Agenda item

(a)       That the report be noted; and

(b)       That a report with an overview of collaborative projects be submitted to the next meeting of the Committee.

The Finance Manager - Strategy & Technical introduced the report on the Annual Financial Audit outline for the audit of the Council’s accounts for 2012/13 and those of the Clwyd Pension Fund.

Ms. A. Hughes of Wales Audit Office (WAO) gave an overview, highlighting the main risks and proposed actions in Exhibit 1 of both reports.  She pointed out that some of the key risks were generic and would apply to other Local Authorities whilst others were specific to Flintshire, including those arising from previous audits with potential implications on this year’s audit.

On the Regulatory Plan, Mr. Morris explained that a similar report would be issued for performance audit work under the Local Government (Wales) Measure 2009, possibly in time for the next meeting of the Committee.  He reported that the Auditor General had confirmed that a 1.7% reduction would apply to the proposed audit fee for 2013/14 regulatory performance work bringing this to £137,587.

Following a query from Councillor G.H. Bateman, Ms. Hughes explained that the WAO needed to obtain an understanding of the Council’s responsibilities in relation to landfill sites and consider whether sufficient accounting provision had been made in financial statements.  The Head of Finance clarified that this was not a reflection on the management of landfill sites but that all Councils would need to ensure appropriate accounting provision.  The Chief Executive confirmed the need for risk planning and managing closed landfill site liabilities in the medium term financial planning.

On joint committees, pooled budgets and collaboration, Councillor R.B. Jones asked why risks had not been assessed before collaboration arrangements had been put in place.  The Chair commented that the North Wales Residual Waste project had been ongoing for some time.  Ms. Hughes said that this issue was about ensuring that accounting obligations were being met on collaborative arrangements in accordance with regulations: this applied to accounts for Joint Committees but did not apply to risk assessments.  She added that the North Wales Residual Waste Joint Committee had recently approved accounts for the past four years and this was now on track, however her concern was that there may be issues with other joint arrangements.

The Chief Executive said that there were several other collaborative projects of the same scale which would require separate and audited accounts.

Councillor Jones spoke of the difficulty in being able to scrutinise and understand performance in collaborative projects.  Mr. Morris agreed that this was a challenge given the increase in joint working arrangements but that work through local service boards and integrated planning enabled more to be done on achieving clear and purposeful outcomes.  Current work on performance with Overview and Scrutiny across Wales would include collaboration.

Following comments by Councillor A. Woolley on the difficulty in shifting focus to understand trends, Councillor Jones suggested that scrutiny of collaborative issues be included on the Committee’s Forward Work Programme.  The Chief Executive welcomed this and said that reporting arrangements were already in place on adoption of business cases as per the Council’s protocol.  He suggested that a report with an overview of collaborative projects could be submitted to the next meeting of the Committee to ensure that such arrangements were in place.

In response to a query raised by Councillor G.S. Banks on Single Status and Equal Pay liability, Ms. Hughes explained that as part of the previous audit, the WAO had considered whether the Council had made an appropriate accounting estimate for Equal Pay liability based on relevant information.  She was satisfied that progress had been made in providing more accurate information in recalculating the estimate for the accounts.

Following comments by the Chair on the cost of agency workers engaged on Single Status and the provision of Welsh Government (WG) funding, the Chief Executive gave assurance that figures in the accounts for Equal Pay had been refreshed in accordance with audit requirements.  He advised that Members would be requested to make decisions on the Single Status Agreement over the Summer, however in-depth discussion was not possible in a public meeting at this stage as negotiations were currently ongoing with Trade Unions.

The Head of Legal & Democratic Services explained that the initial financial estimate for Equal Pay liability provided by the consultant earlier in the process had been at the maximum end of the scale.  Subsequent working of different assumptions had resulted in a clearer figure which, together with detailed legal advice, gave assurance of officers’ confidence in the process however the final result could not be shared until the completion of negotiations with Trade Unions.

The Chief Executive clarified that it was the Council’s responsibility to settle Equal Pay and Single Status.  To progress Single Status, the Minister had uplifted the annual Revenue Support Grant to Councils and Flintshire had carried forward these amounts into reserves since 2003/04.  On Equal Pay, the Council could apply for capitalisation to Welsh Government to allow borrowing to meet the costs of liability in full or in part and could draw on its Equal Pay/Single Status Reserve.

In response to a query by the Chair on unlisted investments in the Clwyd Pension Fund, Ms. Hughes explained that quoted prices did not apply to private equity investments and that there was a requirement for the Fund Manager to provide internal control reports to give assurance to WAO.

RESOLVED:

(a)       That the report be noted; and

(b)       That a report with an overview of collaborative projects be submitted to the next meeting of the Committee.