Agenda and minutes

The Members had before them:

A.    The Agenda papers (previously circulated); and

B.    The Minutes of the meeting held on 20 March 2015.

A copy of document A will be attached to the signed Minutes.

Mr P M McDonald for Mr L C R Mallett.

Apologies were received from Mr L C R Mallett, Mr R J Sutton, and Mr P A Tuthill.

Members of the public wishing to take part should notify the Head of Legal and Democratic Services in writing or by e-mail indicating the nature and content of their proposed participation no later than 9.00am on the working day before the meeting (in this case 25 June 2015). Further details are available on the Council’s website. Enquiries can be made through the telephone number/e-mail address below.

None.

To confirm the Minutes of the meeting held on 20 March 2015. (previously circulated – pink pages)

RESOLVED that the Minutes of the meeting held on 20 March 2015 be confirmed as a correct record and signed by the Chairman.

Report to follow.

The Committee considered the Final Accounts Pack including the Statement of Accounts for the financial year ending 31 March 2015.

The report set out the key dates for the 2014/15 closedown process, the Statement of Accounts for the year ending 31 March 2015, matters of substance and disclosures/changes.

The Chief Financial Officer introduced the report and commented that:

·         The process of preparing the accounts had been more challenging in a positive way than previous years. There were a number of areas where the accounts had been enhanced and it had been a challenge to present them to this Committee to the highest standards by the end of June. He thanked his Accountancy team and Grant Thornton for their efforts in producing the Accounts

·         The external auditor had indicated that they would issue an unqualified opinion on the Accounts. There was a small amount of work that had not been completed but this should not have any material impact on the final accounts. He would consult with the Chairman and Vice-Chairman of the Committee to finalise any resulting adjustments. Subject to the approval of the Committee, the Accounts would be formally published

·         The Council had broken even compared to the cash limited budgets. There had been a decrease in the amount of useable reserves which was the third year that this had happened

·         The General Fund Balance remained at £13m. A number of adjustments had been made most notably capital adjustments relating to voluntary aided schools. The County Council derecognised £42.4 million of assets due to school buildings being transferred to newly established academy schools in 2014/15. (£97.8 million of assets were derecognised by restating the 2013/14 and 2012/13 consolidated Balance sheets). This related to minor capital expenditure on a range of voluntary aided and voluntary controlled schools

·         There was an error in the report as the external borrowing figure for 2013/14 should read £262.3m however this did not impact on the figures for the ratio of external borrowing to tax revenue.  The Council had increased the money made from investments by not going to external markets however this situation could change in the future

·         Provisions of £3.0 million (£2.0 million in 2013/14) have been included in the accounts to allow for staff redundancy costs resulting from restructuring of £1.9 million, contracted commitments on TUPE staff of £0.5 million and various smaller provisions totalling £0.6 million     

·         In relation to the Pension Fund accounts, net assets had performed well, increasing by 11% with the performance in the american and equity markets being particularly successful. However this success could not be sustained in the future therefore the challenge facing the Council was how to respond and therefore investment in infrastructure and property was being considered

·         The liabilities in the Pension Fund had grown significantly. Liabilities were tied to the success or otherwise of the gilt rate. As the gilt rate fell, liabilities rose. Quantative easing had been introduced in Europe and the government were purchasing gilt bonds, the effect of which would not  ...  view the full minutes text for item 347.

The Committee considered approving the Annual Governance Statement.

The Chief Financial Officer introduced the report and commented that the Annual Governance Statement confirmed the overall assurance of the Council’s systems and had been signed by the Chief Executive and Leader of the Council. Helen Lillington confirmed that the external auditor was content with the Statement.

RESOLVED that the Annual Governance Statement be approved. 

The Committee considered the latest refresh of the Corporate and Transformation Risk Registers.

The Business Planning and Performance Manager introduced the report and made the following points:

·         Subject to approval by this Committee, there would be some minor presentation changes prior to its consideration by Cabinet

·         There had not been any change to the RAG rating for the 4 shared risks. It was important to prevent these amber risks from receiving a red RAG rating but at the same time more work was required to mitigate the risks so that they received a green rating

·         Demographic changes had been identified as a red RAG rated corporate risk which was a cause for concern for the Council. The Council needed to understand the implications for future service provision

·         The risk relating to data security and data protection had reduced from red to amber due to the implementation of the recommendations provided by the Information Commissioners Office following their visit in 2014

·         The inability of Children's Social Care to deliver savings targets due to pressures on placements and staffing budget remained a red RAG rating and a matter for concern for the Council. However an action plan was in place to try and address the issue.      

RESOLVED that:

a)    the latest refresh of the Corporate and Transformation Risk Registers be noted; and

b)    red risks and mitigating actions be noted.

The Committee considered the Internal Audit Annual Report 2014/15.

The Chief Financial Officer introduced Garry Rollason from Warwickshire County Council who had taken over audit responsibilities on behalf of the delegated audit service.

Garry Rollason introduced the report and made the following points:

·         The number of limited assurance audits had reduced from the previous year. However he added a note of caution as audits tended to vary in nature from year-to-year

·         The overall significant assurance opinion had been issued on the design, adequacy and effectiveness of the system of internal control at the Council which was very positive

·         The proportion of audit recommendations between high, medium and low was similar to last year

·         94% of audit plans had been achieved. There were a few elements of audit work that remained outstanding but these did not affect the overall opinion.

In the ensuing debate, the following principal points were raised:

·         In response to a query about the programme of internal audit work, Garry Rollason stated that work had continued on the audit plans and a number of them had been finalised. The majority of the audits were expected to receive a significant audit opinion

·         The Council was currently spending £6.9m on agency staff annually at a time when permanent staff were being made redundant. Had any correlation been made to two issues? The Chief Financial officer explained that the majority of agency spend related to hard to recruit job areas for example children's social work. Manager's had available to them a dashboard which ensured that their spend on agency staff did not exceed that of permanent staff.

RESOLVED that the Internal Audit Annual Report 2014/15 set out in the Appendix to the report be endorsed.

The Committee considered the Internal Audit Risk Assessment and Plan 2015/16.

In the ensuing debate, the following principal points were raised:

·         It was noted that the total annual input for the internal audit team had been agreed at 1,450 days, was this more than in previous years? The Chief Financial Officer stated that the way in which the number of days had been calculated varied from previous years. However, there had been a reduction in the number of days but there was no assurance that the required audit opinion would be delivered

·         In response to a query about Evesham Abbey Bridge, Garry Rollason explained that work had not started on the bridge but had been scheduled for the 3^rd quarter.

RESOLVED that the Internal Audit Risk Assessment and Plan 2015/16 be approved.  

The Committee received an update on the internal audit commissioning arrangements.

The Chief Financial Officer introduced the report and commented that the Worcestershire audit team, consisting of 8 members of staff, had successfully transferred to Warwickshire on 1 May 2015.  The arrangement ensured the provision of a resilient, high quality and more flexible audit service for Worcestershire into the future. It was also clear that there would be opportunities for both councils to benefit from the synergies from merging the two teams, whether that was through more efficient systems and processes, best practice audit techniques or shared learning and development. 

In the ensuing debate, the Chief Financial Officer informed members that district councils were responsible for the Fire Authority's auditing arrangements.

RESOLVED that the content of the Internal Audit Commissioning update report be noted.

The Committee considered its future work programme.

RESOLVED that the work programme be noted.