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Agenda and minutes

Audit Committee
Monday 22nd September, 2014 7.00 pm

Venue: Bourges/Viersen Room - Town Hall

Contact: Karen S Dunleavy; Governance Officer 

Items
No. Item

1.

Apologies for Absence

Minutes:

Apologies for absence were received from Councillors Thulbourn and Martin.  Councillor Murphy was in attendance as a nominated substitute.

 

2.

Declarations of Interest

At this point Members must declare whether they have a disclosable pecuniary interest, or other interest, in any of the items on the agenda, unless it is already entered in the register of members’ interests or is a “pending notification “ that has been disclosed to the Head of Legal Services.

 

Minutes:

There were no declarations of interest. 

 

3.

Minutes of the Meeting Held on 30 June 2014 pdf icon PDF 83 KB

To approve the minutes of the meeting held on 30 June 2014.

Minutes:

The minutes of the meeting held on 30 June 2014, were approved as an accurate and true record.

 

4.

Use of Regulation of Investigatory Powers Act 2000 (RIPA)

The Committee is requested to NOTE that there have been no RIPA authorisations in this quarter.

Minutes:

The Committee noted that there were no RIPA authorisations in this quarter.

 

5.

Risk Management: Strategic Risks pdf icon PDF 61 KB

To receive details of the strategic risks impacting on the Council and the mitigating actions to address these.

 

Additional documents:

Minutes:

The Head of Resilience introduced the report on Risk Management and Business Continuity to the Committee, which had also been reviewed by Corporate Management Team (CMT) on 24 June 2014.  The Committee was also advised by the Head of Resilience, that an exercise was underway to explore risk appetite with CMT, with the intension to include CMT’s recommendations into the current Risk Policy.

        

The key points within the report included:

 

  • Review of current Departmental Registers;
  • Meetings of the Risk Group;
  • Corporate Business Continuity Plan to be reviewed and revised in line with international standards;
  • Business Impact Assessments (BIA) templates, recently reviewed by the British Standards Institute;
  • Continued review of the risk management procedures by the Council’s Internal Audit Team;
  • Quarterly reviews of the risk register by CMT, with updates provided on the Council’s: intranet, web page and on E-Learning; and
  • Strategic issues.

 

The Executive Director of Resources and the Head of Resilience responded to comments and questions raised. In summary responses included:

 

  • The business continuity process and plan had recently been reviewed by the Audit Team. The outcome of the review would be available within the next couple of months;
  • The finance position had moved into a red risk rating for the current year, which had been due to a significant budget pressure increase of £17m to £22m. The budget pressures were due to a further investment requirement for Children’s Services funding, in particular to improve services for safeguarding.  There was currently a cross party budget setting working group tasked with reducing the financial impact for the Council;
  • There had been recent improvements made on safeguarding issues, which were positively recognised by an external improvement board;
  • It was felt by some Members that the Council’s budget setting figures should be available;
  • Some authorities had made broad allocations through their budget setting process rather than actually setting budgets; and
  • A review of the Risk Register would take approximately three weeks to complete, which was due to be initiated at the end of September 2014. Due to time constraints involved, it would not be possible to include the outcome of the review as an agenda item for Audit Committee on 3 November 2014.

 

      The Committee:

 

      Considered and noted the content of the report

 

         The Committee also agreed:

 

1.That the Head of Resilience would circulate the outcome of the Risk Register review undertaken by CMT to Members of the Audit Committee; and

2.That the Executive Director of Resources, would communicate to the Budget Setting Working Group, the comments raised by Councillor Murphy regarding the progress of Peterborough City Council’s budget setting.

6.

Audit of Statement of Accounts To Those Charged with Governance pdf icon PDF 117 KB

To receive the final Statement of Accounts for the year ended 31 March 2014 incorporating the Annual Governance Statement together with the annual report to those charged with governance following their scrutiny by External Audit

 

Additional documents:

Minutes:

The Executive Director of Finance introduced a report to Audit Committee Members, which had detailed the external audit outcome of PricewaterhouseCoopers (PWC) statement of accounts for 2013/14.  The Executive Director of Finance also advised the Committee that there were a number of recent changes requested by PwC. The details of the changes were circulated at the meeting and have been attached at appendix one of these minutes. 

 

 

The key points within the report included:

 

  • Technical issues raised around the assets and valuation;
  • Issue with the County Council’s provision of a valuation of a fund, which was inaccurate and would be taken forward by PCC;
  • Council Tax Benefit reform outcome had been positive; and
  • In terms of the Local Authority Mortgage Scheme, there had been difference of opinion between PCC and PwC on the accounting treatment, however, PwC was not minded to challenge that treatment.

 

Julian Rickett from PwC, the Council’s External Auditor, also highlighted key points to the Committee, which included:

 

·   Executive summary;

·   Audit approach;

·   Thanks relayed to Officers for co-operation throughout the process;

·   Significant audit and accounting matters;

·   Accounting issues;

·   Misstatements and significant audit adjustments;

·   Related parties;

·   Internal Controls;

·   Risk of Fraud;

·   Fees Update; and

·   Management Representation Letter.

 

         The Executive Director of Finance, Head of Strategic Finance and PwC responded to      comments and questions.  In summary responses included:

 

·         There had been no plans for the Council owned Children’s Centres, which were currently not in use;

·         The conclusion on the ‘Authority’s arrangements for resources’ had related to a final piece of quality review, which would be undertaken until signed off;

·         Reassessment of the risks had been due to changes arising from the Audit Commission and had affected all Authorities;

·         The difference in opinion with regards to the valuation methods undertaken for Council assets had been between PwC and Wilks Head and Eve (WHE). The Council would not instruct its valuers over which methodology to adopt, unless a specific issue had arose;

·         PwC were content with WHE’s valuation undertaken of the Council’s assets; the issue had been over the methodology used for the valuation of land. The difference of opinion raised, had not created a significant issue over the truth and fairness of the accounts;

·         There had always been an element of judgement applied for the valuation of assets; 

·         A reference to land in the accounts referred to a school in Hampton where the Council owned the building but not the land.  The situation was rare and not common practice;

·         The Council’s use of PwC was due to end in 2015/16.  There would be a two year rotation cycle applied before the Council was permitted to commission the services of PwC.  Prior to this, the Audit Commission normally requested that the lead Partner was rotated. The Council was in a position to challenge the Audit Commission and request that the lead Partner remained for a further year if desired;

·         The most efficient position would be to retain the PwC lead Partner for a further financial year;

 

      The Committee

 

1.    Received and  ...  view the full minutes text for item 6.

7.

Outcome of the Code of Conduct Review pdf icon PDF 130 KB

Minutes:

The Director of Governance introduced a report to the Committee, which had provided  detail over the recent review of the Council’s standards and conduct arrangements for Councillors, recently undertaken by the Code of Conduct (CoC) Review Working Group.  The Director of Governance also advised the Committee that the Code of Conduct Working Group’s recommendation to Council was one of adoption of the Local Government Authority’s (LGA) Code of Conduct template.

 

The key points highlighted included:

 

·         The Council’s CoC had changed in 2011;

·         The 2011 Code was adopted and introduced within a relatively short time-frame with the first part of the code, Members behaviour, remaining unchanged. The second part of the Code had covered disclosable pecuniary interests; 

·         Various codes were considered by the CoC Review Working Group, such as LGA, (National Association Local Councils) NALC and the Department of Communities for Local Government (DCLG);

·         The Nolan Principles would head up the code;

·         None of the adopted codes had dealt with predetermination or bias;

·         The CoC Review Working Group had aimed for a sleek and not overly complicated version;

·         A briefing was due to be held at an All Party Policy on the proposed LGA Code of Conduct template, prior to submission to Council; and

·         Many authorities had adopted similar templates.

 

In general, Members commented that:

 

·         The LGA template was not best suited for PCC Members;

·         The DCLG template should be given further consideration;

·         The LGA template was too prescriptive in telling Members how to undertake their role, such as in relation to their representation of the electorate;

·         The LGA model was too repetitive in respect of the use of Nolan Principles and required a more meaningful approach.

 

 

 

The Committee was requested to:

 

1.    Recommend to Council that a revised Code of Conduct be adopted, in that:

a.    Part 1 of the Code (general conduct) should be deleted and replaced

       with the wording from the Local Government Association template Code; 

b.    The revised description of the Principles of Conduct in Public Life were incorporated within the Code; and

c.    Part 2 of the Code (interests) remained unchanged.

2.    That enhanced training concerning the common law on interests and bias be         offered to all Councillors.

3.    It be noted that the Group also recommended that the revised wording of the         Integrity Principle was to be incorporated into Council Standing Orders, which had           currently been the case.

 

The Committee:

 

REFUSED the Code of Conduct Review Group’s recommendation.

 

AGREED that the Review Group would be requested to:

 

  1. Revisit their recommendation over which Code of Conduct template to adopt;
  2. Consider the comments made by some Members of the Audit Committee in particular to the preferred DCLG Code of Conduct template; and
  3. Share the outcome of the CoC review with each political party for comment prior to any formal adoption.

 

8.

Feedback Report pdf icon PDF 43 KB

Additional documents:

Minutes:

The Governance Officer introduced the report, which provided feedback on items considered or questions raised at the previous meeting of Audit Committee.  It also provided an update on specific matters which were of interest to the Committee or where the Committee had requested to be kept informed of progress.

 

Members commented that there appeared to be a discrepancy of around £60,000, in relation to the explanations provided within the Commercial Property Decrease in Income briefing note.

 

The Chief Internal Auditor also provided an update on the outcome of a meeting held on 4 September 2014, to discuss the Council’s auditing arrangements.  The Chief Internal Auditor also advised that the audit of partnership organisations, included within the Internal Audit Plan 2014/15, had commenced and outcomes would be reported to Members of the Audit Committee once concluded.

 

The Committee agreed:

 

  1. That the Head of Strategic Finance would provide Audit Committee Members with a briefing note, which would detail the projected income for the Peterborough United Football Club and Commercial Property for 2014/15.

 

9.

Work Programme pdf icon PDF 81 KB

Minutes:

The Governance Officer submitted the latest version of the Work Programme for the Municipal Year 2014/2015 for consideration and approval.  The standard report provided details of the proposed Work Programme for the Municipal Year 2014/2015 together with any training needs identified.

        

The Committee:

 

Noted and approved the 2014/2015 Work Programme. 

 

The Committee also agreed:

 

         That the revised review of the Code of Conduct would be submitted to a future meeting of the Audit Committee.

 

 

 

 
Peterborough City Council. Town Hall, Bridge Street, Peterborough, PE1 1HF - (01733) 747474
 
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