Agenda, decisions and minutes

No declarations of interest were made.

No declarations of interest were made.

To confirm as a correct record the minutes of the meeting held on 17 July 2012.

That the minutes be approved as a correct record and signed by the Chairman.

The minutes of the meeting of the Committee held on 17 July 2012 were submitted.

RESOLVED:

That the minutes be approved as a correct record and signed by the Chairman.

(a)       That the final version of the Statement of Accounts 2011/12 be recommended to County Council;

(b)       That the reports from the Wales Audit Office be noted;

(c)        That the Letter of Representation - Flintshire County Council and Letter of Representation - Clwyd Pension Fund be recommended to County Council;

(d)       That the Corporate Finance Manager and Head of Corporate & Capital Accounting provide a separate response to Councillor Jones’ query on the increased amount for software licences; and

(e)       That Wales Audit Office colleagues share with Council officers the CIPFA model Accounts, together with other examples, at the closing Accounts meeting.

The Head of Finance and Corporate Finance Manager introduced the Statement of Accounts for 2011/12, together with the Wales Audit Office (WAO) report in connection with the audit of the 2011/12 financial statements for Flintshire County Council and the Clwyd Pension Fund.

The draft Accounts had been received by the Committee on 17 July 2012 when officers had responded to Members’ questions.  The remaining queries had been followed up by a written response, with no further queries received since that time.  Changes agreed with WAO colleagues during the course of the audit had been incorporated into the final Statement of Accounts to be presented to the County Council later in the day in order to meet the statutory approval deadline.

Mr. J. Herniman of WAO commented on the difficult task of producing a set of accounts that were easy to understand, whilst following the necessary requirements.  For both audits, the Council was required to provide a Letter of Representation to confirm that all necessary information had been disclosed and that the financial statements were accurate.

Audit of Financial Statements Report for Flintshire County Council 2011/12

It had been reported that whilst the audit work had been substantially complete, some areas of work remained outstanding due to a number of significant adjustments and delays in receiving information.  Mr. Herniman confirmed that this had been resolved and there were no further issues, additional to the report, which needed to be brought to the Committee’s attention.  He advised that although an unqualified opinion would be issued, a query on Communities First had been raised by a member of the public late in the process but prior to the audit sign-off.  As a result, the audit closure certificate could not be issued until the query had been investigated.

There were two uncorrected misstatements detailed in the report.  The first identified that a number of assets had not been depreciated appropriately which resulted in assets being overstated, and the second was an incorrect classification on the balance sheet between creditors and grants received in advance.  It was noted that although the auditor was required to raise these with the Committee, if the Committee chose not to correct them and included appropriate comment in the Letter of Representation, this would not change the audit opinion.

The Head of Finance said that the points raised by WAO had been accepted by management and would be dealt with accordingly for future years.  She explained that there had been a timing issue in deciding not to correct the two misstatements, due to audit work continuing late into the audit period; this left little time to correct any late issues raised at Audit within the time available.  The significant amount of work required in following through any corrections would have impacted on finalising the Statement of Accounts.

Councillor R.B. Jones said he hoped that the issue on fixed asset depreciation would be resolved with the introduction of the Technology Forge software.  On intangible assets, the Corporate Finance Manager and Head  ...  view the full minutes text for item 25.

(a)       That the report be noted; and

(b)       That the Treasury Management Mid Year Report 2012/13 be presented to the Cabinet on 16 October 2012.

The Clwyd Pension Fund Manager introduced the update report on matters relating to the Council’s Treasury Management Policy, Strategy and Practices 2012/13 to the end of August 2012 which was also due to be submitted to Cabinet and County Council.

Members were advised of the Council’s continuing cautious approach to invest for no longer than three months and that the availability of lower interest rates for longer periods made it difficult to restructure debt.  The mid-year report showed compliance with every treasury management practice, with the exception of a minor administrative error detailed in the report.  The Clwyd Pension Fund Manager gave an update on the Landsbanki issue shown in the report, but was unaware of a potentially related issue brought to his attention by the Chair.

Following a question from Councillor G.H. Bateman on the transfer of responsibility for the Council’s Treasury Management function, the Clwyd Pension Fund Manager said that officers would continue to take advice from the treasury advisers, Sterling, on policies.  The Head of Finance explained that following a review of the Finance function, responsibility for the Council’s Treasury Management would transfer to the Corporate Finance Manager and his team which included the Finance Manager (Strategy & Technical) and Funds Officer who were present in the public gallery.

RESOLVED:

(a)       That the report be noted; and

(b)       That the Treasury Management Mid Year Report 2012/13 be presented to the Cabinet on 16 October 2012.

(a)       That the letter and report from the Office of Surveillance Commissioners be noted; and

(b)       That the recommendations of the report of the Office of Surveillance Commissioners be endorsed.

The Democracy & Governance Manager presented a report from the Office of Surveillance Commissioners (OSC) following an inspection on 26 July 2012 to review the Council’s management of covert activities and compliance with the Regulation of Investigatory Powers Act 2000 (RIPA).

He explained that this was the first such report received as part of the new role of the Audit Committee and that it was favourable of the Council’s RIPA policies and procedures which were mainly used by Trading Standards as a last resort.  Two recommendations had been made on the clarity of wording in procedures and a requirement for RIPA training, the latter of which had already been identified.  The Democracy & Governance Manager reported that both recommendations had been acted upon, with training scheduled for 31 October 2012 to update officers on the complex legislation.

Councillor R.B. Jones suggested that an additional recommendation be made for the Committee to endorse the recommendations of the OSC report and this was duly seconded.

Following a question from Councillor G.S. Banks on the use of CCTV equipment for fly tipping and dog fouling enforcement, the Democracy & Governance Manager explained that this had been included in the report to explain why the Council did not resort to covert surveillance for such matters.

RESOLVED:

(a)       That the letter and report from the Office of Surveillance Commissioners be noted; and

(b)       That the recommendations of the report of the Office of Surveillance Commissioners be endorsed.

That the report be accepted.

In response to discussion at the previous meeting, the Internal Audit Manager presented a report to inform the Committee of items deferred from the Audit Plan over the past two years.

He explained the process of deferring items from the Plan and said that 22 audits had been deferred from the Plan in 2011/12 and 19 in 2010/11, most of which had been advisory with the remainder as risk-based.

Of the 22 audits deferred in the 2011/12 Plan, Councillor G.H. Bateman enquired about that for the Communities First Follow Up.  The Internal Audit Manager said that this had been deferred a year ago and would be carried forward to 2014/15.  The Chair asked for clarification on the comments column for this audit and it was explained that this related to the deferment of the audit as the Communities First scheme was nearing completion before a further scheme could be continued.

Following a query by Councillor R.B. Jones on the ‘In Plan for 2012/13’ column in the plan deferrals table, the Internal Audit Manager replied that a three year Strategic Plan was in place and that the target year for each audit was shown in brackets.  Councillor Jones questioned the clarity of the table and also referred to earlier discussion on Communities First.  The Internal Audit Manager said that this issue had only been raised recently and could be a possible change to the Plan.

Following a question by Councillor Bateman on a deferral from the 2010/11 Plan, the Internal Audit Manager explained that the CD27 Waste Management audit had been a Strategic Assessment of Risks & Challenges (SARC) risk-based review on recycling performance and was included in the 2012/13 Plan.  In response to a query from the Chair, he replied that the scope of the original HR Strategy Management audit had related to Service Plans and People Plans rather than staff appraisals.

Councillor Jones felt that the report was too complex and said that information was only needed on Plan items for the current year and where they had come from.  The Chair stated that work had been carried out to simplify information in the report which remained ‘work in progress’.  The Democracy & Governance Manager pointed out that the report had been produced in response to the Committee’s request for details of deferred items, following comments made in the Wales Audit Office report on Internal Audit received at the June 2012 meeting.  Councillor I.B. Roberts felt that the report gave clear information.  The Chair remarked that the report was the result of officers’ genuine attempts to respond to Members’ requests and that improvements would be continue to be made.

RESOLVED:

That the report be accepted.

That the report be accepted.

The Internal Audit Manager introduced a report to inform the Committee of the actions resulting from points raised at previous Audit Committee meetings.  A summary of actions was attached to the report and it was noted that most had been completed with the remainder to be reported to a future meeting.

The Chair explained that this was an improved method of reporting actions carried out and asked about progress with Finance staff appraisals.  The Internal Audit Manager stated that these had been scheduled to take place between September and November 2012 to coincide with the implementation of the Finance function review.  He added that the Head of Finance had also discussed appraisal policy review with the Head of Human Resources.

Councillor G.H. Bateman, who had earlier given apologies for being unable to attend the drop-in sessions for Members, asked if these had been well attended and whether they would continue to be offered in future years.  The Corporate Finance Manager replied that there had been no visits made by Members for this year and that the Audit Committee would need to take a view on future sessions.

RESOLVED:

That the report be accepted.

That the Forward Work Plan be approved.

The Internal Audit Manager presented a report to consider the Forward Work Programme for the Audit Committee for the coming year, similar to that produced for Overview & Scrutiny Committees.  It was explained that this had been drafted based on reports due to be submitted to the Committee and that Members were able to propose changes.

RESOLVED:

That the Forward Work Plan be approved.

(a)       That the report be accepted; and

(b)       That once the allocation of 200 days for investigations had been used, resources should be provided, at the discretion of the Head of Finance, to enable the Audit Plan to be completed.

The Internal Audit Manager presented a report to update on progress of the Internal Audit department.

As agreed at the previous meeting of the Committee, the new report had been divided into five sections to cover previous lengthy reports on Audit Plan, Final Reports, Recommendation Tracking, Performance Indicators and Investigations Progress.  The section on the Audit Plan included adjustments to the Plan after the failure to recruit which had been reported to the Committee in June 2012.  This had been following discussion with the Chief Executive and Head of Finance which had also resulted in the agreement to bring in some resource.

It was reported that due to a major investigation being undertaken, 183 days had been used up until the end of August 2012 out of the allocated 200 days for investigations for the whole of the year.  Although the investigation was still ongoing, it was estimated that around 100 additional days would be required to ensure that obligations were met and that a decision would need to be taken on whether to acquire extra resources or defer more items from the Plan.  The Internal Audit Manager explained the intention for management to review and prioritise work on the Plan and to submit a half-year Plan for approval to the next meeting of the Committee.

Councillor I.B. Roberts proposed that once the total number of days used for investigations extended beyond 200, that additional resources be sought from RSM Tenon Plc to enable the Audit Plan to retain its integrity for the year, as opposed to the deferral of more audits.  The Head of Finance welcomed the support of the Committee but said that officers would need to explore the type of resources required and that this could be from another source.  It was proposed that once the allocation of 200 days had been used, resources should be provided to enable the Audit Plan to be completed at the discretion of the Head of Finance.  This was seconded and agreed.

In response to a question from Councillor R.B. Jones on the cost of extra resources from RSM Tenon Plc, Mr. Patrick Green replied that this would be around £300-350 per day depending on the skills required.

On Recommendation Tracking, the Internal Audit Manager outlined proposed changes to the method used which would allow analysis of reasons given by departments on non-implementation and that future reports would be developed to include this.  On Performance Indicators and in particular the target for client departments, the Chair commented on the Committee’s support of Audit in obtaining responses within 20 days.  She also remarked on work that she had undertaken with the officers to help clarify wording on the report and said that further improvements would be made.

Prior to discussion on investigations, it was explained by the Democracy & Governance Manager that if more detail was required, a decision would need to be made on whether to exclude the press and public from the meeting.

RESOLVED:

(a)       That the report be accepted;  ...  view the full minutes text for item 31.

That the press and public be excluded from the meeting as the following item was considered to be exempt by virtue of Part 1 of Schedule 12A of the Local Government Act 1972 (as amended).

RESOLVED:

That the press and public be excluded from the meeting as the following item was considered to be exempt by virtue of Part 1 of Schedule 12A of the Local Government Act 1972 (as amended).

That the report be accepted.

The Head of Finance and Internal Audit Manager responded to a number of questions raised by Members on an ongoing investigation.

RESOLVED:

That the report be accepted.

There were no members of the press or public in attendance.