To provide the Audit and Corporate Governance Committee with the Chief Internal Auditors final audit assurance report for 2007/08.

Consideration was given to a report which provided the Committee with the Chief Internal Auditor’s final audit assurance report for 2007/08.

Tony Ford, the Chief Internal Auditor, referred to paragraph 4.1 of the report which sets out the action taken in four key issues identified in the Audit Services Assurance report for 2006/07 considered by the Committee on 29 June 2007. He stated that in respect of paragraph 4.1(a), reports had been submitted to Cabinet and Scrutiny Committee and that a report would be submitted to Audit and Corporate Governance Committee on this issue in September this year. All relevant actions had been completed with regard to the issues referred to in paragraph 4.1(b), (i), (ii) and (iii).  Follow up work in respect of the critical recommendations resulting from the use of contractors in ICT audit review, paragraph 7.36 of the report refers, and in respect of paragraph 7.38, Customer Relationship Management (CRM) review, had been completed. Concerns had been expressed regarding the salaries system in Children’s Services and the pedestrian Crossings BVPI (points 16 and 19 respectively in Annex 2 to the report). Appropriate action had been taken on these concerns.

Mr T Tobin, Audit Commission, stated that he was pleased with the follow up recommendations in the report.

Dr. P Ashurst, Chair of Audit Assurance Committee at the Herefordshire Primary Care Trust (PCT), had been invited to the Committee as an observer. He referred to the National Fraud Initiative in the National Health Service (NHS) and informed Members that the PCT was rated on the continuous counter fraud activity. The PCT would be discussing with the Council the possible Council use of their counter fraud initiatives.

Councillor AM Toon made reference to the scrutiny review of ICT and asked why the ICT function within another directorate had not yet been transferred to the corporate ICT team.

The Chairman requested that Councillor Toon’s question be raised with the Chief Executive.

Councillor RH Smith made reference to the current contract negotiations in relation to the Managed Learning Platform/Virtual Learning Environment project and requested details.

Alan McLaughlin, Assistant Chief Executive Legal and Democratic, stated that he would be unable to comment on the negotiations in public session.

EXCLUSION OF PRESS AND PUBLIC

In the opinion of the proper officer, the following information will not be, or is likely not to be, open to the public and press at the time it is considered.

RESOLVED:   that the public be excluded from the meeting for the following business on the grounds that they involve the likely disclosure of exempt information as defined in schedule 12(A) of the Act, as indicated below.

The committee considered the Exempt oral report (page 1).

RESOLVED:   that the Committee reverts to public session.

Councillor RH Smith referred to paragraph 7.36 of the report and requested that the Committee should have assurance that the corrective measures have been acted upon.

Sonia Rees, Director of Resources, informed the meeting of the following assurance statement from the Interim Deputy Chief Executive.

With regard to paragraph 7.36, the Interim Deputy Chief Executive confirms that action plans arising from the Section 151report, Crookall review and audit reviews had been significantly addressed, including the following actions:

(i)                  The Deputy Chief Executive Directorate, previously the Corporate and Customer Services Directorate, has fully supported the review and implementation of the Council’s Procurement Policy.

(ii)                The Directorate operates auditable compliance with the Procurement Policy, in particular in respect of ICT procurements.

(iii)               Evidence with compliance with procurement Policy is provided by the positive Society of Information Technology Managers (SOCITM) report into the network upgrade.

(iv)              A report is due to be presented to Joint Management Team (JMT) proposing the project management and procurement processes for reviewing and making recommendations for the future management of the community network when the current contract with Siemens ends.

(v)                The Deputy Chief Executive, in liaison with the Chief Executive, has commissioned an option appraisal of the Herefordshire Connects programme as recommended by the Audit Commission in their 2007 Letter to the Council, as reported to Cabinet. This includes reviews of existing business cases to ensure they are fit for future purpose.

(vi)              The Directorate has developed project management guidance, tools and advice services for use by project managers developing and implementing business cases across the Council. Consideration is being given to training needs and to enabling JMT to prioritise and deploy corporate project management expertise to the most strategically important and complex programmes to improve services for customers and manage project risks.

Councillor AM Toon referred to a request that she had made to the Chief Executive regarding details of the numbers of external contractors being employed by the Council other than the ICT service.

The Chairman requested that the Chief Executive circulates Committee members with the details.

Councillor WLS Bowen referred to the Internal Control Audit Opinion Matrix in paragraph 9.3 of the report and asked what would be the difficulty to achieve a ‘Good’ rating

Tony Ford, Chief Internal Auditor, stated that the score would need to be 85% or above to achieve a ‘good’ rating.

Councillor RH Smith referred to paragraph 7.34 of the report and requested details of the 26 recommendations where action had not been agreed upon.

Tony Ford, Chief Internal Auditor, informed the Committee that a report would be submitted to the Committee with details of these recommendations and actions.

Councillor RH Smith made reference to the Results of the Recommendation Follow Up in paragraph 7.43 and, in particular, the 15% of recommendations which had not been implemented in 2007/08. Although this was a reduction from the previous years 25%, he took the view that this performance was not good enough as the number of recommendations made had significantly increased and there must be an improvement.

Councillor RH Smith commented on customer satisfaction ratings for the Audit Services team.

Sonia Rees, Director of Resources, stated that satisfaction rates are monitored. She commented that whilst the team took a robust approach to its activities, it aimed to do so with the appropriate level of customer care.

Councillor AM Toon referred to paragraph 7.29 of the report and requested clarification on whether the unsatisfactory opinion was in relation to the Drugs Forum

or the Council’s Drugs Partnership.

Tony Ford, Chief Internal Auditor, stated that there was a report on the Drugs Forum and a separate report on the Council’s Drugs Partnership and that there were unsatisfactory opinions on both reports.

RESOLVED:   that

(i)                 the Chief Executive circulate details of the number of external contractors employed by Council services other than the ICT Service and also reasons for the delay in the Merging of ICT services with another Directorate;and

(ii)        the Committee notes the Audit Assurance report for 2007/08 attached as Appendix 1 to the report.