To provide a progress report on the delivery of external audit’s responsibilities and to provide a summary of emerging national issues and developments that may be of relevance.

The Committee received a report from external auditors, Grant Thornton. The report was available earlier than usual due to preparation for the audit of final accounts and value for money conclusion.

The main issues emerging from the report are:

·                Scrutiny in the current operating climate

·                Meeting objectives with regard to outside bodies and joint ventures

·                Involvement of citizens

In answer to a question from the Chairman on External Audit’s view of contract management arrangements, Grant Thornton representatives felt that arrangements are adequate although this needs to be considered in relation to how the council meets its strategic objectives.  External Audit is able to share best practice from other local authorities and noted the difference between commissioning and contract management, where there needs to be focus on developing long-term relationships.

The Chief Financial Officer confirmed that the medium term financial plan is satisfactory and that compared with other authorities, Herefordshire is stronger in its partnership arrangements. Grant Thornton acknowledged that the council shows some good examples of oversight.

The chair of the General Overview and Scrutiny Committee commented on the need to be forward thinking and to optimise joint working. The ability to scrutinise within available resources must also be maintained.

Grant Thornton drew attention to the importance of effective partnerships, citing Greater Manchester’s new partnership arrangements. There were also lessons to be learned from experiences at Rotherham with possible intervention there from the Secretary of State as a result of significant failings in governance.

Attention was drawn to the Audit Commission’s being abolished in April 2015 which will have implications on the future recommissioning of the council’s external auditor contract beyond 2017-18. The committee was advised to consider delaying until after the elections any decision on extending the engagement of Grant Thornton beyond the current five year contract.

It was noted that in the context of events in Rotherham and Greater Manchester referred to in the report, and the matter of self-sufficiency, Herefordshire must not become complacent and due diligence is required.

The Chief Financial Officer explained that the formula grant of £26m would disappear under self-sufficiency. Demographics and health pressures in Herefordshire would also have an impact on the extent of self-sufficiency.

RESOLVED:

that the External Audit Update be noted.