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

The Chairman reported that he had agreed to one item of urgent business being added to the agenda, nominations for the Procurement Panel, as the process needed to commence before the next meeting of the Accounts, Audit and Risk Committee. The item would be considered after agenda item 13.

To confirm as a correct record the Minutes of the meeting of the Committee held on 22 June 2011.

The Minutes of the Meeting held on 22 June 2011 were agreed as a correct record and signed by the Chairman.

** Please note report and appendices 1, 2 and 3 are to follow as they are currently being finalised **

Report of Head of Finance

Summary

The purpose of this report is to obtain official sign-off by the Chief Financial Officer and the Chairman of Accounts, Audit and Risk Committee the audited Statement of Accounts 2010/11 and the 2010/11 Annual report and Summary of Accounts.

Recommendations

The Accounts, Audit and Risk Committee is recommended:

(1)               To  approve the amendments to the 2010/11 financial statements detailed in Appendix 1.

(2)    Subject to reviewing the contents of the Annual Governance Report (separate agenda item) approve the 2010/11 financial statements (Appendix 2).

(3)     Approve the 2010/11 Annual Report and Summary of Accounts which have been updated to reflect audit adjustments.

The Committee considered a report of the Head of Finance which sought official sign-off by the Chief Financial Officer and the Chairman of Accounts, Audit and Risk Committee the audited Statement of Accounts 2010/11 and the 2010/11 Annual report and Summary of Accounts.

The Technical Accountant circulated the Annual Report and Summary of Accounts 2010/11, a revised Statement of Accounts 2010/11 (Subject to Audit) and a document detailing an audit trail of 22 presentational changes made to the Statement of Accounts since the version distributed to Members on 13 September 2011.

The Head of Finance reported that two accounting adjustments had been made to the accounts as part of the review by the Audit Commission. The Committee was advised that a total of 37 adjustments (including the 22 since 13 September) had been made to the accounts since they were signed by the Chief Finance Officer on 30 June 2011. The majority of the changes were presentational and only 6 were highlighted in the Annual Governance Report as required audit adjustments.

The Head of Finance reported that there had been a number of challenges producing the Statement of Accounts 2010/11 linked to the move to International Financial Reporting Standards (IFRS) which included having to restate the 2009/10 accounts, accounting for the Icelandic deposits and the implementation of two new financial systems.

The Head of Finance circulated the Letter of Representation which was required by the Audit Commission as part of their standard close down procedures. The letter required the Chairman of the Accounts, Audit and Risk Committee to respond to four questions. The Committee considered the letter and was satisfied with the responses.

The Committee noted the Annual Report and Summary of Accounts 2010/11 which had been updated to reflect audit adjustments. Members commented that it provided an invaluable opportunity to present its achievements to local businesses and residents. The Annual Report and Summary of Accounts 2010/11 would be submitted to Full Council in November

The Committee thanked the Finance Team for their hard work in producing the Statement of Accounts 2010/11 and Annual Report and Summary of Accounts 2010/11.

Resolved

(1)               That the amendments to the 2010/11 financial statements be approved.

(2)               That the response to the questions raised to those charged with governance be noted.

(3)               That, subject to reviewing the contents of the Annual Governance Report (separate agenda item) and noting the clarification required on the 2010/11 Movement in Reserves Statement, authority be delegated to the Head of Finance in consultation with the Chairman of the Accounts, Audit and Risk Committee to approve the 2010/11 financial statements and Annual Governance Statement and in accordance with this approval, the Chairman signs the 2010/11 financial statements.

(4)               That the 2010/11 Annual Report and Summary of Accounts, which had been updated to reflect audit adjustments, be approved.

** Report and appendices to follow as subject to finalisation by External Auditors **

Report of Head of Finance

Summary

To allow Members to consider the Auditors’ Annual Governance Report which includes comments on the audit of the 2010/11 Statement of Accounts and judgement against the Value for Money ( V.F.M.) criteria.

Recommendations

The Accounts, Audit and Risk Committee is recommended to:

(1)                     Consider the matters raised in the report before approving the 2010/11 financial statements and recommending to Council (pages 5 to 7 and Appendix 1).

(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)

The District Auditor, Audit Commission presented the External Auditors Annual Governance Report to the Committee, which included comments on the audit of the 2010/11 Statement of Accounts and judgement against the Value for Money (VFM) criteria.

The District Auditor reported that the Report was almost complete however the External Auditors were awaiting the final version of Cherwell District Council’s accounts before they could issue an opinion. The Committee was advised that it was anticipated that the Council would receive an unqualified opinion on the 2010/11 financial statements and a positive value for money conclusion.

The District Auditor acknowledged that International Financial Reporting Standards (IFRS) had presented a challenge to Finance Officers and that Cherwell District Council, like many other local authorities, had been required to make amendments to their accounts. The District Auditor thanked the Finance Team, and in particular the Head of Finance, for all their hard work in complying with the new accounting standards and responding to all queries in a timely manner.

In light of the increased work the External Auditors had been required to undertake primarily due to the implementation of IFRS, the District Auditor advised the Committee that the Council would be required to pay an extra fee as the original fee had not taken extra work into consideration. The District Auditor explained that the council would be informed of the final fee as soon as feasible after the final version of the accounts had been approved. In response to Members’ questions, the Head of Finance confirmed that the extra fee could be accommodated from existing budgets

Members acknowledged that the first year of moving to IFRS had presented challenges but anticipated that IFRS would be of benefit to local authorities and commended the Finance Team for their hard work.

In response to Members’ questions, the District Auditor updated the Committee on future external audit arrangements. She reported that it was intended that the Audit Commissions to transfer in-house Audit Practice to the private sector, and in due course, to abolish the residual element of the Commission. The process for outsourcing the work of the Audit Practice had formally commenced and bids were being invited. The Audit Commission would award three to five year contracts with a start date of 1 September 2012 the week commencing 6 February 2012.

Resolved

(1)               That the matters raised in the External Audit Annual Governance Report be noted and the 2010/11 financial statements be approved and recommended to Council.

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

(3)               That authority be delegated to the Head of Finance in consultation with the Chairman of the Accounts, Audit and Risk Committee to approve the letter of representation on behalf of the Council once the clarification on the Movement in Reserves has been provided to the Audit Commission.

Report of Head of Finance

Summary

The report provides a progress report on the work of external audit.

Recommendations

The Accounts, Audit and Risk Committee is recommended to:

(1)               Note the contents of the progress report (Appendix 1).

The Committee considered a report of the Head of Finance which provided a progress report on the work of external audit. The Audit Manager (Audit Commission) advised Members that the Annual Audit letter would be submitted to the Committee for consideration at their December meeting.

Resolved

(1)               That the contents of the report be noted.

Report of Chief Internal Auditor

Summary

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

Recommendations

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 2011/12 for the period from June 2011 to September 2011. The Committee was advised that 29% of the plan had been completed which was in line with the agreed profile of the work within the internal audit plan.

The Audit Team Leader reported that since the Committee’s June meeting four final reports had been issued and draft reports had been issued and/or fieldwork commenced in three areas. The Committee was advised that in addition to the fraud awareness training provided for Members at the last meeting, the internal auditors had conducted a training session for officers in June 2011.

Resolved

(1)       That the Internal Audit progress report be noted.

Report of Head of Finance

Summary

To receive information on treasury management performance and compliance with treasury management policy for Quarter 1 2011/12 as required by the Treasury Management Code of Practice.

Recommendations

The Accounts, Audit and Risk Committee is recommended to:

(1)               Note the contents of the report.

The Committee considered a report of the Head of Finance which presented information on treasury management performance and compliance with treasury management policy for Quarter 1 2011/12 as required by the Treasury Management Code of Practice.

The Head of Finance advised the Committee that the level of funds invested externally had reduced due to the Council’s decision to bring investment back in-house. Interest levels were currently at a higher level than had been budgeted for as re-investment rates were higher than had been anticipated. The Committee was advised that Sector, the Council’s treasury management advisors, had released a newsflash on 8 September 2011 advising clients to keep investments to a maximum of three months.

Resolved

(1)               That the contents of the report be noted.

Report of Corporate Strategy and Performance Manager

Summary

To update the Committee on the management of Strategic, Corporate and Partnership Risks during the first quarter of 2011/12 and highlight any emerging issues for consideration.

Recommendations

The Accounts, Audit and Risk Committee is recommended to:

(1)               Review the quarter 1 Strategic, Corporate and Partnership Risk Register. (Appendix 1).

(2)               Note the progress made with regards to the risk management internal audit 2011 (Appendix 2).

The Committee considered a report of the Corporate Strategy and Performance Manager which updated Members on the management of Strategic, Corporate and Partnership Risks during the first quarter of 2011/12 and highlight any emerging issues for consideration.

The Corporate Strategy and Performance Manager reminded the Committee that strategic, corporate and partnership risks were reviewed on a monthly basis and reported via the performance and risk management frame to the Executive quarterly. The Committee was advised that in Quarter 1 the rating of six risks had remained constant, five risk ratings had improved, six risk ratings had worsened and four new risks had been added to the register.

The Corporate Strategy and Performance Manager reported that the 2011/12 risk management audit would be undertaken in October/November 2011 and would provided assurance of progress and identify any additional issues.

Resolved

(1)               That the quarter 1 Strategic, Corporate and Partnership Risk Register be noted.

(2)               That the progress made with regards to the risk management internal audit 2011 be noted.

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.”

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.

The Committee considered the exempt annex to the report of the Head of Finance which updated Members on the Council’s investments and counterparties at 31 August 2011.

Resolved

(1)       That the exempt annex be noted.

The Head of Finance advised Members of an upcoming procurement which related to the work of the Committee and requested the Committee to nominate two members to participate in the procurement process.

Resolved

(1)       That Councillors Ilott and Stevens be nominated to participate in the procurement process.