At the request of the Chairman and for reasons of special urgency an additional item on the Annual Governance Report has been included to the agenda.

The District Auditor, Mrs Liz Cave, presented her report to the Committee and referred Members to the key messages on page 4.  Mrs Cave advised that the Council had received an unqualified approval of the accounts.  She added that the audit was nearly complete and did not anticipate any changes to it.  There had been excellent co-operation from staff and stated that it had been a very technically difficult year and believed that next year would not be as difficult.  

Mrs Cave referred to the challenge of the complex changes to the way PFI and similar schemes would need to be accounted for and that management had agreed to make a number of adjustments to the statement of accounts, which would mainly improve the notes to the accounts.  She added that a number of errors had been identified that were not material in aggregate but individually were above the trivial threshold.  It was noted that officers did not propose to make any amendments and they would be reported as unadjusted misstatements, which were at Appendix 2 of the report.  Members were also advised that there were three issues relating to the public which remained and had not been signed off and one issue that she and her team were continuing to investigate. 

Mrs Cave referred the Committee to two of the Council’s contracts, one with Shaw Homes and the second the Waste PFI contract.  The authority was working with Worcestershire Council on the Waste PFI contract as this was an asset that had not initially been picked up and now needed to be valued.  However, it was not expected to be above £500k but would need to be included next year.

In discussing the Annual Governance Report Members questioned the timing of the report and were advised that it had to be completed at the end of the audit.  The Committee approved the Annual Governance Report. 

RESOLVED

               THAT:

               (a)     the content of the Annual Governance Report for 2009/10 was discussed with the external auditor;

               (b)    the action plan in the Annual Governance Report in response to the recommendations contained in the report for 2009/10 be approved; and

               (c)     the draft Letter of Representation (Appendix 3 of the Annual Governance Report 2009) be approved for signature by the Chairman of the Audit and Governance Committee and the Director of Resources (Council).

NOTE ON ABOLITION OF AUDIT COMMISSION

The District Auditor informed the Committee that it had been a great surprise to staff when the Government had made the announcement that the Commission would be abolished.  She advised that a new regime had not been decided upon by Government and that the Commission would carry on providing an audit for 2010/11 and 2011/12.  However, there would be a change in the areas relating to value for money and financial resilience; and therefore, there would be some rebate in the fees.  By 2012/13 Council’s would be able to appoint their own auditor and it was expected that private companies would be expected to place a tender, a framework would be put in place for this.  It was noted there was still a lot of issues around the detail of the government plans.  Mrs Cave explained that overheads were currently being cut and that the organisation as it currently is would be a much leaner organisation in the near future.

The Chairman stated on behalf of the Committee and Director of Resources that the authority was more than satisfied with the work Mrs Cave and her team had carried out and thanked her for the work they had done.