Agenda and draft minutes
Venue: Meeting Room M71, Seventh Floor, Town Hall, Mulberry Place, 5 Clove Crescent, London, E14 2BG
Contact: Zoe Folley, Democratic Services Tel: 020 7364 4877, E-mail: Zoe.Folley@towerhamlets.gov.uk
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APOLOGIES FOR ABSENCE To receive any apologies for absence.
Minutes: Apologies for absence were received on behalf of Councillors Abbas, Eaton and Snowdon. It was also reported that Councillor Dr Jones would be deputising for Councillor Snowdon.
Noted. |
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Appointment of Vice Chair for Meeting In view of the unavailability of the Vice – Chair Councillor Abbas, the Chair Councillor Haque sought nominations for the appointment of a Vice – Chair for the duration of the meeting.
Accordingly it was RESOLVED that Councillor Hawkins be appointed Vice – Chair for the duration of the meeting.
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DECLARATIONS OF INTEREST 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 Chief Executive.
Minutes: Councillor F. Haque (Chair) declared a general personal interest in the agenda. The declaration was made on the basis that the agenda contained references to Tower Hamlets Homes and Councillor Haque was a member of the Tower Hamlets Homes Board.
Councillor D. Jones declared a general personal interest in the agenda. The declaration was made on the basis that the agenda contained references to Tower Hamlets Homes and Councillor Jones was a member of the Tower Hamlets Homes Board.
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UNRESTRICTED MINUTES To confirm as a correct record of the proceedings the unrestricted minutes of the ordinary meeting of the Audit Committee held on 29th September 2009.
Minutes: RESOLVED that subject to the amendment below the unrestricted minutes of the meeting held on 29th September 2009 be approved -
Minute 6.1 (Tower Hamlets Annual Governance Reports 2008/09) – Second Paragraph be reworded to state that in relation to the £120m assets incorrectly included in the previous years balance sheet, Councillor Haque queried the reasons for this and asked that it be clarified.
ACTION BY: Zoe Folley (Democratic Services)
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DEPUTATIONS AND PETITIONS To receive any deputations or petitions.
Minutes: None received.
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UNRESTRICTED AUDIT COMMISSION REPORTS FOR CONSIDERATION Nil items. Minutes: Nil Items. |
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UNRESTRICTED TOWER HAMLETS ITEMS FOR CONSDIERATION Additional documents: |
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Quarterly Internal Audit Assurance Report September 2009 - November 2009 (AC/001/09) To note the contents of the report and to take account of the assurance opinion assigned to the systems reviewed during the period.
Minutes: Mr Minesh Jani (Service Head Risk Management) introduced the report and explained the four assurance ratings assigned to each area audited for the benefit of the Committee.
Mr Jani reported that the percentage of priority 2 recommendations implemented at the follow stage was 71% but the target was 95% and reaching this was a key aim. Corporate wide action had been taken to improve this score. It was anticipated that this would have the desired effect.
In reply to a question from Councillor Haque, Mr Jani reported that all of the recommendations not implemented were submitted to and discussed with the Corporate Directors and this enabled them to considered with Audit what needed to be done.
It was RESOLVED that a progress report be submitted to the next meeting of the Committee (highlighting progress in reaching the targets). It was also RESOLVED that where no progress had been made, the Corporate Director be asked to submit a written response explaining the reasons for the lack of progress.
ACTION BY: Minesh Jani (Service Head Risk Management)
(a) Management of Major Works – Systems Audit - Limited (Extensive Assurance)
Mr Jani reported on the reasons why the above had been assigned a limited assurance. Overall it was considered that the systems of control for recovering outstanding arrears and debt recovery needed to be strengthened. Mr Jani welcomed to the meeting Ms Jackie Odunoye (Service Head Strategy - Innovation & Sustainability) and Sayeed Kadir (Director of Tower Hamlets Homes).
The officers reported the following points:
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Annual Internal Audit Report for Schools – 2008/09 (AC/002/09) To note the contents of the report and to take account of the matters raised by audit in each of the 12 areas examined by audit.
Additional documents: Minutes: Mr Steve Vinnel (Deloittee& Tauche) presented the findings of the Annual Audit Report for Schools for 2008/09 drawing attention to the common findings and the conclusions.
In reply to a question from Councillor Jones, Mr Vinnel stated that the findings of the Audit were reported to the Head Teachers and the School Governors. The Audit Inspectors also held exit interviews with the school staff. At which they would highlight the key findings and would agree recommendations. Schools were also sent copies of draft reports.
Councillor Haque considered that the systems in place in schools needed to be strengthened given most schools audited only met the minimum standards. He considered that the findings in respect of CRB checks were a particular cause for concern.
In reply to a further question about the Council’s role in strengthening the systems of control, Mr Jani reported that the systems of control in place varied between individual Schools. The Council could take steps to ensure the key objectives were met. It was intended that the Corporate Directors and Children’s School’s and Families would formulate an improvement plan based on the findings and that often school audits were followed up with an intensive level of support from Children’s Schools and Families.
Councillor Haque considered that there were inconsistencies between schools and that this needed to be addressed. He commented that the number assigned substantial assurance (eight) was quite low. Members considered that an implementation plan should be produced to show how schools planned to improve. It was RESOLVED that this information would be reported back to the Committee in March. Councillor Haque also considered it important to establish which schools were reaching the standards. It was RESOLVED that this information be included in the report requested.
RESOLVED: That the contents of the report (AC/002/09) be noted and the matters raised by audit in each of the 12 areas examined be taken into account.
ACTION BY: Mr Steve Vinnel (Deloittee& Tauche) Minesh Jani (Service Head Risk Management)
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Annual Governance Statement for the 2008/09 Accounts Update (AC/003/09) To note the action in dealing with the issues raised on the annual governance contents of the report.
Minutes: Mr Minesh Jani (Service Head, Risk Management) introduced the report. The report updated the Audit Committee on the progress made in dealing with the significant issues identified in the annual government statement.
In response to the report, Members discussed the likelihood that Tower Hamlets Homes would achieve Two Star Status and the funding to be generated by this. The Committee indicated that they should keep a watchful eye over this matter given the implications for the Decent Homes Programme.
Following which it was RESOLVED That the action in dealing with the issues raised on the annual governance contents of the report be noted.
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Update on Risk Management (AC/004/09) The Audit Committee is asked to note:
· the contents of the report; and · the actions planned over the next year to embed risk management in section 8 of this report.
Minutes: Mr Minesh Jani (Service Head, Risk Management) presented the report. The report provided an update on the Council’s risk management arrangements. The report also captures the risks reported to the Corporate Management Team as part of the recent risk management update.
Mr Jani outlined the key improvements as detailed in the report. Mr Jani reported that the Corporate Risk Register was considered at a Corporate and a Directorate level and at the Finance Strategy Group. A key aim of the improvements was to make the process for managing risk simpler. He referred to the development of an automated system for capturing risk which was JCAD. It was also reported that the Council had appointed a number of Risk Champions. The Risk Champions held quarterly meetings with Audit where they examine pertinent risks for reporting to the Corporate Management Team.
Attention was draw to the new issues in particular the risks around future budget settlements, not achieving the energy efficiency requirements, the implications of the Laming Report and the failure to deliver Decent Homes by 2016.
In response to questions, it was reported that the Risk Champions received specific training and there was an e-learning tool for staff use at a lower level. There was also a wider risk management forum made up of key bodies such as the Police, the PCT and Fire Services and the aim of this was to gain a holistic picture of risk. All of the Risk Champions were Service Heads or one tear below in every directorate.
It was RESOLVED that an update on the Working Neighbourhoods Fund (WNF) be submitted to the Committee at its next meeting in March 2010. It was also noted that the funding for this initiative was due to expire in October 2010. The Committee stressed the need to identify the implications of this risk and to take early action before the funding expired. C Naylor RESOLVED to report back to the Committee about this.
It was also reported the WNF monitoring group reviewed progress against spend and were due to produce a report in June 2010.
RESOLVED: That the contents of the report (AC/004/09) and the actions planned over the next year to embed risk in section 8 of the report be noted.
ACTION BY: Chris Naylor (Corporate Director Resources) Minesh Jani (Service Head Risk Management)
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Revised Internal Audit Plan 2009/10 (AC/005/09) Minutes: Mr Minesh Jani (Service Head, Risk Management) presented the revised internal Audit Plan drawing attention to the key changes. Following a brief discussion it was RESOLVED That the contents of the report (AC/005/09) be noted and the changes to the 2009/10 internal audit plan be endorsed.
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Progress on National Fraud Initiative 2008/09 and Anti Fraud Update (AC/006/09) Minutes: Mr Tony Qayum (Head of Audit Services) presented the report highlighting the key issues.
Mr Qayum reported the following points:
· The Government was encouraging the use of publicity campaigns to prevent housing fraud. Namely the subletting of RSL properties. Posters encouraging people to report suspected cases had been placed in a variety of public places including doctors surgeries. · Audit were working with all RSLs and services across the Council (such as legal services) to facilitate recovery and prosecution where there was evidence of housing fraud. Progress reports for this particular area of work would be reported to the Audit Committee on a quarterly basis.
In reply to questions, the Committee noted:
· The Government had also awarded the Council £50,000 for recovery and prosecution. The Council was utilising this funding to establish the extend of Housing Fraud within the Authority. At this point it was too early to tell how significant the problem was. However the new processes in place should allow officers to identify the scope of the problem. · Appendix A indicated that the Audit Commission target of 15% for recovery and prosecution had been met. Further government funding for this area of work may follow.
RESOLVED: That the contents of the report (AC/006/09) be noted.
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Treasury Activity for Period Ending 30th November 2009 (AC/007/09) Minutes: Mr Finch (Service Head Corporate Finance) presented the report highlighting the key points. Mr Finch reported that paragraph 5 (Credit Criteria) showed the credit requirements placed on financial institutions to which the Council lends. All of which demonstrated the relative strength of the banks within the Council’s lending and investment list. Mr Finch confirmed that the Council had restricted investment to institutions that had support from national governments and had a strong parent body and were approved by the ratings agencies as fit for purpose. At the request of the Chair, Mr Finch clarified the meaning of the credit ratings listed in Table 1 of the report regarding Credit Rating Requirements.
All of the institutions within table 3, (the investment strategy list of current investments) were UK based institutions. In the event the UK rating decreases and becomes less than that overseas, this position would be likely to change. A key issue was a lot of the banks that met the criteria were not currently lending.
It was planned to restrict the term for investment to a 6-9 month duration as there was advice that the interest rates may rise in 2010. The Council was currently making a 1.56% return on its investments which represented a relatively strong performance over the period being more than 1% over the Bank of England base rate.
RESOLVED: That the contents of the report (AC/007/09) be noted.
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ANY URGENT UNRESTRICTED BUSINESS Minutes: None reported. |
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Date of Next Meeting. Minutes: Tuesday 30th March 2010 7:30pm. |