To receive apologies for absence.

Apologies for absence were received from Councillors Mrs P.A. Andrews and R.I.Matthews.

To receive any details of Members nominated to attend the meeting in place of a Member of the Committee.

There were no named substitutes made.

To receive any declarations of interest by Members in respect of items on the Agenda.

There were no declarations of interest made.

To approve and sign the minutes of the meeting held on 30th June, 2006.

RESOLVED:  That the Minutes of the meeting held on the 30^th June, 2006 be approved as a correct record and signed by the Chairman.

To note the Terms of Reference, attached at Appendix 1, which were approved by Council at its meeting on 28th July, 2006.

The Head of Legal and Democratic Services referred to the Terms of Reference which had been approved by Council at its meeting on 28th July 2006 (Agenda Item Report No.5 refers) and that these were essentially the areas of work that the Audit and Corporate Governance Committee should be addressing in future.

The Committee noted that the Terms of Reference were in line with the guidance issued by the Chartered Institute of Public Finance and Accountancy in respect of such Committees.

RESOLVED:  That the Terms of Reference be noted.

To receive the Audit Commission’s Annual Governance Report, in line with good practice. 

The Director of Resources referred to the Audit Commission’s Annual Governance Report for Herefordshire Council for 2005/2006 (Agenda Item Report No.6 refers), and indicated that it was pleasing to note that the Audit Commission anticipated being able to issue an unqualified opinion on the Council’s Statement of Accounts by 30th September 2006. The Audit Commission had made three recommendations and these and the Council’s response to those recommendations were set out in the Action Plan at Appendix 6 of the Annual Governance Report.

Mrs L Cave, District Auditor, drew the Committee’s attention to the purpose and scope of the report which set out the fundamental principles which were adhered to in carrying out the audit of the Council. She made particular reference to adjusted misstatements, qualitative aspects of accounting practices and financial reporting, material weaknesses in internal control identified during Audit (paragraphs 17, 18, and 19 respectively of the report), the recommendations pertaining to those issues, and noted the response to those recommendations in the action plan at Appendix 6 of the audit report.

RESOLVED:

              THAT (a)       the management’s responses to the Audit Commission’s

                                    recommendations be approved; and

(b)        the Letter of Representation be signed on behalf of the

          Council by the Chairman of the Audit and Corporate

          Governance  Committee and the Director of Resources.

To consider and approve the Council’s draft Code of Corporate Governance attached at Appendix 1.  (Report to Follow).

The Committee considered a report (Agenda Item Report No.7 refers) which referred to a Code of Corporate Governance for the Council. It was noted that the Code was closely linked to the Council’s Statement on Internal Control and brought together in one document the Council’s overall strategy on governance.

Particular reference was made to the Standards of Conduct within the Code, and the need to maintain a set of appropriate Standards.

In endorsing the Code of Corporate Governance, the Chairman suggested that a ‘Foreward’ be composed to prefix the Code of Corporate Governance to explain the Committee’s role generally, the framework of the Code of Corporate Governance and the role of the public.

It was suggested that the Head of Legal and Democratic Services should draw up a set of Standards, as referred to in the Code at paragraphs 42 to 45 of the Code, and how these Standards should apply.

RESOLVED:

THAT     (a)    the Director of Resources be the responsible officer for

                       financial probity, performance and risk, together with internal audit, and review independently the efficiency and effectiveness of the Code in that regard;

(b)        the Monitoring Officer (currently Head of Legal and

Demoratic Services) be the responsible officer for legal probity and the ethical framework review, and the efficiency and effectiveness  of  the Code in thatregard;

   (c)   the reviews referred to above shall be carried out  annually,

          and a report submitted to the Audit and Corporate 

          Governance Committee and the Standards Committee

          respectively and any issues arising reported to Cabinet;

(d) subject to any comments by the Audit and Corporate

     Governance Committee and the Standards Committee, the

     Code of Corporate Governance be approved by the

     Cabinet/Council;

(e)   the Director of Resources prepare a ‘Foreward’ to the Code of Corporate Governance which explains the link between the Audit and Corporate Governance Committee’s role and the framework of the Code of Corporate Governance which emphasises the role of the public;and

(f)     the Head of Legal and Democratic Services to draw up a set of Standards for Members and Officers and how they should be applied, and that these be submitted to this Committee for consideration and approval in due course.

To approve the updated draft Audit Charter.

The Principal Audit Manager presented a report (Agenda Item Report No.8) with regard to this Council making provision for Internal Audit in accordance with the Chartered Institute of Public Finance and Accountancy/SOLACE (CIPFA) Code of Practice. It was emphasised that the suggested new Code by CIPFA had updated the old previously adopted Code.

RESOLVED: That the updated Audit Charter, Appendix 1 to Agenda Item Report No.8, be approved.

To consider the draft Risk Management Policy and its recommendations for recommendation to Cabinet.  (Report to Follow). 

The Principal Audit Manager presented a revised Risk Management Policy (Appendix 1 to Agenda Item Report No.9) which had further developed the Council’s approach to Risk Management and ensured compliance with good practice. He indicated that the revised Policy had streamlined the original Policy previously agreed in April 2004.

The Director of Resources informed the Committee that Corporate Governance and Risk Management would be kept under constant review with a view to keeping both areas updated in line with best practice.

RECOMMENDED:

Thatthe Committee endorses the Risk Management Policy and that the Policy be submitted to Cabinet for consideration and approval.

To note the outcome of the Audit Commission’s review of the Council’s 2005/6 Statement on Internal Control.

The Principal Audit Manager presented a report (Agenda Item Report no. 10 refers) on the outcome of the Audit Commission’s review of the Council’s 2005/6 Statement of Internal Control. He made reference to paragraph 6 in the report regarding Council Tax and Revenues and Benefits, and informed the Committee that these had now been included within the Statement of Internal Control. With regard to the Annual assurance return from Directors and Heads of Service, paragraph 7 of the Report refers, this had been reduced to a quarterly return which accorded with the suggestion by the Audit Commission to improve the frequency of returns.

RESOLVED:

             That the Report be noted and the actions endorsed.

To note the progress in relation to the Use of Resources Improvement Plan.

The Director of Resources presented a Report (Agenda Item Report No.11 refers) regarding the progress in relation the Use of Resources Improvement Plan (Appendix 1 to that report refers). The Appendix listed the progress made with regard to financial matters, value for money and timescales being worked to.

RESOLVED: That the report be noted.