(a)

the report outlined the continuing progress being made across services in delivering operational risk registers;

(b)

the total number of operational risks had increased from 115 to 118, comprising four high (red) risks, 63 medium (amber) risks and 51 low (green) risks;

(c)

commentary on the high risk areas was included within the report, together with details of control actions/mitigation in place.

(d)

target dates had been set against red risk items;

(e)

clarification on the number of children currently waiting allocation of a school place would be sought;

(f)

an update on progress with regard to replacement of the Council’s performance management system would be sought, together with details of how the risk involved in transferring from one system to another was being recorded.

(1)

the current position with regard to operational risk management be noted;

(2)

written responses to the questions raised at (d), (e) and (f) above would be circulated to Committee Members via the Democratic Support Officer.

(a)

provided details of the approach which had been taken in order to carry out the review, along with the scope and objectives;

(b)

set out the key findings arising from the review which included many examples of very good, even exemplary, risk management practice;

(c)

identified risk management of partnerships as an area of relative weakness but commented Plymouth was not alone and that this was typical of the sector;

(d)

contained seven recommendations designed to support further integration and embedding of risk management across the Council.

(e)

the Audit Committee appeared to be playing its part in monitoring risk management, as had been evidenced through minutes of meetings, any further relevant observations would be fed back following today’s meeting;

(f)

a fundamental review of risk management of partnerships was being carried out by the Head of Performance, Policy and Partnerships over the next 12 months;

(g)

clarification would be sought on who would be responsible for monitoring the City’s birth rate after primary care trusts had been abolished.

(1)

the findings of the independent review be endorsed.

(2)

a written response to the question raised at (g) above would be circulated to Committee Members via the Democratic Support Officer.

(a)

as part of the review for 2010, it was being proposed that the Finance Regulations (hereafter referred to as Finance Rules) should be incorporated within the overall constitution in order to clarify and ensure consistency of Council delegation authorities;

(b)

the new Finance Rules, which had been significantly refined from 108 pages down to 30 pages, were attached at Appendix A to the report;

(c)

authority was also being sought to amend the virement delegation limits and the inclusion of the Capital Governance document, attached at Appendix B to the report, onto the index.

(d)

a separate presentation would be provided on the proposed Capital Programme Governance arrangements for which the Capital Programme and Projects Manager and Head of Capital and Assets were in attendance.

(1)

the proposal to incorporate the Financial Rules within the overall constitution be noted;

(2)

the proposed changes to the virement delegation limits be recommended to Council;

(3)

the new Finance Rules be recommended for discussion at Council; the same to be attached to the constitution as an appendix;

(4)

the Capital Governance Document outlining the detailed arrangements for managing and monitoring the capital programme be approved and added to the Finance Rules Index, subject to new schemes costing up to £100,000 being approved by the relevant Cabinet Member;

(5)

no project manager should be appointed to any project (revenue or capital) prior to having undertaken relevant project management training.

(a)

outlined how the treasury management function contributed to the Council’s overall policy objectives;

(b)

set out the risks inherent within the treasury management function and how officers would seek to minimise those risks;

(c)

identifies the Council’s Prudential Indicators for the next three years as required by the Local Government Act 2003, together with the MRP policy for 2011/12 required under the Local Authorities (Capital Finance and Accounting) (England) (Amendment) Regulations 2008.

(d)

details of the interest rates being achieved in respect of the Council’s investments were available and would be circulated to Members separately after the meeting;

(e)

it was difficult to draw a comparison with how Plymouth was performing as many local authorities were still only using the Government’s Debt Management Fund, however, benchmarking of the Council’s performance had been included in the last report and would be included in the next mid-year report to Committee;

(f)

the banks listed in the report were UK banks or wholly-owned UK subsidiary companies.

(1)

Treasury Management Strategy Statement for 2011/12 be approved;

(2)

Investment Strategy for 2011/12, as outlined in Section 11 of the report, be approved;

(3)

Lending Organisations and Counter Party Limits, as outlined in appendix D to the report, be approved;

(4)

Director for Corporate Support, acting under delegated authority in accordance with the Constitution, be requested to keep the lending list under review and updates the list during the year as dictated by market circumstances;

(5)

following be recommended to Full Council, subject to update following any revision to the capital programme –

(a)

the Prudential Indicators set out in the report;

(b)

the Authorised Borrowing limits of £379m, £376m and £373m for the period 2011/12 to 2013/14;

(c)

the Operational Boundary of £355m, £347m and £334m for 2011/12 to 2013/14;

(d)

the MRP Policy for 2011/12.

(a)

the project continued to progress well;

(b)

there had been a delay in receiving the guidance notes which had resulted in officers being behind with the re-statement of the 2009/10 accounts.  The focus was now on –

• re-stating the 2009/10 accounts in the new format
• ensuring there was clarity on different treatments and that any changes were tracked
• following through small pieces of outstanding work around grants and employee benefits

(c)

several meetings had taken place with external audit and agreement had now been reached on the proposed treatment of some smaller, less material, items;

(d)

an IFRS workshop, hosted by Grant Thornton, had been held in Plymouth before Christmas and had been well attended by representatives from local councils;

(e)

more detailed work was being undertaken with respect to preparing revised / new accounting policies and a revised set of accounting policies was now ready for  the 2010/2011 closedown;

(f)

anIFRS chart of accounts had been set up in the General Ledger and three years’ worth of draft statements had been produced in the new format.  These were all now being reviewed in light of receipt of the final guidance and would need to be re-run when all of the re-statement entries had been finalised;

(g)

a lot of work had been done around analysing ‘hidden’ transactions, such as –

• embedded leases
• service concessions
• embedded derivatives

(h)

Officers hoped to be in a position to familiarise Committee with the new format prior to bringing the final accounts for 2010/11 to Committee for approval in June.

(a)

set out the requirements for certification arrangements and the approach adopted by Grant Thornton, acting as agent of the Audit Commission;

(b)

detailed the key messages arising from the certification work, including that –

·         9 claims and returns had been certified for the Council, amounting to £207 million

·         the Council’s performance in preparing claims and returns had significantly improved since 2008/09

·         work was required in relation to timeliness of submissions

·         only one claim had been identified as having significant issues and that was in respect of the Housing and Council Tax Benefit Scheme

(c)

indicated that the fee for certification work at the Council in 2009/10 was £49,031.

(d)

certification fees were set nationally by the Audit Commission and fees for 2010/11 had been frozen;

(e)

there had been a significant increase in certification work relating to the Housing and Council Tax Benefit Scheme this year and Plymouth was by no means alone in this regard.  A number of reasons for this were cited, including the change in eligibility criteria and increasing workloads.

(a)

the area of work around revaluation of fixed assets was part of a five-year rolling programme and was still under review.  The external auditor was happy with the Council’s decision to take out trust and academy schools, however, the Audit Commission was now involved and clarification was expected by year end;

(b)

Grant Thornton was also the auditor for Plymouth Primary Care Trust and they would be looking at what mechanisms would be in place to put things in order before they were wound up.