Agenda and minutes
Venue: Town Hall, Mulberry Place, 5 Clove Crescent, London, E14 2BG
Contact: Antonella Burgio, Democratic Services Tel: 020 7364 4881, E-mail: antonella.burgio@towerhamlets.gov.uk
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APPOINTMENT OF VICE-CHAIR To appoint a Vice-Chair of the Audit Committee for the Municipal Year 2013/14. Minutes: Nominations were received for Councillor Judith Gardiner and Councillor Carlo Gibbs. In the absence of a seconder, Councillor Gardiner agreed to withdraw from the election and the nomination that Councillor Gibbs be appointed Vice-Chair of the Audit Committee for the duration of the municipal year was seconded. There being no other nominations, it was
RESOLVED
That Councillor Carlo Gibbs be appointed Vice-Chair of Audit Committee for the duration of the municipal year.
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APOLOGIES FOR ABSENCE To receive any apologies for absence.
Minutes: Apologies for absence were received from Councillor Shafiqul Haque.
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DECLARATIONS OF DISCLOSABLE PECUNIARY INTEREST PDF 56 KB To note any declarations of interest made by Members, including those restricting Members from voting on the questions detailed in Section 106 of the Local Government Finance Act, 1992. See attached note from the Monitoring Officer.
Minutes: No declarations of disclosable pecuniary interest were made.
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UNRESTRICTED MINUTES PDF 100 KB To confirm as a correct record of the proceedings the unrestricted minutes of the ordinary meeting of the Audit Committee held on 26 March 2013.
Minutes: The unrestricted minutes of the Audit Committee held on 26 March 2013 were presented for approval.
RESOLVED
That the minutes of the Audit Committee held on 26 March 2013 be approved as a correct record of proceedings.
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AUDIT COMMITTEE TERMS OF REFERENCE, MEMBERSHIP, QUORUM AND DATES OF MEETINGS PDF 52 KB To note the Terms of Reference, Membership, Quorum and Dates of future meetings as set out in Appendices 1, 2 and 3.
Additional documents:
Minutes: The clerk presented the annual report which asked Members to note its Terms of Reference, Membership, Quorum and Dates of future meetings.
RESOLVED
That, Terms of Reference, Membership, Quorum and Dates of future meetings of Audit Committee for the municipal year 2013-14 as set out in Appendices 1, 2 and 3 to the report be noted.
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UNRESTRICTED TOWER HAMLETS REPORTS FOR CONSIDERATION |
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The Annual Financial Report 2012/13 PDF 97 KB To note the Annual Financial Report for the year end 31 March 2013.
Report to follow. Additional documents: Minutes: The Acting Corporate Director - Resources presented the draft Annual Financial Report for 2012/13. He apologised that, owing to statutory deadlines and the time required to prepare the accounts for external audit, it had been necessary to circulate the Annual Financial Report as a supplementary agenda. He advised that, as the external audit of the accounts had yet to be undertaken the Committee was required only to note the information presented at this time. The main elements of the report were summarised. These were: · that Council finances were healthy · that expenditure 2012/13 in all directorates except benefits was within budget · that the Council had been able to set aside £5 million into general reserves. These funds would be used to mitigate further savings that were anticipated from the forthcoming Government spending review which was to be announced on 26 June 2013
Noting that timescales around the circulation of the report may have afforded Members reduced access to the documents, the Acting Corporate Director - Resources offered to meet with Councillors individually to discuss in detail any issues which may have arisen from the report. The Committee was also asked to note: · That that some preliminary audit work had already been undertaken. · That some minor changes might become necessary as a result of the audit process but these were not expected to have any material impact on the Council’s overall financial position. · It was planned that the external audit would be concluded in late August and the results reported to the Committee at its meeting on 24th September 2013.
In response to a Member question, the Committee was informed that the report had not been available in the normal agenda publication timescales because of other statutory deadlines. He advised that this issue occurred annually and there had been no exceptional circumstances associated with the task this year.
RESOLVED:
1. That the annual financial report for the year ending 31 March 2013, comprising the explanatory forward and the draft statement of accounts which is subject to audit, be noted
2. That the Acting Corporate Director - Resources invitation to meet individually with Committee Members to discuss in detail any issues arising from the draft statement of accounts be noted.
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Internal Audit Annual Report 2012/13 PDF 407 KB To note the content of the annual audit report, the summary of audits undertaken which have not been previously reported and also the opinion of the Head of Audit.
Minutes: The Head of Risk Management and Audit presented the report at agenda item 6.2 which summarised all of the work carried out by Council’s auditors during 2012/13. The Committee was advised that the report contained the following five elements: A the annual internal audit opinion in accordance with the CIPFA code of practice B summary of audits not previously reported C resources used in providing internal audits D the number of audits completed but not previously presented and E a guide on how Tower Hamlets compares as part of the CIPFA benchmarking club
Internal Audit Opinion - The Head of Risk Management and Audit summarised the professional opinion provided in the report. He advised that, in his opinion, systems of control were adequate and noted 108 system audits had been undertaken 75% of which achieved full or substantial assurance. And 18% returned limited assurance. The remaining 7% were audits where assurances had yet to be returned or where assurance was not applicable. He advised that these results had been achieved not only by audits procedures but also by offering assistance and support to departments that, having been audited, wished to improve their controls and implemented actions to this end. He noted that two of the planned audits had not been completed within the annual timescale and advised that work on these had now begun.
Audits not previously reported. - The Head of Risk Management and Audit reported on management of audit recommendations, advising the Committee that a 6-month post-audit review of the implementation of all agreed recommendations had returned that, as a whole, 84% of priority one recommendations had been implemented and 82% of priority two recommendations had been implemented. He acknowledged that this could be a concern and agreed to follow up limited and nil assurance reports so that a satisfactory level of assurance can be obtained. .
Concerning the summary of audit assurance published in the table at paragraph 8.3 of the report, Councillor Gibbs enquired why significantly more substantial assurances had been assigned to extensive audits than to non-extensive audits. The Head of Risk Management and Audit advised that this was because the risks around extensive systems were greater therefore the Council needed to ensure that arrangements were robust. He advised that most moderate systems were in fact schools and referred to past issues that had been raised around the number of poor assurances that had been returned from their audits.
Concerning audit performance data given in the table at paragraph 9.1 of the report, Councillor Gibbs noted that percentage of priority one and two recommendations implemented at the six-month post audit review were both 84% and considered this figure to be low. The Head of Risk Management and Audit acknowledged that there was presently no system to monitor whether or not recommendations had been implemented after the six-monthly review. However this was an area that he was looking to develop.
Resources used - The Head of Risk Management and Audit advised that in 2012/13 costs were ... view the full minutes text for item 6.2 |
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Annual Governance Statement 2012/13 PDF 237 KB To consider the framework for reviewing and reporting on the Council’s system on internal control and governance arrangements in line with regulation 4(2) of the Accounts and Audit Regulations 2003 and agree the Annual Governance Statement which forms part of the annual accounts. Minutes: The Head of Audit and Risk Management presented the report containing the draft statement that set out the framework for reviewing and reporting on the Council’s system on internal control and governance arrangements in line with regulation 4(2) of the Accounts and Audit Regulations 2003 which was required to be produced to review the Council's governance arrangements. He advised the Committee that the review must be satisfied that the Council's governance arrangements were adequate and, should any non-compliance be found, the Council must identify a remedy. The appendices to the report gave details of the elements that the review required to be checked. After the review some areas for improvement were noted were identified and these were detailed in Appendix 3 (the draft governance statement) together with details of what structures were in place.
He advised that a similar report would be presented to the Standards Advisory Committee with a focus on governance arrangements.
In response to Members’ questions the following information was provided:
RESOLVED:
That
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Anti-Fraud and Corruption Strategy and Pro-active Anti-Fraud Plan 2013-14 PDF 135 KB To note the update provided on the Anti-Fraud and Corruption Strategy and summary of the proposed Proactive Anti -Fraud Plan for 2013-14.
Additional documents: Minutes: The Head of Audit and Risk Management reported the following matters to Committee:
In response to Members’ questions, the following information was provided:
RESOLVED:
That the anti-fraud and corruption strategy and Pro-active Anti-Fraud Plan 2013/14 be noted.
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Treasury Management Activity for Period Ending 30 April 2013 PDF 525 KB To note the contents of the treasury management activity report for period ending 30 April 2013 and the recent downgrade of the Co-operative Bank.
Additional documents: Minutes: The Interim Service Head Finance and HR Development, Resources presented the quarter one treasury management report 2013/14. The Committee was asked to note the following:
The Acting Corporate Director – Resources further advised that most local authorities banked with the Co-operative Bank and that the Co-op, as an organisation, had significant other assets. Therefore the risk of loss of capital was mitigated.
In response to Members’ questions the following information was provided:
The Committee was asked to consider the track record and status of the Co-op Bank; given these, senior management was of the view that the Government would not allow the Bank to become insolvent. None-the-less senior officers were monitoring the situation constantly and keeping a daily review of developments in the Council’s relationship with the Bank.
RESOLVED:
That:
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ANY OTHER UNRESTRICTED BUSINESS CONSIDERED TO BE URGENT Minutes: Nil items. |