(a)

the report summarised the work undertaken by Devon Audit Partnership during 2013/14, reviewed the performance and effectiveness of the Internal Audit service and provided an audit opinion on the adequacy of internal control;

(b)

Internal Audit was able to provide reasonable assurance on the adequacy and effectiveness of the Authority’s internal control framework;

(c)

the 2013/14 Audit Plan was subject to change due to the emergence of the Transformation Programme and audit resources had been targeted in response to the far reaching changes that were being proposed. As a result, some work originally included within the 2013/14 audit plan was no longer relevant or had been deferred to a later date to fit with client needs and current objectives, especially within ICT;

(d)

the audit plan set out the business objectives which included the following challenges and opportunities: transformational change, partnering and collaboration, commissioning, information technology, financial and operational constraint and compliance and regularity;

(e)

issues contained within the Internal Audit Assurance Work included support of the implementation boards, review of partner contracts, advice on procurement processes, service management reviews, advice on reduction in control framework and  compliance reviews on all material systems;

(f)

the Audit coverage and performance against the plan for 13/14 showed that there was a small variance in outturn against target for audits provided during the year; there was an increase in work linked to fraud investigation and irregularity work;

(g)

an analysis of customer survey results between April 2013 and March 2014 showed that the majority of customers were very satisfied with work undertaken;

(h)

based on audits completed and on indications from previous and on-going work, it was considered that material systems controls for the Transformation and Change department (formally Corporate Services) had either been maintained or improvements were being made to address identified weaknesses;

(i)

it was considered that during the 2013/14 financial year and in previous years, adequate controls were in place to control operations within the People department; where weaknesses were identified management had agreed these findings and had either agreed the recommendations or accepted the associated risks; a significant amount of time was spent undertaking investigations within this department which had an impact upon Internal Audit’s delivery against the agreed audit plan;

(j)

Internal auditors were not in a position to provide an overall opinion for the Public Health directorate as work planned towards the end of the 2013/14 financial year was deferred at the Interim Director of Public Health’s request;

(k)

it was considered that overall work had continued to confirm that adequate controls were in place in the Place Directorate; management had generally responded positively to Internal Audit’s recommendations to improve controls and reduce exposure to risk;

(l)

schools were considered  ...  view the full minutes text for item 5.

(a)

External Audit considered the impact of key developments in the sector and took account of national audit requirements as set out in the Code of Audit Practice;

(b)

there were two presumed significant risks which were applicable to all audits under auditing standards including the revenue cycle including fraudulent transactions and the management over-ride of controls;

(c)

other risks identified included the employee remuneration, welfare expenditure and operating expenses;

(d)

Grant Thornton had undertaken a risk assessment to identify areas of risk the Value for Money conclusion identified; these included the review of the Council’s budget and medium term financial plan, review of the Council’s proposals for a shared ICT service with NEW Devon CCG, review the emerging governance and performance management arrangements for the joint waste PFI contract with Devon County Council and Torbay Council and the assessment of the introduction of the Better Care Fund.

(a)

the aim of the report was to provide Members with a progress update on Grant Thornton, as the Council’s external auditor, in delivering upon their responsibilities;

(b)

the 2013/14 final accounts audit would be submitted to the Audit Committee in September 2014;

(c)

the Council’s scale fee for 2014/5 had been set by the Audit Commission at £181,428, which was identical to the audit fee for 2013/14;

(d)

a guide to local authority accounts had been sent to Members in order to assist in explaining the key features of the primary financial statements; this information would be emailed out again to those that didn’t receive a copy;

(e)

in March 2014 CIPFA’s (the Chartered Institute of Public Finance and Accountancy) Local Authority Accounting Panel (LAAP) issues the LAAP Bulletin 98 which provided further guidance and clarification to complement CIPFA’s 2013/14 Guidance for Practitioners; topics in the guidance note included public health reform, non-domestic rates and disclosure requirements for dedicated schools grant;

(f)

Grant Thornton would be hosting a series of free workshops in July 2014 across the South West on the Local Government Audit Committee accounts; these workshops were being held in Taunton.

(1)

noted the External Audit Plan Progress report;

(2)

would be provided with a briefing on the LAAP Bulletin 98 at a future meeting.

(a)

the report summarised the work carried out during 2013/14 to develop the Council’s approach to risk and opportunity management;

(b)

the Head of Corporate Risk and Insurance chaired the Information Lead Officer Group (ILOG); audit findings from Information Commissioner’s Officer audit would be submitted to the September 2014 Audit Committee meeting;

(c)

Public Events Planning Training was held on 31 January 2014 by Berrymans, Lace, Mawer litigation solicitors who carried out a mock trial based on an incident occurring at a major public event; this was considered to be a success and was a valuable learning experience;

(d)

the Transformation Portfolio Board was supported by the Portfolio Office who manage the risk management element of the projects using a Portfolio, Programme and Project Risk Management methodology;

(e)

the Plymouth Risk Management Group (PRMG) was a multi-agency group established with the objective of using risk management strategies to help with the delivery of the Plymouth Plan;

(f)

the appendix attached to the report records where the risk management fund was used.

(a)

the report outlined the continuing progress being made across services in delivering Operational Risk and Opportunity Registers in line with the Council’s shared vision and priorities;

(b)

the total number of operational risks now reported had increased from 140 to 144, comprising 3 high (red) risks, 62 medium (amber) risks and 79 low (green) risks;

(c)

the three red risks included  issues surrounding the Medium Term Financial Strategy, increasing homelessness as a direct result of the Local Housing Allowance and Welfare Reform changes and deterioration of the condition of the city's highway network;

(d)

risks to the Transformation Project outcomes were being tracked operationally via project risk logs.

(a)

the report outlined the background to the statutory requirement to produce an Annual Governance Statement (AGS) and described the process followed in producing the AGS for 2013/14 for publication with the Annual Statement of Accounts;

(b)

preparation of the AGS was a wide ranging corporate issue that should not be owned by any one department of the Council therefore a Working Group of key officers was established to oversee the process;

(c)

the Governance Framework  enables the authority to monitor the achievement of its strategic objectives and to consider whether those objectives have led to the delivery of appropriate services and value for money.

(1)

note the processes adopted for the production of the 2013/14 Annual Governance Statement;

(2)

endorse the adequacy and effectiveness of the system of internal audit;

(3)

approve the Annual Governance Statement prior to signature by the Leader, Chief Executive and Section 151 Officer (Assistant Director for Finance) (replacing the Director for Corporate Services following an explanation at the meeting of role changes).

(a)

the statement of accounts had to be produced in line with the relevant CIPFA Codes of Practice and with regard to relevant items of statute; CIPFA offered guidelines to make the statement more readable and friendly and as result the amount of pages had reduced from 200 to 84;

(b)

the period of public inspection of the accounts would take place between 01 July to 26 July 2014; the accounts would be published in September 2014;

(c)

the governance of the Energy from Waste Partnership was through the South West Devon Waste Partnership Committee; the partnership were required to come up with their own set of accounts;

(d)

the transformation team were working on a project to update the Civica Financials to improve the financial reporting; the Council was also reviewing the way that the access to financial systems was managed and administered;

(e)

the Code required that events occurring after the balance sheet date (31 March 2014) were considered in terms of their relevance to the Council’s financial position for 2013/14; there was an obligation to ensure that any such events were properly reflected in the Statement of Accounts up to the date that the statement was authorised for issue.

(a)

some information contained within the original report was incorrect therefore a supplementary report was published to replace this information;

(b)

errors had been corrected in the following sections:

·          

section 1.2.2 to reflect Barclays replacing Co-operative as our operational bank and reflecting the new overdraft arrangements;

·          

section 1.7.1 to reflect Barclays internet banking arrangements and security (also 1.7.2.3);

·          

section 5.3.6 change of title to Monitoring Officer;

·          

section 5.5 on dealing limits (to match the table);

(c)

officers were continuing to work closely with Arlingclose advisors.

(d)

a manual diary was kept for Treasury Management files including major receipts and payments including future Chaps payments that needed to be made; the intention of the manual diary was to strengthen internal controls however officers would research how to improve this process;

(e)

there was a statutory duty for Officers to present the Audit Committee with the full annual report; an appendix would be attached to future reports to highlight specific changes to Members.