RY001 Annual Audit and Inspection Letter
Description
audit 2003/2004 Annual Audit and Inspection Letter Ryedale District Council INSIDE THIS LETTER PAGES 2 - 9 • Key messages • The purpose of this letter • Background to the audit and inspection programme • Objectives of audit and inspection • Council performance • Financial aspects of corporate governance • Accounts • Other work • Looking forward • Closing remarks PAGES 10 - 11 Appendices • Appendix 1 - Audit and inspection reports issued • Appendix 2 - Audit and inspection fees Reference: RY001 Annual Audit and Inspection Letter Date: December 2004 audit 2003/2004 ANNUAL AUDIT AND INSPECTION LETTER Action needed by the council • Make further progress with the improvement Key messages plan arising from the CPA. Our Comprehensive Assessment (CPA) work • Focus on key service improvements in reported in May assessed the Council as good. priority areas. The Council has responded positively to address • Assess the adequacy and operation of the issues raised in the report and has made some governance framework. progress in defining improvement priorities, • Continue to work towards achievement of although still needs to develop more outcome the Government’s e-government targets based targets and milestones. increasing access to services via the web. • Focus financial resources towards key Council performance priority areas to address the 2005/06 The key findings of our follow up of ...
Sujets
Informations
| Publié par | Ostlue |
| Nombre de lectures | 18 |
| Langue | English |
Extrait
Reference:
RY001 Annual Audit and Inspection Letter
Date:
December 2004
Annual Audit and Inspection
Letter
Ryedale District Council
I
N
S
I
D
E
T
H
I
S
L
E
T
T
E
R
P
A
G
E
S
2
-
9
•
Key messages
•
The purpose of this letter
•
Background to the audit and inspection
programme
•
Objectives of audit and inspection
•
Council performance
•
Financial aspects of corporate governance
•
Accounts
•
Other work
•
Looking forward
•
Closing remarks
P
A
G
E
S
1
0
-
1
1
Appendices
•
Appendix 1 - Audit and inspection reports issued
•
Appendix 2 - Audit and inspection fees
audit
2003/2004
audit
2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
Annual Audit and Inspection Letter – Audit 2003/2004
Ryedale District Council – Page
2
Key messages
Our Comprehensive Assessment (CPA) work
reported in May assessed the Council as good.
The Council has responded positively to address
issues raised in the report and has made some
progress in defining improvement priorities,
although still needs to develop more outcome
based targets and milestones.
Council performance
The key findings of our follow up of previous
inspection work on services for younger people
and development control were:
•
progress has been made in increasing
capacity with the funding of a youth
co-ordinator post to drive improvement; and
•
better performance in development control
for all key indicators with more delegated
decisions and quicker processing of
applications.
Governance issues
The Council adopted the CIPFA Solace
framework in 2003 in its Code of Corporate
Governance. Whilst partial monitoring takes
place it is not part of a coherent approach
covering all aspects of the framework.
In addition we have raised the following issues:
•
you have made progress in improving access
to services but, having pulled out of the
North Yorkshire ICT partnership, you will
need to firm up internal plans to meet
targets;
•
you have drafted a Partnerships Protocol to
ensure terms of reference are clear but more
work is needed on funding strategies and
performance management for partnerships;
•
work is on-going to address a budget deficit
of £0.6 million; and
•
risk management has progressed with
strategic and operational risks identified
although service and risk plans are not yet
fully integrated.
Action needed by the council
•
Make further progress with the improvement
plan arising from the CPA.
•
Focus on key service improvements in
priority areas.
•
Assess the adequacy and operation of the
governance framework.
•
Continue to work towards achievement of
the Government’s e-government targets
increasing access to services via the web.
•
Focus financial resources towards key
priority areas to address the 2005/06
revenue budget shortfall.
•
Continue to develop Risk Management.
The purpose of this letter
This letter summarises the conclusions and
significant issues arising from our 2003/04 audit
and inspection programme and comments on
other current issues.
We have issued separate reports during the year
having completed specific aspects of our
programme. These reports are listed at
Appendix 1 for information.
The Auditor’s responsibilities are summarised in
the Audit Commission’s statement of key
responsibilities of auditors. The responsibilities
of Audit Commission Inspectors are detailed in
section ten of the Local Government Act 1999.
What we say in this letter should be viewed in
the context of that more formal background.
Background to the audit and
inspection programme
To ensure councils receive a tailored seamless
service, integrated with the work of other
inspectorates, the Audit Commission appointed a
Relationship Manager for each Council. Your
Relationship Manager, Mark Kirkham, is the
Commission’s key point of contact with you and
he also acts as the interface between the
Commission and the other inspectorates.
audit
2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
Annual Audit and Inspection Letter – Audit 2003/2004
Ryedale District Council – Page
3
Objectives 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.
Your corporate governance arrangements are
central to our audit which is structured around
the three elements of our responsibilities as set
out in the Code and shown in Exhibit 1.
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.
•
Legality of transactions.
Performance management
•
Use of resources.
•
Performance information and BVPP.
Inspection
Inspection work is based around section ten of
the Local Government Act 1999, which requires
us to carry out inspections that:
•
enable the council and the public to judge
whether best value is being delivered;
•
enable the Government to assess how well
its policies are being implemented; and
•
identify failing services where remedial
action may be necessary.
Council performance
Comprehensive Performance
Assessment (CPA) and
improvement
In May 2004 the council was assessed as good
under the Comprehensive Performance
Assessment (CPA) framework.
The CPA noted the rate of service improvement
you have achieved and that you are putting in
place many of the building blocks needed to
improve services further. The council:
•
is providing strong community leadership
through the local strategic partnership;
•
has developed its ambitions and priorities
through consultation with residents and
stakeholders;
•
has good staff and councillor expertise, and
uses partnerships and procurement to
strengthen its capacity;
•
delivers most services well; and
•
is increasingly tackling cross cutting issues
such as services for young people, and
reducing fear of crime.
You have made a good start on identifying
improvement priorities and have:
•
developed performance measurement and
monitoring further;
•
identified funds to support additional staff in
priority services such as planning, benefits
and housing; and
•
restructured Senior Management Team
(SMT) to strengthen strategic capacity.
audit
2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
Annual Audit and Inspection Letter – Audit 2003/2004
Ryedale District Council – Page
4
Your improvement plan could be more outcome
focused and would benefit from milestones that
can be used to monitor progress.
Other Audit Commission
inspections
Younger People
You completed your best value review of
services for younger people and key
recommendations include:
•
developing a young people’s strategy or
charter;
•
building a strong youth partnership with
direct links to the Ryedale Strategic
Partnership;
•
establishing a single point of contact for
youth issues within the council;
•
working in partnership to improve access to
information for young people; and
•
developing further your facilitation role in
implementing packages of projects (on the
basis established in the SRB5 programme).
You have now successfully identified funding for
a youth co-ordinator post to implement the
action plan.
Development Control
Since we carried out an inspection of
development control in February 2003 you have
set up a new planning committee, revised your
scheme of delegation, arranged training for
members and agreed a new code of conduct.
We are pleased to note the impact your new
arrangements. The council currently processes
68 per cent of minor planning applications in
eight weeks. 80 per cent of decisions are now
delegated, compared to 50 per cent at the time
of the inspection and this is set to rise given new
arrangements agreed by members.
The service is currently fully staffed, and funding
has been agreed to recruit an additional
planning officer as the number of planning
applications continue to rise.
Performance information
The council’s 2003/04 Best Value Performance
Plan (BVPP) complied in all significant respects
with statutory requirements. There is scope to
improve checking processes for the Performance
Indicators (PIs) used to monitor performance.
Our duty under the Local Government Act 1999
is to audit the council’s BVPP. The statutory
audit report includes an unqualified opinion.
Whilst the information was generally accurate
we found one calculation error and four
indicators where the collection method was not
fully consistent with the national definitions.
Work is on-going to update systems and prevent
similar problems in future.
PIs are a key part of your performance reporting
system but only limited checks are made. While
Internal Audit reviews BVPP information there is
no overall quality assurance process for in year
reporting of performance information.
Financial aspects of
corporate governance
Members have responsibility for the governance
framework. Although there are some reporting
arrangements in place, it is not clear how
Members gain assurance about the adequacy
and operation of this framework.
Overall Governance Arrangements
Last year you updated many of the key
governance documents and
adopted the CIPFA
Solace framework in your Code of Corporate
Governance. The framework brings together
aspects such as codes of conduct, Overview and
Scrutiny Committee and the constitution. This
should be regularly monitored by Members to
ensure each element is effective.
Whilst partial monitoring takes place via the
Overview and Scrutiny Committee in following
up audit reports, this is not part of a coherent
approach across all aspects. The Committee
needs to test adherence to your code and set up
a monitoring framework.
audit
2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
Annual Audit and Inspection Letter – Audit 2003/2004
Ryedale District Council – Page
5
Partnership arrangements
Officers have agreed an action plan following our
work which highlighted the need to:
•
provide comprehensive terms of reference for
its partnerships, including clarification of
decision making processes, accounting
systems and scrutiny arrangements, and
establishing procedures for recording
declarations of interest, complaints
procedures, and personnel matters;
•
review both the support and allocation of
resources to partnerships, and to develop a
funding strategy for partnerships, linked to
policy objectives and priorities; and
•
work with partners to enable greater
integration of objectives and actions, and
performance management arrangements.
You have now drafted a Partnership Protocol to
provide terms of reference, clarify decision
making, and introduce accounting and scrutiny
arrangements.
Access to services
We conducted a risk assessment which focused
on your plans to improve access to services and
meet the government target of 100 per cent
provision of electronic access for identified
services by the end of 2005.
Due to affordability and value for money issues
you withdrew, along with some other
North Yorkshire District Councils, from the
NYICTP which had previously been the core
method of delivering against e-targets.
You had already developed a revised approach
which is now being developed to deliver the key
elements required. The approach is being
supported by a programme management process
and key aspects are:
•
develop Customer Access Strategy;
•
telephony/Contact management (CRM);
•
transactional web site and intranet
development ;
•
broadband capacity; and
•
workflow/document management.
Work is being managed using project
management methods monitored by the
e-Government Working Party.
In October 2004 we set in train a review of the
arrangements which we will be conducting
concurrently across the districts in
North Yorkshire to:
•
understand the current situation;
•
review progress to date and future plans;
•
compare approaches; and
•
highlight good practice and opportunities for
co-operation.
We aim to produce a draft report in late 2004.
Financial standing
The council has arrangements to ensure its
financial standing is soundly based. There is
pressure to balance the revenue budget with
savings of £0.6 million needed.
Your financial reserves remain on an upward
trend as seen in Exhibit 2 below.
EXHIBIT 2: RESERVE BALANCES
March
2002
£m
March
2003
£m
March
2004
£m
General
0.7
0.8
0.8
Earmarked
Investment
Income
1.9
1.9
2.4
Repairs and
Renewals
0.6
0.7
0.8
Other
0.4
1.1
1.1
3.6
4.5
5.1
This trend is in accordance with the medium term
financial plan which sets out:
•
the general reserve level at ten per cent of
Net Revenue Expenditure; and
•
the strategy to build earmarked reserves to
support capital spending.
The 2005/06 revenue position is more difficult.
There is uncertainty surrounding the level of
some grants and pressure to make efficiency
savings in accordance with the Gershon Review.
Initial indications are that savings of £0.6 million
will be required and you need to identify options
deliver them and review the affordability of your
priorities in that context.
audit
2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
Annual Audit and Inspection Letter – Audit 2003/2004
Ryedale District Council – Page
6
While you have mechanisms to prioritise
spending, earmarked reserves, such as the
investment income reserve, do not link overtly to
the priorities set out in the community strategy.
It is therefore possible that spending against the
reserves may not be targeted to priority areas.
You should explicitly link earmarked reserves and
priority areas.
Financial reporting
Last year we referred to the need to improve
revenue budget monitoring arrangements. We
are pleased to note you have now extended
reporting to leading Members so they receive
summaries of key financial trends including
budget variances, debtors collection and
investment performance. Scope remains for
further improvements by:
•
linking performance and financial reporting;
•
adding commentary putting financial
performance into perspective; and
•
highlighting the corporate financial position
and anticipated out-turn.
Income collection and arrears
In 2003/04 collection rates for both council tax
and business rates improved and targets were
exceeded as seen in Exhibit 3 below.
EXHIBIT 3: COLLECTION RATES
2002/03
Actual
%
2003/04
Target
%
2003/04
Actual
%
Business Rates
98.4
98.8
98.9
Council Tax
98.5
98.5
98.7
The overall arrears trend is down although
council tax levels have increased over the last
three years as seen in Exhibit 4
EXHIBIT 4: TREND IN OUTSTANDING DEBTORS
2001/02
£000
2002/03
£000
2003/04
£000
Business
Rates
749
428
295
Council
Tax
503
601
717
Total
1,252
1,029
1,012
You focus on collecting current year arrears to
maintain high performance compared with
others. While council tax arrears levels are not
high the current trend could make future
recovery more difficult and may lead to an
increased write off level. You need to:
•
set and monitor targets for the recovery of all
arrears from previous years; and
•
consider the best options to chase arrears
within existing resources.
Systems of internal financial
control
The council has arrangements to ensure the
control framework is satisfactory. Our work has
not identified any significant weaknesses.
Risk management
You continue to make progress in implementing
risk management. Alongside the strategic risk
register, service registers have been prepared
and future review and reporting timescales
agreed.
You still need to fully embed the system, aligning
risk, service and financial planning. There is also
a need to:
•
consider training for staff and Members; and
•
link and record emerging risks.
Internal Audit (IA)
Your IA function is carried out by the
North Yorkshire Audit Partnership (NYAP). Our
assessment is that they provide an effective
service. Our detailed review confirmed that we
were able to rely on their work in forming an
opinion on the financial statements for 2003/04
thereby minimising our direct work.
Standards of financial conduct
and the prevention and detection
of fraud and corruption
We have not identified any significant
weaknesses in the council’s arrangements for
maintaining proper standards of financial
conduct.
audit
2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
Annual Audit and Inspection Letter – Audit 2003/2004
Ryedale District Council – Page
7
Overall arrangements
The primary responsibility for the prevention and
detection of fraud, and taking reasonable steps
to limit the opportunity for corrupt practices, lies
with the council. It is also the council’s
responsibility to ensure that it has arrangements
in place to make sure that proper standards of
conduct are maintained. Our principal role is to
review the adequacy of your arrangements.
We reviewed your overall arrangements and, on
the basis of the work done, there are no matters
that we wish to raise with members.
National Fraud Initiative (NFI)
You took part in the Audit Commission’s NFI in
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
nationally exceeded £83 million
We are repeating the exercise this year and will
again collect payroll, pensions, housing benefits,
student loan and housing rents data from
authorities. A number of pilot initiatives will also
be undertaken at selected sites. These include
payments made to privately run care homes,
abuse of blue badge parking permits, serial
insurance claimants and duplicate payments to
suppliers. These pilot areas, if effective, will be
incorporated into future exercises.
Legality of transactions
We have not identified any significant
weaknesses in the framework established by the
Council for ensuring the legality of its significant
financial transactions.
We reviewed your overall arrangements and, on
the basis of the work done, there are no matters
that we wish to raise with members.
Freedom of Information
The Freedom of Information Act 2000 gives a
general right of access to all types of ‘recorded’
information held by public authorities, sets out
exemptions from that right and places a number
of obligations on public authorities.
We reviewed your arrangements for meeting the
requirements and found you have taken positive
steps in relation to the information agenda by:
•
preparing a publication scheme, (approved
by the Information Commissioner);
•
appointing an Information Access Officer, a
shared appointment with three other
districts.
There is scope for further improvement in:
•
establishing clear ownership and sponsorship
by Members of broader information issues;
•
clarifying roles and responsibilities for
information and records management to
facilitate the development of effective
corporate policies; and
•
drafting policies for Freedom of Information
or Records Management, and reviewing the
policy on document retention and disposal.
An action plan has been agreed with officers.
Accounts
We have almost completed our audit and plan to
give an unqualified opinion on the accounts by
30 November.
The published accounts are an essential means
by which you report your stewardship of public
funds and financial performance. You approved
your accounts on 3 August 2004.
In last year’s letter we emphasised that
timeliness will become increasingly important as
the deadline for completion of the accounts is
brought forward in line with the Government’s
requirement. While the requirements were met
this year, the deadlines will become increasingly
more difficult to achieve and will require early
planning and scheduling of meetings next year.
audit
2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
Annual Audit and Inspection Letter – Audit 2003/2004
Ryedale District Council – Page
8
Other work
Grant Claims
We have adopted a more risk-based approach to
the certification of grant claims. With effect from
2003/04 the smaller claims, those less than
£100,000, 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 your control environment.
Part of this control environment is the work of
Internal Audit. Additional input relating to
Housing Benefit and SRB claims may reduce the
level of direct transaction testing by ourselves.
Your arrangements for managing and quality
assuring grant claims submitted for audit has
improved in recent years. There are still areas
where improvement could be made including:
•
ensuring a full audit trail is maintained; and
•
strengthening checking procedures.
We will work with officers to improve
administrative arrangements.
Looking forward
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. ie, Best Value and
programme management. The remaining
elements of that plan, including our audit of the
2004/05 accounts, will be reported in next
year’s Annual Letter.
We have sought to ensure, wherever possible,
that our work relates to your improvement
priorities. We will continue with this approach
when planning our programme of work for
2005/06. We will seek to reconsider, with you,
your improvement priorities in the light of the
latest CPA assessment and your own analysis,
and develop an agreed programme by
31 March 2005. We will continue to work with
other inspectorates and regulators to develop a
co-ordinated approach to regulation.
New Code of Audit Practice
The Audit Commission has consulted on a
revised Code of Audit Practice. The new Code,
which will be laid before Parliament in
January 2005, is designed to secure:
•
more streamlined audit, which is
proportionate to risk;
•
stronger emphasis on value for money and;
•
better and clearer reporting of audit results.
Further details will be provided in the Audit and
Inspection Plan 2005/06.
CPA 2005 and beyond
The Audit Commission has also consulted on a
new framework
for CPA in 2005 and beyond.
The main changes proposed are as follows:
•
rationalization of service blocks;
•
‘achievement’ element of Corporate
Assessment to be driven by review of
Community Plan and shared priority themes;
•
move away from rigid numerical model, to
one based on rules;
•
Corporate Assessments to be undertaken on
rolling programme, integrated with Joint
Area Reviews of children and young people;
•
stronger focus on service delivery for users
and customers; and
•
more robust and explicit view of vfm and
cost-effectiveness.
audit
2003/2004
ANNUAL AUDIT AND INSPECTION LETTER
Annual Audit and Inspection Letter – Audit 2003/2004
Ryedale District Council – Page
9
Closing remarks
This letter has been
discussed and agreed with
the Senior Management team including the Chief
Executive and the Chief Financial Officer. A copy
of the letter will be presented at the Overview
and Scrutiny Committee of 9 December 2004.
Availability of this letter
This letter will be published on the Audit
Commission’s website at
www.audit-commission.gov.uk
, and also on your
website.
Mark Kirkham
District Auditor & 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
.
.
audit
2003/2004
APPENDICES
Annual Audit and Inspection Letter – Audit 2003/2004
Ryedale District Council – Page
10
A
P
P
E
N
D
I
X
1
Audit and inspection reports issued
Reports issued
Date
Freedom of Information review
January 2004
Auditor Scored Judgements
January 2004
Audit plan
March 2004
Grant Claims
March 2004
CPA Report
May 2004
BVPP and BVPI Report
November 2004
audit
2003/2004
APPENDICES
Annual Audit and Inspection Letter – Audit 2003/2004
Ryedale District Council – Page
11
A
P
P
E
N
D
I
X
2
Audit and inspection fees
Audit fee update
Audit area
Plan 2003/04
£
Actual 2003/04
£
Accounts
14,400
14,400
Financial aspects of corporate governance
33,800
33,800
Performance, including inspection and Best Value
47,600
47,600
TOTAL CODE OF AUDIT PRACTICE FEE
84,800
84,800
Grant Claim certification
7,500
On-going
Additional Voluntary work (under Section 35)
0
0
© 2010-2024 YouScribe