Agenda and minutes

RESOLVED  

i.              that Councillor Klier be appointed as Chair of the Audit Panel for this Municipal Year.

ii.            that Councillor Slater be appointed as Vice Chair of the Audit Panel for this Municipal Year.

RESOLVED that the minutes of the meeting held on 20 March 2014 be confirmed and signed.

Councillor Slater declared an Interest in Item 6 as an employee of Voluntary Action Lewisham.

The report was introduced by Darren Wells, Director, Grant Thornton. He informed Panel members that the Audit Plan contained the Main Accounts and the Pension Fund. The Main accounts included the financial statement and value for money conclusion. Mr Wells explained the contents of the main accounts and highlighted the significant risks outlined in the report. He then described how the scope of work was done for a value for money conclusion, adding that a specific report would be done for Council on value for money arrangements.

The Chair asked whether there was capacity to complete the proposed plan, and was told that there were resources to deploy staff to do additional work as required. The Chair also asked if payroll has been reconciled, and was told it has for 2013/14, and the process for 2014/15 was currently being reviewed. Mr King asked if officers had not been reconciling after the end of each month, and was told they had not.

Councillor Slater said that it would be useful if the information presented in these reports could be summarised at the beginning of each report and the key issues highlighted for members as this would save a lot of time, because members would focus on things that are important for them to be aware of. The Head of Financial Services said an Executive Summary could be done for future meetings. Mr Robinson said that although an Executive Summary would be useful, reports that are done for the Audit Panel were prescriptive as part of Governance responsibilities, and the format could not be altered.

Panel members asked whether Grant Thornton had reviewed asset revaluations as this had been an on-going issue since last year. Darren Wells said that they noted a clear use of the asset register, but it had not been used throughout the year.

RESOLVED that the report be noted.

Darren Wells introduced the report. The Chair said she was aware of the historical issue about having a separate bank account for the Pension funds, and asked if this had been resolved. It was noted that although a separate account was now being used the Council was still not fully compliant, and a recommendation had been raised within the report.

The Head of Corporate Resources said that this issue had been discussed in the past and would need to be discussed further, to ensure a final decision could be reached. He added that officers were quite clear as to Council activities as opposed to pension activities. He said that the new Oracle R12 financial system would be going live on 4 August and the Council could then work to get to a position of compliance. Councillor Barnham said that this standard had been mandatory since 2012, and asked whether other councils were in compliance. It was noted that some were, but others were in the same position as Lewisham.

Panel members said it would be sensible for Lewisham to look at how others were able to comply and see if they could emulate them. The Chair said the pension plan would be a budget pressure each year, and asked whether increased expenditure would contribute to the pension pressure. The Head of Corporate Resources said that this would depend on how the investments perform, and the accounts would be reviewed by the Pensions Investment Committee.

RESOLVED  that the report be noted.

PRE AUDIT STATEMENT OF ACCOUNTS

The report was introduced by the Head of Financial Services,

who informed Panel members that future funding remain uncertain as in previous years. The Group Finance Manager, Core Accounting informed Panel Members that extensive valuation of the non-current assets had been done this year, and the housing stock had been valued and progress was being made with the asset register which would soon be in regular use. 

The Chair commented that the cost for Adult Social Care seem to be going up. The Head of Financial Services said that the reason for this was because of Grants, which were technically not ring-fenced. It was noted that Grants have been drastically reduced  and although it was expected to go up a bit in the next financial year it would be minimal. The Head of Financial Services added that there were huge reductions in RSG in the last 3 years, and money was being put into non ring-fenced Grants.

Councillor Barnham stated that he had noticed the rise in reserves. The Head of Financial Services explained the two types of reserves as set out in the report, adding that unusable reserves could not be used to fund expenditure, but usable reserves could be used. Councillor Barnham said he had noted that the schools reserves had gone down from £20m to £19m.

Councillor Klier commented that when career average pension payments come into force there would be some savings on redundancies. The Head of Corporate Resources said that this would not be implemented for a while. Councillor Klier asked whether Lewisham staff could not be asked to contribute more, and was told that this was a national scheme, and could not be varied locally.

Mr Robinson said that it would be difficult to evaluate pensions on an annual basis, it should be done on long term forecast. He added that although the average salary scheme might help, a large factor would be the value of the council’s investments.

The Chair asked whether officers were comfortable with the level of risk on page 43 of the report. The Group Finance Manager, Core Accounting said that these were the investments and loans of the Council, and were reported to members each year. The Head of Corporate Resources said that a judgement had to be made, there was a strategy in place, and the level was normal. He added that officers were very cautious with council money.

The Chair asked whether the figures had been affected by changes to welfare benefits and council tax. The Group Finance Manager, Core Accounting said that there had not been any effect on pension funds, but it was still early days. The Head of Financial Services stated that the council took a very cautious view, on council tax collections, and predicted 50% payment rate, but actually had 90% payment, which was very good.

RESOLVED that the report be noted.

The Head of Corporate Resources introduced the report, he apologised for the following typos in the report;

i.              page 94, first sentence para 6.1 should read “ Only 74% of the non-school internal assurance work planned to be delivered in the year was finalised at the

ii.            end of May by the contractor (compared to 87% in the prior year)”.

iii.           Para 7.7, 3^rd sentence should read “For each change, the HIA will agree and report the changes to the audit panel”.

Mr Robinson asked whether the delay in implementing some of the recommendations, was because of the loss of management capacity. The Head of Corporate Resources stated that this was the case on occasion as when staff resources were reduced some recommendations were left unattended, and because officers believed there was risk involved, follow- up work was being done. It was noted that with the new financial system underway, the risks involved could be greater.

The Head of Corporate Resources stated that with the core financial system in place, it is hoped would result in fewer financial recommendations

Mr King commented that he had asked in a previous meeting why nothing had been done about the 13 outstanding recommendations within the Third Party Access to IT System. The Head of Corporate Resources said that some of them were partially completed but they have now been re-opened. Much of the IT focus has been on clearing Public Sector Network requirements which impact on IT system security. It was noted that there were some management delay, and when audit officers had not heard from IT officers they had assumed that they had agreed with the recommendations.

Panel members were informed that there had been a lot of issues with the IT provision, which is outsourced. The Head of Corporate Resources informed Panel members that another reason for the problems could be that the head of IT had recently retired. Audit Panel members asked if there was something they could do to assist audit officers, to ensure managers implement audit recommendations. The Head of Corporate Resources said that Panel Members could continue to invite managers to future meetings to explain why they were having problems implementing audit recommendations. Councillor Slater said that this could be done for Managers with recurring issues.

Councillor Slater asked why there had not been plans that could be used to drive efficiency and effective work within the IT section. The Head of Corporate Resources said that there was an IT Strategy being prepared which included benchmarking with other authorities. The installation of Windows 7 would give the council some structural base to enable further improvements.

Councillor Ingleby raised his concerns over the number of deferred and cancelled reviews, and asked whether there was any intention of running some of these programmes to identify variances in order to narrow any impending risk. It was noted that there were software available to run business interrogation, but it would need to be done regularly for it to be effective.  ...  view the full minutes text for item 7.

The Head of Corporate Resources introduced the report, and notified Panel members that they would get this report on a quarterly basis. Mr King asked why the reconciliations were not timely. Chris Harris Director, Baker Tilly, said that some discrepancies had not yet been ironed out fully, but the reconciliations had improved from the last time. The Head of Corporate Resources said that officers had done some work on this as reconciliation was highlighted as a concern before. It was noted that risk remains on individual transactions and payments. The Head of Corporate Resources said that internal audit would review this every year to stay on top of things, and Audit Panel would be updated regularly.

The Head of Financial Services said that new systems were being introduced, with better modules, and management would ensure staff were being trained properly. Councillor Slater said that it was important that officers know and understand what needs to be done. Mr Robinson said that the figures should always balance before they are signed off. Mr King said that money reconciliation was part of the performance structure. Mr Robinson said that other authorities he had worked with reconciled on a weekly basis.

Councillor Slater said that with the present financial climate being so fluid reconciliation was of the utmost importance, and members need to have confidence in the reports that come before the Audit Panel. Mr King added that if reconciliation was not done, it could lead to fraud.

Councillor Barnham asked why the due date for Libraries contracts had changed so many times. The Head of Corporate Resources said that it involved lease negotiations, but he would find out more and inform the Panel at their next meeting.

The Head of Corporate Resources introduced the report. Councillor Slater asked whether there was something in particular that officers would want Panel members to be aware of. The Head of Corporate Resources said that officers do mainly reactive work instead of preventive work. He informed Panel Members that there was a Police Officer seconded to the Team, and their investigation were very thorough. Councillor Slater asked whether staff had to be reduced.

The Head of Corporate Resources said that there were some temporary staff in the team as housing funding was time limited and the benefit staff had been reduced pending transfer to the DWP on 1 April 2015. Councillor Klier said there seem to be a lot of complaints about blue badges. The Head of Corporate Resources said that his staff investigate blue badges fraud, and they catch offenders every year. He added that it was important to put deterrents in place to prevent increases in offences.

Councillor Slater asked what type of system was in place to trigger suspicions. The Head of Corporate Resources said that it depended on the area. Front office staff were trained to check irregularities, also there were some long standing clients whose circumstances may have changed. Scrutiny of validation documents was part of the process.

RESOLVED that the report be noted.

Meeting ended 9:02pm                                                 

                                                                                                Chair