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 24 September, 2010.

Agreed the minutes of the meeting held on 24 September, 2010.

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

There were no items of Chair’s urgent business.

A representative of the Director for Corporate Support will be in attendance to report on project management arrangements.

The Head of Finance reported that, as a review of project management arrangements was currently being undertaken by the Capital Delivery Board, it would be appropriate to defer this item until a more comprehensive written report could be presented to Members early in the new year.

A representative of the Director for Corporate Support will be in attendance to report on improvements made within Revenues and Benefits to address problems with addressing Housing Benefit claims and to provide an overview of the future of the service.

The Revenues and Benefits Service Manager was in attendance to report on improvements made within Revenues and Benefits to address problems with processing housing benefit claims and to provide an overview of the future of the service.  Members were advised that –

In response to questions raised, Members heard further that -

The Director for Corporate Support’s Corporate Accountancy and Finance Manager will provide an update in respect of International Financial Reporting Standards (IFRS).

The Head of Finance reported that the International Financial Reporting Standards (IFRS) had been introduced by Statute to make financial reporting more transparent and to make it easier to draw comparisons between local authorities.  These Standards were adopted by the Private Sector in 2005 and Central Government and NHS in 2009.  Plymouth City Council was taking a risk-based approach to the restatement of the Balance Sheet numbers.  It was also stated that these Standards had an impact across the Authority (Human Resources, Assets and Procurement being given as examples) and Finance was engaging both Internal and External Audit in the process.

As these changes would have a huge bearing on the signing off of the next Statement of Accounts (2010/11) it was suggested that Members may benefit from some form of training in this regard.

          Agreed that a workshop/training event on the International Financial Reporting Standards for the benefit of Audit Members be arranged early in the new year.

The Director for Corporate Support will submit the Treasury Management Strategy 2010/11 - Mid-Year Review.

The Assistant Director for Finance, Assets and Efficiencies gave an overview of the report and its highlights which included that the City Council –

·              had reduced its overall borrowing by £6.977m

·              had repaid a debt of £33.9m to Devon County Council

·              was currently only investing in UK institutions and for periods of no longer than 12 months

·              was forecasting a favourable revenue outturn of £0.139m

·              was continuing to challenge Icelandic investments through the Local Government Association and Bevan Brittan

It was also reported that, in looking forward, the Council would –

·              consider making investments of up to 2 years in order to benefit from higher interest rates

·              upon the advice of our professional advisors, look to increase its counter-party list to include top credit rated organizations outside of the UK

·              optimise short term borrowing rates

·              continue to balance risk versus return

In response to questions raised, Members were advised that -

Agreed –

The Council’s external auditor, Grant Thornton, will submit the Annual Audit Letter for 2009/10.

The City Council’s external auditor, Grant Thornton, submitted the Annual Audit Letter 2009/10 for consideration.  The letter summarised the key messages and conclusions which had arisen from the work of Grant Thornton during their 2009/10 audit, namely –

·                auditing the 2009/10 year end accounts

·                certification work on grant claims and returns

·                assessing the Council’s arrangements for securing economy, efficiency and effectiveness in the use of its resources

          Councillor Evans challenged the external auditor’s opinion that the governance arrangements put in place around the disposal of Plymouth Citybus were appropriate (paragraph 3.34).  He raised concerns about –

·                scrutiny of the disposal process and queried how it could have been effective when answers to questions asked had been refused

·                how a marketing exercise to ‘test the water’ had turned into a full-on disposal

Members acknowledged that it had been a very difficult process with a balance having been drawn between what information could be put into the public domain and what could not.  Councillor Stark shared Councillor Evans’ concerns about the market testing exercise and drew comparison with the current marketing of the Civic Centre stating that he hoped that did not turn into a sale without prior consultation with Members.  Overall, Members were happy to accept the external auditor’s view that the process had been appropriate and that areas for improvement around transparency had been identified and highlighted within paragraph 3.35 of the report.

Questions were also raised in regard to data protection and data management but it was suggested that, as this was covered in more detail in the Internal Audit – Six Monthly Progress Report which featured later on the agenda (see minute 55), those questions be considered there.

          Recommended that the Overview and Scrutiny Management Board (or relevant scrutiny panel) –

(Councillor Evans’ proposal to move that the Annual Audit Letter be endorsed by the Committee with the exception of paragraph 3.34, having been seconded by Councillor Murphy, was put to the vote and declared lost).

The Council’s external auditor, Grant Thornton, will submit the 2009/10 Audit Plan Progress Report.

The City Council’s external auditor, Grant Thornton, submitted its audit plan progress report in respect of projects undertaken in 2009/10.

          The Committee noted the report.

The Assistant Head of Devon Audit Partnership will submit the Internal Audit – Six Monthly Progress Report.

The Assistant Head of Devon Audit Partnership submitted the six-monthly progress report which –

·          reviewed audit work which had been carried out since April, 2010

·          commented on current commitments and performance

·          outlined proposed audit coverage for the remainder of the financial year

          Members were advised that performance and progress with the 2010/11 plan had been very good and particular attention was drawn to examples of where Internal Audit had provided value for money, and delivered tangible benefits, to the Council.

Overall, based on the work performed in the first six months, Internal Audit was able to provide reasonable assurance on the Authority’s internal control environment.  However, the review of the Corporate Information Management System had identified a number of ‘fundamental weaknesses’ in the Council’s current information governance arrangements.  In attendance to provide further information on the audit review and its findings was the auditor responsible for undertaking the review along with the Assistant Director for IT to respond to Members’ questions. 

          Members were advised that –

Members raised concern that the Internal Audit Six-Monthly Report had identified that progress in achieving productivity improvements within the Devon Audit Partnership (DAP) had not matched initial expectations.  Members were advised that this was due to the continued inability of DAP’s IT service provider to provide acceptable service provision.  Whilst there had been some recent improvement, the impact on delivery of the audit plan had been significant due to the amount of time lost.  The Head of DAP would be meeting with the Head of IT the following week to try and resolve the situation.

          The Committee noted the report and agreed –

The Committee will consider its work programme for 2010/11.

The Committee considered its work programme for 2010/11.  Having regard to the issues referred to scrutiny in minutes 50, 53 and 55, it was agreed that should they not be endorsed by the Overview and Scrutiny Management Board the following would instead be included within the work programme of the Audit Committee –

·          monitoring the review of the Revenues and Benefits Service and progress against the action plan produced by the external auditor, Grant Thornton

·          monitoring progress against the action plan arising from the Citybus Review

·          reviewing progress on the Joint Strategic Needs Assessment (JSNA) to ensure that –

o        the intentions of the JSNA are translated into a wide range of actions within service plans, supported by key targets and measures that partners would be able to use to monitor progress

o        the Council, and its partners, were refining the JSNA to ensure that it reflected the new arrangements (i.e. changes to the way that health services were to be managed and delivered) and were able to respond to any new or emerging challenges

·          consideration of the problems highlighted within the Devon Audit Partnership relating to IT service provision to ensure that the issues were resolved

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.