|Place:||Wheel Room, Civic Centre, West Paddock, Leyland, PR25 1DH|
|Present:||Councillors Ogilvie (in the chair), Patten, Mrs Snape and Mrs K Walton.|
|In attendance:||Garry Barclay (Head of Shared Assurance Services), Carol Eddleston (Democratic Services Officer), Susan Guinness (Head of Shared Financial Services), Dawn Highton (Principal Auditor), Lee Hurst (Principal Systems and Financial Accountant) and Michael Jackson (Principal Financial Accountant).
Councillor Bennett (Cabinet Member for Finance and Resources).
Fiona Blatcher, Richard Watkinson and Gareth Winstanley, representatives of the Council's external auditors, Grant Thornton.
Councillors Mrs Moon and P Smith.
Apologies for Absence
Apologies for absence were submitted on behalf of Councillors Clark and Foster.
Declarations of Interest
There were no declarations of interest,
Minutes of the Last Meeting, Held on 24 June 2015
The chairman confirmed that, since the last meeting, preliminary discussions with officers had concluded that a different word than 'endorse' could be used in future recommendations relating to the?retention of reserves without changing the objective of the recommendation.
RESOLVED (unanimously) that:
the minutes of the meeting held on 24 June 2015 be approved as a correct record and signed by the chairman.
External Audit - The Audit Findings for South Ribble
Report (547K/bytes) attached
Fiona Blatcher presented the report and confirmed that it was anticipated that the Council?s external auditors, Grant Thornton, would issue an unqualified opinion in respect of the financial statements by 30 September and an unqualified Value for Money conclusion based on their review of the Council?s arrangements to secure economy, efficiency and effectiveness in its use of resources.
Ms Blatcher highlighted the challenge that would be presented for members and officers by new legislation which brought forward the deadlines for the preparation and audit of Local Government financial statements, meaning that the 2017/18 audit would have to be completed by the end of July. Councillor Bennett, Cabinet Member for Finance and Resources, acknowledged that this change would present challenges but confirmed that a ?dummy run? was already taking place to enable all parties to prepare for what lay ahead.
Ms Blatcher confirmed that the audit was now substantially complete, with only a few areas of work to be finalised by early the following week. She was confident that these would not necessitate a change to the accounts and considered that the chairman could sign the accompanying Letter of Representation this evening. The chairman said he was pleased to receive a positive report outlining only very minor differences between the pre-audited and post-audited accounts and, given Ms Blatcher?s comments, indicated that he would sign the letter at the end of the meeting, with the caveat that it not be released until work on the accounts had been finalised and the External Auditor had confirmed the unqualified opinion.
The external auditors, the Head of Shared Financial Services and the Principal Systems and Financial Accountant responded to questions from the committee and the audience.
In relation to the amber assessment against bank reconciliation on page 14, the Head of Shared Financial Services assured the committee that effective system controls were already in place but that steps had now been taken to re-introduce a more formal review and sign-off of the Council?s bank reconciliation.
The misstatement in the Collection Fund Statement was simply due to ?883,000 having been misallocated to the ?Business Rates Receivable? line rather than the ?Increase/(Decrease) in Provision for Appeals? line.
Ms Blatcher considered it entirely appropriate that the Governance Committee should be aware of the governance arrangements around the City Deal and satisfied that these arrangements were effective but did not consider that there should be any specific relationship between the committee and its City Deal counterpart.
Ms Blatcher confirmed that there were no tax implications arising from the incorrect classification of expenditure relating to catering costs outlined on page 15.
Councillor Bennett, Cabinet Member for Finance and Resources, and Councillor P Smith from the audience commented that this was an excellent report and the Council should not be complacent about the achievement of yet another excellent External Auditor opinion.
In response to questions from the member of the public, Ms Blatcher said that this Council?s reserves were higher than some other Local Authorities. Given the significant financial challenges that local authorities were facing in future years, however, she was of the opinion that this position was a helpful one.
Ms Blatcher confirmed that some local authorities used an external audit firm to carry out their internal audit function but explained that no such firm could act as both internal and external auditor for the same authority simultaneously.
SRBC Audited Statement of Accounts 2014/15
SoA (35K/bytes) attached
App A (2M/bytes) attached
App B (66K/bytes) attached
Councillor Bennett, Cabinet Member for Finance and Resources presented the covering report to the Audited Statement of Accounts which, as mentioned earlier, contained only minor changes from the pre-audited statement which came before the committee in June.
The chairman outlined that as this committee had already endorsed the unaudited accounts in June, it now only needed to consider the Grant Thornton comments received following the audit. He was pleased to note that only a very few minor misclassification and disclosure changes had been identified by the Auditor which demonstrated the quality of the Council?s Shared Financial Services team.
In response to a question from the member of the public, Councillor Bennett explained that at any one time the authority was carrying a number of vacancies and at the present time this was in the region of eight. Cabinet Members were currently looking at the vacancies in their particular service areas but it was likely that the current vacant posts would be filled.
RESOLVED (unanimously) that:
Internal Audit - First Internal Audit Interim Report as at 28 August 2015
Report (50K/bytes) attached
The Principal Auditor presented the report which advised members of the progress made on the South Ribble and Shared Services Internal Audit Plans for the period April 2015 to August 2015 and gave an appraisal of the Internal Audit Service?s performance to date.
She was pleased to report that the assessment of the adequacy of internal controls over fuel management had found no critical issues and the arrangements were found to be robust.
As responsibility for insurance fell within Shared Assurance Services, the audit had been conducted independently by Lancashire County Council. Our arrangements had again been found to be robust.
At this stage in the year, ?% of planned time used? and ?% audit plan completed? were behind target. The Principal Auditor explained that this was simply due to the fact that the work programme was profiled equally across the year but, since the start of the year, a number of service areas had asked for reviews to start in the later quarters. The nature of the National Fraud Initiative meant that Internal Audit input was required at different stages of the year and it was anticipated that all the planned days would indeed be used.
The chairman suggested that including an explanatory note in Appendix 3 about any re-profiling of the work programme would alleviate the negative connotation of ?below target?. He welcomed the positive report and commended in particular the fact that all management actions had been agreed.
Treasury Management Activity Mid Year Review 2015/16
Report (85K/bytes) attached
App A (20K/bytes) attached
App B (32K/bytes) attached
App C (19K/bytes) attached
App D (20K/bytes) attached
Councillor Bennett, Cabinet Member for Finance and Resources, presented the report which outlined performance in the last five months and compliance with prudential indicators. The report also asked the committee to recommend that Council approve a number of proposed changes to Prudential and Treasury Indicators.
Councillor Bennett explained that some of the proposed changes were in response to the fact that the authority had more cash available for investment than had been estimated before the year started and it was therefore timely to update the prudential and treasury indicators accordingly.
The Principal Financial Accountant outlined the changes as proposed in Appendix B to Prudential Indicators 1 - Capital Investment, 2 - Capital Financing Requirement (CFR), 5 & 6 - Borrowing and Investment Projections, 8 - Operational Boundary for External Debt, 9 -Authorised Limit, and Treasury Indicator 1 ? Upper Limit on Variable Rate Exposure.
RESOLVED (unanimously) that:
Review of Investment Counterparties 2015/16
Report (79K/bytes) attached
Appendix (437K/bytes) attached
Councillor Bennett presented the report which summarised a review of investment options with the view of proposing an updated list of Investment Counterparties. This would provide a more flexible approach and thus facilitate potentially a higher rate of return on investment without sacrificing the security or liquidity principles of the decision making process.
Drawing the committee?s attention to the benchmarking graph in Appendix A, Councillor Bennett illustrated that this Council was currently slightly below the average level of performance achieved by other local authorities and suggested that the recommendations in the report would allow the authority greater flexibility in its approach to investments to achieve a greater rate of return.
The Principal Financial Accountant outlined a number of proposed changes to the Financial Institutions approved by Council in March 2015 and explained each of the categories of investment counterparty referred to on pages 4 and 5, some of which were new to this Council:
Forward Plan (19K/bytes) attached
The Forward Plan was noted without further debate.