 

Internal Audit working practices were required to comply with CIPFA’s Code of Practice although these arrangements were set to change from 2013/14 and be replaced by new consolidated Public Sector Internal Audit Standards (PSIAS).

 

The existing working practices predominately met much of the newly introduced PSIAS requirements although there would also be an obligation to arrange for an external assessment of the effectiveness of internal audit at least once every five years.

 

Internal Audit operated in an 8 point quality assurance, a summary of review outcomes had been attached at Appendix 1 of the report.

 

Appendix 2 of the report highlighted the additional requirements specified by the PSIAS in relation to future external assessments of the effectiveness of Internal Audit.

 

The next element, complying with CIPFA’s Code of Practice for Internal Audit, had confirmed that full compliance had been achieved in relation to 11 key criteria.

 

Complying with CIPFA’s Statement on the role of the Head of Internal Audit set out 5 principles that defined the core activities and behaviours that applied to the role of the Head of Internal Audit, and the organisational arrangements to support them.  Each principle had associated requirements (59 in total); however, 2 of these principles did not apply but the remaining 57 elements had been found to be satisfactory.

 

Referring to the quality standards applied to the Internal Audit Service, 98.8% of audit recommendations had been achieved against a target of 90%; however, the percentage of high priority recommendations implemented had fallen from 44% to 20% - only two out of the ten high priority recommendations had been completed.  The other main aspect of this work were the timescales for completing audits which had been far from satisfactory over the course of the year.  It had been established that audit fieldwork had been late for a number of reasons and these had been highlighted at paragraph 3 on page 83 of the agenda.  As far as the cause of the lengthy timeframes between draft and final audit reports was concerned, delays had been due to either late receipt of management responses, or problems associated with agreeing the form that the management response should take.  The Internal Audit Consortium Manager explained that a number of meetings had been held with Deloittes to ensure that the Audit Plan was completed on  ...  view the full minutes text for item 22.

23.

Annual Report and Opinion for 2012-13 (Agenda item 11) pdf icon PDF 190 KB

Report by the Head of Internal Audit.

Additional documents:

Minutes:

The Internal Audit Consortium Manager gave a detailed overview of the report which had been developed to satisfy the mandatory requirements of the new Public Sector Internal Audit Standards (PSIAS), effective from April 2013 (specifically Standard 2450), and to satisfy the requirements of the Accounts and Audit (England) Regulations 2011.

 

The structure of the report had been revised to previous years; a commentary on compliance with new standards must now be prepared in much the same way as the extent of compliance achieved against the CIPFA Code of Practice had to be documented.

 

It was noted that when considering the report and its attached opinions, the statements made therein should be viewed as key items which need to be used to inform the organisation’s Annual Governance Statement. 

 

Internal Audit’s service provisions and costs had increased marginally by 2.3% compared with the previous year.  This had been due to an expanded Internal Audit Plan being delivered in 2012/13.

 

In order to provide the Council an overall opinion on its control environment, the Internal Audit Consortium Manager had revisited the assurance levels given to individual audit assignments throughout the year, relating to both financial and non financial systems.  These had been highlighted in the tables on page 91 and 92 of the agenda.

 

Members were asked to note that this year a change of methodology had been applied to work carried out to support the preparation of the Annual Governance Statement.

 

On the basis of the audit work undertaken in 2012/13, the Internal Audit Consortium Manager’s opinion was that the overall adequacy and effectiveness of the Organisation’s governance, risk and control framework for the year ended 31 March 2013 were adequate.  A good assurance had been additionally given to Breckland’s corporate governance and risk management arrangements, whilst an adequate assurance had been awarded to the Anglia Revenues and Benefits Partnership in respect of its governance.

 

The table of individual audit opinions at paragraph 3.4.1 of the report confirmed that there had been 4 audits where less favourable assurances had been given (3 limited assurances and 1 unsatisfactory assurance).  This unsatisfactory assurance was in relation to procurement which was still an area of particular concern.

 

The report also set issues of significance to be considered when compiling the authority’s Annual Governance Statement for 2012-13.  At paragraph 3.6.1 of the report, the details of eleven high priority recommendations, 5 of these had been earmarked for completion within the financial year and 5 had been carried over from the previous year’s audits, 2 of which had since been delivered by management.

 

A review of audit work delivered in 2012/13 compared with the Annual Audit Plan that had been approved on 3 February 2012 had been highlighted at paragraph 3.7.1 of the report.

 

An overview of the Audit Plan on pages 101 to 103 of the agenda noted where it had been necessary to reschedule work in year whilst abbreviated management summaries relating to the 12 audits that had been finalised since the progress report on  ...  view the full minutes text for item 23.

24.

End of Year Review of the Current Status of Agreed Audit Recommendations (Agenda item 12) pdf icon PDF 99 KB

Report by the Head of Internal Audit.

Additional documents:

Minutes:

The purpose of the report was to inform Members as to the progress made in implementing audit recommendations falling due between 1 October 2012 and 31 March 2013.  The report provided a commentary on management updates provided during this period, the outcomes of recent audit verification work and a year end position regarding recommendations.

 

Mr Ludlow felt that the dates seemed to be slipping and were not being addressed and asked what the consequences would be for the individuals concerned. The Deputy Chief Executive assured Members that he would report these valid points to the Corporate Management Team.  In response to the latter, he explained that these issues would be picked up in managers’ performance and indeed would have an affect on their performance related pay.  The Deputy Chief Executive said that he would like to see the officers/managers accountable for these areas to be present at these meetings in future.

 

Mr Ludlow felt that the main issue of concern was that there was no commentary or explanation as to why the dates had been put back or why the recommendations had not been implemented.

 

The contents of the report were otherwise noted.

 

25.

Annual Report on Treasury Management Performance (Agenda item 13) pdf icon PDF 165 KB

Report of the Assistant Director of Finance.

Additional documents:

Minutes:

The Assistant Director of Finance presented the report.

 

The Council was required through regulations issued under the Local Government Act 2003 to produce an annual treasury report reviewing treasury management activities and the actual prudential and treasury indicators for 2012/13.  The report had met the requirements of both the CIPFA Code of Practice on Treasury Management (the Code) and the CIPFA Prudential Code for Capital Finance in Local Authorities (the Prudential Code).

 

The first table on page 160 of the agenda highlighted the slippage of the capital expenditure and Appendix A of the report provided Members with a commentary on interest rates and the economy from Sector, the Council’s Treasury Management Advisors.

 

The Committee discussed the options of lending to other Councils to achieve better interest returns.

 

Mr Ludlow asked why the table on page 166 of the agenda did not show any detail in the first column for March 2012.  He also asked if the Council monitored its credit rating.  In response to the first question, the Assistant Director of Finance said that he would have to speak to the Senior Accountant, the author of the report and report back.  As far as the latter was concerned, the Council did not monitor its own credit rating as, by default, Councils credit ratings were linked to the UK Government’s credit rating agency.

 

RESOLVED that:

 

(1)   the actual 2012/13 prudential indicators within the report be approved; and

 

(2)   the Treasury Management stewardship report for 2012/13 at Appendix B and Appendix C of the report be noted.

 

NB: Following the meeting and in response to Mr Ludlow’s question in the final paragraph above, the Senior Accountant for Capital and Treasury advised that, in 2012/13 the net borrowing position had been split to show Breckland money separately ie Icelandic money not yet received and non Breckland cash (TGP) had been shown on a separate line.  In 2011/12 everything was shown on one line.

 

26.

Draft Statement of Accounts (Agenda item 14)

Report of the Assistant Director of Finance.  

 

Due to its size, the Statement of Accounts will be sent out as a separate document following the agenda issue.

Additional documents:

Minutes:

The Accountancy Manager provided Members with a short detailed presentation emphasising the main areas of change to the Statement of Accounts.  There had not been any technical changes since the previous year but much of the ‘clutter’ had been removed and therefore the number of pages had been reduced in accordance with latest guidance.

 

The un-audited Statement of Accounts had to be signed off by no later than the end of June, followed by the Audit Committee’s approval of the audited accounts no later than 30 September each year.

 

In response to a question in relation to the figures on page 48 of the Statement of Accounts, Members were informed that the assumption figures had been provided by the pension fund actuary and had been based on a long term view of the scheme.

 

Under Note 11 – Property, Plant and Equipment (PPE), Mr Ludlow asked if the Council carried out a full property valuation every 5 years.  The Accountancy Manager explained that an impairment valuation was carried out on all Council-owned properties; valuations were not.  The Vice-Chairman felt that there should be a note included on the Statement of Accounts to reflect this.

 

Mrs Jolly asked what element of the running expenses of the £23m expenditure were contract payments, Members were informed that these figures reflected what had already been provided and approved in the budget presentation earlier in the year.

 

Referring to the foreword, it was agreed that the wording would be changed to reflect the actual number of Parish Councils.  Again under the foreword, but this time under the title of Achievements and Targets in relation to the percentage of household waste for reuse, recycling and composting, Members were informed that the final figures had not, as yet, been received from Norfolk County Council.

 

With regard to the Notes to the Core Financial Statements under Note 17 – Long Term Debtors on page 56 of the document, Mr Ludlow questioned the long-term benefit overpayments that had increased every year for the past four years.  The Assistant Director of Finance explained that this question had been put to the Anglia Revenues Partnership and the response had shown that the caseloads had increased along with changes in circumstances which took some time to be reflected in the benefits claims.    Mr Ludlow said that he would be interested to see sight of the percentages to these figures.

 

Mr Ludlow had also noticed that the note on page 71 of the document had changed dramatically in comparison to the previous year.

 

It was pointed out that this meeting had been convened one week earlier than last year making it quite a tight turnaround to produce the accounts and it was agreed that the date of the 2014 meeting would be set in the second week of June.

 

RESOLVED that subject to the aforementioned amendments/additions the draft un-audited Statement of Accounts for 2012/13 be noted.

 

27.

Work Programme (Agenda item 15) pdf icon PDF 63 KB

A copy of the Committee’s work programme is attached.  The Committee is asked to consider whether any additions, deletions or amendments to the programme are required.

Minutes:

It was agreed that the following items would be added/removed to the work programme for the next meeting in June:

 

  • Breckland Training Services (to add)
  • Annual Report on Complaints under the Localism Act (to remove)

 

It was further agreed that the following item would be moved from the June meeting to the September meeting:

 

  • Audit Joint Working Protocol

 

28.

Next Meeting (Agenda item 16)

To note the arrangements for the next meeting to be held on Friday, 28 June 2013 at 10.00am in the Norfolk Room.

Minutes:

The arrangements for the next meeting on Friday, 28 June 2013 at 10.00am in the Norfolk Room were noted.