To introduce the external auditor’s Annual Governance Letter for 2008 as an appendix to the Director of Resources report.

The Committee received a report from Sonia Rees, Director of Resources, which introduced the external auditor’s Annual Governance Report for 2008 which set out:

(a)                     their opinion on the financial statements for 2007/08 approved by the Committee on 20 June 2008.

(b)                     their opinion on the Council’s arrangements for securing value for money.

(c)                     their recommendations for further improvements in the Council’s governance arrangements arising from their audit work.

Liz Cave and Terry Tobin represented the Audit Commission and presented the Annual Governance Report for 2008.

Liz Cave reported that the she was pleased to inform the Committee that the Audit Commission’s Report was very positive and that there was very little substance to report which was good news.  She made reference to page 12 and highlighted five new key areas of judgement and audit risks. These areas were looked at in detail and were found to be substantially correct. With regard to the draft representation letter, Appendix 1 to the Commission’s Report, she stated that it was normal. There were no material weaknesses in internal control but drew the Committee’s attention  to two matters. The first was in respect of the ISIS (nursing home payments) system set out in paragraph 16 of the Report, with a recommendation that issues raised in relation to the system for paying nursing homes be addressed. The other matter which was the main concern, was in relation to pooled budgets and the fact that there were no signed agreements in place, paragraph 17 of the Report refers. The recommendation was that the pooled budget arrangements with the PCT including ensuring governance arrangements are updated and signed agreements are put in place. The corporate arrangements for securing economy, efficiency and effectiveness in its use of resources, i.e. value for money, were ‘adequate’ which meant that the basic requirements had been met.

The Committee was asked to consider and approve the draft representation letter attached to the Commission’s Report at Appendix 2.

Sonia Rees reported that the Audit Commission’s recommendations had been referred to the appropriate Directors and that their Actions taken would be tracked accordingly by audit.

Tony Ford, Chief Internal Auditor, informed Members that the recommendations would also be referred to a Scrutiny Committee. The Committee would be up dated on progress in terms of Directorate action and from a Scrutiny viewpoint.

The Chairman drew attention to paragraph 6 of the Commission’s Report and whether the reference in the Report with regard to this Committee’s approval of the Council’s Accounts and Annual Governance Statement and the Committee’s need to consider  Audit Commission’s findings in its Report was creating a ‘tension’ factor for the Committee.

Liz Cave emphasised that there were no material amendments in their Report so the wording was incorrect and that the respective wording in the draft Letter would as a consequence be reviewed.

Councillor RH Smith proposed that the Director of Resources be invited to submit a report summarising the extent and values of current pooling of budgets and current thinking and planning towards further pooling.

Sonia Rees informed Members that she would be working closely with the Director of Integrated Commissioning to produce a report on the pooling of budgets.

The Chairman wished to record acknowledgement for the work of the Director of Resources and staff in achieving such positive results in the Audit Commission’s Report.

Members also expressed their appreciation to Liz Cave for her work.

RESOLVED:   that

(a)         the Audit and Corporate Governance Committee agrees the proposed action plan in response to the recommendations contained in the Annual Governance Report for 2008;

(b)         the Audit and Corporate Governance Committee approves the Letter of Representation for signature by the Chair of the Committee and the Director of Resources, attached at Appendix 2 of the Audit Commission’s Annual Governance Report 2008; and

   (c)     the Director of Resources be invited to submit a report   summarising the extent and values of current pooling of budgets and current thinking/planning towards further pooling.