Royal Borough of Kingston upon Thames:

Minutes for Audit Committee meeting, Jun 29 2011, 7.30PM official page

Other committee documents for Royal Borough of Kingston upon Thames :: Audit Committee details

Venue: Guildhall, Kingston upon Thames

Contact: David Maher, tel 020 8547 5062  email:  david.maher@rbk.kingston.gov.uk

Items No. Item

1.

MINUTES

To confirm the minutes of the meeting held on 15 March 2011

Minutes:

RESOLVED that the minutes of the meeting held on 15 March 2011 be agreed as a correct record.    

2.

ANNUAL CORPORATE GOVERNANCE STATEMENT 2010/11 PDF 70 KB

Additional documents:

Minutes:

Local authorities are required to prepare and publish an annual Corporate Governance Statement, in accordance with Solace/CIPFA guidance published in July 2007.  This is necessary to meet the statutory requirement set out in regulation 4(2) of the Accounts and Audit Regulations 2011. 

 

The Committee has responsibility to recommend to the Policy & Resources Committee (and Executive) the approval of the Council’s Annual Governance Statement 2010/11 (ANNEX 3 to the report), to be signed off by the Leader and Chief Executive.  The Annual Governance Statement (AGS) is an honest self assessment of the organisation’s performance across all of its activities with a statement of actions being taken or to be taken to address areas of concern or for improvement.  There is no statutory timetable for this approval, but it is good practice for this statement to be published with the financial statements.

 

Members requested that the wording of the process for consideration of the Committee be clarified.

 

RESOLVED that:

 

1.         it be noted there is a requirement for a local authority to have in place proper arrangements for the governance of its affairs and to undertake an annual open and honest assessment of its governance framework.

 

2.         it be noted RBK has undertaken and agreed a corporate assessment of the Council’s Corporate Governance Framework (ANNEXES 1 and 2).

 

3.         it be noted RBK has or is developing a programme of work to address the relative improvement areas highlighted by the assessment of the Council’s Corporate Governance Framework (final column of ANNEX 2).

 

4.         the Annual Governance Statement for 2010/11 be recommended for approval by the Policy & Resources Committee (and Executive) and for signing by the Leader and Chief Executive (ANNEX 3).

 

Reason for decision

 

To recommend for approval the 2010/11 Annual Governance Statement in accordance with the Accounts and Audit Regulations to provide assurance on the Council’s corporate governance arrangements.

 

Note: In the light of issues raised with Members of the Committee, after the formal part of the meeting, regarding the resources available to Internal Audit, a rider was added to the Committee’s recommendation to the Policy and Resources Committee.

 

 

3.

ANNUAL INTERNAL AUDIT REPORT 2010/11 PDF 514 KB

Minutes:

Consideration was given to the Annual Internal Audit Service report 2010/1. The service primarily provides an independent and objective opinion to the organisation on risk management, control and governance by evaluating its effectiveness in achieving the organisation’s objectives.  In addition the Service examines, evaluates and reports on the adequacy of systems as a contribution to the proper, economic, efficient and effective use of resources.  

 

Each year the Committee considers an Internal Audit Plan (the Service’s work programme for the forthcoming year), and an Internal Audit Report (the review of performance for the past year).  This Annual Report summarises some highlights from the Service’s work in 2010/11.  

 

Members questioned the evaluation of staff productivity (94%), against an issue of long-term sick leave. Officers noted that the team were working more effectively against a changing working environment and a greater focus on internal audit matters.

 

Particular concerns were raised that recommendations made by Internal Audit were not always being followed in a timely fashion. A regular update on the progress of audits was requested. 

 

Councillor O’Mahoney questioned the need for the audit work outlined in the report carried out in relation to Eagle Brewery Wharf. Officers advised that the Director of Place & Regeneration had requested the audit to seek assurance regarding the arrangements for the project which was a further example of the Council’s project management arrangements which were subject to audit.

 

RESOLVED that the report on the activities of Internal Audit for 2010/11 be noted and appropriate linkages be made to the 2010/11 Annual Governance Statement. 

 

Reason for decision

 

To inform Members of the work of Internal Audit.

4.

TREASURY MANAGEMENT 2010-2011 PDF 109 KB

Additional documents:

Minutes:

In accordance with the CIPFA Treasury Management Code of Practice adopted by the Council, this Committee annually considers a report on the activities, strategy and performance of the Royal Borough’s Treasury Management function.

 

This annual report for the year 2010/11 includes:

 

·        the regulatory framework and the Council’s approach to Treasury Management risk,

·        a summary of debt management activity,

·        a summary of cash management and investment activity,

·        Treasury Management risk benchmarking,

·        Treasury Management Performance and Activity Indicators (and cash investment monitoring report showing Kingston’s performance for 2010/11).

Officers outlined the ongoing need for caution in treasury management activity with the economic environment and concern over the security of financial institutions.

The management of proposed changes to housing revenue streams encompassed within the Localism Bill was likely to bring new challenges from 2012. A report on this issue will be brought to a future meeting.

RESOLVED that the report be noted.

 

Reason for decision

 

To inform the Committee of the Council’s Treasury Management performance for 2010-11.

5.

Audit Commission Fee Letters PDF 54 KB

Additional documents:

Minutes:

The District Auditor annually submits fee letters for the audit year for the Audit Committee to note. There are separate fee letters for the Council’s main accounts and for the Pension Fund, which is audited separately. 

 

The fee letters reflect the Audit Commission’s work programme and scale of fees 2011/12 which it issued in February 2011 after consultation with councils and other interested parties.

 

The indicative scale fee for 2011/12 for the Council is £241,200, which is based on the 2010/11 fee and the work mandated. Variations in this fee will only occur as the audit progresses and if the complexity of the audit changes. The total indicative fee for 2011/12 for the Pension Fund is £35,000 (exclusive of VAT), which is the same as the 2010/11 planned fee.

 

 

RESOLVED that the Committee receive the fee letters for the 2011/12 audit of the Council’s financial statements and value for money conclusion; and for the audit of the Pension Fund, which have been agreed with officers.

 

Reason for decision

 

To present the agreed fee letters to the Committee for information.

 

 

 

6.

FINAL ACCOUNTS 2010/11 PDF 109 KB

Additional documents:

Minutes:

The Accounts and Audit Regulations 2011 have changed the requirements for member consideration and formal publication of the accounts, in that they now require the accounts for 2010/11 to be signed by the Director of Finance on or before 30 June 2011.

 

The regulatory requirements for Member consideration, formal approval and publication require this to happen on or before 30 September 2011, after the conclusion of the external audit. However, it is considered good practice for the draft accounts to be reported formally to Members and published on a “subject to audit” basis. Additionally, the responsibilities delegated to the Audit Committee include the scrutiny of the Council’s accounts and making appropriate recommendations to the Policy & Resources Committee, which will also receive the draft accounts on 30 June 2011.  This report provided information to assist the Committee in reviewing the accounts.

 

The Officers were thanked for their efforts and the timeliness of the accounts against significant time pressures.

 

RESOLVEDthat having reviewed the accounts for 2010/11 as set out in Enclosure 1 to this agenda (as amended by the late material circulated at the meeting); the Policy & Resources Committee on 30 June 2011 be advised that the Committee had no matters to draw to its attention regarding the accounts.

 

Reason for decision

 

To review the draft 2010/11 accounts before they are submitted for audit.

7.

PENSION FUND ACCOUNTS 2010/11 PDF 59 KB

Additional documents:

Minutes:

Since 2008/09, the Council has been required to publish the accounts for the Pension Fund separately from the main Accounts. They are also audited separately.

 

The Accounts and Audit Regulations 2011 have changed the requirements for Member consideration and formal publication of the accounts, in that they now require the accounts for 2010/11 to be signed by the Director of Finance on or before 30 June 2011. The Regulatory requirements for Member consideration, formal approval and publication require this to happen on or before 30 September 2011, after the conclusion of the external audit.

 

However, it is considered good practice for the draft accounts to be reported formally to members and published on a “subject to audit” basis. Additionally, the responsibilities delegated to the Audit Committee include the scrutiny of the Pension Fund accounts and making appropriate recommendations to the Policy & Resources Committee, which received the draft accounts on 30 June 2011. 

 

The Fund investments achieved a one-year return of 8.6% outperforming the local authority benchmark of 7.8%. The market value of the assets rose from £384.7 million as at 31 March 2009 to £425.3 million as at 31 March 2011. 

 

Changes to the scale used for the measurement of the Pension Liability had changed from the Retail Price Index (RPI) to Consumer Price Index (CPI), which had improved the position of the fund.

 

RESOLVED that, having reviewedthe Pension Fund accounts for 2010/11 and the Pension Fund Annual Report as set out in Enclosures 2 and 3 to this agenda required (as amended by the late material circulated at the meeting); the Policy & Resources Committee on 30 June 201 be advised that the Committee has no matters to draw to its attention regarding the Pension Fund accounts & Annual report.

 

Reason for decision

 

To review the 2010/11 Pension Fund accounts and annual report before submission for audit.

8.

CORPORATE RISK MANAGEMENT PDF 146 KB

Minutes:

A revised Corporate Risk Register and Risk Map have been developed from a consultative process. This Risk Register and Risk Map replace the previous ones which had evolved from a similar exercise undertaken in 2008 although a number of the pre-existing risks have been migrated to the new register.

 

The Committee was asked to note the new Register and Map and the processes that have been put in place by the Strategic Leadership Team (SLT) for managing and monitoring the risks. The Committee also has a convention of reviewing two red or amber risks from the Register a year to give it assurance that the Council’s risk management processes are effective in practice. Suggestions are made for which risks the Committee should give attention to in 2011/12 in these twice yearly reviews of risks.

 

Members welcomed the useful evaluation of risk, which was becoming of increased salience with the economic situation, and its associated ramifications. They noted the ‘green’ assessment of risk 23 which related to the economy going into a double dip recession and suggested that the Senior Leadership Team (SLT) may wish to reconsider this. In that context Officers referred the availability of the Local Economy Monitor, which provided a regular snapshot to aspects of the local economy in Kingston and, in particular, underlying trends. It was thus a very useful tool for keeping track of the health of the local economy.

 

 

 

 

RESOLVED that:

 

1.         the revised Corporate Risk Register and Risk Map (exempt ANNEX 1) and the processes that have been put in place by SLT for managing and monitoring the risks are noted;

 

1.                  SLT be recommended to keep risk 23 under review and to consider revising its ranking; and

 

2.                  risks 22 and 12 be selected from the Corporate Risk Register (exempt ANNEX 1) for the Committee’s twice yearly risk reviews in 2011/12 and the Committee notes the aide memoire (ANNEX 2) to support these reviews.

 

Reason for decision

 

To note the revised Corporate Risk Register and Risk Map, and the process for managing the risks, and to inform the Committee’s choice of risk review for 2011/12.

9.

Information Item - Progress report from the Audit Commission

Minutes:

RESOLVED that the following information item be noted:

 

  • Progress report from the Audit Commission

 

 

 

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