Public Document Pack AUDIT COMMITTEE Contact: Pauline Bagley Committee Secretary Thursday, 29 June 2006 at 7.30 pm Direct : 020-8379- 5119 Conference Room, Civic Centre, Silver Street, Enfield Tel: 020-8379-1000 EN1 3XA Ext: 5119 Fax: 020-8379-3177 (DST) E-mail: [email protected] Council website: www.enfield.gov.uk Councillors : Andreas Constantinides, Don Delman, Jonas Hall (Chairman), Dino Lemonides, Henry Pipe, Jeff Rodin and Edward Smith (Vice-Chairman) LEAD OFFICER : Bill Somerville/Assistant Director, Finance and Corporate Resources COMMITTEE SECRETARY: Pauline Bagley/Democratic Services Team AGENDA – PART 1 1. WELCOME AND APOLOGIES FOR ABSENCE (IF ANY) 2. DECLARATIONS OF INTEREST (Pages 1 - 2) 3. MINUTES OF THE LAST MEETING (Pages 3 - 8) To receive the Minutes of the meeting that took place on 5 April 06. 4. MATTERS ARISING FROM THE MINUTES To consider any matters arising from the Minutes. 5. 2005/06 ANNUAL STATEMENT OF ACCOUNTS (REPORT NO. 27) (Pages 9 - 104) To receive the report of the Director of Finance and Corporate Resources presenting the unaudited Annual Statement of Accounts for the 2005/06 financial year for the consideration and approval of the Committee. (NOTE: A copy of the full Statement of Accounts has been provided only for members of the Committee. In addition, a copy has been placed in the Members’ Library and in both Group Offices (for reference). Further copies are available on request from the Committee Administrator, details as above). 6. STATEMENT OF INTERNAL CONTROL (REPORT NO. 28) (Pages 105 - 124) To receive the report of the Director of Finance and Corporate Resources. In accordance with the Accounts and Audit Regulations 2003 the Council is required to produce a Statement of Internal Control each year as a part of its Accounting Statements. 7. INTERNAL AUDIT OUT TURN 05/06 AND ASSURANCE STATEMENT (REPORT NO. 29) (Pages 125 - 138) This report deals with two main issues, it summarises the performance and effectiveness of the Internal Audit Division for the year 2005/6. It also contains an opinion on the internal control environment, which is based on the internal audit work which has been carried out during that year. 8. TERMS OF REFERENCE (REPORT NO. 30) (Pages 139 - 144) To consider revisions to the terms of reference for Audit Committee. TO FOLLOW 9. AUDIT COMMISSION - AUDIT AND INSPECTION PLAN 2006/07 (Pages 145 - 168) This plan sets out the audit and inspection work that will be undertaken in 06/07. The plan has been drawn up from the Audit Commission’s risk-based approach to audit planning and the requirements of the Comprehensive Performance Assessment. 10. ACCOUNTS AND AUDIT (AMENDMENT)(ENGLAND) REGULATIONS 2006 (REPORT NO. 31) (Pages 169 - 172) To note the changes introduced by these revised regulations. 11. INVESTIGATION OUTTURN REPORT (REPORT NO. 32) (Pages 173 - 176) To note the outcomes from investigations during 2005/06. TO FOLLOW 12. FORWARD PLAN (Pages 177 - 178) To receive the forward plan for the coming year. 13. DATES OF FUTURE MEETINGS To note the proposed dates for the rest of the municipal year: Thursday 14 th September 2006 Tuesday 28 th November Tuesday 9 th January 2007 Tuesday 13 th March* *Please note that this date is likely to change. 14. EXCLUSION OF THE PRESS AND PUBLIC To consider, if necessary, passing a resolution under Section 100A(4) of the Local Government Act 1972 excluding the press and public from the meeting for the items of business as listed in Part 2 of the agenda on the grounds that they involve the likely disclosure of exempt information as defined in those paragraphs of Part 1 of Schedule 12A to the Act, (as amended by the Local Government (Access to Information) [Variation] Order 2006) as are listed on the agenda. (There are no items currently identified as containing exempt information) This page is intentionally left blank Page 1 Agenda Item 2 DECLARING INTERESTS FLOWCHART - QUESTIONS TO ASK YOURSELF What matters are being discussed at the meeting? You can NO Do any relate to my participate in interests? the meeting and vote YES Is a particular matter close to me? Does it affect: me; my partner; NO my relatives; my friends; NO my job or my employer; companies where I am a director or where I have a shareholding of more than £25,000 (face value) or Personal interest interest Personal 1/100th of the capital; my partnerships; or my entries in the register of interests more than other people in the area? YES You may Declare your have a interest in personal the matter interest NO You may Would a member of the public - if he or have a she knew all the facts - reasonably think prejudicial that the personal interest was so interest YES important that my decision on the matter would be affected by it? Prejudicial interest Prejudicial YES Withdraw from the meeting by leaving the room. Do not try to improperly influence the decision. 1374.PD/HL Page 2 This page is intentionally left blank Page 3 Agenda Item 3 AUDIT COMMITTEE - 5.4.2006 MINUTES OF THE MEETING OF THE AUDIT COMMITTEE HELD ON WEDNESDAY, 5 APRIL 2006 COUNCILLORS PRESENT Don Delman (Chairman), Andreas Constantinides, David Schofield and Ann Zinkin ABSENT Edward Smith (Vice Chairman), Jonas Hall, Alex Mattingly and Jeff Rodin OFFICERS: Bill Somerville, Derryck McCready, Mark McLaughlin (Director of Finance and Corporate Resources), Ian Sadler, John Austin (Borough Secretary), David Hulme and Pauline Bagley (Secretary) 1462 APOLOGIES Apologies for absence were received from Councillors E Smith, Hall, Mattingly and Rodin. Apologies for lateness were received from Councillor Zinkin. 1463 DECLARATIONS There were no declarations of interest made. 1464 RELATIONSHIP MANAGER AND DISTRICT AUDITOR'S ANNUAL AUDIT AND INSPECTION LETTER RECEIVED the report of the Chief Executive (No. 290) summarising issues arising from the inspection programme for 2004/05 and comments on current issues and the verbal update by Carol Mounfield. NOTED 1. The recommendations set out in the report had been endorsed by Cabinet at the meeting held on 8 February 06 and at the Council meeting on 22 February 06. 2. The key messages were: • The improvements in service delivery; - 1364 - Page 4 AUDIT COMMITTEE - 5.4.2006 • The Council’s increasing emphasis on value for money; • Audit Commission’s unqualified opinion of the Council’s 2004/05 accounts on 31 October 05 was that the General Fund balance had been maintained in line with the target level. However, weaknesses in the award of the SEN transport contract indicated that internal financial controls were not consistently exercised; 3. The actions needed to be taken by the Council as set out in paragraph 4 of the report. 4. The Chairman said that he had been impressed with the Council’s performance and referred to the CPA outcome under the new arrangements. It was confirmed that Enfield was one of the first authorities to undergo the harder test. RESOLVED that (1) The contents of the report be noted; and (2) A report be submitted to Audit Committee in six month’s time outlining the actions taken to address the findings set out in the Key Messages. 1465 ANNUAL INTERNAL AUDIT WORKPLAN RECEIVED the report of the Director of Finance and Corporate Resources (No. 337) and the verbal update by Ian Sadler. NOTED 1. The requirement within the CIPFA Code of Practice for the production of a plan. 2. The background on the planning cycle and the types of audits undertaken (as set out in paragraph 3.3). 3. An analysis of the types of audit undertaken and the time spent on each activity. 4. The breakdown of the Audit Plan for 06/07. 5. The main challenge this year would be the proper and correct transfer of the Housing Benefit HBIS system to the new Pericles system and the upgrade of other Housing computer systems. The Council would be working closely with the Audit Commission to ensure that the planning process was appropriate. 6. Councillor Constantinides asked for clarification in respect of the planned days. Ian Sadler explained this and how vacancies affected this total. Should the vacancies figures prove to be an over estimate, - 1365 - Page 5 AUDIT COMMITTEE - 5.4.2006 work would be undertaken on the next audits identified on the plan. (Based on a risk assessment) 7. That there was a requirement to audit core areas and thereafter work was carried out on a risk approach basis. 8. Investigation of fraud and irregularities was a specialist task and work was usually carried out by staff who were expert in this field. 9. Councillor Zinkin referred to the new Housing Benefits system and what happened in the event of more time being required to carry out work set down in the audit plan. It was confirmed that there was no option but to continue with the work until its completion. Derryck McCready explained the additional controls that would come from the new Pericles system. Ian Sadler said that this was a superior system that would be used for Council Tax and NNDR and would eventually be developed for other auditing processes. 10. Councillor Schofield asked what areas of Housing would be audited. Ian Sadler said that this was outlined within the report but added that this could change with the advent of ALMO. Internal Audit Services could be bought-in or not by the ALMO Management. RESOLVED that the contents of the report be noted. 1466 ANNUAL REPORT ON CORPORATE GOVERNANCE FOR 05/06 AND PLANS FOR 06/07 RECEIVED the report of the Director of Finance and Corporate Resources (No. 338) marked To follow on the agenda and the verbal update by Bill Somerville.