To consider and note the external auditor’s statutory annual governance report for 2011/12. 

Wards: Countywide

The Committee considered the District Auditor’s statutory annual governance report for 2011/12, which set out the opinion on the Council’s financial statements for 2011/12, arrangements for securing value for money, and recommendations for further improvements in the Council’s governance arrangements arising from their audit work. 

The District Auditor drew the following key issues from the report:

·         Changes during the financial year: Two major agreed changes had taken place to the Council’s accounting system during the course of the financial year which were considered to be areas of recognised risk, namely: (1) the Council was now working with a new integrated ledger system (Agresso); and (2) Hoople had prepared the annual accounts for the first time.  The District Auditor explained that this had led to a longer audit process than usual, and closedown had been challenging, with a few deadlines missed due to the timescale for completion.  Overall however, she was of the view that these risks had been managed well. [Amended by Audit and Governance Committee on 12 November 2012, minute 28 refers] 

·         Financial Statements: She talked the Committee through the statutory headings in the Financial Statements section of her report.  Corrective errors identified in this section had related largely to valuations, and the overall impact of these had been a reduction in the deficit on the interest and expenditure statement.  As a result of work undertaken to address the issues, there were no significant uncorrected errors in the accounts, and she was satisfied with the result. 

·         Whole of Government Accounts: She had reviewed the Whole of Government Accounts return, and acknowledged that in general, there had been an increase in the work required to complete these.  As a result, this area was still being progressed, and she anticipated that she would not be able to issue a certification of the accounts at present.  This would be done in the very near future, however, and she emphasised that there would be no consequence for the Council in this respect. 

Members raised the following points in discussion:

·         With reference to Hoople’s admittance to the Local Government pension scheme, the Chief Officer (Finance and Commercial Services) said that this would be factored into the statutory review of the pensions fund, which took place every three years.  It would also be considered in 2013 as a separate issue, as part of the Council’s regular financial planning.  He added that the Council’s Service Level Agreements were also being reviewed, and formal meetings were taking place with Hoople regularly to ensure continued confidence and transparency in the process. 

·         In response to a question from Councillor CNH Attwood, the Chief Officer (Finance and Commercial Services) said that he would furnish him with a financial breakdown of costings relating to Hoople. 

·         The Committee sought assurances that the criteria for the Waste Management Contract would be met, and noted that the responsibility for monitoring it lay with Overview and Scrutiny.  The Committee observed that it was within its remit to ensure that the capital aspect of the Waste Management Contract was well-run, and members therefore asked for the Overview and Scrutiny Committee to consider this as a regular part of its work programme. 

RESOLVED:  that

(a)        the Audit & Governance Committee note the content of the Annual Governance Report (AGR) for 2011/12;

(b)       the Audit & Governance Committee approves the Draft Letter of Representation for signature by the Chair of the Committee and the Chief Officer;

(c)        the Audit & Governance Committee request that an action plan be brought forward to the next committee; and

(d)       it be recommended to the Overview and Scrutiny Committee, that the consideration of value for money of the proposed Waste Management PFI contract, be included in its regular work programme.