Agenda and minutes

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

Contact: Committee Services  01362 656870

Items
No. Item

13.

Introductions (additional item)

Minutes:

The two new Independent Members, Mr K Stevens and Mr T Ludlow, were welcomed to their first meeting.

 

Mr P Southgate and Mr T Cracknell were in attendance in support of Agenda item 14, Diss Rugby Club.

 

Following introductions the meeting commenced.

 

14.

Minutes (Agenda item 1)

14a

To confirm the minutes of the meeting held on 14 January 2011. pdf icon PDF 100 KB

Minutes:

The Minutes of the meeting held on 14 January 2011 were confirmed as a correct record and signed by the Chairman.

14b

Matters Arising from the Minutes

Minutes:

Progress Report on Internal Audit Activity 2010/11 – Covering the period up to 16 December 2010 (Minute No. 5/11)

 

Members were reminded that under this particular Minute the assigned Officer for Capita Symonds had been asked to attend to report on contract monitoring.  The Deputy Chief Executive was in attendance to present the item but as the agenda was quite full it was agreed to postpone the matter until the June meeting.

15.

Apologies (Agenda item 2)

To receive apologies for absence.

Minutes:

An apology for absence was received from Mr R Childerhouse.

 

Members were informed that Mark Kiddle-Morris had hoped to attend the meeting to support agenda item 13 but unfortunately he had sent his apologies due to other commitments.

 

16.

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

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

Minutes:

Lady K Fisher.

 

17.

Joint Audit and Scrutiny Panel: 2 March 2011 (Agenda item 6) pdf icon PDF 64 KB

To confirm the Minutes of the Joint Audit & Scrutiny Panel meeting held on 2 March 2011 and any actions arising.

Minutes:

The Head of Finance had attended the Joint Audit & Scrutiny Panel meeting on 2 March and the ICT Project Manager was present in case the Audit Committee raised any technical questions.

 

The Chairman pointed out that the Audit Committee Members had been unable to attend the joint meeting and therefore were unable to comment on the Minutes.

 

18.

Audit Opinion Plan 2010/11 (Agenda item 7) pdf icon PDF 278 KB

Report of the Audit Commission.

Minutes:

Mr Robert Murray presented the Audit Commission’s Audit Opinion Plan to Breckland Council for 2010-11.  Members’ attention was drawn to a number of key areas.  Firstly the fee, which had been reduced due to the abolition of the Comprehensive Area Assessments (CAA); a rebate of 1½% to reflect these new arrangements had been incorporated.  Members were informed that the Audit Commission Board would be considering a possible further reduction in 2011/12.  Secondly, the Audit Commission would normally be outlining a fee for the Anglia Revenues Partnership Joint Committee (ARPJC); however, the Department for Communities and Local Government (DCLG) had published a consultation for the ‘Revision and consolidation of the Accounts and Audit Regulations 2003’, and since the revised regulations were not being implemented until 31 March 2011, no further audit work would be undertaken until clarification was received.

 

Pages 20 and 21 of the Plan provided the nature of the audit work and the risks relevant to Breckland Council.  The biggest risk identified was the preparation of the financial statements under the International Financial Reporting Standards (IFRS).

 

No questions were put forward.

 

RESOLVED that the Audit Opinion Plan for 2010/11 be noted.

 

19.

Certificate of Claims and Returns - Annual Report (Agenda item 8) pdf icon PDF 225 KB

Report of the Audit Commission.

Minutes:

Kevin Sharman, the Audit Manager presented the report.

 

In 2009/10, the Audit Team had certified three claims (housing and council tax benefit, national non-domestic rates and disables facilities) with a total value of £63 million.  Of these, a limited review had been carried out on two claims and a full review on the other.  The Audit Team had been unable to fully certify the 2009/10 housing benefit and council tax benefit subsidy claim and had therefore issued a qualification letter.  The issues raised had not been significant and accordingly there were no matters to report and no action for Members to take.

 

The report was otherwise noted.

 

20.

Whistle Blowing Policy (Agenda item 9) pdf icon PDF 90 KB

Report of the Head of Internal Audit.

 

Members are asked to note the Minute extract attached from the General Purposes Committee meeting held on 16 February 2011.

Additional documents:

Minutes:

The Head of Finance explained that in the printing process the actual policy had inadvertently been missed off the report.

 

RESOLVED that the Whistle Blowing Policy be deferred until the next meeting in June.

 

21.

Corporate Anti Fraud and Corruption Strategy (Agenda item 10) pdf icon PDF 86 KB

Report of the Head of Internal Audit.

 

Below is an extract from the Minutes of the General Purposes Committee meeting held on 16 February 2011.

 

Counter Fraud and Corruption Strategy (Minute No. 13/11 (a))

 

RECOMMEND to the Audit Committee that the Counter Fraud and Corruption Strategy be approved.

Additional documents:

Minutes:

The Head of Internal Audit presented the Council’s Counter Fraud and Corruption Strategy which had not been subject to a review since January 2008.

 

The legislative and policy framework around countering Fraud and Corruption had not changed in the last three years although there had been numerous publications in the interim highlighting that the financial consequences of fraud and corruption against Local Authorities and Public Sector Organisations had been far higher than previously thought.

 

Added to this, in March 2010, the National Fraud Authority issued the report of the Smarter Government Public Sector Fraud Taskforce entitled: “A fresh approach to combating fraud in the public sector”, in which case it had been acknowledged that approximately £684m had been lost in local government each year to non-benefit related fraud; therefore, it was important to continue to develop this policy.

 

Rather than re-writing the Strategy, the Head of Internal Audit had looked at many others for comparison and had kept the basic principles the same.  However, the revised strategy had been further enhanced through three new supplementary appendices which confirmed the roles and responsibilities within the Council, a Fraud Response Plan and an Action Plan.  All these improvements had been linked to the Council’s corporate objectives.

 

The Corporate Anti Fraud and Corruption Strategy had also been through the Council’s Local Joint Consultative Committee and the General Purposes Committee.  Members were now being asked to formally approve and adopt the document.

 

Mr Ludlow, Independent Member, asked how such policies were monitored and further asked what internal control the Council had with regard to third parties.  The Head of Finance explained that such matters would be requested during the procurement process and formed part of the evaluation for each tender.  He pointed out, however, that the Council did not have the power and was not legally bound to audit these policies.

 

The Chairman fully supported the aforementioned points and felt that the Council should have a policy in place during the procurement process which contractors should adhere to.  In further response to the Independent Member’s questions, the Head of Finance stated that the Council, as part of the audit brief for any subsequent reviews, could verify with its contractors whether these policies were still in place

 

A Member highlighted the cost of public sector fraud which amounted to approximately £3k per household.  He felt that the above suggestion should be recommended to the Director of Commissioning as part of Breckland Council’s Tender process.

 

Subject to all the aforementioned points and suggestions being taken into account, it was

 

RESOLVED that the revised Counter Fraud and Corruption Strategy be adopted.

 

22.

Anti Money Laundering Policy (Agenda item 11) pdf icon PDF 93 KB

Report of the Head of Internal Audit.

 

Below is an extract from the Minutes of the General Purposes Committee meeting held on 16 February 2011.

 

Anti-Money Laundering Policy (Minute No. 13/11 (b))

 

RECOMMEND to the Audit Committee that the Anti-Money Laundering Policy be approved.

Additional documents:

Minutes:

CIPFA guidance and money laundering legislation and regulations indicated that the Council was not legally bound to develop such a policy or detailed procedures, confirming how staff should handle potential incidents of this nature and the formulation of arrangements to be followed where dishonest practices were suspected.  A failure to determine a corporate response could lead to a significant reputational risk to the Council.

 

The guidance of how the Council should be responding had been set out at paragraph 3.2.2 of the report.

 

It was advised that the Assistant Director of Democratic Services, as the Council’s Monitoring Officer, be nominated to act as the Money Laundering Reporting Officer and the Assistant Director of Finance should act as the Deputy Money Laundering Officer.

 

The Independent Member pointed out that the comments he had made in relation to the previous item should be applied to all these policies.

 

RESOLVED that the Anti-Money Laundering Policy be adopted, subject to the Assistant Director of Democratic Services being nominated as the Money Laundering Reporting Officer and the Assistant Director of Finance being nominated as the Deputy Money Laundering Officer.

 

23.

Quarter 3 Governance Reports Risks (Agenda item 12) pdf icon PDF 232 KB

Report of the Governance & Performance Accountant.

Minutes:

The Governance & Performance Accountant presented the report.

 

No new risks had been identified as the Quarter 3 Performance Clinic had been postponed due to the implementation of the new shared management arrangement.  However, an internal review of the Council’s partnerships would see a number of new risks being presented to the Committee in the next quarter.

 

Pages 118 – 125 of the report covered the risks that had been currently rated the highest.

 

Under risk R-AM 03, funding for car park maintenance, the Head of Finance reported that funding had been requested in the Capital Programme.  A Member alerted the Committee to public liability claims for injury and damages if these car parks were not maintained. Members were informed that all car parks under the Council’s ownership had regular inspections and the Council also had a revenue budget for repairs, although the Capital Programme did not have a schedule for more significant works such as re-surfacing.

 

In response to an observation in relation to R-SR 10 (Snetterton Utilities Project) with regard to the Audit Committee pushing home its strong advocacy for Thetford or Attleborough being considered as an Enterprise Zone, the Chairman pointed out that Snetterton had already been identified as the main area for jobs once the electricity problem had been resolved.  He felt it would be a good idea to take heed of what George Osborne MP had said in a recent speech.

 

A further observation made was in regard to R-HR 05 (Human Resources) which, out of all the risks identified, was felt to be rather woolly. It was agreed that the responsible Officer should have another look at how this risk had been described then re-write it.

 

The Governance & Performance Accountant confirmed that all the aforementioned points would be taken into account.

 

RESOLVED that the report be noted.

 

24.

REV Active Project Risk Monitoring Report (Agenda item 13) pdf icon PDF 84 KB

Report of the Head of Economic Development.

Additional documents:

Minutes:

The Head of Economic Development, the Economic Development Officer and the Funding Support Officer were in attendance.

 

REV Active provided free, confidential and impartial support to eligible SMEs (small and medium enterprises) to reduce costs and carbon footprints. 

 

It was noted that the REV Active project had been and would continue to be very well audited.

 

A power-point presentation was provided which afforded Members with a complete picture and understanding of the progress of the current projects including expenditure (presentation attached for information).

 

One of the biggest risks was whether businesses would invest, fortunately, many had and a number of cases studies had already been produced.

 

The Head of Economic Development covered the forward strategy – building on the success that had been achieved thus far.  He wanted REV Active to continue and to become sustainable in its own right.  Interest had been received to franchise the project out which would generate income back into the authority.

 

The Chairman asked whether the REV Project had been looked at nationally.  Members were informed that REV Active was already working nationally with Lloyds TSB and through the new Anglia Local Enterprise Partnership (LEP).  The Leader of the Council was also promoting this project to the Green Economy Council. 

 

As the Chairman of the Green Panel, Lady K Fisher had taken a great deal of interest in the REV Project; however, in discovering where the energy wastage problems might be, she felt that the Council should be identifying whether there were any such problems within its own property portfolio.  The Head of Economic Development explained that the infrared information that the Council had was absolutely confidential but as far as the Council’s own portfolio was concerned, the Council had already deemed this type of work as an investment decision that had to be made.   The Economic Team was already working closely with the Asset Management Team and both were looking at ‘green’ standards.  Ultimately, it was about practicing what we preach.

 

In terms of risk and audit, Lady K Fisher felt that the Council, if it was going to earn money from the REV project, should be considering funding its potential problems going forward.  In response, the Chairman advised that the Council already had a policy of this nature.  It was noted that part of the Asset Plan was to look at these issues and Elizabeth House in future.

 

The report was otherwise noted.

 

25.

Match Funding Application - Diss Rugby Club (Agenda item 14) pdf icon PDF 84 KB

Report of the Community Development Officer.

Additional documents:

Minutes:

The Assistant Director of Comms & Communities introduced Mr Southgate and Mr Cracknell to Members and explained the reason for the report coming forward to the Audit Committee.

 

Mr Cracknell explained that Diss Rugby Club (DRC) had a substantial amount of members from the Breckland area. The club also benefited the district by operating a coaching outreach service to 20 schools, five of which lied within the vicinity of Breckland district.

 

The Club had been formed over 50 years ago and had, most of the time, been able to finance necessary improvements itself.  Plans had been drawn up for much improved facilities, including a larger kitchen.  Funding had so far been secured from a variety of organisations including a 15 year loan and a grant from the R.F.U (Rugby Football Union), £200k was expected to be raised by Club member pledges and £46k of that total had been offered from Breckland based benefactors.  The remaining balance of members’ pledges after completion of Phase 1 (forecast for May 2011 and estimated at £30k) would be used to fund phase 2, along with the secured funding from South Norfolk District Council, Mid-Suffolk District Council and the pending Match Funding Grant from Breckland Council (DRC was spread across these three District Councils).

 

Lady K Fisher who was the Ward Member for the Parish adjacent to Diss did know a number of youths from her area that played in the teams.   She thought it wonderful to have a rugby club of that calibre in the vicinity.

 

A Member was fully satisfied that DRC had met the criteria required for Breckland Match Funding.  He felt that clubs such as these should not be disenfranchised as long as there was clear delivery.

 

Another Member urged Members to support the grant funding as the benefit to young people was tremendous.

 

In response to a query with regard to the amount of funding, Members were informed that DRC hoped to get a further £30k from the R.F.U.

 

The Chairman felt that the Club was an advantage to Breckland as the facility was well run and had much support.

 

Referring to the options listed in the report, particularly in relation to option 3, Members felt that the criteria for Match Funding applications should not be changed subject to it being value for money for Breckland residents and each case should be judged on its merits.

 

The Chairman said that the Committee fully supported what the Club was trying to achieve and hoped that Breckland’s funding would make a difference.

 

Mr Cracknell thanked Members for their help and support.

 

RECOMMEND to Cabinet that:

 

1)     the funding application for Diss Rugby Football Club Match Funding totalling the amount of £20,000 be approved;

 

2)     no changes be made to the eligibility criteria for Match Funding applications; subject to it being value for money for Breckland residents;

 

3)     a protocol be implemented to ensure that the local authority within which the organisation is based matches or exceeds the grant requested from Breckland; and

 

4)  ...  view the full minutes text for item 25.

26.

Variation to Environmental Services Contract - referral from Cabinet (Agenda item 15) pdf icon PDF 141 KB

Report of the Environmental Services Manager.

 

Attached are the reports and appendices that were considered at the Cabinet meeting on 19 October 2010 where it was resolved that the Audit Committee be commissioned to investigate the financial aspects of the proposal (Minute extract attached).

Additional documents:

Minutes:

Roger Wilkin, the Council’s former Interim Environmental Services Manager, presented the report which outlined a proposal from Serco to allow payments in advance for the Environmental Services contract, in return for a payment discount to Breckland Council.

 

A report had been presented to Cabinet at its meeting on 19th October 2010 where it had been resolved that the Audit Committee be commissioned to investigate the financial aspects of such a proposal.

 

The issue of paying substantial amounts of money before the invoice was due had been one of the reasons why it had been recommended to the Audit Committee.

 

Information on Serco’s current financial position looked favourable but it did not guarantee its performance.  To carry out further rigorous checks would cost the Council more than the discounts were worth.

 

Serco had refused to consider any further offers. 

 

Members were informed that there were other Councils who had accepted certain discounts (see paragraph 3.3 of the report). 

 

Another concern to consider was if the interest rates changed.  The Assistant Director of Commissioning had been approached about this matter and he had stated that if Cabinet accepted such a discount, it would have to be built into the contract with a caveat for an annual review.  Taking this approach would allow the Council not be locked into something which could be considered unfavourable.

 

The Chairman could remember many companies that had collapsed over the years and felt that the time was not right for such a proposal taking into account the economic environment. 

 

Mr Ludlow, Independent Member, reported that he had spent much time trying to unwind contracts such as these and therefore knew that the Council could be putting itself at risk by paying for services in advance.  He disagreed with the aforementioned point about the proposal being written into the contract.  Referring to Serco’s financial position, he highlighted the fact that such information could be retrieved from the company’s monthly management accounts. Mr Stevens, Independent Member, agreed with the points made above and felt that annual savings that could be made would not be worth the risk.

 

Lady K Fisher, who was in attendance specifically for this item was disappointed by the response as she thought £30k going back into the Council’s purse, would have been good.

 

The Chairman reminded Lady Fisher of the companies that had lost hundreds of thousands of pounds by their contractors failing and Serco could be just as much as risk as anyone else.  He further reminded Members that this was Council Tax payers’ money.

 

A Member felt that in a culture of cuts it was not worth the risk.

 

The Independent Member felt that the level of risk for paying one month early was reduced, as this was paying for a service that had already been delivered.

 

A Member had many concerns about various points in the report, one of which was the failure risk if Serco was to go bust.  If a supplier was coming forward that was not in financial  ...  view the full minutes text for item 26.

27.

Updating of Strategic and Annual Audit Plans for 2011/12 and beyond to reflect the outcomes of a recently performed Computer Audit Needs Assessment (Agenda item 16) pdf icon PDF 75 KB

Report of the Head of Internal Audit.

Additional documents:

Minutes:

The Head of Internal Audit presented the report which provided details of the outcomes of the Computer Audit Needs Assessment work carried out between December 2010 and February 2011.  The views of four key IT Officers had been canvassed and essentially, an analysis had been undertaken of 41 discrete auditable areas constituting the key aspects of the IT environment within the Council.  This work had then been supplemented by a separate analysis designed to complement these areas, this time focusing on the organisation’s key applications and upcoming projects, in order to facilitate a comprehensive evaluation of IT arrangements.   Risk priority ratings had then been used to compile both a Strategic Computer Audit Priority Analysis and Annual Computer Audit Activity Plans.

 

The results of Deloitte Public Sector Internal Audit Ltd who had carried out this piece of work on behalf of the Council had been attached to the report at Appendix 1.

 

In terms of audit coverage for 2011/12, the original provision of 44 computer audit days, approved by the Audit Committee at its meeting on 14 January 2011, had subsequently been revised to 45 days to deliver four assignments and computer audit follow up work.  The four assignments selected had been highlighted at paragraph 3.2.1 of the report. 

 

Members were informed that a further number of audits that had been deemed as important had been put on hold into reserve status due to budget constraints.

 

RESOLVED that the proposals put forward as a consequence of the Computer Audit Needs Assessment exercise, the amended Strategic Audit Plan for 2011/12 to 2015/16, the reworked Annual Audit Plan for 2011/12 and the amended Summary of Internal Audit Coverage for 2011/12 be approved.

 

28.

Work Programme (Agenda item 17) pdf icon PDF 52 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:

Members were informed that the timetabling for the formal approval of the Statement of Accounts had changed and as a result would be moved to the September meeting.

 

The Whistle Blowing Policy and the Capita Symonds Contract Monitoring report which had been deferred would be added to the 10 June meeting.

 

The REV Active Project Risk Monitoring report would be rescheduled to every six months.

 

Mr Robert Murray asked for the consultation on the future of local public sector audit to be considered at a future meeting.  The Head of Finance informed Members that this consultation could be circulated for information once it had been issued.  It was agreed that if the Committee felt that this required further discussion a Special meeting could be convened as the deadline for comment was not likely to fall within the Committee timetable.

 

29.

Next Meeting (Agenda item 18)

To note the arrangements for the next meeting to be held on Friday, 10 June at 10.00am in the Norfolk Room.

Minutes:

Arrangements for the next meeting on 10th June 2011 were noted.