Items
No. |
Item |
1. |
Election of chair and Vice Chair PDF 19 KB
Minutes:
|
RESOLVED
|
that Councillor Harris be elected
Chair and Councillor Peake be elected
Vice Chair of the Audit Panel for the municipal year
2012/13.
|
|
|
There were no declarations of
interest.
|
|
|
2. |
Minutes PDF 21 KB
Additional documents:
Minutes:
|
RESOLVED
|
that the Minutes of the meeting
of the Panel held on 22 March 2012, which was open to the press and
public, be confirmed and signed as a true record of the
proceedings.
|
|
|
3. |
Audit Plan 2011.12 PDF 580 KB
Minutes:
3.1
|
Ms Exton presented the external
auditor’s report. She drew members’ attention to the
risks outlined in Table 1.
|
|
3.2
|
Mr Webb asked what could be
described as a heritage asset. Mr Lambeth said that heritage assets
were assets held and maintained principally for their contribution
to knowledge and culture. Mr Webb asked whether a museum could be
described as a heritage asset. Mr Lambeth said that it could be,
but was unlikely. However, it was more
likely that the contents would be the heritage assets. There could
be differences of opinion between officers and external auditors
about what should be included within the heritage asset but it
would be subject to discussion.
|
|
3.3
|
The Chair asked what external
audit was considering in respect of the closure and transfer of the
libraries. Mr Banister said that the transfer and signing of the
new leases were considered. Mr Lambeth said that there had been
some uncertainty because the assets had been operated by third
parties from June 2011. The leases had now been signed and Lewisham
still owned the buildings. The Libraries are being managed on
behalf of Lewisham.
|
|
|
RESOLVED
|
that the report be
noted
|
|
|
|
|
|
|
4. |
Audit Plan - Pension Fund PDF 571 KB
Minutes:
4.1
|
Mr Banister presented the
external auditor’s report and outlined the significant risks
in Table 1 of the report.
|
|
4.2
|
Mr King asked about the risk
identified from the opening of the new bank account for the pension
fund during 2011/12. Mr Lambeth said that transactions through the
account had been built up during the year and the necessary
controls had now been put in place.
|
|
|
RESOLVED
|
that the report be
noted.
|
|
|
|
|
|
|
5. |
Draft Statement of Accounts PDF 45 KB
Additional documents:
Minutes:
5.1
|
Mr Hall presented the report.
He said that the group accounts had been circulated at the meeting
because they had not been ready for distribution with the
agenda. Members were invited to raise
any queries with officers in advance of the next meeting of this
Panel.
|
|
|
|
|
5.2
|
Mr Lambeth drew members’
attention to three points. Firstly the format had changed because
it did not have the comparative figures of last year. Secondly,
there was an extra requirement that heritage assets be included in
the accounts. Finally, the Housing Revenue Account (HRA) was to be
self financing from April 2012. A significant proportion of the
outstanding HRA debt had been repaid by the government on 28 March
2012; this was shown in the accounts and had an effect on the
borrowing figures.
|
|
|
Pension Fund
|
|
5.3
|
The Chair said that the Actuary has assumed that the
Fund’s assets will generate a return of 6.1% per annum Mr
Hall said that this was a reasonable long term assumption. It was
difficult to predict how commodities would perform in volatile
markets and the current uncertainty in the Eurozone would have an impact on global equity
markets. However, he said that the prediction was consistent with
asset performance. The Chair then asked at what point the
predictions of the actuaries would be considered. Mr Hall said that
officers and members do not always actively accept what actuaries
are predicting. The Council have fund advisers in Hyman Robertson
who offer advice, performance of fund managers is scrutinised and
the performance of Lewisham’s fund is compared with other
similar local authority pension funds.
Recently, Lewisham withdrew money from a manager because of
underperformance.
|
|
5.4
|
The Chair asked why the
pensions liabilities had increased over the year ending 2011/12 by
10%. He asked whether it was due to early retirement. Mr Lambeth agreed and said that there were
comparative figures at page 77 of the accounts. He said that other
differences were the past service costs adjustment and technical
changes, but there was not one major cause. The Chair said that a
10% increase was large and he asked that a breakdown of this
increase be submitted to the next meeting of this Panel so that
members can have an understanding of the reasons for the
increase.
|
ED R& R
|
|
|
|
5.5
|
The Chair asked about
investment analysis in paragraph 5. He asked officers to send
members details of how global securities are
diversified.
|
|
5.6
|
The Chair asked why the
decision had been taken to change from an active to a passive fund
management. Mr Hall said that the Pensions Investment Committee had
been considering moving to passive management over the last 18
months. A high proportion of the portfolio is in equities. The
active fund management requires higher returns and so entails
higher risks. Active management comes with higher transaction costs
and higher fees. A passive fund is less risky and the fees are
substantially lower. Active funds require more officer time because
performance must be managed ...
view the full minutes text for item 5.
|
|
6. |
Internal Audit Update Report PDF 163 KB
Minutes:
6.1
|
Mr Austin presented the report.
|
|
6.2
|
Mr Harris updated the Panel on
each of the remaining 2011/12 reports.
The position was:
·
Fraud report – Now finalised
·
Information Governance – Still in raft, soon
to be finalised
·
Payroll and HR system – Work in progress,
draft to be issued in the next week or two
·
HR Thematic – to be ready by end
July
·
Regeneration of Lewisham – to be finalised in
July
·
Implementation of NNDR – work in progress;
more work required on data migration expected to take place
soon.
·
Supporting People Framework – Now
finalised.
|
|
6.3
|
Mr Austin updated the Panel on
the work done to align the audit plan to the Council’s key
risks, including examples of the risks covered by internal audit
and those not. Mr King asked what other
assurances are in place for the approximate 40% of corporate risks
not being looked at by internal audit.
In these cases Mr Austin described how there are other assurances
in place, such as services accredited to standards (e.g. legal) and
others reviewed by external independent inspectors (e.g. OFSTED and
CQC). The 2012/13 audit plan includes a
project to refresh the mapping of these assurances. It was agreed that going forward the alignment of
the Audit Plan and Key Risks should be made.
|
|
|
|
|
6.4
|
Mr Dale referred to the
contractor Performance Indicators. Mr King asked in particular
about number 4 which gave a score of 4.6 out of 5 for the average
level of client satisfaction achieved. He asked whether this figure
was too high; were internal auditors taking the soft option. He
asked members of the panel whether they agreed with this
figure. Mr Austin said that of the 90
audits in 2011/12 only 15 returned their questionnaires. Officers
have shortened the questionnaire (four questions each to be scored
on a scale of 1-4) and put it online and are encouraging audit
sponsors to return more questionnaires. He said that it could be
that those who have suggestions to improve the service were not
returning questionnaires.
|
|
6.5
6.6
6.7
|
Mr Harris said that, as the
contractor, they invested time upfront in the audit
process. Working with audit sponsors to
agree the audit objectives and discussing the draft audit findings
and recommendations prior to issuing the draft report to ensure the
factual aspects of the work are agreed.
He thought it difficult to state what a good performance score
would be.
The Executive Director for
Resources and Regeneration asked whether the Panel was suggesting
that the audit contractor’s relationship with the client
might be too ‘cosy’. Mr
Dale agreed with her description.
Mr King asked how members could
know whether Lewisham were compliant with CIPFA code? Mr Austin said that three years ago
Lewisham’s compliance was reviewed by the external auditors,
two years ago by the London Borough of Croydon. This year internal
audit undertook a self-assessment, and next year (2012/13) Lewisham
will be reviewed by Lambeth. In each
year the recommendations for continuous improvement have been
...
view the full minutes text for item 6.
|
|
7. |
Annual Assurance Report 2011.12 PDF 158 KB
Minutes:
7.1
|
Mr
Austin presented the
report.
|
|
7.2
|
Mr King referred to the satisfactory assurance in
paragraph 5.2, he suggested that the word ‘generally’
should be omitted. This was agreed.
|
ED R&R
|
7.3
|
Mr Dale referred to Appendix 1. He said that the
Payments to Residential Domiciliary Care had a Limited assurance
last year. Mr Austin said this review remains in draft and the
opinion is indicative. There were concerns that it was taking
longer than expected to make sure that it goes back to at least
satisfactory assurance.
|
|
7.4
|
Mr Webb noted the negative opinions recorded but
that it was not clear which directorate they were in.
|
|
7.5
|
Mr King referred to the appendix, he asked for the
information on service groups within their directorate to each be
presented on one page. It was agreed
that the directorate for each service should be included in future
reports where this is relevant to drawing out the internal control
message.
|
ED R&R
|
|
RESOLVED
|
that the report
be noted.
|
|
|
|
|
|
|
8. |
Anti Fraud and Corruption team (A-Fact) update PDF 229 KB
Minutes:
8.1
|
Mr Austin said that at the last
meeting of this panel, members asked Lewisham Homes to be invited
to this meeting to outline the work undertaken by them with regard
to Anti-Fraud and Corruption. He then introduced Adam Barrett from
Lewisham Homes.
|
|
8.2
|
Mr Barrett said that there
was a large number of sub-lettings in
the borough. Lewisham Homes operate on information received rather
than random investigation. Lewisham homes support National Fraud
Investigations; from which council tax and benefits are cross
referenced and checked. Data sources are checked with regard to
occupancy and identification.
|
|
8.3
|
Mr Barrett said that Lewisham
Homes work with the Council with regard to identification of false
documents; ultraviolet scanners are one of the methods used. He
said that out of 1,200 occupancy checks, 101 properties were
recovered; not all of these were fraud, some were cases where a
tenant had died but had not been reported.
|
|
8.4
|
Mr Barrett said that
contractors were given a check list of things to be aware of when
visiting a property, including child care and vulnerable adults. If
there are multiple locks in a property, this could be an indication
of sub letting. Market rents are a lot higher than social rents and
there is a market for illegal letting and high returns from
rents.
|
|
8.5
|
The Chair asked whether
occupancy checks were based on pre-screening. Mr Barrett confirmed
that it was; referrals were received from members of the public,
data, and contractors. Random checks are not often undertaken
because they are not productive. The
Chair asked whether the cost of pre screening had been compared to
random checks. Mr Barrett said that there were no comparative
figures but the costs of data matching and other different method
of investigative work would be compared to the cost of random
checks in the near future.
|
|
8.6
|
The Chair asked how joined up
the process of recovery was. Mr Barrett said that reports are
submitted to Committees and the Council. Regular meetings are held
with Lewisham officers in the fraud team. He intended to test the
effectiveness of the process before considering whether any more
money should be invested in investigations. The cost of refurbishment and rent loss would also
need to be included in these cost considerations.
|
|
8.7
|
Mr King asked whether there
were any comparable figures with other local authorities. Mr Austin
said that there were not any directly comparable figures because
the stock within each local authority varied. Lewisham recovered
100 properties; another authority considered the recovery of 36
properties to be good.
|
|
8.8
|
Mr King asked whether any of
the tenants displaced became the responsibility of Lewisham. Mr
Barratt said that some tenants are referred to Lewisham’s
housing service who consider whether
they should be re-housed. Occupants can be victims of illegal
landlords. He did not know whether they would be fast tracked into
suitable accommodation.
|
|
8.9
|
Mr Austin said that officers
were presented with such scenarios. Sometimes properties had been
sub-let in cramped, over crowed ...
view the full minutes text for item 8.
|
|
9. |
Exclusion of the press and public PDF 20 KB
Minutes:
|
RESOLVED
|
that
under Section 100(A)(4) of the Local
Government Act 1972, the press and public be
excluded from the meeting for the following items of business on
the grounds that they involve the likely disclosure of exempt
information as defined in paragraphs 3, 4 and 5 of Part 1 of
Schedule 12(A) of the Act as amended by the Local Authorities
(Executive Arrangements)(Access to Information) Amendments
(England) Regulations 2006:-
10. Closed minutes
|
|
|
The following is a summary of
the items considered in the closed part of the meeting:
|
|
|
|
|
10
|
CLOSED MINUTES
|
|
|
RESOLVED
|
that the Minutes of the meeting
of the Panel held on 22 March 2012, which was not open to the press
and public, be confirmed and signed as a true record of the
proceedings.
|
|
|
The meeting ended at 9.20p.m.
|
|
|
Chair
|
|
|
|
|
|
|
|
10. |
Closed Minutes
Additional documents:
|