Agenda and minutes

Councillor Ian Pattison, Vice-Chairman in the Chair

Minutes of the meeting held on 29 June 2011 (previously circulated). 

The Minutes of the meeting held on 29^th June 2011 were signed as a correct record by the Chairman.

There were no items of urgent business.

There were no declarations of interest.

Councillor Williamson arrived mid-way through the following item.

Report of Head of Financial Services (to follow)

Report of the Chief Executive (to follow)

Committee received the report of the Chief Executive, which sought Committee’s approval for the draft Annual Governance Statement for the 2010/11 financial year, in accordance with the Committee’s terms of reference (part 3, section 8 of the Constitution).

It was reported that it was necessary to prepare and publish an Annual Governance Statement in England, in accordance with proper practices to meet the statutory requirement set out in Regulation 4 (24) of the Accounts & Audit (England) Regulations 2011.  Its publication also incorporated and satisfied the requirement to produce a Statement on Internal Financial Controls (SIFC) under the Local Government Statement of Recommended Practice (SORP).

Members were advised that ‘proper practices’ were set out in the framework and guidance Delivering Good Governance in Local Government, which required the Council to develop and maintain a Local Code of Corporate Governance.  This had been approved by Audit Committee on 23^rd January 2008.  The Council was also required to prepare a Governance Statement in order to report publicly on an annual basis on the extent to which the Council complied with its own Code.  The Annual Governance Statement had been drawn up following a review of the Council’s framework.

It was reported that a review had been undertaken of the Council’s position and performance against the Local Code of Corporate Governance.  The results of the evaluation exercise were demonstrated in the Overview Charts, which were attached at Appendix A to the report, together with the Evaluation Report.  These showed that there had been gradual improvements in a number of areas and highlighted some areas where the financial climate and organisational change raised some additional challenges to maintaining effective governance.  The number of factors in which there remained a perceived shortfall in performance had reduced from 18 to 11, and none had received a shortfall of more than 1 point.  The Code of Governance consisted of 67 elements within 6 core principles, which underpinned the Council’s system of governance.  The core principles were set out in the report.

Members were advised that a document had been compiled which detailed the identified ‘sources’ of assurance for each element of the Code, ranging from a record of official policy and strategy documents, such as the Constitution, to the reviews such as internal audit and external audit reports to procedures such as one-to-one management meetings.  Individual ‘assurance statements’ had been sought from Service Heads in relation to internal control and governance arrangements within their areas, and these had been built into the overall evaluation.  Significant matters raised in those statements had been included in the Governance Statement.

It was reported that the Accounts & Audit (England) Regulations 2011 included a requirement that local authorities undertake an annual review of the effectiveness of their Internal Audit, and that this should form a part of the overall review of governance.  Details of the self-assessment that had been undertaken, in relation to ‘characteristics of effectiveness’, were shown at Appendix B to the report. 

Members were informed  ...  view the full minutes text for item 14.

Report of Head of Governance

Committee received the report of the Head of Governance to enable Members to consider the Ombudsman’s Annual Review Letter and Report for 2010/11.

It was reported that the Local Government Ombudsman (LGO) had recently published its Annual Report for 2010/11, giving an overview of its work nationally.  In addition, it had published an annual review letter and report relating to each council.  A copy of the City Council’s annual review letter and report were appended to the report.

Members were advised that the LGO now provided a standalone statement of reasons for its decisions to both the complainant and council, which replaced the former practice of communicating decisions by letter to the complainant and supplying a copy to the council.  The Ombudsman’s power had been extended to include dealing with complaints regarding adult social care and those about schools by pupils or their parents, but these extensions did not directly affect the City Council.

It was reported that the Ombudsman had received a total of 21,840 complaints in 2010/11, compared with 18,020 in the previous year, which was an increase of 21.2%.  It was noted that the highest numbers of complaints had been received regarding housing, particularly housing repairs and housing allocations. 

The Ombudsman provided training in complaints handling, and a survey carried out in 2010/11 showed a positive outcome from that training and the findings would inform how the Ombudsman developed and provided training in the future.

Members were advised that a total of 28 cases had been received by the City Council from the Ombudsman in 2010/11.  Eleven of these had been forwarded to the investigation team and there were no findings of maladministration against the Council.  One case had been resolved by local settlement when the Council had agreed to pay £150 in compensation.  The other 15 cases in which decisions had been made in 2010/11 comprised 2 relating to planning applications and 2 to planning advice.  The others related to forward planning, drainage, environmental health, housing allocation, housing benefit, local taxation, contractual and business matters, land, parking, licensing and anti-social behaviour.

It was reported that there had been an improvement in the average number of days taken to respond from 35.0 days in 2009/10 to 29.7 days in 2010/11.  However, this still remained above the 28 days limit set by the Ombudsman, and it was hoped that the 2011/12 response times would show further improvement.

Members considered the Annual Review in detail and did not wish to submit any comments to the Ombudsman.  

It was proposed by Councillor Newman-Thompson and seconded by Councillor Knight:

“(1)      That the Ombudsman’s Annual Review letter and report for 2010/11 be noted.

(2)        That the Ombudsman or a senior manager be requested to meet with the Committee and explain their work in greater detail.”

Resolved:

(1)        That the Ombudsman’s Annual Review letter and report for 2010/11 be noted.

(2)        That the Ombudsman or a senior manager be requested to meet with the Committee and explain their work in greater detail.

Report of Internal Audit Manager

Committee received the report of the Internal Audit Manager to advise Members of the latest position regarding the 2010/11 Internal Audit Plan and to seek Members’ approval for a change to the Plan and endorsement of a future schedule of audit work.

It was reported that the 2011/12 Internal Audit Plan had been approved by Audit Committee on 29^th June 2011.  The report was based on the monitoring position up to 31^st August 2011.  A detailed monitoring report was attached at Appendix A to the report.  The position at that date was shown in the table below.

Members were advised that the monitoring position took into account ongoing and planned work commitments.  Overall, current commitments totalled 538 days, compared with the original plan of 685 days.  It was now estimated that 695 days could be delivered, giving an uncommitted resource of 167 days, including the general contingency of 40 days and a balance of 21 days set as contingency for investigation work.

Committee noted that paragraph 2.3 of the report reported that within the main programme of assurance work, the audits of core financial systems and, to a lesser extent, the Revenues and Benefits Shared Service, had exceeded the original plan.  This reflected the additional work required in a new approach to these audits and a wider than normal programme, covering all significant systems in this year.  It was proposed to meet the shortfall in these areas from the additional 10 days  deliverable with the balance (29 days) by re-directing resources from the ‘Core Management Arrangements’ section of the assurance programme.  This was reflected under the ‘Proposed Plan’ column of the table above and Members were asked to approve the change.

It was reported that audits of the Revenues and Benefits Shared Services’ systems, as operated by Preston City Council, would form the section’s major work programme in the near future, which would result in reports to Preston City Council’s management and Audit Committee.  The work was currently estimated to take 40  ...  view the full minutes text for item 16.

Report of Internal Audit Manager

Committee received the report of the Internal Audit Manager to inform Members of the results of internal audit work since the last report to Committee on 11^th January 2011.

Members were advised that the report covered audit work and reports issued since the last meeting and noted that summary reports were issued to Members for their consideration and posted on the Council’s Intranet.

Set out in the report was a list giving the assurance opinion issued for areas audited since the last Audit Committee.  The audits where a ‘reasonable’ level of assurance had not been achieved were also set out in the report, as follows, together with the conclusions reached and details of the follow-up reviews.

10/0791 – Corporate Learning and Development Limited – follow-up review in November 2011.

10/0795 – Capital Contract Management (Limited) – a follow-up review of progress, with action plan, scheduled for October 2011.

10/0819 – Purchasing Cards (Minimal) – a follow-up review of progress, with the action plan, scheduled for September 2011.

09/0776 – Payroll 2009/10 Follow-Up Review (Limited) – options being evaluated by officers.

08/0753 – Williamson Park Financial Procedures Follow Up Review (Limited) – a new and more in-depth audit review, including progress to be undertaken in the second half of the year, was to be undertaken in the second half of the year.

09/0759 – Housing Standards Follow Up Review (Limited) – officers were satisfied that a ‘substantial’ level of assurance would be achieved once the comprehensive housing strategy, currently due by December 2011, was in place.

Members noted that Appendix A to the report provided the updated position and recommendations for further action for all previously reported audits where the level of assurance had not yet reached ‘substantial and updates were provided at the meeting.  These were as follows:

08/0708 – Income Management (Housing Rents Direct Debit Payments) – it was recommended that the Internal Audit Manager continue to track and report on progress to the Committee.

07/0709 – Payroll – officers had been evaluating options for procuring a payroll and HR solution through the strategic partnership being implemented by Lancashire County Council, with implementation scheduled for April 2012.  It was recommended that the Internal Audit Manager continue to track and report on progress to the Committee.

07/0679 – Markets – the invoicing and payment collection arrangements introduced from 1^st June 2011 had gone a long way to meeting the Committee’s resolution at its meeting on 20^th January 2010 that Audit Committee wishes to increase the amount of non cash payments in the Charter Market, the Festival Market and the Assembly Rooms and that a report be presented to the next Audit Committee as to the progress on this policy and the areas in which it can be applied.  The current position was set out in the report.  Internal audit’s opinion was that the invoicing and payment collection arrangements introduced from 1^st June 2011 had gone a long way to meeting the Committee’s resolution and the Council’s  ...  view the full minutes text for item 17.