To present to the Committee for consideration the draft revised terms of reference for the Audit and Governance Committee.

The Chief Internal Auditor presented a report regarding draft Revised Terms of Reference for the Audit and Corporate Governance Committee. He drew member’s attention to the current terms of reference in Appendix 1 to the report and to the revised terms of reference set out in Appendix 2 which encompassed the Chartered Institute of Public Finance and Accountancy (CIPFA) guidance and good practice.

Councillor AM Toon expressed concern that the proposed scope referred to at page 41 of the report did not include responsibility for reviewing external audit or inspection reports and referred to the Crookall report as an example.

Councillor RH Smith referred to paragraph 7 of Appendix 2 and was of the view that the Committee would wish to read and where appropriate act upon reports of external audit and inspection agencies.

Terry Tobin, representing the Audit Commission, informed the Committee that a lot of Audit Committees struggled with the performance area issue. He took the view that there was no defined answer to the problem. He further stated that CIPFA can advise on good practice but the Council have to be comfortable with its approach. From his point of view, it was not necessary that all amended reports needed to be dealt with by the Audit and Corporate Governance Committee if its being dealt with by another Committee.

Councillor Smith referred to paragraph 10(iii) on page 6 and questioned the proposal that the Committee could only endorse the management response to any recommendations made regarding the external auditor’s annual governance letter.

The Assistant Chief Executive Legal and Democratic emphasised that the timescale would be for this Committee to receive the review of the constitution for consideration. It would then go to Strategic Monitoring Committee and Cabinet and ultimately to Council. He emphasised that would be a further opportunity for the Committee consider its revised terms of reference.

Councillor Smith expressed further concerns about exclusions from the proposed terms of reference and was of the view that the following matters should be included:

            (i)         Audit

Committee should ratify/identify issues to be investigated exceptionally agreeing lines of enquiry and scope and depth of audit activity.

Comment on scope, depth and value for money of external audit.

(ii)        Financial Management

Monitor in year forecasts of revenue and capital outturn, satisfying itself that appropriate and timely measures are in place to avoid or minimise any projected overspend.

(iii)       Governance

Maintain an overview of all procurement processes.

Encourage improvement in standards of accuracy, clarity, comprehensiveness and brevity in the Council’s documentation.

The Acting Director of Resources informed Members that the Committee needed to be careful about straying into Scrutiny and Cabinet areas. The discussion concluded with the agreement that the Audit and Corporate Governance Committee should receive a six monthly report giving the overall year outturn position.

Councillor AM Toon referred to financial reports that had been submitted to Children’s Services Scrutiny Committee and that the format of those reports was questionable.  It was her view that those reports were not consistent with those that were submitted to this Committee which were in a format that was understandable.

Councillor Smith referred to his previous role as Vice-Chairman of Community Services Scrutiny Committee and to a report received on the outturn of Children’s Services Information Communications Technology (ICT) report. He did not like the format.

The Acting Director of Resources informed the Committee that he had discussed the issue with Councillor Smith and was much more comfortable with the current reporting format relating to ICT finance. On the Children’s Services Scrutiny Committee issue raised by Councillor Toon, he informed Members that reports to that Committee were sometimes presented differently. He had, however, discussed the matter with the Children’s Services Director to address the inconsistencies in the reporting process.

Terry Tobin, representing the Audit Commission, was of the view that it was most unusual for Audit and Corporate Governance Committees to consider budget monitoring reports but that it was an issue for the Committee to decide upon.

The Chief Internal Auditor made reference to Councillor Smith’s suggested inclusion in the terms of reference regarding Governance, part (iii) above, and assured the Committee that the audit plan would be looking into standing orders for contracts and procurement.

RESOLVED:   That the Chairman and Vice-Chairman to meet with the Chief Internal Auditor to discuss the proposed terms of reference in line with the suggested amendments in the preamble and that the amended version be submitted to the meeting of this Committee on 20 March.