TE010l Annual Audit and Inspection Letter - FINAL

V-Holtom

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Annual Audit and Inspection Letter March 2006 Annual Audit and Inspection Letter Tewkesbury Borough Council External audit is an essential element in the process of accountability for public money and makes an important contribution to the stewardship of public resources and the corporate governance of public services. Audit in the public sector is underpinned by three fundamental principles: • auditors are appointed independently from the bodies being audited; • the scope of auditors' work is extended to cover not only the audit of financial statements but also value for money and the conduct of public business; and • auditors may report aspects of their work widely to the public and other key stakeholders. The duties and powers of auditors appointed by the Audit Commission are set out in the Audit Commission Act 1998 and the Local Government Act 1999 and the Commission's statutory Code of Audit Practice. Under the Code of Audit Practice, appointed auditors are also required to comply with the current professional standards issued by the independent Auditing Practices Board. Appointed auditors act quite separately from the Commission and in meeting their statutory responsibilities are required to exercise their professional judgement independently of both the Commission and the audited body. Status of our reports to the Council The Statement of Responsibilities of Auditors and Audited Bodies issued by the Audit ...

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• Publié par: Phoon
• Nombre de lectures: 18
• Langue: English

Extrait

Annual Audit and Inspection Letter

March 2006

Annual Audit and Inspection Letter

Tewkesbury Borough Council

 

 

 

             

 

External audit is an essential element in the process of accountability for public money and makes an important contribution to the stewardship of public resources and the corporate governance of public services. Audit in the public sector is underpinned by three fundamental principles: • auditors are appointed independently from the bodies being audited; • scope of auditors' work is extended to cover not only the audit of financial the statements but also value for money and the conduct of public business; and • auditors may report aspects of their work widely to the public and other key stakeholders. The duties and powers of auditors appointed by the Audit Commission are set out in the Audit Commission Act 1998 and the Local Government Act 1999 and the Commission's statutory Code of Audit Practice. Under the Code of Audit Practice, appointed auditors are also required to comply with the current professional standards issued by the independent Auditing Practices Board. Appointed auditors act quite separately from the Commission and in meeting their statutory responsibilities are required to exercise their professional judgement independently of both the Commission and the audited body.  

Status of our reports to the Council The Statement of Responsibilities of Auditors and Audited Bodies issued by the Audit Commission explains the respective responsibilities of auditors and of the audited body. Reports prepared by appointed auditors are addressed to members or officers. They are prepared for the sole use of the audited body. Auditors accept no responsibility to: • member or officer in their individual capacity; or any •any third party.  

Copies of this report If you require further copies of this report, or a copy in large print, in Braille, on tape, or in a language other than English, please call 0845 056 0566.

© Audit Commission 2006 For further information on the work of the Commission please contact: Audit Commission, 1st Floor, Millbank Tower, Millbank, London SW1P 4HQ Tel: [phone] Fax: [phone] Textphone (minicom): 020 7630 0421 www.audit-commission.gov.uk

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Contents Key messages 5   Introduction 5   Council performance 5   The accounts 6   Financial position 6   Other accounts and governance issues 6   Action needed by the Council 7   Council performance 8   Direction of travel report 8   Best value performance plan 13   Performance information 13   Accounts and governance 14   Audit of 2004/05 accounts 14   Financial standing 14   Systems of internal financial control 16   Standards of financial conduct and the prevention and detection of fraud and corruption 16   Legality of transactions 16   Use of resources judgements 16   Other work 19   Grant claims 19   National Fraud Initiative 19   Looking forwards 20   Future audit and inspection work 20   Revision to the Code of Audit Practice 20   A new CPA framework 20   Closing remarks 21   Availability of this letter 21   Appendix 1  Background to this letter 22   The purpose of this letter 22  

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Audit objectives Inspection objectives

Appendix 2  Audit and Inspection reports issued

Appendix 3  Audit and Inspection fee

 

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Key messages

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Introduction This year Annual Audit and Inspection Letters for District Councils are to be produced by 31 March 2006. This is later than the usual 31 December. This timetable has been produced so that the Use of Resources and Direction of Travel work undertaken as part of the 2005/06 audit can be included within the 2004/05 letter.

Council performance 1 The Council has allocated additional resources to the priority of providing support and investing in communities. It has improved the range of services it provides and by working successfully with partners it has improved its ability to enable the provision of affordable housing. But its support to residents who live in poor housing conditions is weak and generally worsened over the two years up to 31 March 2005. 2 planning performance improved over the two years up to 31 March 2005,While the Council was designated as a ‘Planning Standards Authority’ in 2005/06 by the ODPM. This is because its performance is still below standard and because of concerns about its ability to meet future targets. 3 While the waste collection service had good levels of satisfaction in the last survey in 2003, its performance is worsening. The Council is unlikely to meet its statutory recycling targets in 2005/06, but plans are now in place to improve the service. From October 2006 the Council is introducing a weekly dry recyclable collection, together with an alternating weekly collection of residual household waste and an 'opt in' garden waste collection service for which there will be a charge. 4 The Council has taken some action to improve the accessibility of its services. While many of the Council's buildings do not fully meet current standards for disabled access, the Council has made improvements and where it is impractical to make adjustments, alternative arrangements are in place to make its facilities accessible. The Council has not taken a strong lead in developing its approach to equalities and diversity, but it has improved residents' access to council services   through its development of Area Advice and Information Centres around the district. 5 The Council does not have robust and consistent plans for improvement. There is no sustained focus on established priorities and councillors and staff are unclear about what the Council’s current priorities are for improvement.

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6 The Council Plan for 2004-2008 does not clearly outline what the Council’s priorities are for improvement, because it includes objectives and targets for most of the services the Council provides. The absence of clear political direction on future priorities is currently limiting the Council's ability to develop a Medium- Term Financial Strategy. The lack of clearly communicated and focussed improvement priorities limits the Council’s understanding and ability to target its resources on key improvement priorities. 7 The Council’s ability to secure continuous service improvement is being hampered by corporate governance weaknesses. These include the long- standing lack of political leadership, a lack of strategic capacity, a lack of understanding by councillors of their roles and responsibilities, a lack of clear prioritisation and future resource allocation, poor working relationships and dysfunctional behaviours, and a failure to effectively manage performance. 8 the Government Office of the South West (GOSW) with aWe are liaising with view to setting up an improvement team to help the Council address the issues identified in the direction of travel report. 9 An unqualified Statutory Report on the Best Value Performance Plan (BVPP) has been issued, before the statutory deadline of 31 December. This was partly achieved as a result of internal and external audit working together to review performance indicator information before the publication of the BVPP.  

The accounts 10 audit opinion on the Council's accounts and soundWe gave an unqualified arrangements are in place for the production of the annual accounts. This performance needs to continue as the timetable comes forward.

Financial position 11 The Council's budget was substantially delivered whilst still achieving planned savings and maintaining a relatively low council tax increase. The medium term budget projections indicate that further savings are required over the coming years to meet the target council tax increases.

Other accounts and governance issues 12 The Council needs to improve overall in its use of resources. Particular attention is needed to improve the Council's arrangements for ensuring sound financial standing, financial management and value for money. 13 The Council has been undertaking a management restructure for the last two years. We have had concerns about the process used to decide on the new structure including the lack of independent advice provided to members.

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14 The Council completed a comprehensive assessment of its systems of internal control. Eleven significant weaknesses were reported in the published Statement on Internal Control including the need to embed risk management and producing a medium term financial strategy.

Action needed by the Council 15 It is important that members ensure that: • performance information is produced correctly first time and that the arrangements are consistently applied to all performance information and not just limited to Best Value Performance Indicators (BVPIs); • identified within the medium term budget projections are delivered; savings  actions planned to address the eleven identified significant internal control • weaknesses are delivered; • preferred management structure is identified and implemented without the further delay; • improvement priorities are established and communicated clearly; • medium term financial strategy is produced that links resources to priorities; a • is taken to address corporate governance weaknesses; and action • the improvement team is established in order to address the issues identified in the direction of travel report.

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Council performance An unqualified Statutory Report on the Best Value Performance Plan (BVPP) has been issued, before the statutory deadline of 31 December. This was partly achieved as a result of internal and external audit working together to review performance indicator information before the publication of the BVPP.

Direction of travel report 16 Tewkesbury Borough Council was assessed as Fair in the Comprehensive Performance Assessment carried out in 2004. These assessments have now been completed in all district councils with the following results. Figure 1 Overall performance of district councils in CPA Three times as many district councils are rated Good or Excellent than Poor or Weak   Overall performance of district councils in CPA 100 86  86 80 60 40 20 9 0 poor weak

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fair

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good excellent

Source: Audit Commission 17 Since the assessment, the Council has identified its priorities for improvement and we have been working with the Council as it seeks to improve further. 18 the Council as improvement priorities are providingThe areas identified by support and investing in communities, supporting a buoyant economy, providing a safe, clean and cared for environment and improving access to services for all. The following paragraphs describe the Council's progress at improving these priorities.

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Providing support and investing in communities 19 The Council has allocated additional resources to the priority of providing support and investing in communities. Following a tendering exercise the Council took the housing service back in-house. It has improved the range of services it provides and by working successfully with partners it has improved its ability to enable the provision of affordable housing. But its support to residents who live in poor housing conditions is weak and generally worsened over the two years up to 31 March 2005. 20 The Council maintains an effective housing benefit and council tax benefit service and it has improved the take-up of benefits as a result of the appointment of two benefits officers. The performance of this service is good relative to other councils and while there was a drop in performance in 2004/05 this has significantly improved in 2005/06. 21 Council’s work on community cohesion is good and has received externalThe recognition from the Improvement and Development Agency (IDeA). It supports communities especially in rural areas by ensuring that new developments are integrated with the necessary infrastructure such as by the provision of community facilities and shops. It works in partnerships to plan and deliver services. It has researched housing needs and the needs of vulnerable people and it works well with the County Council on supporting people. Supporting a buoyant economy 22 The Council works with external stakeholders to improve the local economy. Examples include the partnership with English Heritage which improves Tewkesbury's architectural heritage and will provide a new heritage centre and the appointment of an external funding officer has increased the take up of external grants. Following a value for money review and consultation with external agencies, the Council withdrew its support to developing businesses because the scheme was no longer proving to be effective. 23 planning performance improved over the two years up to 31 March 2005,While the Council was designated as a ‘Planning Standards Authority’ in 2005/06 by the ODPM because its performance is still below standard and because of concerns about its ability to meet future targets. 24 an active role in developing the town ofThe Council continues to take Tewkesbury. The Council's plans to redevelop and regenerate part of the town will not only improve the ‘shopping experience’, but are also expected to provide a new and more extensive leisure facility. Depending on where this is sited, the Council may realise significant capital receipts which may help fund further redevelopment proposals.

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Providing a safe, clean and cared for environment 25 The Council has allocated additional resources to improve the standards of street cleaning and grass cutting and the recycling of household waste. The performance of the street cleaning service, despite the recent investment, is worsening. Surveys of the streets and public spaces in 2004/05 show increased levels of littering with resulting falls in the levels of residents’ satisfaction 26 While the waste collection service had good levels of satisfaction in the last survey in 2003, its performance is worsening. The Council is unlikely to meet its statutory recycling targets in 2005/06, but plans are now in place to improve the service. From October 2006 the Council is introducing a weekly dry recyclable collection, together with an alternating weekly collection of residual household waste and an 'opt in' garden waste collection service for which there will be a charge. 27 mixed. There were reductions in theTrends in levels of recorded crime are numbers of domestic burglaries, robberies and thefts of and from vehicles in 2004/05. However, the numbers of violent attacks, sexual offences and racial incidents increased. Improving access to services for all 28 The Council has taken some action to improve the accessibility of its services. While many of the Council's buildings do not fully meet current standards for disabled access, the Council has made improvements and where it is impractical to make adjustments, alternative arrangements are in place to make its facilities accessible. The Council has not taken a strong lead in developing its approach to equalities and diversity, but it has improved residents' access to council services through its development of Area Advice and Information Centres around the district. 29 Residents’ satisfaction with sport and leisure facilities is in the worst quartile of comparative performance and it worsened in the last survey in 2003, this was against a national trend of improvement. The Council is however levering in significant grants to improve facilities by working with external partners and it is providing significant funding itself. Prospects for future improvement 30 The Council does not have robust and consistent plans for improvement. There is no sustained focus on established priorities and councillors and staff are unclear about what the Council’s current priorities are for improvement. 31 The Council Plan for 2004-2008 does not clearly outline what the Council’s priorities are for improvement, because it includes objectives and targets for most of the services the Council provides. The lack of clearly communicated and focussed improvement priorities limits the Council’s understanding and ability to target its resources on key improvement priorities.

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32 The Corporate Improvement Plan for 2004-2007 is weak because it focuses on internal processes and does not link to the Council Plan. It recognised that the Council ‘could not deliver its priorities for improvement without effective decision making and the effective use of resources targeted to areas of greatest need’. But neither of these requirements has yet been met and its targets for 2004 to 'develop a medium term financial strategy' and to 'review the capacity and management structures' are still outstanding. 33 The Council has not addressed the most significant weaknesses identified in the Comprehensive Performance Assessment in 2004. Councillors are still not working together to provide clear political leadership. And future priorities for local services and the resources necessary to deliver them are still not clear. 34 The Council’s recent deliberations over its priorities have been driven by the need to make savings of £459,000 in 2005/06. However the recent re-prioritisation exercise was not linked to the previously agreed and communicated priorities and has resulted in 60 differing aspects of the Council's services being classed as priority areas, while 46 are designated as non-priorities. The current confusion among councillors and staff about what the Council’s priorities are for improvement is recognised by the Council and it plans to re-establish its priorities in the new Council Plan for 2006-2008 due to be published in the Spring of 2006. 35 The Council’s high-level performance management is poor. Councillors have not monitored progress in delivering the actions and targets it set in its Corporate Improvement Plan and some planned monitoring reviews in specific services have not been undertaken. The limited range and quality of performance indicators provided to Scrutiny Committee at their quarterly meetings does not enable them to effectively monitor or manage performance and the Council failed to deliver 57 per cent of its targets for improvement in 2004/05.    36 Previous Audit Commission inspections show that service provision in Tewkesbury is generally 'fair' and that there is a track record of 'uncertain' prospects for future improvement. CPA in 2004 found the Council to be ‘Fair’ overall and this has also been the finding in four out of five previous service inspections. The prospects for improvement have been ‘uncertain’ in three of four service inspections. In housing services where there was previously a ‘promising' judgement in 2003, a recent inspection found there are now ‘uncertain’ prospects for future improvement. 37 The Council’s ability to secure continuous service improvement is being hampered by corporate governance weaknesses. These include the long- standing lack of political leadership, a lack of strategic capacity, a lack of understanding by councillors of their roles and responsibilities, a lack of clear prioritisation and future resource allocation, poor working relationships and dysfunctional behaviours, and a failure to effectively manage performance.

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