Apologies for absence were received from Councillor MJ Fishley.

Councillor NL Vaughan substituted for Councillor MJ Fishley.

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

GUIDANCE ON DECLARING PERSONAL AND PREJUDICIAL INTERESTS AT MEETINGS

The Council’s Members’ Code of Conduct requires Councillors to declare against an Agenda item(s) the nature of an interest and whether the interest is personal or prejudicial.  Councillors have to decide first whether or not they have a personal interest in the matter under discussion.  They will then have to decide whether that personal interest is also prejudicial.

A personal interest is an interest that affects the Councillor more than most other people in the area.  People in the area include those who live, work or have property in the area of the Council.  Councillors will also have a personal interest if their partner, relative or a close friend, or an organisation that they or the member works for, is affected more than other people in the area.  If they do have a personal interest, they must declare it but can stay and take part and vote in the meeting. 

Whether an interest is prejudicial is a matter of judgement for each Councillor.  What Councillors have to do is ask themselves whether a member of the public – if he or she knew all the facts – would think that the Councillor’s interest was so important that their decision would be affected by it.  If a Councillor has a prejudicial interest then they must declare what that interest is and leave the meeting room.

Councillor RH Smith declared a personal interest in item no. 6 on the Agenda, Minute No. 6 refers, being a member of the Courtyard Trust.

Councillor AM Toon declared a personal interest in item no.6, Minute No.6 refers, relating to Social Services.

To approve the Minutes of the meeting held on 20 March 2009.

RESOLVED:   That the Minutes of the meeting held on the 20 March 2009 be approved as a correct record and signed by the Chairman.

To report to the Committee on the Review of Procurement undertaken by the Audit Commission.

The Director of Resources presented a report on the Review of Procurement undertaken by the Audit Commission. The Audit Commission had been requested to carry out a specific audit on procurement with an emphasis on the work that had already commenced to review the partnership arrangement with AMEY. The Director of Environment and Culture circulated a Briefing Note at the meeting, a copy of which is attached to the Minutes as appendix 1, relating to the Council’s partnership with AMEY.

Mr T Tobin presented the review by the Audit Commission. He introduced Mr S Weldon, the Audit Commission officer who had dealt with the review. Mr Tobin stated that when the Audit Plan had been considered in 2008, the Chief Executive had requested the work regarding the Council’s negotiations with AMEY so that issues raised by the Audit Commission could be taken into account and this was, in his view, a commendable approach. He emphasised however that the views taken in November/December 2008 were as at that time and since then negotiations had rapidly moved forward. The Chief Executive had requested that the Audit Commission review what had taken place in the negotiations since then and it was found that the issues which had been highlighted had been picked up by the Council’s officers.

A Member commended the involvement of the Audit Commission during the AMEY contract negotiations which, in her view, was a benefit rather than at the completed stage.

Mr Weldon informed the Committee that the Commission had considered the procedures and outcome in the negotiations against a best practice approach throughout the negotiations. Although the negotiations at the early stages in September/October were not fully in keeping with best practice, since then that ethic was being embedded and was ongoing with the officers recognising the high awareness of procurement. With regard to the completed contract, the main findings were that innovative methods were used in negotiations together with the value for money concept. The Council knew what it wanted to achieve. There was a lack of clarity in the early part of the negotiations but with this highlighted, the Council had responded and improved this issue.

The Director of Environment and Culture stated that lessons learned in the previous contract prior to AMEY had been taken forward in the review with AMEY.

The Vice-Chairman asked about the benefit of Members sitting in on procurement  training for officers with Members’ perception being useful.

The Director of Resources disagreed and advised that detailed training in procurement was given in sessions to a maximum of three Council officers with two officers of the Primary Care Trust‘s Integrated Commissioning being trained with individual officers being trained as champions. He suggested that a Member event could be held in relation to Procurement.

With regard to the project management arrangements for procurement, the Director of Resources referred to the use of the Project Team for Procurement across the Council’s services where appropriate and the upward trend was for the Team to be used.  ...  view the full minutes text for item 5.

To report to the Committee on the 2008/09 Statement of Accounts.

The Acting Head of Financial Services presented a report on the 2008/09 Statement of Accounts which, in accordance with the Accounts and Audit regulations 2003, had to be approved by 30 June 2009. She emphasised the core statements in paragraph 7 of the report and that there were no significant changes from the previous year except some technical issues. Although the income and expenditure account was in deficit as detailed in paragraph 13, there was a net underspend of £249,000 in 2008/09 on revenue spend. She further emphasised that the balance sheet long term assets had increased by £24.811m to £403.576m during the year.

Circulated at the meeting was a replacement page 24 of the Statement of Accounts, a copy of which is attached to the Minutes.

With regard to a Member’s question that paragraph 2.2.5 b of the report did not show the Youth Service annual spend, the Acting Head of Financial Services informed the Committee that it had not been reported as there had not been a significant variance.

With regard to the Local Government Pension Scheme which is administered by Worcester County Council, the Chairman suggested that this Council should have a representative on the County Council Panel dealing with the issue. The Director of Resources advised that although this Council was a significant contributor, the County Council has stated that they have not admitted this Council because this would mean they would have to admit other contributors.

The Acting Head of Financial Services referred to the surplus monies in relation to the collection fund, paragraph 28 of the report refers, and informed Members that this was as a consequence of the number of assumptions which had been made around the Council tax base when setting Council tax. A Member asked if there were collection indicators. The Director of Resources advised that the Council did have collection indicators for the collection of rates. He informed Members that approximately 99 per cent of the Council tax was collected.

The Vice-Chairman took the view that Section 75 of the Health Act 2006 Partnership Schemes, paragraph 10.8 in the Statement of Accounts, were still unclear and questioned the apparent adverse trends in creditors and debtors, page 62 refers, and the net worth to the Council if these trends were  reversed. The Acting Head of Financial Services advised that long term debtors were increasing due to a build up of Private Finance Initiative assets and a change of accounting arrangements in Adult Services. There was however no real increase in long term debt as such. In debtors, the main increases were around contributions towards capital schemes (including Department of Children Schools and Families (DCSF) grants) and the Primary Care Trust. With regard to creditors, the figures included receipts in advance. Government grants were being received in advance which were being held before being spent. The cut off date for grants being spent was 31 March and any of those grants which were not spent before that date would be returned to  ...  view the full minutes text for item 6.

To report progress against the data quality action plan 2008 / 09 and the plan for the next 12 months.

The Head of Policy and Performance presented a report on progress against the data quality action plan 2008/09 and the plan for the next 12 months. However, the action plan had not been completed according to the timetable and since the action plan had been approved, two thirds of the plan had been completed. Although the statistic was disappointing, more of the plan had been completed since the first report to the Committee. The Audit and Inspection letter indicated that there were adequate arrangements in place currently. Much of the action plan had been implemented after the audit period, but assuming this was effective, future letters might be able to report further improvements in the Council’s arrangements.

The Chairman referred to paragraph 6a of the report and expressed concern and disappointment that it was unclear whether partners were willing to follow the Council’s data quality policy or had something better to offer. The Head of Policy and Performance informed the Committee that there were a number of formal protocols where partners share the information. Of the 20 organisations being chased for the information, 9 had responded.

The Vice-Chairman drew Members attention to the average delay for completion of 14 months in respect of the 19 incomplete tasks, paragraph 6 of the report refers. He asked if the Risk register had been amended on data quality.

The Head of Policy and Performance informed Members that the corporate risk register currently showed a score of 15 (the maximum being 25) which would be reduced to a residual score of 9 if the action plan was completed. He saw no reason to change either score at present. The delay in completing the action plan simply meant that it was taking longer than previously hoped to reduce the risk score to 9.

RESOLVED:   That

(i)                 progress against the 2008/09 data quality action plan be noted and the 2009/10 plan at Appendix 1 to the report be supported;

(ii)               a list be submitted to the Committee of staff in directorates still requiring training on data quality controls; and

(iii)       the extent that directorates local procedures on data quality have been produced.

To outline to the Committee the Action Plan that the Planning Obligations Manager will undertake in the next six months in developing a monitoring system for section 106 Agreements.

The Planning Monitoring Officer presented a report which outlined the Action Plan

that the Planning Obligations Manager would undertake in the next six months in

developing a monitoring system for Section 106 Agreements.

The Head of Planning and Transportation was pleased to report that major changes

and systems had been put in place which would result in a closer monitoring of

Section 106 Agreements. He advised the Committee that due to the Section 106 levy

decreasing and, therefore, preventing the funding of the Monitoring officer post, that

a Senior Planning officer had been seconded to the post. It was necessary for new

systems to be put in place and the trialling of those systems before the benefits could

be seen. It was evident from the first 2 to 3 months of the secondment to the post,

the benefits achieved had been extremely positive.

The Planning Obligations Manager drew Members’ attention to the work programme

for the first 6 Months as set out in paragraph 10 of the report. She emphasised that

all the information relating to Section 106 Agreements would be transferred onto one

Section 106 database. The database would capture income, expenditure, projects

benefitted and an audit trail would be established. She informed the Committee that

she had met with 17 other local authorities and Herefordshire Council was the only

Authority to have adopted the Supplementary Planning Document on Planning

Obligations. Currently, there was potential to achieve from developments approved

from April 2008 to April 2009, an income of £4.1million. The research on existing

Planning Obligations was an ongoing process. To date, £410,000 income had been

secured from historical agreements which would not have been achieved without the

system changes. Parish Councils were being consulted with a view to compiling a

wish list where Section 106 income could be spent. A training schedule for

Councillors would be put in place regarding Section 106 Agreements.

The Head of Planning and Transportation informed the Committee that the Planning

Obligations Manager would be securing a link between the new monitoring

system and the Integrated Environment Regeneration Scheme (Civica). He

emphasised that Income is received from new Section 106 Agreements when

development is completed whereas the income from the old style agreements was

received in a variety of forms from when development is commenced, through

phasing of a development and sometimes on completion. The income had to be

spent within a time period otherwise it had to be repaid. The new system

would track this issue.

The Planning Obligations Manager stressed that if developers did not pay the

Section106 monies on time, the Agreements contained penalty clauses that

would mean developers owing additional money above the Section 106 Agreement

money.

Members expressed satisfaction with the report.

RESOLVED:   That the report be noted.

The meeting adjourned at 12.20 pm for lunch and reconvened at 12.50 pm.

To present the external auditor’s Audit Opinion Plan to the Audit and Corporate Governance Committee.

The Committee considered the external Audit Opinion Plan submitted by the Audit Commission.

Mr T Tobin, Audit Commission, presented the Audit Opinion Plan (AOP). He emphasised that an initial AOP was issued for 2008/09 and was presented to the Committee on 20 June 2008 and set out the work which the Audit Commission proposed to undertake. Since that report, the Commission had revised its risk assessments including the highlighting of significant risks and the table in paragraph 12 on page 122 set out the revisions. The general issue was property valuations which were currently being addressed. The other two issues were, however, more important.  The payments to independent care providers and the ISIS payments system was currently under revue, with issues centring on reconciliations around various systems and authorisations. The final issue was regarding the authorisation of payments to creditors and fraud risks. As a consequence, the Internal audit would be carrying out substantive testing of creditors and fraud risk identification.

The Director of Resources informed Members that staff had been asked to refer back payments which had not been authorised and that this addressed the unauthorised payments issue referred to. 

Mr Tobin advised that the three significant risk issues were the sort of issues the Commission was investigating. The Commission was also looking at the National Policy for liability for teachers and how teachers are accounted for.

The Chief Internal Auditor informed the Committee that his team were looking at the last financial year with regard to the payments to independent care providers. Regarding the points raised on creditor payments, the Audit Services Assurance report would provide the reporting mechanism for those matters.

RESOLVED:   That the Audit Opinion Plan be noted.

To inform the Committee of the work to be undertaken for 2009/10 financial year by the Audit Commission.  The report also provides a total indicative fee.

The Committee considered a report regarding the work to be undertaken by the Audit Commission in 2009/10 financial year and which highlighted the Commission’s total indicative fee.

Mr T Tobin, Audit Commission, referred to the letter attached to the report and informed the Committee that the Commission’s work would focus on the use of resources assessment. The letter set out the use of resources work and that there would be specified areas of work and these were itemised in the table on pages 178 and 179.

The Vice-Chairman asked whether the specified areas of work were a good use of Audit Commission resources. The Director of Resources concurred with the focus work areas. He made reference to double counting any projected savings on shared services which he highlighted as an issue. He welcomed the review particularly around the shared services and Herefordshire Connects.

With regard to a Member’s question, the Director of Resources informed the Committee that the Primary Care Trust and the Council were jointly exploring the way services are provided in relation to back room staff with good practice being a key factor.

The Director of Resources informed Members that the proposed fee was increased slightly from last year, page 177 refers, and his view was that the fee was acceptable.

RESOLVED:   That the content of the Annual Audit Fee Letter be noted and the proposed fee be approved.

To seek the Committee’s approval of the draft Annual Governance Statement for 2008/09.

The Chief Internal Auditor presented a report which requested approval of the draft Annual Governance Statement for 2008/09. He drew Members’ attention to the five principles outlined in the Council’s Code of Governance which had been linked to the six principles of good governance outlined in the SOLACE/CIPFA publication ‘Delivering Good Governance in Local Government, paragraph 7 of the report refers. He also highlighted the corporate objectives and priorities which were set out in a number of key plans and strategies in addition to the Corporate Plan, paragraph 9 refers. He referred to the Council’s responsibilities to comply with the Code of Corporate Governance and that these were set out in the five principles, paragraphs 3.3 to 3.28 of the report refers. The Council had to review annually the effectiveness of the governance framework and this review had been set out in paragraphs 4.5 to 4.66 of the report. The content of the report had been discussed with the Chief Executive, Directors, Leaders and the Chairman and Vice-Chairman of the Committee.

The Vice-Chairman asked when the results would be available in relation to the Herefordshire quality of life survey. The Chief Internal Auditor advised that the appropriate government department would be issuing that information but no timescale had been given by the government for the issue.

The Vice-Chairman referred to paragraph 3.28 of the report and stated that the PACT process was under review and that the paragraph did not include this issue. It was suggested that the paragraph be amended to include the words ’The process is nevertheless under review’.

The Vice-Chairman referred to paragraph 4.12 of the report and took the view that the Monitoring Officer’s report was incomplete. The Legal Practice Manager informed Members that he was unaware of any outstanding issues. The progression of the responsibilities of the Monitoring officer would be recommenced shortly with the appointment of the Interim Deputy Chief Executive Legal and Democratic. The Chief Internal Auditor stated that there were no apparent issues from the Monitoring Officer but that if there was concern about the content of the report referred to then the final sentence of paragraph 4.12 could be deleted.

The Vice-Chairman took the view that paragraph 4.56 of the report significantly understated the Audit Commission’s findings. The Chief Internal Auditor advised Members that the issues for improvement as set out in paragraphs 4.56 and 5.9 had been added into paragraph 4.55. The Director of Resources suggested that the Committee might wish to reinforce paragraph 4.56.

The Chief Internal Auditor would amend the wording of paragraph 4.58 with the addition of the words ‘presented to Children’s Services Scrutiny Committee on 30 March 2009’ after the word ‘report’.

With regard to the view of a Member that the Annual Governance Statement could contain additional documentation to add clarity to the points highlighted, the Director of Resources advised that to achieve the Statement in the form submitted to the Committee was an art and had been accomplished through skill and expertise.

A  ...  view the full minutes text for item 11.

To provide the Committee with the Chief Internal Auditor’s final audit assurance report for 2008/09.

The Committee considered a report which provided the Chief Internal Auditor’s final audit assurance report for 2008/09. He emphasised that the Annual Governance Statement for 2007/08 identified the key governance and internal control issues that needed addressing in 2008/09. He referred to paragraph 40 on page 157 regarding the ‘Critical 1’ recommendation relating to the Payment of Independent Providers Review and further emphasised that additional work was being carried out and this work would be included in the assurance work as part of the year. The appendices attached to the report had been updated with this information.

The Vice-Chairman referred to items 39, 40, 42 and 44 in appendix 1, and asked when would the information which was outstanding be provided by the responsible officers. The Chief Internal Auditor advised that he would request a timescale from the officers.

The Vice-Chairman also referred to item 84 in appendix 2 regarding major projects and reminded the Committee that a position statement on these was to be included as a standard item on each agenda. The Director of Resources informed the Committee that with due regard to the heavy Agenda, he did not include the report. It would however be submitted to the September meeting of the Committee.

Drawing attention to Minute No.148 of the meeting held on 20 March 2009, the Vice-Chairman recalled that specific fraud training was under consideration and asked that this be added to appendix 2.

RESOLVED:   That

(a)        subject to the following, the report be noted:

(i)                 the responsible officers for Items 39, 40, 42 and 44  of appendix 1 be requested for a timescale for completion;

(ii)               fraud training be added to the training for Members schedule, Item 61 on page 6 of appendix 1 refers;

(b)       a communication be sent to all officers reminding them of the need  to

ensure the accuracy of information being given on the current position on resolutions and recommendations made by the Committee on various subjects.