Agenda item
Annual Audit Letter 2009 - 2010
Minutes:
Mr Hayes from the Audit Commission presented the report and also drew Members’s attention to the Annual Governance report Addendum on page 245 of the Agenda.
Included in the ‘Overall Conclusion from the Audit’ in the report (page 16-17 of the Agenda) were some issues over timeliness of responses to queries, and meetings were in train to ensure deadlines would be met in future and to make the audit process smoother.
The audit relating to Value for Money (VFM) went well, and the future focus would be on planning and resilience.
The Government had announced the abolition of the Audit Commission; staff would be setting up a mutual audit practice and would be offering their services to Councils.
Focusing on International Financial Reporting Standards (IFRS), Mr Hayes commented that the Housing Benefit claim had been very well managed, and was the best one audited by the Audit Commission this year.
In response to a request by Councillor Eaton, Mr Hayes said that weaknesses included: some reconciliations were not completed, and this meant controls could not be tested to his satisfaction. More work was created for auditors, which meant more fees were payable; discussions were in train to fix these controls and help the auditors.
There was a need for more Quality Assurance, the draft finished in June enabled auditors to do the more difficult testing. Mr Hayes said it can be difficult to get deeper questions answered and the investment and changes in the internal audit would help.
In response to the Chair’s question about the Certificate of Claims, Mr Hayes said that other matters can take priority. Mr Finch said that there was a knock on effect; the extra time needed to finalise the accounts had delayed the Certificate of Claims.
Councillor Edgar commented that the unqualified audit and VFM audit were good, but there was a sorry story of adjustments, which could be worrying, but he had been encouraged by the positive comments since then. Councillor Edgar asked if the substantial cuts had informed the Audit Commission’s work. Mr Hayes responded that resources were in place, and there was nothing in future plans that mitigated against retaining financial controls. In Appendix 3 was a good Action Plan, but the Council should not rest on its laurels; there was still the challenge of IFRS. In previous assessments, the team had been very pleased with forward planning, and the challenge was to retain what was good in previous situations: Mr Hayes was confident that it would remain robust. The Chief Executive and Corporate Director were fully informed and in touch.
The Chair drew attention to the projected overspends listed on page 20 of the agenda and asked how significant these were. Mr Hayes said they were not huge in the context of the Council’s overall budget (£1.1 million from the General Fund and £500,000 from the Housing Revenue Account (HRA)), but it was nevertheless important that they were dealt with. The Corporate Management Team (CMT) were receiving monthly reports on the projected outturns. The main causes were Children’s Services and Adult Social Care, both of which were demand led: both services were under review as part of the Council’s response to the Comprehensive Spending Review (CSR). There were ongoing discussions with Tower Hamlets Housing (THH), who had responded positively, and the projected overspend was shrinking. The projected outturn figures were manageable with the current levels of reserves, but need to be reduced.
Councillor Eaton commented that in the 3rd Quarter of the Internal Audit Plan, self managed services could make a substantial saving, as the Council was often paying twice for the same service.
RESOLVED: That the Annual Audit Letter 2009-2010 be received and noted.
Supporting documents: