To note the Audit Commission’s Annual Audit Letter for 2009/10 and approve the response to each of the action points raised.

The Director of Resources introduced the report which captured the key points to the Audit Commission’s Annual Audit Letter and informed Members that it was an unqualified opinion on the Council’s financial statement and also an unqualified value for money conclusion stating that the Council had satisfactory arrangements.  The Director thanked the District Auditor for the work carried out by her team.

Liz Cave, District Auditor stated that the Council had sound financial accounts and made the following points:

The key points made were:

• Welcomed the changes to the planning service and committee as a good example of the Council acting quickly following the comments of the previous audit report.  Committee meetings were conducted well and the decision making processes had improved.  The Council is now inline with the national average for planning appeals.
• The financial plan is good and is moving in the right direction.
• The waste disposal contract has had a considerable amount of public interest.  Once planning permission is granted and the tender process starts an evaluation on value for money should be carried out.
• International Financial Reporting Standards (IFRS) – making good progress, confident the standard will be reached.
• Value for money – summary of work under use of resources is good.
• Good proactive work and follow up carried out on fraud, particularly in relation to benefits with savings of £380k.
• Support for older people, considerable amount has been done to improve the support provided; the benefits should now start to be seen.
• The transformation programme has been redefined to ensure delivery, with a targeted review to obtain cost savings.  The aims need to be focused in order to measure the benefits of the programme and review the business case for shared services.
• Regeneration – there has been considerable public interest in the ESG project.  The Council needs to set out clearly how it intends to judge the success of the project and to improve communications with the public to gain their confidence and involvement in the project.

Finally, the District Auditor added there would in future be two new value for money criteria: securing financial resilience, and prioritising resources within tighter budgets.  It is intended that this would provide a stronger focus on financial risks and resilience.

The Committee noted the comments of the District Auditor and made the following comments:

·         The Chairman thanked the District Auditor for such a positive report and that the Standards and Audit and Governance Committees were playing an effective role.

·         The comments on waste management were noted and that the authority was moving in the right direction regarding the ESG project (Hereford Futures) with improved communications.  Consideration would now need to be given to the strategic review.

·         Members noted the reduction in planning appeals, which could be aligned to the reduction in applications, but felt the new procedures worked well with officers.  Members discussed the planning procedures in relation to the new localism bill and the concerns of Members and parish councils.

The Chairman invited the Non Executive Director and Chairman of the Audit and Assurance Committee, Phillip Ashurst to speak to the Committee. 

Mr Ashurst noted that a number of points raised resonated with the PCT and that financial resilience would have a major impact for both organisations.  He commended officers for their work on fraud and the savings that had been made.  This was an area that both organisations were working much more closely on and it sent a strong message that fraud would not be tolerated.  He added that the growing number of older people was a focus point for both organisations and and was a major part of expenditure for the PCT.  The transformation programme, therefore, was key to both organisations as they moved to shared services and making the best use of resources for the residents of Herefordshire.

The District Auditor thanked officers and Members for all their work and the support provided.

RESOLVED: That the Annual Audit Letter and action plan be noted.