OS2005 August 23 Rep Minutes of Audit Sub 21 July

Joan

Informations

• Publié par: Unne
• Nombre de lectures: 23
• Langue: English

Extrait

AUDIT-SUB COMMITTEE

21 JULY 2005

Present:
Councillors Holl (Chairman), Bromell and Hockin

Apologies:
Councillor Corney, Clatworthy, Fusco and Milton


1. MINUTES

The Chairman confirmed the minutes of the Audit Sub-Committee held on 25
April and 9 May 2005, as a correct record.

2. EXTERNAL AUDIT - NEW CODE OF AUDIT PRACTICE

The Chairman welcomed Richard Bacon and Huw Thomas as representatives
from Price Waterhouse Coopers (PwC), the Council’s external auditors. Mr
Bacon reported on areas of particular interest to the Sub-Committee as
follows:

• The Audit Commission had issued a new Code of Audit Practice that was
applicable for the 2005/06 financial year onwards. The new Code
reinterpreted the requirement of the Audit Commission Act 1988.

• There were now two parts to the work under the new Code. The first part
was the audit of accounts. The second part the conclusion of Value For
Money arrangements (use of resources).

• PwC are now required to adopt International Standards of Auditing in their
financial statements audit for 2005/06.

• There will be a two-part audit report covering financial statements and
conclusions on ‘proper arrangements’ relating to the use of resources.

• Reporting will be sharper and timelier, while existing reports would be used
for more than one purpose. The aim was to integrate PwC work across
Council audit cycles wherever possible. The PwC deadline for the
completion of audits for 2005 is the end of October, and the end of
September for 2006. PwC aim to conclude their external audit report at the
same time as the Council’s yearly accounts are closed.

• PwC are required to come to a judgement on arrangements in place over
certain performance and financial management practices.
AUDIT SUB (25.01.05)
• It would be helpful if PwC and the Council could agree a formal
assessment on the issues in the Statement on Internal Control (SIC) in
order to make best use of the work that has already happened.

The Director of Resources advised the Sub-Committee that he was extremely
pleased that reporting was going to be timelier.

3. EXTERNAL AUDIT – 2005/2006 AUDIT AND INSPECTION PLAN

Mr Bacon advised the Sub-Committee that PwC were currently auditing
accounts for 2004/2005, and the final report and opinion will be made
available later, with which there were no fundamental issues expected. Mr
Bacon also made reference to the following:

• In 2005/06 PwC would also be required to undertake mandatory work at
the Council in respect of the Comprehensive Performance Assessment
(CPA) in relation to the use of resources. In the past the Audit
Commission conducted audited score judgements, but would now have to
feed into the CPA for local authorities, although these arrangements were
yet to be finalised.

• The level of the Audit and inspection fee had fallen from £77,681 in
2004/05 to £74,706 in 2005/06. The Director of Resources advised that
this was the result of the Audit Commission cutting the inspection element
of the fee.

• £5,000 has been included in the Plan for CPA Use of Resources work
although this had yet to be agreed upon. The Director of Resources
advised the Sub-Committee that he believed this figure to already have
been included in the base fee that the Council pay PwC and he would
undertake further negotiation with PwC when the new CPA option was
more clearly understood. Councillor Hockin expressed concern as to
whether the Council would get a refund if the audit took PwC less time than
expected. Mr Bacon informed the Sub-Committee that the Plan offered an
indication of the cost of the audit, and that these figures could be subject to
change. The Director of Resources informed Members that any proposed
increase in the fee would have to firstly be approved by the Executive.

• The Audit and Inspection Plan for 2005/06 would include an audit of the
Best Value Performance Plan and the Best Value Performance Indicators

4. EXTERNAL AUDIT - PROGRESS REPORT

Mr Bacon informed the Sub-Committee that much of the detail contained
within the report related to the work the Council had undertaken preparing its
accounts. Mr Bacon commented on areas of particular interest to the Sub-
Committee as follows:

2AUDIT SUB (25.01.05)
• The Council needed to ensure that they complied with the Statement of
Recommended Practice (SORP), although Mr Bacon was not aware of any
significant issues relating to Teignbridge with regards to SORP.

• That there had been an issue regarding levels of sick leave in Internal
Audit.

• Implementing Electronic Government. The Director of Resources advised
Members that the Council’s Head of Revenue and Benefits had also been
appointed as an interim Customer Services Manager in order to drive
forward the Customer Services Strategy and oversee the new Customer
Relationship Management system that was now in place.

• PwC were not concerned about the Council’s management and monitoring
of individual budgets, but had identified the need for the Council to
formalise their financial management system.

5. DRAFT STATEMENT ON INTERNAL CONTROL

The Chief Internal Auditor advised the Sub-Committee that the draft SIC
would be signed off this year with the Council’s accounts. The Chief Internal
Auditor informed Members that the SIC contained a plethora of controls, with
particular reference made to the following:

• The SIC was a major item of work in the year, and could be updated on an
annual basis.

• The SIC was not mandatory for 2004/05, therefore by undertaking this
work the Council was adopting a proactive approach to risk management.

• The SIC would go to Council with the draft statement of final accounts for
2004/05.

• One area that had to be rectified this year related to risk assessment. This
needed to be concluded by December 2005 to be included in the Risk
Management Strategy.

• The Chief Internal Auditor had led a project developing software in
conjunction with CIPFA that the Council have, to date, sold to 45 local
authorities.

ST6. INTERNAL AUDIT SUMMARY 1 QUARTER 2005/2006

stThe Chief Internal Auditor presented his report for the 1 Quarter 2005/2006.
Over 1300 hours of audit work had so far been undertaken in 2005/2006. The
total hours spent on productive audit work was 69%, which was just below the
service performance target of 70%. The Chief Internal Auditor advised the
3AUDIT SUB (25.01.05)
Committee that he was pleased to report that sickness levels for the Internal
Audit Section had been considerably reduced for this Quarter.

The Chief Internal Auditor advised that Appendix A and B had been added to
the report in response to a request from Members at the last Committee for
more detail in the reports. Members were pleased with the layout of the
appendices, although the Chief Internal Auditor felt that it could be improved
upon year on year. The Director of Resources advised that it would be
advantageous to detail in the appendices those items that are most pertinent
first, to ensure their prioritisation.

The Chief Internal Auditor made reference to the following projects detailed in
the appendices:

• The Leisure Centre Computer System was the market leader 5 or 6 years
ago when the Council purchased the software. Unfortunately it would
appear that the system has never properly been installed and has been
beset with problems. Those problems had been exacerbated by the failure
to formulate a contingency plan if the software failed. The Chairman
expressed concern about this software, as it had cost in the region of
£180,000.

• The Council was leading the project to set up the Devon Audit Partnership
along with South Hams and Mid Devon District Councils. The Partnership
stwas scheduled to be fully operational by the 1 April 2006, although this
date may have to be revised. Delays had been caused due to the length of
time it has taken to set up standard processes across authorities. Audit
staff from the three authorities would be convening for a day-long
workshop in advance of the commencement of the scheme. The
Partnership should ensure significant Gershon efficiencies. The Director of
Resources advised the Committee that the Council was already selling
audit expertise to other local authorities, and were one of the leading
Internal Audit departments in the South West.

7. Any Other Business

The Director of Resources reported that CIPFA had issued a position
statement on Audit Committees bringing together best practice across all local
authorities. The Council had some minor areas that it needed to improve
upon. The Chairman praised the Chief Internal Auditor and his section for
their efficient and professional work.



John Holl
Chairman
4