Agenda and minutes

To confirm the Minutes of the Meeting held on 23 June 2015 (to be laid on the table half an hour before the meeting).

The Minutes of the Meeting held on 23 June 2015 were agreed and signed.

To receive apologies for absence.

An apology for absence was received from Councillor Richard Seaborne.

To receive from Members, declarations of interests in relation to any items included on the Agenda for this meeting, in accordance with the Waverley Code of Local Government Conduct.

There were no disclosures of interest received.

The Chairman to respond to any questions received from members of the public of which notice has been duly given in accordance with Procedure Rule 10.

There were no questions by members of the public.

At the meeting on 23^rd June the Committee asked for some updates to the Committee’s terms of reference. A suggested updated version is attached. The introductory section at Paragraph 8.02 sets out the general role of the committee, and the bullet points in bold already cover the points made by Members about the broader remit of the committee. The suggested additions are shown in sections 8.03, paragraphs 1, 2 and 3 in italics.

The committee is asked to consider these, and agree any changes which they can recommend to the Council to adopt.

Recommendation

It is recommended that the Audit Committee consider the updated Terms of Reference and agree and any changes to recommend to Council to adopt.

At the meeting on 23 June 2015, the Committee had asked for some updates to the Committee’s terms of reference. These were presented to this meeting, as set out on pages 7 to 10 of the Agenda report.  The Committee considered and agreed those changes and

RESOLVED to RECOMMEND to Council that the changes be adopted.

To receive the attached External Audit Findings Report from Grant Thornton and for Members to raise any relevant questions and observations they may have.

(PLEASE NOTE: With reference to the outstanding items listed on page 5 of the External Audit Findings Report from Grant Thornton, Members will receive a written update on any further progress made prior to the meeting).

Recommendation

It is recommended that the Audit Committee endorses the External Audit Findings Report.

Iain Murray and Matthew Dean from Grant Thornton presented their External Audit Findings Report for the year ending 31 March 2015 as set out on pages 11 to 42 of the Agenda.

Section 1: Executive Summary

It was affirmed that the draft Group and Council financial statements had been produced to a very high standard and that this had resulted in a minimal level of issues arising from Grant Thornton’s work. These statements had been supported by an excellent set of working papers and the input of Members and Officers had been gratefully received.

They anticipated that an unqualified opinion in respect of the financial statements could be provided and that no adjustments affecting the Group and Council’s reported financial position were required. It was also stated that the Council’s strong financial reporting process meant that it was likely the accounts and audit process would be delivered earlier then deadlines planned for 2018.

Section 2: Audit Findings

Supplementary to the report, the key findings of the audit were highlighted including the following:

·        No issues identified in respect of revenue recognition with accounting policy in line with the requirements of the CIPFA Code.

·        No evidence of management override of controls and no significant issues in respect of journal controls and entries.

·        No significant issues identified in terms of operating expenses and employee remuneration.

·        Stated critical judgements and estimation uncertainties were in line with the CIPFA Code. The Councils approach regarding Business rate appeals provision and the calculation of depreciation of Council Housing stock was appropriate and satisfactory.

·        The management’s assessment of the Council and its services as a going concern were assessed as satisfactory and appropriate.

·        A review of accounting policies had not identified any issues.

·        Regarding Property, Plant & Equipment (PPE) estimates and judgements; it was stated that Grant Thornton were happy with the Council’s approach. They did however highlight the importance of revisiting this at the end of each year where a full revaluation of PPE does not take place.

·        Internal controls were found to have been operating effectively with no matters to report to the Committee.

Section 3: Value for Money

It was explained that Grant Thornton’s work had highlighted that the Council had robust financial management arrangements in place and that the Medium Term Financial Plan was updated on an annual basis.

However, the audit had identified the need for the Council to find an additional £900,000 of savings between 2016-17 and 2017-18. It was acknowledged that the Council had a proven track record of delivery cost savings, £10m since 2007-08. But, steps to achieve the needed savings had to be identified if the risk presented to medium term financial health was to be removed.

It was found that the Council’s arrangements to challenge economy, efficiency and effectiveness by prioritising resources, improving efficiency & productivity were sound. However, two key areas of residual risk had been identified that would need to be managed closely to ensure that they did not have any adverse impact on the organisation. These were  ...  view the full minutes text for item 18.

The purpose of this report is for the Audit Committee to consider and approve the Statement of Accounts for the year ended 31 March 2015 (provided as an individual booklet)

Recommendation

It is recommended that the Audit Committee

1.    approves the Statement of Accounts for the financial year ended 31 March 2015 (Covering Report on pages 43-46 and Statement of Accounts provided as an individual booklet as ANNEXE 1); and

2.    approves the Letter of Representation for 2014/2015 (ANNEXE 2) (pages 47-50); and

3.    confirms that the accounts have been prepared on a going concern basis.

The Committee received a report that asked them to consider and approve the Statement of Accounts for the year ended 31 March 2015 (Annexe 1) and to approve the letter of Representation for 2014/15.  The Committee were content that the Statement of Accounts had undergone sufficient scrutiny via a serious of meetings and e-mail exchanges with officers in recent weeks and were also content with the answers to questions from the auditors and members.  

Members raised concern about the size of the current Pension Fund deficit and asked Matthew Dean and Iain Murray from Grant Thornton for their opinion.

Grant Thornton stated that they had looked at the issue as part of the audit process and found nothing significant to report. Surrey County Council administered the Pension scheme used by Waverley and Grant Thornton were happy with the assumptions made by the Actuary. It was emphasised that Waverley’s position was not unique in relation to other similar sized District and Borough Councils, such as Mole Valley, and that the appropriate disclosures had been made.

Officers advised Members that representatives from Surrey County Council Pension Scheme would be attending the next meeting of the Audit Committee in November to answer any further questions they had.

RESOLVED to

1.         approve the Statement of Accounts for the year ended 31 March 2015;

2.         approve the Letter of Representation for 2014-2015; and

3.         confirm that the accounts have been prepared on a going concern basis.

The Committee’s Terms of Reference include provision for the Committee to comment on the progress made in the achievement of the Internal Audit Plan. An update on the current position of the review for 2015/16 is presented.

Recommendation

It is recommended that the Committee notes the Internal Audit Plan 2015/16 as attached at Annexe 1.

The Committee received a report on the progress made in the achievement of the Audit Plan an update to Annexe 1 was tabled reflecting the current position.  The Committee noted that most Quarter 1 and Quarter 2 reviews had been achieved on target and that it was anticipated that those outstanding in Quarter 3 and Quarter 4 would be completed by the end of the financial year.  If any were still outstanding at that time they would be brought back to the Committee for agreement to carry over.

RESOLVED to note the progress for the Internal Audit Plan 2015-16.

To inform the Audit Committee of Senior Management’s progress in implementing the recommendations raised by Internal Audit following a review in their service areas.  This report will enable the Committee to consider what action is required in respect of those that are overdue or appear likely to be implemented later than the target date.

Recommendation

It is recommended that the Committee:

1.    considers the information contained in Annexe 1 and identifies any action it wishes to be taken; and

2.    receives and considers a written update from Heads of Service regarding the position to achieve the agreed target date for the implementation of internal audit recommendations and identifies any action it wishes to be taken;

(PLEASE NOTE: This will be provided in the Update Sheet prior to the meeting).

3.    approves the proposed changes in implementation dates in Annexe 2.

The Committee considered a report of Senior Management’s progress in implementing the recommendations raised by Internal Audit following a review in their service areas.  The Committee was asked to consider whether any action was required in respect of those reviews overdue or that appeared likely to be implemented later than the target date.  An update to Annexe 1 and Annexe 2 was tabled reflecting the current position.

The Committee noted that in respect of IA15/14 an internal candidate had been appointed to the post of Financial Services Manager so that due date could be brought forward.  Members were advised that regarding IA15/03.001 an interface was in place and the target had been achieved.

The Committee agreed to the revised due date of 20 November 2015 for the recommendation reference IA15/14.005 – Payments – Approval of Purchases (updated Annexe 2)

RESOLVED that

1.         there was no action required for the information contained in Annexe 1; and

2.         the proposed changes in implementation dates in Annexe 2 be approved.

To approve the Annual Governance Statement 2014/15 following the decision at the last meeting to delay approval to allow Members further time to read the AGS and send any comments to the Head of Finance.

Recommendation

It is recommended that the Committee approves the attached Annual Governance Statement 2014/15.

The Committee received the Annual Governance Statement 2014-15 following the decision at the last meeting to delay approval to allow further reading time and discussion.

RESOLVED to approve the Annual Governance Statement 2014-15.

This report presents the latest corporate risk register as refreshed by Heads of Service.

Recommendation

It is recommended that the Audit Committee considers the revised corporate risks register at (Exempt) Annexe 1 and passes comments and observations to officers.

The Committee received a report presenting the latest corporate risk register as refreshed by Heads of Service.  During discussion of this item the Committee

RESOLVED   that pursuant to Procedure Rule 20 and in accordance with Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting during consideration of the following item(s) on the grounds that it is likely, in view of the nature of the business to be transacted or the nature of the proceedings, that if members of the public were present during the item(s), there would be disclosure to them of exempt information (as defined by Section 1001 of the Act) of the description specified in the appropriate paragraph(s) of the revised Part 1 of the revised Part 1 of Schedule 12A to the Local Government Act 1972, namely:-

Information relating to the financial or business affairs of any particular person (including the authority holding that information)

RESOLVED   that the comments and observations recorded in the [Exempt] Annexe to these minutes be passed to officers.