The Committee will appoint the Chair and Vice-Chair for the municipal year 2010/11.

Agreed to appoint Councillor Berrow as Chair and Councillor Evans as Vice-Chair for the municipal year 2010/2011.

Members will be asked to make any declarations of interest in respect of items on this agenda.

The following declaration of interest was made in accordance with the Members’ Code of Conduct –

To confirm the minutes of the meeting held on 26 March, 2010.

Agreed the minutes of the meeting held on 26 March, 2010.

To receive reports on business which, in the opinion of the Chair, should be brought forward for urgent consideration.

Order of Business

The Chair reported that, due to the substantial amount of business on the agenda, it would be appropriate to prioritise the items to be considered today and the remaining items would be deferred to a special meeting to take place at the end of July, 2010.

Agreed that the following items be prioritised for consideration –

• Internal Audit Annual Report 2009/10
• Annual Governance Statement 2009/10
• Treasury Management Annual Report 2009/10
• Statement of Accounts 2009/10
• External Audit Interim Audit Report 2009/10
• External Audit Progress Report
• External Audit Plymouth Citybus Review
• Audit Committee Work Programme

(In accordance with Section 100(B)(4)(b) of the Local Government Act, 1972, the Chair brought forward the above item of business because of the need to consult Members).

The Assistant Head of Devon Audit Partnership will submit the Internal Audit Annual Report for 2009/10.

The Assistant Head of Devon Audit Partnership presented the Internal Audit Annual Report 2009/10 which –

• summarised the work undertaken by Devon Audit Partnership during the year
• reviewed the performance and effectiveness of the Internal Audit service
• provided an audit opinion on the adequacy of internal controls
• was of particular relevance to preparation of the Authority’s Annual Governance Statement

One of the significant issues highlighted within the report related to the findings of the Audit Service, following a review in October 2009, of ‘fundamental weaknesses’ within the CareFirst system.  Members were advised that those findings had been accepted by the CareFirst Programme Board, chaired by the Assistant Chief Executive, and resources had since been allocated to address those weaknesses.  A recent audit follow-up review had found significant improvements which had changed the overall audit opinion from ‘fundamental weaknesses’ to ‘improvements required’.  In attendance to support the report in respect of this particular matter, and respond to questions, were the Assistant Chief Executive and CareFirst Project Manager.

In response to questions raised, the Committee was advised that –

Agreed that –

The Director for Corporate Support will submit the Annual Governance Statement for 2009/10.

The Head of Corporate Risk and Insurance presented the Annual Governance Statement for 2009/10.

Concern was expressed that, despite an already significant shortfall in the funding of the Council’s pension fund, the Council had knowingly increased this pressure by adding the Citybus pension deficit to it.

Agreed that –

The Director for Corporate Support will submit the Treasury Management Annual Report for 2009/10.

In accordance with the Code of Practice for Treasury Management, the Director for Corporate Support submitted a report which –

·        presented details of capital financing, borrowing, debt rescheduling and investment transactions

·        commented on the risk implications of treasury decisions and transactions

·        gave details of the outturn position on treasury management transactions in 2009/10

·        confirmed compliance with treasury limits and Prudential Indicators

In response to questions asked, committee members were further advised that –

Agreed that –

The Director for Corporate Support will submit the Statement of Accounts for 2009/10.

The Assistant Head of Finance (Corporate Accountancy) presented the Draft Statement of Accounts for 2009/10.  A summary of the changes which had been made to the report as a result of the Quality Control Review was tabled and Members’ attention was drawn to the report’s key messages for 2009/10 relating to  –

• Accounting for PFI and similar schemes
• Accounting for local taxes, i.e. Council Tax and NNDR
• Financial Liabilities
• Removal of Disclosure Notes
• Officer Remuneration
• Housing Stock Transfer
• Sale of Citybus
• Pensions Deficit
• Balance Sheet Position

In response to questions raised, it was further reported that –

A number of questions were raised relating specifically to the sale of Citybus but it was suggested it would be more appropriate for those questions to be considered under the external auditor’s report on the ‘Plymouth Citybus Review’ (see minute 11).

Agreed the Statement of Accounts for 2009/10.

(Councillor Murphy declared a personal interest in respect of the above item).

The City Council’s External Auditor, Grant Thornton, will submit the Interim Audit Report for 2009/10.

The City Council’s external auditor, Grant Thornton, submitted its Interim Audit report for 2009/10, whose scope included –

• Interim Accounts Audit
• Value for Money (VFM) Conclusion
• Review of VAT arrangements

The report also provided an update on progress made against 2008/09 recommendations.

Members were advised that, with regard to VFM, work on evaluating the Council’s use of resources had ceased since May, in accordance with instructions from the Audit Commission.  Whilst, the results of the work undertaken to date were not permitted to be shared with the Council, good progress had been made against all of the identified areas.  It had been agreed with the Director for Corporate Support that a formal report highlighting the areas identified for improvement and highlighting successes achieved to date would be submitted to a meeting of City Council.

Concern was expressed at the fact that a report had been produced reviewing the sale of Plymouth Citybus before the detailed working papers and disclosures had been reviewed by the external auditor.  However, Committee was reminded that the purpose of the Citybus review had been to examine the process of the disposal in order to establish whether appropriate arrangements were in place and that they had been properly applied.

Any further questions in this regard would be reserved for the relevant agenda item (see minute 11).

The City Council’s External Auditor, Grant Thornton, will submit a progress report.

The City Council’s external auditor, Grant Thornton, submitted its Audit Plan Progress Report for projects undertaken in 2009/10.  Members were advised that, with regard to progress on the Use of Resources report, guidance was awaited from the Audit Commission in light of the new coalition government’s views on performance targets and monitoring.

The Committee noted the report.

The City Council’s External Auditor, Grant Thornton, will submit the Plymouth Citybus Review.

The City Council’s external auditor, Grant Thornton, presented the findings of the Plymouth Citybus Review.  Members were advised that –

Councillor Evans raised a number of questions and concerns and disagreed with the external auditor’s view that the process had been adequate.  He also expressed concern about the action plan and how it would be monitored.  Other Members commented that they had appreciated that the project had been difficult to deal with, given the sensitivity around the competitive tendering process, and, whilst the Council may have erred on the side of caution and certain situations could have been handled differently, the right decision had ultimately been made.  The Chair stated that he would be happy to meet separately with Councillor Evans to discuss the concerns he had raised.

Agreed that the report be noted.

(Councillor Stark declared a personal interest in respect of the above item).

The Assistant Head of Devon Audit Partnership will submit the Audit Committee’s Work Programme for July 2010 to June 2011.

The Assistant Head of Devon Audit Partnership submitted the Committee’s work plan for July 2010 to June 2011.  Members were advised that –

Councillor Evans raised concerns regarding a specific organisation receiving business rate relief.  It was suggested that he raise any concerns he had in this regard with the Assistant Head of Devon Audit Partnership outside of the meeting.

Agreed the revisions to the work plan as outlined at (a)-(c) above.

The Director of Corporate Support will submit a Service Delivery Review report in respect of Plymouth’s Registration Service.

Deferred to special meeting to be held in July.

The Director of Corporate Support will submit the Risk Management Annual Report.

Deferred to special meeting to be held in July.

The Director of Corporate Support will submit an update report in respect of Operational Risk Management.

Deferred to special meeting to be held in July.

The City Council’s External Auditor, Grant Thornton, will submit a report on Performance Management Arrangements.

Deferred to special meeting to be held in July.

The City Council’s External Auditor, Grant Thornton, will submit a Review of Arrangements for Complying with Age Related Equalities Legislation.

Deferred to special meeting to be held in July.

The Assistant Head of Devon Audit Parnership will submit a Review of the Whistleblowing Policy.

Deferred to special meeting to be held in July.

The Assistant Head of Devon Audit Partnership will submit Plymouth’s Internal Audit Strategy and Charter.

Deferred to special meeting to be held in July.

To consider passing a resolution under Section 100A(4) of the Local Government Act 1972 to exclude the press and public from the meeting for the following item(s) of business on the grounds that it (they) involve the likely disclosure of exempt information as defined in paragraph  of Part 1 of Schedule 12A of the Act, as amended by the Freedom of Information Act 2000.

There were no items of exempt business.