Agenda and minutes

Members are asked to declare any interest and the nature of that interest which they may have in any of the items under consideration at this meeting.

There were no declarations of interest.

The Chairman to report on any requests to submit petitions or to address the meeting.

There were no petitions or requests to address the meeting.

The Chairman advised the Committee that the Head of Finance had successfully passed her Accountancy exams. The Committee joined the Chairman in congratulating the Head of Finance on her magnificent achievement. The Chief Executive echoed the sentiments of the Committee and added her congratulations to the Head of Finance.

The Chief Executive thanked the Chief Finance Officer / S151 Officer for his hard work with the Finance Team and support to Cherwell District Council over the past 6 months. In particular, she thanked the Chief Finance Officer and Head of Finance for all their hard work supporting Cherwell District Council. The Chairman also thanked the Finance Team for the tremendous amount of preparatory work that had already taken place as part of the 2011/12 budget setting process.

The Chairman to advise whether they have agreed to any item of urgent business being admitted to the agenda.

There was no urgent business.

To confirm as a correct record the Minutes of the meeting of the Committee held on 23 June 2010.

The Minutes of the meeting held on 23 June 2010 were agreed as a correct record and signed by the Chairman.

Report of Head of Finance

Summary

The purpose of this report is to consider the Annual Governance Report issued by the Audit Commission and to obtain official sign-off by the Chief Financial Officer, Chairman of Accounts, Audit and Risk Committee, Chief Executive, Leader of the Council and District Auditor, for the Statement of Accounts 2009/10.

Recommendation

The Accounts, Audit and Risk Committee is recommended to:

(1)               Take note of the adjustments to the financial statement made subsequent to the adoption of the draft accounts on 23rd June 2010 as detailed in paragraph 1.2 and Appendix 1

(2)               Note the 4 changes requested by external audit detailed in Appendix 1 and the audited Statement of Accounts 2009/10 in Appendix 2

(3)               Note the continued improvement in closedown process and positive impact on audit opinion and VFM judgement

(4)               Approve the 2009/10 financial statements, subject to reviewing the contents of the Annual Governance Report (separate agenda item).

The Head of Finance submitted a report which presented the 2009/10 Audited Financial Statements and Annual Governance Statement for consideration and sought to obtain official sign-off by the Chief Financial Officer, Chairman of Accounts, Audit and Risk Committee, Chief Executive, Leader of the Council and District Auditor.

The Head of Finance reported the Finance Team had implemented 4 changes that had been requested by external audit and 17 minor presentation changes to the Statement of Accounts “Subject to Audit” 2009/10 as adopted by the Accounts, Audit and Risk Committee on 23 June 2010.

The Committee noted the continued improvement the Council had made in the closedown process and commended the Finance Team for all their hard work and efforts throughout the process and requested that the entire the Team be advised of Members’ satisfaction with the documents presented. The Committee assured the External Auditors that the Council would not be satisfied with merely maintaining the current standard, rather it would continue to look forward and continually seek to improve further.

Resolved

(1)               That the adjustments to the financial statement made subsequent to the adoption of the draft accounts on 23 June 2010 be noted.

(2)               That the 4 changes requested by external audit be noted.

(3)               That the continued improvement in the closedown process and positive impact on the audit opinion and Value For Money judgement be noted.

(4)               That, subject to reviewing the contents of the Annual Governance Report, the 2009/10 financial statements be approved.

Report of Head of Finance

Summary

The purpose of this report is to seek approval for the combined Annual Report and Summary of Accounts 2009/10, subject to any amendments the Accounts, Audit and Risk Committee may wish to make.

Recommendation

The Accounts, Audit and Risk Committee is recommended to:

(1)  Approve the Annual Report and Summary of Accounts 2009/10 for  publication.

The Head of Finance submitted a report which sought approval for the combined Annual Report and Summary of Accounts 2009/10. The Technical Accountant distributed an updated version which incorporated changes that had been made since the publication of the agenda.

Members of the Committee commented that the Annual Report and Summary of Accounts provided an invaluable opportunity to present its achievements to local businesses and residents. The Committee requested a copy of the Annual Report be sent to all elected Members for information.

The Committee thanked the Finance Team for their hard work in producing the Annual Report and Summary of Accounts 2009/10. The Chief Executive echoed the sentiments of the Committee and thanked the Finance Team for producing an excellent set of accounts.

Resolved

(1)               That the Annual Report and Summary of Accounts 2009/10 be approved for publication.

(2)               That a copy of the Annual Report and Summary of Accounts 2009/10 be sent to all elected Members.

Report of Head of Finance

Summary

To allow Members to consider the Auditors’ Annual Governance Report which includes comments on the audit of the 2009/10 Statement of Accounts and judgement against the Value for Money ( V.F.M.) criteria.

Recommendation

The Accounts, Audit and Risk Committee is recommended: to:

(1)               Consider the matters raised in the report before approving the 2009/10 financial statements and recommending to Council (pages 7 to 8);

(2)               Take note of the adjustments to the financial statements set out in this report (Appendix 2);

(3)               Approve the letter of representation on behalf of the Council. (Appendix 3 of the Annual Governance Report)

(4)               Take note that all of the Criteria for the Value for Money Assessment have been met (Appendix 4);

(5)               Agree response to the proposed action plan (Appendix 5)

The District Auditor, Audit Commission presented the External Auditors Annual Governance Report to the Committee, which included comments on the audit of the 2009/10 Statement of Accounts and judgement against the Value for Money (VFM) criteria.

The District Auditor reported that Cherwell District Council had carried out an excellent closedown process and produced the best working papers and set of accounts of all the sets she had signed off. The Council would receive an unqualified opinion on the 2009/10 financial statements and a positive value for money conclusion. The District Auditor thanked the Finance Team for all their hard work in producing an exemplary set of accounts.

Members of the Committee commented that they were very pleased to receive such positive feedback and echoed the sentiments of the District Auditor in praising the Finance Team. The Committee and Chief Executive also thanked the External Auditors for their guidance and support.

In response to Members’ questions, the District Auditor updated the Committee on the future external audit arrangements in light of the  Government’s announcement in August that the Audit Commission would be disbanded. She reported that until 2012 the Audit Commission would continue to provide the same service to Local Authorities in terms of auditing accounts and Annual Governance reports.  It was anticipated that draft legislation would be published in the autumn which set out the design of the future regime and arrangements for local audit.

Resolved

(1)               That the 2009/10 financial statements be approved.

(2)               That the adjustments to the financial statements be noted.

(3)               That the letter of representation on behalf of the Council be approved.

(4)               That it be noted that all of the Criteria for the Value for Money Assessment have been met. 

(5)               That the proposed action plan be agreed.

Note: Following consideration of this item and in accordance with the Accounts and Audit Regulations, the Chairman signed the letter of representation on behalf of the Council, the Chairman and Chief Finance Officer signed the 2009/10 Statement of Accounts and the Chief Executive and Leader of the Council signed the Annual Governance Statement and the District Auditor signed the Independent Auditor’s report to members of Cherwell District Council.

Report of Chief Internal Auditor

Summary

This report provides the Committee with an update of the work of Internal Audit since the last meeting.

Recommendation

The Accounts, Audit and Risk Committee is recommended to:

(1)               Consider and approve this report.

The Committee considered a report of the Chief Internal Auditor which summarised the progress made against the internal audit plan for 2010/11 for the period from June to September 2010. The Committee was advised that 36% of the plan had been completed and the remainder would be completed by the end of the financial year.

The Audit Team Leader reported that since the start of the financial year five final reports had been issued, assurance provided on one area and draft reports had been issued and/or fieldwork had commenced in five areas.

The Audit Team Leader updated the Committee with a summary of the activity of the Benefits Investigation Team from April – July 2010. The Team had received 112 referrals and had a sanctions success rate of 58.50% against a target of 50%

The Chief Internal Auditor advised the Committee that the Internal Audit Charter had been updated to reflect the requirements of the Audit Commission Triennial Review. This would be presented to the Committee’s December meeting.

Resolved

(1)               That the Internal Audit Progress report be approved.

Report of Head of Finance

Summary

This report details the actual return on investments for the period from 1 April 2010 to 31 August 2010. It details the counterparties that have been used for investments and considers compliance with the investment strategy.

Recommendation

The Accounts, Audit and Risk Committee is recommended to:

(1)     Note the contents of the report and treasury performance to date

The Committee considered a report of the Head of Finance which updated Members on the actual return on investments for the period from 1 April 2010 to 31 August 2010, detailed the counterparties that have been used for investments and considered compliance with the investment strategy.

The Head of Finance reminded Members that as part of the Council’s Investment Strategy the Committee had responsibility for considering the investment performance to date and the Council’s compliance with counterparties being used. The Committee was advised that the performance for to August 2010 showed a small positive variance and, at present, the interest received looked set to stay on track for the remainder of 2010/11.

The Head of Finance advised the Committee that on the advice of the Council’s treasury advisors, the Portfolio Holder Resources and Communication had agreed that the cash limit the Council invests with any bank one banking group be increased from £8m to £15m. This was due to a reduction in the Council’s counterparty list which had resulted in difficulties finding places to invest funds.

The Head of Finance reported that the Treasury Management function had undergone its internal audit during the first quarter of 2010/11. The audit had given a ‘high assurance’ rating. The report had noted an improvement in the performance of the Treasury Management function since 2009/10.

The Head of Finance updated Members on the current situation regarding the Council’s investments with the failed Icelandic bank Glitnir. The Council had not been given preferential status and would therefore only recover 31% of the £6.5m investment balance. The objections of all Local Authorities to their creditor status would be considered under Icelandic insolvency law and legal arguments to support the preferred creditor status for 14 test cases (3 of which represented Cherwell deposits) had been presented to Icelandic Courts in September 2010. A further update would be provided to the Committee’s December meeting.

Resolved

(1)               That the contents of the report and treasury performance to date be noted.

Report of Head of Finance

Summary

The purpose of this report is to provide a brief update to Councillors on the Councils progress towards IFRS and completing the 2010/11 Statement of Accounts under these new standards.

Recommendation

The Accounts, Audit and Risk Committee is recommended to:

(1)                     Note the contents of this report and the officers’ proposed actions to deal with the implementation of IFRS.

(2)                     Consider whether they would like to take up the opportunity to have an IFRS training session at the December meeting to be facilitated by District Auditor

The Committee considered a report of the Head of Finance which updated Members on the Councils progress towards International Financial Reporting Standards (IFRS) and completing the 2010/11 Statement of Accounts under these new standards.

The Head of Finance advised the Committee that the IFRS Project Group was holding regular meetings to ensure the smooth transition of the accounts, which would be facilitated by the publication of the CIPFA Guidance Notes in December 2010. She reported that the District Auditor had offered to present an overview of the IFRS to Members at the Committee’s December meeting.

Resolved

(1)               That the contents of the report and the officers’ proposed actions to deal with the implementation of International Financial Reporting Standards be noted.

(2)               That an IFRS training session facilitated by District Auditor be held at the Accounts, Audit and Risk Committee’s December meeting.

Verbal update from the Head of Finance.

The Head of Finance gave a verbal update on the Accounts, Audit and Risk Committee’s work programme.

The following item contains exempt information as defined in the following paragraphs of Part 1, Schedule 12A of the Local Government Act 1972.

3 – Information relating to the financial or business affairs of any particular person (including the authority holding that information).

Members are reminded that whilst the following item has been marked as exempt, it is for the meeting to decide whether or not to consider each of them in private or in public. In making the decision, members should balance the interests of individuals or the Council itself in having access to the information. In considering their discretion members should also be mindful of the advice of Council Officers.

Should Members decide not to make a decision in public, they are recommended to pass the following recommendation:

“That, in accordance with Section 100A(4) of Local Government Act 1972, the press and public be excluded form the meeting for the following items of business, on the grounds that they could involve the likely disclosure of exempt information as defined in paragraph 3 of Part 1, Schedule 12A of that Act.”

Resolved

That, in accordance with Section 100A(4) of Local Government Act 1972, the press and public be excluded form the meeting for the following item of business, on the grounds that they could involve the likely disclosure of exempt information as defined in paragraph 3 of Part 1, Schedule 12A of that Act.

The Committee considered the exempt annex to the report of the Head of Finance updating Members on Treasury Management Performance, which listed the investments that Cherwell District Council had across all funds at 31 August 2010.

Resolved

(1)               That the exempt annex be noted.