Agenda item

Evidence was received from Ian Luder, Independent Member of the Royal Borough of Kensington & Chelsea’s Audit Committee and Vice-Chairman of the City of London’s Audit and Risk Management Committee and John Morley, the Chairman of this Council’s Audit Committee.

Issues raised included:

• Kensington & Chelsea’s Audit Committee consisted of 4 Council Members and 3 Independent Members
• The 3 Independent Members did not have the same terms of office which provided continuity and experience
• It was important for Independent Members to have a good understanding of the workings of an Authority. At Kensington & Chelsea (K & C)  copies of agenda, including Cabinet agenda were sent out to Independent Members of the Audit Committee
• There should be provision within the Audit Committee’s Terms of Reference for Members to commission reports
• Audit Committees should have effective means of challenge
• Summaries of Internal Audit reports were seen by K & C’s Audit Committee. However, if there were high risk / unsatisfactory assurance levels received, Members would expect to see full reports
• The Audit Committee had the authority to invite the relevant Cabinet Member to the Committee if unsatisfactory assurance levels were received and if there was conflict between the Head of Audit and the department, both the relevant Cabinet Member and office holder would be invited to attend the Audit Committee
• The skills required for Audit Committee Members included business acumen, audit governance, IT, Internal Controls and accountancy. A skills audit should take place on those Members elected to an Audit Committee
• At K & C, Independent Members could not be residents of the Royal Borough or have been a Member or officer of the Council in the previous 5 years. This requirement would perhaps not work for all Local Authorities
• The terms of office of Members were staggered to ensure that the expertise and knowledge of the membership would not be lost with local elections and the possibility of Members losing their seats on the Council   
• The training of Audit Committee Members was important to ensure the skills and knowledge base was good to enable Members to carry out their duties effectively
• At the City of London Authority interviews would be taking place shortly for another Independent Member, and Members of the Audit Committee would be interviewing candidates
• Reference was made to getting the balance right in terms of training and providing briefings for Independent Members, to ensure they remained impartial and not part of the Authority              
• Reference was made to the Department for Communities and Local Government consultation on the Future of Local Audit and the proposal for Audit Committees to have more than one Independent Member
• An appropriate membership of Audit Committee would be 7-9 Members
• A positive development could be a Pan-London network of Chairmen of Audit Committees which would enable an exchange of views and best practise to be discussed. Such an idea could be discussed with London Councils
• With regard to Risk Management, K & C’s Audit Committee looked at two strategic risks with the risk holder at each meeting   
• A possible option for the membership of Audit Committees could be rotation of Members on Cabinet and on the Audit Committee or just a general rotation of a Group of Members. This would increase the skills and knowledge base and would provide a diversity of Member views
• Reference was made to elections which take place in Hillingdon every four years which potentially could mean that a number of experienced Members could lose their seats. Increasing the knowledge base with a number of Members could mitigate this

Members thanked Ian Luder and John Morley for attending the meeting and for helping the Committee with their review.

RESOLVED -

1.      That the information provided as part of the witness session be noted and a draft of this Committee’s final report be submitted to a meeting of the Committee in December.