Agenda and minutes
Venue: MP701, Town Hall, Mulberry Place, 5 Clove Crescent, London, E14 2BG
Contact: Nishaat Ismail, Democratic Services Tel: 020 7364 0842, E-mail: nishaat.ismail@towerhamlets.gov.uk
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DECLARATIONS OF DISCLOSABLE PECUNIARY INTEREST PDF 64 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 or any other declarations of interest were made. |
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MINUTES OF THE PREVIOUS MEETING(S) PDF 197 KB To confirm the minutes of the Audit Committee held on 16/09/2014 Minutes: The minutes of the previous meeting held on 16th September 2014 were presented for approval.
Referencing page 5, para 1 of the minute pertaining to agenda item 3.1, Chris Holme (Acting Corporate Director) requested the figure to be corrected to £250,000.
The Chair moved and it was:-
RESOLVED
That the unrestricted minutes of the meeting of the Audit Committee held on 16th September 2014, be agreed as a correct record of the proceedings, and the Chair be authorised to sign them accordingly.
Action by: Nishaat Ismail (Committee Officer, Democratic Services, LPG) |
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TOWER HAMLETS ITEMS FOR CONSIDERATION |
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Quarterly Assurance Report PDF 264 KB Minutes: The Head of Risk Management and Audit presented the Quarterly Assurance Report, which summarised the work of Internal Audit for the period September 2014 to November 2014.
The Committee heard that;
· 18 Audits were undertaken · 9 were assigned Limited Assurance and of these 4 were school audits. · The Audit performance against the Audit plan achieved a return of 48% as opposed to 50%. · All priority 1 recommendations will be expected to be implemented in the next quarter and priority 2 recommendations will be implemented over the next 6 months. · Appendix 3 (page 55 of agenda pack) indicates the number of recommendation remaining to be implemented. · It was stated that internal auditors have made recommendations that management have agreed.
The Committee were also told that a number of key performance indicators in relation to the audit plan were identified with delivery being slightly behind than planned however the target is to deliver plan by the end of March 2015.
Summary of Audits assigned Limited Assurance
Pest control audit This was assigned limited assurance. Feedback was provided and it was identified that a number of services were being provided free of charge and some Service Level Agreements (SLAs) were not updated and reviewed. There were also a number of jobs which were left open on the system and showed as “outstanding”.
The Head of Consumer and Business Regulations informed the Committee that the properties listed on the management system had been updated. There were 86 properties on the system and 21 of them were chargeable. The Committee heard that there was 0.6% loss on income and 50% of the jobs recorded open at the time of the audit, 50% had been closed.
Monitoring and control of mainstream grants This was assigned Limited Assurance. The Committee were told that although there were examples of good practice in some directorates and there was authorisation of payments in line with guidelines. However there were no documented monitoring procedures currently in place.
Specific issues on Youth Connexions The Committee were informed that there were no documented monitoring procedures currently in place for those organisations receiving MSG funding for the Youth and Connexions projects.
Luncheon Club projects The Committee were told that some service providers were not achieving the targeted outputs for which the grant was awarded.
The Third Sector Programmes Manager informed the Committee that there are 11 funding streams across ESCW, CLC and D&R. A number of weaknesses were found in the programmes tested however they had been addressed by setting out clear procedures guidance for officers administering grants.
The Committee heard that all grants officers had been given a Grants Procedure Manual and they are to attend a briefing so they understand the procedures. In addition, all grants officers have been asked to implement procedures give feedback to the Third Sector Programme Manager, to ensure that the manual can be improved and updated with relevant practices.
In response to Members questions, the Committee heard that;
· Officers had access to the manual before the ... view the full minutes text for item 3.1 |
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Updated Internal Audit Plan 2014-15 PDF 243 KB Minutes: This report, presented by the Head of Risk Management and Audit, provided Members with an update of audit activity planned for this financial year and reflects the amendments made to the original internal audit plan as a result of the changing priorities of the authority. · The original internal audit plan was prepared at the start of the current financial year and was presented to the Audit Committee for approval in March 2014. · The Committee heard that the plan has been revised in line with the internal audit strategy and the reasons given were; 1. Requests from officers to perform audits that were not originally planned; 2. Requests from officers to increase the scope of audits which resulted in higher allocation of audit days; 3. Requests from Chief Officers to defer audits due to service restructuring, other external inspections and changes made to existing systems and the need to allow a period of bedding in; 4. Make use of days provided in the original plan that had not been allocated to specific audits; 5. To avoid duplication of work with either the external auditor or other assurance provider and 6. Additional commitment to unplanned work.
The appendices attached to this report summarised the audits that had been added to or deferred from the original audit plan.
In response to Member’s questions the Committee were informed that;
· There is a risk assessment formula used to make decisions regarding the changes made to the internal audit plan.
The Committee were also informed that key findings identified from the work of the Anti-Fraud team will be reported to the Audit Committee in Anti-Fraud Annual Report scheduled for presentation to the June 2015 Committee.
Members requested to see an action plan around processes given to PwC.
Action by: Chris Holme (Acting Corporate Director Resources)
The Committee also asked for information about the number of whistle blows received.
Action by: Minesh Jani (Head of Risk Management and Audit)
The Chair Moved and it was:-
RESOLVED:
· That the changes proposed and endorsed the revised 2014/15 internal audit plan attached at Appendix 2 (p62 of agenda pack) be noted. · The resourcing of the audit plan as detailed at para.4.1of the report be noted.
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Annual Internal Audit Report for Schools 2013-14 PDF 198 KB Additional documents: Minutes: This report summarised the work of Internal Audit in relation to the audit of schools for the financial year 2013/14.
The Committee were informed that;
· During the financial year 2013/14, audit visits were carried at 27 schools. · The report highlighted the weaknesses in financial control and management in 14 out of 27 schools visit by Internal Audit during 2013/14 · There were 12 control areas examined during the audit; 1. Operation of Governance Processes; 2. Financial Planning and Budgetary Control; 3. Control and Monitoring of Schools Bank Account 4. Procurement, including Large Single Purchases, Tendering and Value for Money; 5. Accounting of Income and Expenditure; 6. Charging Policy, Income Collection and Banking; 7. Personnel and Payroll Management; 8. School Meals 9. Voluntary Fund and School Journey; 10. Asset Controls and Security of Assets; 11. Security of the IT Infrastructure, Disaster Recovery and Data Protection; and 12. Risk Management and Insurance. · 14 schools were assigned Limited Assurance. · Key findings by Audit Area were around; Ø Operation of Governance Processes Ø Financial Planning, Budget Setting, Monitoring and Forecasting Ø Control and monitoring over School Bank Accounts Ø Procurement Ø Accounting of Income and Expenditure Ø Charging Policy and Income Collection and Banking Ø Personnel and Payroll Management Ø School Meals Ø Voluntary Fund and School Journey Ø Asset Controls and Security of Assets Ø Security of the IT Infrastructure, Disaster Recovery, Data Protection Ø Risk Management and Insurance
· Members were informed in detail about the schools investigated; Ø Cambridge Heath Sixth Form Ø Shapla Primary School Ø St Anne’s Catholic Primary School Ø St Paul’s Way Trust School
The Service Head for Resources-ESCW was present to answer Members’ questions. She informed the Committee that; · The 4 schools investigated, had been assigned Limited Assurance for the 3rd time, indicating a systematic failure over a 3 year period and failure to implement internal systems. · There had been regular meetings with the schools concerned but it was difficult to intervene directly · The audit has highlighted the need to provide additional support to these schools.
Further to Members’ questions the Committee was informed; · That it is for schools to monitor the number of people entitled to free school meals. · The Council has the authority to withdraw finance delegation- but this would be the ultimate sanction · 10 schools had been identified as needing extra support to avoid being assigned Limited Assurance for a 4th year. · In order to assist schools who were failing financially, the entire governance system needed reviewing. · Very few schools were in deficit and those that were, were due to specific reasons such as; school building expansion. · There are a number of schools that had not been audited in over 4 years however they were assessed as low risk schools. · There are currently 96 schools on the programme
Members stressed the importance of monitoring the schools in questions due to child protection issues arising in other UK authorities.
The Chair moved and it was;-
RESOLVED That the contents of the Annual Internal Audit ... view the full minutes text for item 3.3 |
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Minutes: This report was presented by the Acting Corporate Director of Resources, who informed the Committee that the Council is required by legislation and guidance to produce 3 strategy statements in relation to its treasury management arrangements. The report also dealt with the setting of Prudential Indicators for 2015/16, which ensured that the Council’s capital investment decisions remain affordable and sustainable. The Committee were given a brief background and told that the Council is required to operate a balanced budget, which broadly means that cash raised during the year will meet cash expenditure.
The Committee was told the following; · The authority was well within its’ borrowing limit. · The strategy was similar to previous years. · There are plans to invest the Council’s money to build additional housing in the borough · Future investments are very much reliant on previous investments with Royal Bank of Scotland (RBS) and Lloyds Bank. · The Council were looking for companies with long existing credit rating to invest in. · The Council has a large capital programme for a local authority and it is important to keep cash balances.
The Chair moved and it was;-
RESOLVED That Members noted the; · The Minimum Revenue Provision Policy Statement set out in section 7 of this report; · The Treasury Management Strategy Statement set out in sections 8-11 od this report; and · The Annual Investment Strategy set out in section 12 & 13 of this report. |
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Treasury Management Activity for Period Ending 31 October 2014 Minutes: This report was presented by the Chief Accountant, which advised the Committee of treasury management activity for the current financial year up to 31st October 2014.
The Committee heard that the current average return on investment stands at 0.72%, compared with budget set of 0.80%, whilst the budgeted cash return on assets was £1.6m for 2014/15; this has been revised to 2.7m due to large cash balances.
The Committee were informed that the Council’s Treasury Management Strategy was approved on 26th February 2014 by Full Council. The Strategy covers the following:
· Treasury limits in force which will limit the treasury risk and activities of the Council; · Prudential and Treasury Indicators; · The current treasury position; · Prospects for interest rates · The borrowing strategy (including policy on borrowing in advance of need); · Debt Rescheduling; · The Investment Strategy; · Credit Worthiness Policy · Policy on use of external service providers; and · The Minimum Revenue Provision (MRP) Strategy
The Committee heard the economic outlook and position for the UK, US and Eurozone. Noting that the economic outlook for the UK and US has improved but for the Eurozone the future remains uncertain.
Members were informed about the performance of investments. Figures displayed in the report showed that performance has consistently outperformed LIBID.
The Chair moved and it was;-
RESOLVED That the contents of the treasury management activity report for period ending 31st October 2014 be noted. |
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ANY OTHER BUSINESS THE CHAIR CONSIDERS URGENT Minutes: Nil items. |