To receive apologies for absence.

Apologies for absence were received from Dr Phillip Ashurst, Non-Executive Director NHS Herefordshire.

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

There were no named substitutes present at the meeting.

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

There were no declarations of interest made at the meeting.

To approve and sign the Minutes of the meeting held on 29^th September, 2011.

RESOLVED:  That the minutes of the meeting held on 29 September 2011 be approved as a correct record and signed by the Chairman, subject to the following amendments:

Minute 77(Statement of Accounts) the addition of reference to:

·         reference made to the auditing of the Amey Contract;

·         potential error which could impact on the revenue account;

·         comparison with other authorities about benchmarking of borrowing;

·         clarification of the grading levels eg “satisfactory”, “adequate” or “not adequate” with a glossary or legend to indicate progress - Chief Officer Finance and Commercial to write to Members about this

To note the Audit Commission’s Annual Audit Letter for 2010/11 and consider the response to each of the action points raised.

The Chairman welcomed the District Auditor, Liz Cave, and the Auditor, Terry Tobin, to the meeting. 

The Chief Officer Finance and Commercial presented a report about the Audit Commission’s Annual Audit Letter for 2010/11. The letter provided the audit was comprised of two elements; the audit of financial statements and the auditor’s assessment of arrangements to achieve value for money in the use of resources.  In both cases the Council had received an unqualified opinion. The letter also provided confirmation that the Council had managed the implementation of International Financial Reporting Standards (IFRS) extremely well.

The Chief Officer Finance and Commercial said that an Action Plan would be prepared through the Council’s Leadership Team and submitted to the Committee in January 2012.

Liz Cave, the District Auditor, said that there had been a positive outcome of the audit of the Council’s accounts. The Council’s financial resilience procedures arrangements had been found to be good in the medium term and demonstrated robust management arrangements. The Council had been able to adequately absorb the overspend in social care had from its reserves. Local Government had the on-going problem of being faced with increasing pressure on public finances but decreasing levels of grant from the Government. It was therefore essential for the Council to ensure that adequate provision was made for Cabinet to be provided with regular progress reports on the savings being achieved in individual services and also for benefit cards to be more specific. 

The increasing need for supporting the elderly in Herefordshire had led to overspend. The District Auditor felt that the Council had made good progress in developing its procedures and how the processes were managed but that it also needed to concentrate on outcomes and adequate budgetary provision.  They felt that the Council’s financial resilience management arrangements were sound and the overspend on social care had been adequately absorbed from reserves. There would however be increasing financial pressures and it needed to be made clear to Members what the reserves were and what they could be used for, rather than reducing spending.  Although the reporting levels were good, monthly reports should be provided to Cabinet on the matter. The potential overspend needed to be carefully monitored and managed.

The Chairman thanked the District Auditor for her assessment and guidance and Members asked a number of questions including the role of the Committee and what the expectations were of its Members. The committee also sought guidance on whether the progress reports were to be submitted to Cabinet or also the Committee and all Members. The Chief Officer Finance and Commercial explained that the role of the Committee centred on the Audit & Governance Action Plan and whether it was being effectively delivered.  Details about the Council’s budget fell within the remit of Cabinet with input from Overview and Scrutiny where appropriate.  Members had been sent a letter from the Head Law Governance and Resilience about proposals which would be submitted to forthcoming Council recommending expanding the role of the  ...  view the full minutes text for item 84.

To receive a verbal update about Internal Audit Progress 2011/12.

The Interim Internal Audit Manager provided the Committee with an update of the main activities of the Council’s Audit Section and was pleased to report that all those areas studied had been giving assurances or substantial assurances about their efficiency and effectiveness. There were some twenty reviews underway at the moment including community pfi, Halo and the Amey contract. One member of staff had been seconded to Hoople (the shared services organisation) and this may result in the need for additional staffing support being obtained from KPMG if found to be necessary.  He said that a progress report would be submitted to the next meeting of the Committee in January 2012.

27^th January 2012

9^th March 2012

The dates of forthcoming meetings are:

27^th January 2012

9^th March 2012