Minutes of Meeting of the Audit and Scrutiny Committee held in the Council Chamber, Council Headquarters, Glenurquhart Road, Inverness on Thursday, 12 June 2008 at 10.30 a.m.
Present:
Dr D Alston, Mr J Gray, Mrs L Munro, Mr G Smith, Mrs J Urquhart, Mr R Greene, Dr A Sinclair, Mr M Rattray, Mr M Finlayson, Mr A Rhind, Ms A MacLean, Mr E Hunter, Mr P Cairns, Mr D Kerr, Mr A Torrance, Mr J Ford, Mr R Wynd, Mr L Fraser, Mr S Park, Mr T Prag
Non-Members also present:
Mr G Farlow, Mr J Rosie, Mrs D Mackay, Mr B Gormley
Officials in Attendance:
Mr A Geddes, Depute Chief Executive and Director of Finance, Ms M Morris, Assistant Chief Executive, Mr B Alexander, Head of Childrens Services, Mr N Rose, Interim Head of Internal Audit and Risk Management, Mr J Grieve, IS Client Manager, Mrs S McKandie, Policy and Development Manager, Finance, Mr I Mitchell, Integration Manager, Social Work, Ms L MacLennan, Principal Officer, Looked After Children and Child Protection, Ms E Kirkham, Principal Staffing Resources Officer, ECS, Miss D Sutherland, Acting Principal Auditor, Mr G Bowie, PPP Projects Officer, Education, Culture and Sport Service, Miss J MacLennan, Democratic Services Manager, Mrs L Hamilton, Admin Assistant
Also in attendance:
Mr R Clark, Senior Audit Manager, Audit Scotland
Dr D Alston in the Chair
Business
An asterisk in the margin denotes a recommendation to the Council. All decisions with no marking in the margin are delegated to the Committee.
1. Apologies for Absence
Apologies for absence were intimated on behalf of Mr D Henderson, Mr I Brown, Mr B Clark and Mr J MacDonald.
2. Internal Audit Reviews
(Programme for the Administration: Corporate Objectives: “We aim to deliver a more responsive and better value Council over the coming four years”.)
Declaration of Interest – Mr L Fraser declared non financial interests in the items relating to Corporate Activity (Receipt of Tenders) and Corporate Activity (Use of Contract Suppliers) as a tenderer for the supply of goods to the Council from time to time but, having applied the test outlined in Paragraph 5.18 of the Councillors’ Code of Conduct, concluded that his interests did not preclude his involvement in the discussion on either item.
There had been circulated Report No. as-10-08 dated 26 May 2008 by the Interim Head of Internal Audit and Risk Management which summarised the final reports issued since the date of the last meeting, together with other information relevant to the operation of the Internal Audit Section, as follows –
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Central Systems - General Ledger – Balance Sheet Reconciliations
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Corporate Activity - Receipt of Tenders
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Corporate Activity - Use of Contract Suppliers
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Chief Executive’s Office - Common Good Fund
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Education, Culture & Sport – PPP and PFI
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Education, Culture & Sport - Early Retirement Procedures (Teachers)
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Social Work - Throughcare & Aftercare Payments
The report also outlined a range of planned and unplanned work currently being progressed and which would be the subject of future reports to the Committee.
The Committee NOTED the terms of the report as circulated.
The Committee further NOTED as follows –
(i) Corporate Activity – Use of Contract Suppliers – that a Presentation
would be made to Members on Scotland Excel following the Resources
Committee meeting in October 2008 which would address a number of
issues raised at the meeting – also that the Head of Procurement was to
meet with the Scrutiny Planning Working Group in the coming weeks
following which a report would be submitted to a future meeting; and
(ii) Social Work – Throughcare and Aftercare Payments – that a further
report would be submitted to the Housing and Social Work Committee
in September 2008 which would address a number of the issues
contained in the report.
It was also AGREED as follows –
(i) Corporate Activity – Receipt of Tenders – that concerns raised by
Members at the meeting in relation to the provision of adequate training
for those staff involved in the receipt and opening of tenders should be
addressed and that Members who were interested in attending tender
opening sessions should intimate such interest to the Director of Finance
in the first instance following which arrangements would be made for
their attendance; and
(ii) Chief Executive’s Office – Common Good Fund – that guidance recently
issued on Common Good Funds should be circulated to Members by the
External Auditor (Audit Scotland) for information.
3. External Audit Reviews
(Programme for the Administration: Corporate Objectives: “We aim to deliver a more responsive and better value Council over the coming four years”.)
There had been circulated Report No. as-11-08 dated 29 May 2008 by the Depute Chief Executive and Director of Finance which contained reports from the Council’s External Auditors (Audit Scotland) as follows -
a) National Fraud Initiative in Scotland 2006-07
During a summary of the report, it was confirmed that the 2006/07 National Fraud Initiative (NFI) exercise had helped to identify fraud and error of at least £9.7million with cumulative savings from NFI in Scotland now being around £37million. These results had suggested that NFI and other anti-fraud work was making an impact in deterring fraud and that bodies were improving their systems of control.
The 2008/09 exercise was to commence in October 2008 when data would again be collected from the participating bodies and in addition Audit Scotland was liaising with the Scottish Government Criminal Justice Directorate in relation to the provision of express powers for data matching in Scotland.
Following discussion, the Committee NOTED the terms of the report as circulated.
b) Computer Services Review Follow up
During a summary of the report, it was confirmed that Audit Scotland had recently completed a follow-up audit of their 2006/07 Computer Services Review and, from discussions with IS Client staff and subsequent submission of progress made in addressing the actions identified in the 2006/07 report, it had been concluded that further work was necessary to complete the agreed action points. Progress in implementing the agreed actions would be reviewed as part of the Annual Report to Members which was expected in September/October 2008 following completion of the audit of the financial statements.
Following discussion, the Committee NOTED the terms of the report as circulated.
It was also AGREED as follows –
(i) Review of the ICT Strategy – discussion to be undertaken in the first
instance with the ICT Procurement Working Group following which a
report would be submitted to the Resources Committee in October
2008;
(ii) Review of the Structure (Stage 1) and Resourcing of IS Client Team –
discussion to the undertaken by the ICT Procurement Working Group
following which a report would be submitted to a future meeting of the
Resources Committee; and
(iii) Review of the Information Systems Security Framework – report to be
submitted to the Resources Committee in December 2008.
4. Code of Corporate Governance 2008/09
(Programme for the Administration: Corporate Objectives: “We aim to deliver a more responsive and better value Council over the coming four years”.)
There had been circulated Report No. as-12-08 dated 28 May 2008 by the Assistant Chief Executive which provided information on progress with the actions agreed in the Local Code of Corporate Governance for 2007/08 and detailed the actions which would appear in the Code for 2008/09.
During a summary of the report, it was confirmed that, in 2008, CIPFA and SOLACE had published a revised Guidance Note for Scottish Authorities – “Delivering Good Governance in Local Government (2007)”. This had provided updated guidance on implementing the framework and was an important development which enabled Local Authorities to review effectiveness and identify continuing improvements in governance arrangements.
It was also noted that the Code was included in the External Auditor’s Annual Review of the Council and the Internal Audit Tactical Plan.
Following discussion, the Committee:-
(i) NOTED progress on actions for 2007/08; and
(ii) APPROVED the actions proposed for the 2008/09 Code of Corporate
Governance.
5. Statement on Internal Control and Annual Report 2007/08
(Programme for the Administration: Corporate Objectives: “We aim to deliver a more responsive and better value Council over the coming four years”.)
There had been circulated Report No. as-13-08 dated 26 May 2008 by the Interim Head of Internal Audit and Risk Management which provided an assessment of the adequacy, reliability and effectiveness of the internal control systems within the Council. This complied with the requirements of the 2002 Code of Practice for Local Authority Accounting which required either a Statement on the System of Internal Financial Control or the wider Statement on Internal Control to be included within the Council’s financial statements. These statements required certain information to be addressed, including information on internal audit standards, reporting arrangements and the effectiveness of the system of internal financial control.
In respect of the Highland Council, a Statement on Internal Control had been produced and this had been provided in Section 2 of the report. In addition, an overview of the Internal Audit Section’s activities for the financial year 2007/08 and the issues to be faced during 2008/09 was also provided.
Following discussion, the Committee NOTED the terms of the report as circulated.
The meeting ended at 12.50pm