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.

To confirm as a correct record the Minutes of the meeting of the Committee held on 19 September 2012.

The Minutes of the meeting of the Committee held on 19 September 2012 were agreed as a correct record and signed by the Chairman, subject to the inclusion of ‘Chris Dickens’ amongst the list of those ‘Also Present’ and the amendment of ‘Charlotte Blisworth’ to read ‘Charlottle Blisland’.

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

There were no petitions or requests at the meeting.

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

There was no urgent business.

Ernest Young will provide a verbal update to the Committee.

The Committee considered a progress report on the external audit process by Maria Grindley on behalf of Ernst and Young, the Council’s external auditor.

It was reported that the Council’s external audit service had been transferred from the Audit Commission to Ernst and Young on 1 November 2012. The Committee was assured that the team at Ernest and Young had the strength and depth of staff needed to provide a robust external audit service.

The Committee was introduced to Mr Alistair Rankin, who had been appointed Audit Manager for external audit purposes and would lead the process in future.

It was reported that the External Audit Plan would be presented to the Committee in due course.

Resolved

(1)               That 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:

(1)       to consider and approve the report.

The Committee considered a report by the Chief Internal Auditor on the work undertaken by Internal Audit since its last meeting.

The Committee heard that 70 audit days out of a planned 160 (44%) were completed and it was anticipated the plan would be completed ahead of the year end. One final report had been issued and draft reports on eight areas had been issued and/or fieldwork completed.

In order to ensure that the audit plan remained fit for purpose, the Committee heard that the scope of the Fraud Risk Assessment Review had been widened to include the use of electronic signatures and rubber stamps. To reflect this wider remit, the review had been renamed the ‘Signature Audit’. The findings of the review would be reported at the next meeting.

The Committee heard that the Collection Fund audit had been given a medium risk rating for 2012-13, but that there had been an increase in the number of issues noted since the 2011-12 internal audit report. Many of these related to unresolved issues from the previous year, including a lack of documentary evidence that controls had been carried out and that a number of control procedures had not been formalised and were undertaken sporadically.

The Chief Internal Auditor reported that PricewaterhouseCoopers (PWC) had recently published a report on ‘The Agile Council: creating the change ready organisation’, which looked at the environment councils were operating in and five steps to becoming an agile organisation.

The Head of Finance and Procurement agreed to undertake a high level assessment against the performance criteria in the report and subsequently report back to the Committee.

In response to a request by Members, the Head of Finance and Procurement agreed to compile a comprehensive list of the IT packages currently used by the Council for circulation to all Councillors for their information.

Resolved

(1)               That the report be approved.

Report of the Corporate Performance Manager.

Summary

To update the Committee on the management of Strategic, Corporate and Partnership risks during the second quarter of 2012/13 and highlight any emerging issues for consideration.

Recommendations

The Accounts, Audit and Risk Committee is recommended:

(1)       to review the Quarter 2 Strategic, Corporate and Partnership Risk Register.

The Committee considered a report of the Policy and Performance Officer on the management of the Council’s strategic, corporate and partnership risks during the second quarter of the 2012/3 financial year.

The Committee was advised that two corporate risks had been updated and amended since the last meeting: Member decision making and joint working. In terms of Member decision making, new regulations had been introduced regarding Executive decision making however the legislation was still in part unclear. The Committee was advised the view of legal officers was that although the risk of a decision being taken which was not in compliance with the legislation was reasonably high, the likelihood of a legal challenge being made remained low. Consequently the risk rating remained unchanged.

In terms of joint working between Cherwell District Council (CDC) and South Northamptonshire Council (SNC), the Committee was advised that as the number of shared services were progressing across the two councils, the impact of different terms and conditions of employment, and specifically pay differentials was becoming an increasing concern to employees and their trade union.  Consequently it was beginning to represent a risk to both councils in relation to employee morale and productivity, and ultimately employee relations.  It is not a legal risk. The Committee was assured that consideration was being given as to the best solution to address this going forward.

In response to questions from Members, the Head of Transformation clarified that the Joint Arrangements Steering Group which comprised CDC and SNC elected Members, was not a formal decision-making body rather an advisory group and its recommendations were considered by formal Council bodies.

The Committee agreed that it would be useful to include the relevant Lead Member responsible for each of the risks identified on the register.

Resolved

(1)               That the Strategic, Corporate and Partnership risk register be noted.

Report of the Head of Finance and Procurement.

Summary

To receive information on treasury management performance and compliance with treasury management policy for 2012/2013 for the period to 31^st October 2012 as required by the Treasury Management Code of Practice.

Recommendations

The Accounts, Audit and Risk Committee is recommended:

(1)       to note the contents of the report.

The Committee considered a report of the Head of Finance and Procurement on the Council’s treasury management performance and compliance with the treasury management policy for the second quarter of 2012/13.

The Head of Finance and Procurement reported that at the end of October 2012, interest received on Council investments was 25% more than budgeted and showed a positive result across the In-House, TUK and Investic funds. This was due to higher than planned balances when creating the Council’s budget as levels of capital slippage were higher from 2011-12, better than projected rates on the Council’s investments and the change in the allocation of funds between In-House, TUK and Investec funds.

The Head of Finance and Procurement reported that the Council had reviewed its interest projection for the year and additional investment income of £250k, including the interest from the Bicester Ecotown, was projected.

The Committee was advised that the financial situation in relation to the Council’s investments in Iceland had not changed and that the Council was not currently recognising the interest on its Icelandic investments.

Resolved

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

** This report is to follow as it is currently being finalised by Ernest Young**

The Committee considered a report of the Head of Finance and Procurement which allowed Members to consider the Auditors’ Annual Certification Report which summarises the results of the certification work on the Council’s claims and returns for 2011/12.

Resolved

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

Report of the Head of Finance and Procurement.

Summary

The purpose of this report is to update Members on the actions taken following the audit of the Housing Benefit and Council Tax Benefit Claim for 2010/11 and to make Members aware of the outcome of the audit of the Claim for 2011/12.

Recommendations

The Accounts, Audit and Risk Committee is recommended:

(1)       to note the contents of the report.

The Committee considered a report of the Head of Finance and Procurement which updated Members on the actions taken following the audit of the Housing Benefit and Council Tax Benefit Claim for 2010/11 and made Members aware of the outcome of the audit of the Claim for 2011/12.

The Committee heard that the council’s claim for 2010/11 had been subject to a number of adjustments. The effect of which was to increase the value of the overpayments to benefit claimants due to official errors and delays and result, the Council faced a potential reduction of its claim in excess of £400,000. However, as a result of further work with Capita, the Council was able to reduce the value of these overpayments and the Department for Work and Pensions had recovered a reduced sum of £114,753. This cost had been shared equally with Capita and the council’s contribution was £57,377 which had been met from reserves and represented a positive outcome for the Council.

The Committee was advised that the problems experienced with the audit of the claim for 2011/11 appeared to have been caused by the transition from the in-house benefits service to the outsourced contact with Capita.

As a result of the problems encountered with the claim for 2010/11 a number of learning points were identified. The Head of Finance and Procurement reported that changes had been made in relation to benefits payments to address official errors and delays, including regular in-year monitoring, quality checking of individual benefit claimants and the need to take greater care in the preparation of reports.

The Head of Finance and Procurement assured the Committee that work was underway to manage the potential risk to the welfare of the community and the council’s reputation by the introduction of Universal Credit. This included presentations to Members, regular updates to the Executive, mailshots to advise those claimants affected by the Bedroom Tax, meetings with the local Landlord Forum and proactive profiling of the effects of the changes by ward.

The Head of Finance and Procurement agreed to circulate a briefing note to the Committee that highlighted the impact of the changes on council services and council’s strategy to manage and respond accordingly.

Resolved

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

Benefits Investigation Manager will provide a verbal update to the Committee.

The Committee considered an update by the Investigation Manager on the Council’s Anti-Fraud and Anti-Corruption Strategy.

The Committee heard of the 10-80-10 theory from the Investigations Manager.  As a result of this, all attendees agreed that in times of economic down turn, fraud would increase as individuals sought ways to ease their financial difficulties.  It also recognised that fraud within the working sector of society had increased being the sector hit hardest by the Governments strategy to reduce the National debt. 

Cherwell District Council was committed to a zero-tolerance policy on fraud and would continue to participate in the National Fraud Initiative exercise.  

The Head of Finance and Procurement reported that the council’s subsidy would be reduced when Housing Benefit fraud matters were transferred to the Department of Work and Pensions under forthcoming welfare reforms and that the Council would need to consider funding for future anti-fraud activities

At the request of Members’, the Head of Finance and Procurement agreed to report to the Committee on proposals for the funding of future anti-fraud activities in course.

Resolved

(1)               That the update be noted.

To review and note the Committee work programme.

The Committee considered its Work Programme 2012/13.

The Committee heard that training sessions on the treasury strategy would be held on 23 January 2013 and on the Council’s accounts in mid-June 2013.

Resolved

(1)       That the work programme 2012/13 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.”

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 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 appendices to the report of the Head of Finance and Procurement which updated Members on the Council’s investments at 31 October 2012.

Resolved

(1)               That the exempt appendices be noted.