Annual Audit Inspection Letter
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audit 2003/2004 Annual Audit and Inspection Letter Lewes District Council INSIDE THIS LETTER PAGES 2 - 6 • Executive Summary • Key messages • Council performance • Accounts and Governance • Other work • Looking forwards • Closing remarks PAGES 7 - 12 Appendix 1 • Reports issued during 2003/04 Appendix 2 • Scope of audit and inspection Appendix 3 • Audit and Inspection fees Appendix 4 • Statutory opinion on the Council’s Best Value Performance Plan Reference: LE013 Annual Audit & Inspection Letter Date: December 2004 audit 2003/2004 ANNUAL AUDIT AND INSPECTION LETTER The Accounts We have completed our work on the Council’s Executive Summary financial statements for 2003/04 and issued an unqualified opinion on 29 November. The purpose of this letter Financial position This is our audit and inspection ‘Annual Letter’ for Members and is presented by the Council’s We are satisfied that the Council has appropriate Relationship Manager and District Auditor. The arrangements to maintain its financial standing. letter summarises the conclusions and Balances increased during 2003/04. The general significant issues arising from our recent audit fund working balance currently stands at and inspections of the Council. £1.6 million compared to the minimum level of £0.96 million determined by the Council. The We have issued separate reports during the Council is revising its medium term financial ...
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| Langue | English |
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audit 2003 2004 Annual Audit and Inspection Letter Lewes District Council
I N S I D E T H I S L E T T E R
P A G E S 2 - 6 • Executive Summary • Key messages • Council performance • Accounts and Governance • Other work • Looking forwards Closing remarks •
P A G E S 7 - 1 2 Appendix 1 • Reports issued during 2003/04 Appendix 2 • Scope of audit and inspection Appendix 3 • Audit and Inspection fees Appendix 4 Statutory opinion on the Councils Best Value • Performance Plan
Reference: LE013 Annual Audit & Inspection Letter Date: December 2004
audit 2003/2004
Executive Summary The purpose of this letter This is our audit and inspection Annual Letter for Members and is presented by the Councils Relationship Manager and District Auditor. The letter summarises the conclusions and significant issues arising from our recent audit and inspections of the Council. We have issued separate reports during the year. These are listed at Appendix 1 for information. Appendix 2 sets out the scope of audit and inspection, Appendix 3 provides information about the fees charged and Appendix 4 is our statutory opinion on the Councils Best Value Performance Plan. Key messages Council performance In March 2004 we assessed the Council as good under the Comprehensive Performance Assessment (CPA) framework. Following CPA the Council developed a programme for improvement. This has included developing the Councils priorities, improving performance and risk management and service specific initiatives and working with other districts in East Sussex to help address common issues. All the districts in East Sussex have compared their strengths and weaknesses from CPA and have agreed a series of actions to help each other improve. This joint learning and work which also involves the county council is commendable and should help all authorities tackle the challenging efficiency agenda set by the government. The Councils Best Value Performance Plan complies with statutory guidance. Performance indicators for 2003/04 show further improvement from those for 2002/03.
Annual Audit and Inspection Letter - audit 2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
The Accounts We have completed our work on the Councils financial statements for 2003/04 and issued an unqualified opinion on 29 November . Financial position We are satisfied that the Council has appropriate arrangements to maintain its financial standing. Balances increased during 2003/04. The general fund working balance currently stands at £1.6 million compared to the minimum level of £0.96 million determined by the Council. The Council is revising its medium term financial strategy to strengthen the link between financial planning and the Councils priorities . Other governance issues We have not identified any significant weaknesses in your arrangements for: • internal financial control; • standards of conduct and arrangements to prevent and detect fraud and corruption; or • ensuring the legality of significant financial transactions. Action needed by the Council • Continue to implement the Councils improvement programme. Council Performance In March 2004 we assessed the Council as ‘good’ under the Comprehensive Performance Assessment (CPA) framework. Following CPA the Council developed a programme for improvement. This has included developing the Council’s priorities, improving performance, risk management and service specific initiatives and working with other districts in East Sussex to help address common issues. Performance indicators for 2003/04 show further improvement from those for 2002/03.
Lewes District Council Page 2
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CPA findings March 2004 report Main strengths We found some important areas in which the Council had performed well. • Most of its services were good, including housing, environmental management and planning, and many were continuing to improve. • There was a high level of satisfaction with the housing service. Council homes were in good order and tenants were involved in decision making. • The Council had increased its ability to improve by working in partnership with other organisations. • The Council had worked hard to achieve restoration and renewal projects in Newhaven, strengthening the local economy and community. • The Council had successfully addressed rising levels of sickness among staff. Areas for improvement We also identified some areas for improvement. • The Council was not clear about what it wanted to achieve for residents and had not set clear areas of priority to support those achievements. • The Council did not involve the users of council services in developing service improvements. • The Council had not linked financial planning to priorities. The Council’s improvement programme since March 2004 Following CPA, the Council developed a programme for improvement. Progress is monitored each month by the corporate management team and by Cabinet twice a year. Some of the key areas are discussed below. Annual Audit and Inspection Letter - audit 2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
Working with other organisations Lewes has been active in working with other organisations to help it deliver its improvement agenda. • All the districts in East Sussex are working together along with the county council to help improve services. Key areas being explored include: human resource management; procurement; joint working in areas such as benefits, planning and waste collection and maximising the contribution of local strategic partnerships. • The Council has engaged the Improvement and Development Agency (IDeA) to help it to review and revise its priorities. • Lewes has been working with the Local Strategic Partnership (LSP) to develop its joint working arrangements. The Council is also working to ensure that there is a better link between its priority areas and those of the LSP. Performance and risk management The Council is making good progress in developing its approach to risk management. The Council recognises that further work is needed to ensure that a strategic risk register is developed and that risks are assessed for all key decisions. The Council has been accepted as a pilot on the Performance Management Measurement and Information (PMMI) project. This is a joint project between the Audit Commission and IDeA to identify and share best practice to help councils develop the way in which they manage performance. Improving services Action the Council has taken to improve services includes: • extending the kerb-side recycling scheme into the rural areas of the district during 2004/05; • introducing a daily monitoring system to help meet statutory targets to place homeless families or pregnant women into appropriate accommodation; and • working with the Benefit Fraud Inspectorate to improve the Councils performance in processing claims for housing benefit.
Lewes District Council Page 3
audit 2003/2004
We are working with the Council to assess the cost-effectiveness of some its key services. This is intended to help the Council improve the way in which it delivers its services. This work includes: • comparing cost and performance data for selected services to other councils; • reviewing customer satisfaction ratings against cost comparators; and • identifying service models and/or procurement options behind the comparators for selected sites. Best Value Performance Plan We have completed our review of performance information for 2003/04 and the Councils Best Value Performance Plan for 2004/05. We found that: • the systems for publishing performance indicators are strong; and • the Best Value Performance Plan for 2004/05 complies with statutory guidance. Where performance information is comparable to previous years this shows continuing improvement in addition to that reported as part of CPA. 28 performance indicators are better than in 2002/03 compared to 15 getting worse. The Council was also required to undertake a satisfaction survey which was last carried out in 2001/02. This shows increasing levels of satisfaction in household waste collection, recycling, planning services and parks and open spaces. However, satisfaction levels were lower for cleanliness standards, some aspects of the Councils housing benefits service and local museums and galleries. Our formal opinion on the Best Value Performance plan is attached at Appendix 4. Annual Audit and Inspection Letter - audit 2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
Accounts and Governance Audit of 2003/04 accounts We have completed our work on the Councils financial statements for 2003/04 and issued an unqualified opinion on 29 November . We are required by professional standards to report to those charged with governance (for Lewes this is the full council) certain matters before we give an opinion on the financial statements. This year there are no such matters arising. The Councils accounts timetable was met and the Council is well placed to meet earlier deadlines for future years. We will continue to work with officers to help the Council to achieve this. Financial standing We are satisfied that the Council has appropriate arrangements to maintain its financial standing. The general fund working balance currently stands at £1.6 million compared to the minimum level of £0.96 million determined by the Council. The Council is revising its medium term financial strategy to strengthen the link between financial planning and the Council’s priorities . Balances at 31 March 2004 This year the Councils general fund benefited from a one off adjustment to the amount set-aside to repay debt, increased interest on investment, additional income from planning fees, land charges and leisure facilities and higher than anticipated grant in respect of kerbside recycling. As a result, the Council was able to increase its general fund reserves by £0.6 million. The housing revenue account has increased by £0.4 million. This is because it has benefited from the Supporting People legislation and the settlement of two long standing potential compensation claims for which provisions had been provided but which are no longer required. Usable capital receipts have increased by £0.6 million. Other reserves have remained at similar levels to last year. Lewes District Council Page 4
audit 2003/2004
31 Marc 31 Marc 200 200 £ £ General fund 0.8 1.6 Ear-marked reserves 4.3 4.5 Total general fund reserves 5.1 6.1 Housing revenue account 0.9 1.3 Major repairs reserve 0.6 0.6 Total housing reserves 1.5 1.9 Usable capital receipts 2.4 3.0 As part of the financial statements for 2003/04, councils are required to disclose their share of any deficit or surplus on the pension fund. This figure is likely to vary significantly from year to year depending on the return the fund achieves. At 31 March 2003, Lewes District Councils share of the pension fund liability stood at £11.5 million. At 31 March 2004 this liability had reduced to £6.9 million. Financial planning The Council has a well established three year financial plan that is updated on a rolling basis. The latest update (to 31 March 2008) projects revenue reserves to be maintained at current levels. This financial plan is supported by: • a structured approach for determining the level of balances appropriate to its need. As at 31 March 2004, this is set at £0.96 million; • a strong annual budget and monitoring process; and • regular financial updates to the Cabinet. The Council will continue to face external financial pressures such as limits on future increases in council tax and the governments efficiency agenda. We are satisfied, however, that the Council has appropriate arrangements to maintain its financial standing. As noted above, one of the improvement areas we identified during CPA was strengthening the link between financial planning and the Councils priorities. The Council is seeking to address this by revising its medium term financial strategy at the same time as developing its priorities. Annual Audit and Inspection Letter - audit 2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
Other financial governance issues We have not identified any significant weaknesses in your arrangements for: • internal financial control; • standards of conduct and arrangements to prevent and detect fraud and corruption; or • ensuring the legality of its significant financial transactions. Other work Grant Claims Over recent years the number of claims requiring audit certification has grown and audit fees have risen in line with this growth. In accordance with its principles of strategic regulation, the Audit Commission has adopted a more risk-based approach to the certification of grant claims. With effect from 2003/04 the smaller claims have not been subject to audit or have received a lighter touch. The approach to larger claims has been determined by risk and the adequacy of the Councils control environment. National Fraud Initiative The Council took part in the Audit Commissions national fraud initiative (NFI) 2002/03. The NFI, which is undertaken every two years, brings together data from local authorities, NHS bodies, government departments and other agencies, to detect a wide range of frauds against the public sector. Total savings from the 2002/03 exercise exceeded £83 million but none were identified at Lewes.
Lewes District Council Page 5
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Looking Forwards Future audit and inspection work We have an agreed plan for 2004/05 and we have reported in this letter those aspects that have already been completed. The remaining elements of that plan, including our audit of the 2004/05 accounts, will be reported in next years Annual Letter. We will seek to ensure, wherever possible, that our work relates to the improvement priorities of the Council when planning our programme of work for 2005/06. Revision to the Code of Audit Practice The Audit Commission has consulted on a revised Code of Audit Practice for application to the audit of the 2005/06 accounts. The new Code, which will be laid before Parliament in January 2005, is designed to secure: a more streamlined audit, which is • proportionate to risk and targeted on areas where auditors have most to contribute to improvement; • a stronger emphasis on value for money, focussing on corporate performance and financial management arrangements (rather than individual services and functions); and • better and clearer reporting of the results of audits. Further details will be provided in the Audit and Inspection Plan 2005/06. Closing remarks This letter has been discussed and agreed with leading members and senior officers. A copy of the letter will be presented at Cabinet on 5 January 2005. The Council has taken a positive and constructive approach to our audit and inspection I would like to take this opportunity Annual Audit and Inspection Letter - audit 2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
to express my appreciation for the Councils assistance and co-operation. Availability of this letter This letter will be published on the Audit Commissions website at www.audit-commission.gov.uk , and also on the Councils website.
Darren Wells District Auditor and Relationship Manager December 2004 Status of our reports to the Council Our annual audit and inspection letter is prepared in the context of the Statement of Responsibilities of Auditors and Audited Bodies issued by the Audit Commission. Annual audit and inspection letters are prepared by relationship managers and appointed auditors and addressed to members and officers. They are prepared for the sole use of the audited and inspected body, and no responsibility is taken by the Audit Commission or its appointed auditors to any member or officer in their individual capacity, or to any third party.
Lewes District Council Page 6
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Annual Audit and Inspection Letter - audit 2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
Lewes District Council Page 7
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Audit & Inspection reports issued
Reports Comprehensive performance assessment Risk management update Audit plan for 2004/05 Best Value Performance Plan report
Annual Audit and Inspection Letter - audit 2003/2004
Date March 2004 June 2004 July 2004 (to be attached as Appendix 4)
APPENDICES
A P P E N D I X 1
Lewes District Council Page 8
APPENDICES
A P P E N D I X 2
audit 2003/2004 Scope of audit and inspection Audit Our main objective as your appointed auditor is to plan and carry out an audit that meets the requirements of the Code of Audit Practice. We adopt a risk-based approach to planning our audit, and our audit work has focused on your significant financial and operational risks that are relevant to our audit responsibilities. Central to our audit are your corporate governance arrangements. Our audit is then structured around the three elements of our responsibilities as set out in the Code and shown in Exhibit 1. The three main elements of our audit objectives
Accounts • Opinion. Financial aspects of corporate governance • Financial standing. Systems of internal financial control. • • Standards of financial conduct & the prevention and detection of fraud and corruption. • Legality of transactions. Performance management • Use of resources. • Performance information. • Best Value Performance Plan.
Annual Audit and Inspection Letter - audit 2003/2004
Lewes District Council Page 9
audit 2003/2004
APPENDICES
Inspection Inspection work is based around section 10 of the Local Government Act 1999, which requires us to carry out inspections and deliver reports that will: • enable the Council and the public to judge whether best value is being delivered; • enable the Council to assess how well it is doing; • enable the Government to assess how well its policies are being implemented; and • identify failing services where remedial action may be necessary. The Audit Commission has circulated to all audited bodies a statement that summarises the key responsibilities of auditors. Our audit has been conducted in accordance with the principles set out in that statement. What we say about the results of our audit should be viewed in the context of that more formal background. Annual Audit and Inspection Letter - audit 2003/2004
Lewes District Council Page 10
audit 2003/2004
Audit and Inspection fee
Plan 2003/04 22,000 12,000 47,400 81,400 35,000 nil
APPENDICES
A P P E N D I X 3
Actual 2003/04 22,000 12,000 47,400 81,400 35,000 est nil
Audit fee update Audit area Accounts Financial aspects of corporate governance Performance TOTAL CODE OF AUDIT PRACTICE FEE Grant Claim certification Additional Voluntary work (under Section 35) Inspection fee update The full year inspection fee is £15,800. This relates to the Councils comprehensive performance assessment.
Annual Audit and Inspection Letter - audit 2003/2004
Lewes District Council Page 11
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