Venue: Norfolk Room, Conference Suite, Elizabeth House, Dereham
Contact: Committee Services 01362 656870
Note: Special meeting
To confirm the minutes of the meeting held on 11 September 2009.
The minutes of the meeting held on 11 September 2009 were confirmed as a correct record and signed by the Chairman.
To receive apologies for absence.
Apologies for absence were received from Messrs. R. Childerhouse, P. Hewett, D. Myers and L. Peacock.
To note whether the Chairman proposes to accept any item as urgent business, pursuant to Section 100(B)(4)(b) of the Local Government Act 1972.
Declaration of Interest
Members are asked at this stage to declare any interests that they may have in any of the following items on the agenda. The Members’ Code of Conduct requires that declarations include the nature of the interest and whether it is a personal or prejudicial interest.
No declarations were made.
Non-members wishing to address the meeting
To note the names of any non-members wishing to address the meeting.
The following Members were in attendance:
· Mr. P.D. Claussen, Executive Member for Economic, Health & Housing
· P. J. Duigan, Executive Support Member for Governance & Corporate Development
Annual Governance Report (Agenda Item 6)
Report of the external Auditor.
Mr. R. Murray, District Auditor, presented the Annual Governance Report for 2008/09.
The audit work was substantially complete, subject to which, it was proposed to issue an unqualified opinion on the Council’s financial statements for 2008-09.
With regard to the Council’s financial statements, the report set out the details of adjusted and unadjusted errors.
One material item to adjust related to the accounting treatment for the impairment of investments in Icelandic banks. The £3.5m impairment had been incorrectly charged to the General Fund rather than being accounted for as an exceptional item within the Income and Expenditure account. There had also been a further amendment resulting from updated guidance from CIPFA regarding impairments for investments with Icelandic banks. Since the submission of the Auditor’s letter, a proportion of the Icelandic investments were transferred from short-term to long term investment to reflect the anticipated recovery time set out in the accounts.
It was noted that the unadjusted items relating to the prior year’s adjustment to the pension reserve, impairment of fixed assets and pension fund assets were not considered to be material.
So far as accounting treatment of ARP Trading Ltd. was concerned, it was considered unnecessary at the present time to have Group Accounts for this purpose.
In relation to the Council’s arrangements for securing value for money, the Council was considered to be meeting minimum requirements and the scores on Use of Resources would be reported to the Council on 19 October.
The Auditors extended their thanks to the officers for their co-operation during the conduct of the audit.
Having considered the matters raised in the report, the Committee
take note of the adjustments made to the
financial statements as set out in the report (Appendix
(2) agree to
accept the misstatements in the financial statements as identified
which management has declined to amend or set out the reasons for
not amending the errors (Appendix 3); and
(3) approve the letter of representation on behalf of the Council before the Auditor’s opinion and conclusion is issued (Appendix 4).
Next Meeting (Agenda Item 7)
To note the next meeting will be held on 13 November 2009.
The date of the next meeting was confirmed as 13 November 2009.
Exclusion of Press and Public (Agenda Item 8)
To consider passing the following resolution:
“That under Section 100(A)(4) of the Local Government Act 1972, the Press and public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in paragraph 2, 3 and 5 of Part 1 of Schedule 12A to the Act.”
RESOLVED that under Section 100(A)(4) of the Local Government Act 1972 the press and public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in paragraphs 2, 3 and 5 of Part I of Schedule 12A to the Act.
Commercial Property (Agenda Item 9)
To consider the background to the issues surrounding commercial property investments. The relevant documents are being sent under separate cover for attending members of the committee only.
The Chief Executive explained that the Cabinet had accepted a report from the former Monitoring Officer at its meeting on 4 August 2009, albeit some areas of the report were not completely accurate. The report raised some areas for consideration by the Council as to the way forward and by this Committee as to a review of policies and procedures followed to ensure they were correct and what, if any, lessons needed to be learned for the future.
It was suggested the points as raised in that report gave a good basis for an examination of the matter and it was felt that it would be possible to make some positive responses to the issues raised.
Additional supporting information provided to the Committee included the original reports to Council, independent valuation reports and business lease relating to the property in question.
The Committee then proceeded to examine the issues in detail, particularly in regard to the contract and terms of lease. The position as to the statement of the accounting treatment of the contract was also examined in detail and was clarified and confirmed.
The investment in property involved in this matter had been questioned but it was noted that the Audit Commission’s report “Room for Improvement” made it clear that such investments by local authorities were not unusual and were a valid use of resources.
So far as the risk assessment made at the time of the investment was concerned, it was felt this had sufficiently addressed necessary areas. However, the risk assessment of the investment did not appear to have covered the question of a parent company guarantee for the business concerned. This latter point was something that needed to be provided for as the rule for all investments in the future (as it was for more standard commercial contracts) and any exceptions to this rule to be reported for a decision in each case.
So far as the question of value for money of the investment was concerned, the investment had outperformed similar cash investments and was expected to continue to do. The question of whether the Council had invested too high a proportion of its resources into a single asset was also considered. It was believed not, the value of the sum invested being a small percentage of the Council’s overall investments.
This was also a long-term investment and performance of such would not be judged over a short period of three years.
It was also felt the asset had not lost value, as evidenced by a recent soft marketing exercise.
In answer to the question of whether the investment had impacted on the medium term financial strategy or council tax, the reply was no. The Council’s investments were managed prudently and the Council currently had a healthy £2m commercial property reserve to manage peaks and troughs.
The question was also asked whether a matter from 2006 should influence the Council’s 2009 Use of Resources scores. It was believed it should not and that there did ... view the full minutes text for item 67.