Agenda and minutes

John Morley and Councillor Raymond Graham declared Personal Interests in Agenda Item 5 – Approval of the 2009/10 Statement of Accounts as they were Members of the Board of Hillingdon Homes. They both remained in the room and took part in discussions on the item.

Councillor George Cooper declared a Personal Interest in Agenda Item 5 – Approval of the 2009/10 Statement of Accounts as he was a Member of the Pensions Committee and a Trustee of Hillingdon & Ealing Citizens Advice Bureau. He remained in the room and took part in discussions on the item.

Councillor Richard Lewis declared a Personal Interest in Agenda Item 5 – Approval of the 2009/10 Statement of Accounts as he was a Member of the Pensions Committee and the Chairman of the Corporate Services & Partnerships Policy Overview Committee. He remained in the room and took part in discussions on the item.

Agreed as accurate records.

[During discussion on the item, the Chairman informed Members that in relation to the Minutes of the meeting held on 11 March 2010 and Minute No. 48 relating to Internal Audit Progress Report, the outstanding recommendation in relation to Website Content Management had not been implemented. The Chairman agreed to the consideration of this item as urgent business to enable the Committee to be provided with information on the likely target date for completion of the outstanding recommendations.]   

To confirm that all items marked Part I will be considered in public and that any items marked Part II will be considered in private.

It was agreed that Item 17 – Internal Audit Progress Report be considered in private.

It was also agreed that Item 16 – Key Financial Audit Risk Relating to the Valuation of Icelandic Investments be moved from Part II of the agenda into Part I.

The Chairman agreed to consideration of this item as urgent business to enable the Committee to be provided with information on progress on this outstanding recommendation.

Members were reminded that at their meeting held on 11 March 2010, Members asked that if the outstanding recommendation in relation to the strategy for standardised access for the website was not implemented that it be brought back to the next meeting of this Committee for consideration.

The Head of Communications and the E Communications Manager attended the meeting and provided Members with an update on the progress in implementing this outstanding recommendation. Members were informed that there had been delays in relation to finalising this strategy because of the work which was being carried out in relation to the Council’s Business Improvement Delivery programme. It was anticipated that there would be a stand alone strategy by the end of this year. Discussion took place on this and Members asked that this be progressed and implemented by the end of 2010. The Head of Internal Audit and Corporate Governance was asked to progress this issue.

 Resolved -    

1.    That the information provided be noted.

 Members were presented with the unaudited 2009/10 Statement of Accounts as required by the Accounts and Audit Regulations 2003. The report provided Members with details on the key issues raised in the Council’s accounts. Included in this were the Pension Fund accounts which formed part of the Pension Fund Annual Report which had been approved by the Pensions Committee at its meeting on 23 June 2010. 

The Head of Accountancy Services informed Members the audit of the accounts by the Council’s external auditor, Deloitte, was due to start on 5 July 2010 and the auditor’s findings would be reported to this Committee at its meeting in September.

The Head of Policy attended the meeting and provided Members with an overview of the Annual Governance Statement for 2009/10, which formed part of the Statement of Accounts.

Issues raised and comments made included:

• Leader’s Statement on page 19 of the agenda was missing
• Treasury Management – It was noted that in relation to Heritable Bank, the Council had received £5.28m back
• Income and Expenditure Account – page 44 of the agenda – Expenditure on Services – Education and Children’s Services. The difference in expenditure and income was caused by property revaluations. This variance was due to impairments on school buildings revalued as part of the 5 year rolling re-evaluation programme
• Cash Flow Statement – Under Revenue Activities, Other Operating Cash Payments – this amounted to £316m which was the biggest item of cash outflows, a breakdown of which was provided in a note to the accounts

Notes to Main Financial Statements

·          Long Term Contracts – Reference was made to Jarvis PLC going into administration which meant they could not meet their obligations under the Barnhill School PFI Contract with the Council. Members were informed that another organisation would be taking over this contract

·          Long Term Contracts – Reference was made to the 10 year contract with Dalkia Energy & Technical Services and Members asked for further details including the terms of the contract.

·          External Audit Costs - Discussion took place on the cost of £535,000 and Members were informed that this cost would be reduced with the Comprehensive Area Assessment and Use of Resources work having been abolished

·          Under summary of Treasury Management Policy, Members noted the sentence which referred to the speculative procedure of borrowing purely in order to invest being unlawful

·          Fund Balances and Reserves – Reference was made to two new earmarked reserves relating to Schools Earmarked Reserves and Grant Funded Reserves and Members were informed that the Schools Earmarked Reserves included reserves from Building Schools for the Future and Grant Funded Reserves were grant payments received in advance that had previously been held in creditors

·          Events after the Balance Sheet Date – Members noted that Hillingdon Homes would be transferring back to the Council on 1 October 2010. The Chairman informed Members that he had contacted the Borough Solicitor regarding his membership of the Board of Hillingdon Homes and he had been advised that he would only have a  ...  view the full minutes text for item 6.

Members were informed that the report prepared by Deloitte detailed the assessment of the Council’s performance under the Use of Resources assessment, which formed part of the now abolished Comprehensive Area Assessment.

The significant improvements made by the Council in terms of the Key Lines of Enquiry (KLOEs) resulted in the Council’s overall score improving from a score of 2 last year, to a score of 3 for this year.

Members noted this substantial improvement in the KLOE scores, particularly the sustained performance in financial management, with the value for money KLOE increasing to a score of 3.

Gus Miah and Paul Hutt from Deloitte attended the meeting and presented the report to Members. The assessment comprised three themes:

·        Managing finances, focusing on the sound and strategic financial management of the local authority;

·        Governing the business, focusing on the strategic commissioning and good governance of the local authority; and

·        Managing resources, focusing on how the local authority manages its natural resources, assets and people

Members were informed that most of the recommendations for improvement related to procurement. Particular mention was made of the recommendation relating to the ‘Annual Questionnaire for Councillors’ which recommended this should include a question on how Members had used their Personal Development Toolkit. This was to enable the Council to monitor the use and effectiveness of these Toolkits.

The Director of Finance and Resources reported that this recommendation would be taken forward as part of the improvement plan for the BID process     

Resolved –

1. That the information contained in the report be noted. 

The Head of Internal Audit and Corporate Governance reported that based on the work undertaken during the year, Internal Audit could provide satisfactory assurance that the systems of internal control within the Council were operating adequately and effectively. Overall there were 9 limited assurance opinions including 4 schools, and 4 audits had received no assurance.

Reference was made to the audit outcome for Asylum Finance and the area of concern relating to only two officers having the required skills and knowledge to carry out the necessary tasks. The Head of Accountancy Services reported that the tasks relating to Asylum Finance were technical and detailed, however the Head of Finance in Education and Children’s Services had knowledge of the processes around this task.

The Head of Internal Audit and Corporate Governance referred to the follow up audits. Members noted that although 82% of recommendations had been implemented at follow up, 18% had not been implemented.

In relation to the use of shared Oyster Cards, the Head of Internal Audit and Corporate Governance was asked to provide an update on this if the action points had not been implemented before this Committee’s next meeting.

The Director of Finance and Resources commented on the limited assurance level which had been given for IT Disaster Recovery. A generator was to be installed in the Civic Centre which would alleviate the problem of the Council’s IT network crashing during power cuts.

Resolved-

1. That the audit opinion and the evidence on which it is based as detailed in the report be noted.  

The Accounts and Audit Regulations 2003 (as amended 2006) required a review of the systems of Internal Audit.

Resolved-

1. That the actions and summary of outcomes detailed in the report be noted.

The report provided Members with details of a Fraud Awareness Survey which had been carried out to measure the success of a survey which had taken place in 2007.

Members noted that the survey had indicated that those staff that were confident that action would be taken if fraud was detected had risen from 59% to 78%. Officers were congratulated for achieving this increased confidence in the Council dealing with fraud. 

Resolved-

1. That the contents in the report and the general improvements made in raising awareness since 2007 be noted.

Reference was made to the point in the report which stated that there was a good culture of managers approaching Internal Audit when they thought they had a problem area.

Resolved –

1. That the contents of the report and the level of   compliance with the Audit Commission checklist for those charged with Governance be noted.

The report was deferred to the next meeting of the Committee.

The report was deferred to the next meeting of the Committee.

The report was deferred to the next meeting of the Committee.

Details of the work carried out by the Committee during 2009-10 were contained in the report.

Minor amendments were suggested and in particular it was suggested that an amendment be made to paragraph 2 – Membership – to indicate that Councillor Eginton had resigned from the Committee on 11 March 2010.

Resolved –

1. That, with the amendments suggested, the report be noted and Council be asked to approve the report at their meeting in September.

• Audit Commission – The National Fraud Initiative 2008/9
• CIPFA – Leading in Hard Times, Guidance for everyone involved in the leadership of public services
• CIPFA / SOLACE – After the downturn, managing a significant and sustained adjustment in public sector funding.

The Head of Internal Audit and Corporate Governance would email Members with details of the changing legislation and current issues detailed in the agenda.

This tem was moved into Part I of the agenda.

The report provided Members with details of the Council’s current position in relation to the valuation of Icelandic investments.

Resolved –

1. That the report be noted.  

The report on this item was included in Part II as it contained information relating to the financial or business affairs of any particular person (including the Authority holding that information) and the public interest in withholding the information outweighed the public interest in disclosing it (exempt information under paragraph 3 of Part 1 of Schedule 12 A to the Local Government (Access to Information) Act 1985 as amended.

Consideration was given to a progress report on two Internal Investigations.

Resolved –

1.  That the information contained in the report be noted.