Audit Committee

Read the Minutes

Present:

• Councillor Watson - In the Chair
• Councillors Andrews, Clayton, Isherwood, Morrison, and Trotman.

Also Present: 

• Councillor Priest, Executive Member for Finance and Human Resources

AS/07/13 Minutes

Decision

To approve the minutes of the meeting held on 1 June 2007 as a correct record.

AS/07/14 Audit Commission - District Auditor's Audit and Inspection Letter

The District Auditor presented his Annual Audit and Inspection Letter issued in March 2007, providing an overall summary of the Commission's assessment of the Council drawing on audit, inspection and performance assessment work, and identifying areas for improvement for the Council, including:             

• Children and young people, including improvements attainment and attendance
• Inequalities (education, jobs and health)
• Crime levels, and

Value for money (including use of resources) for example through the delivery of the Manchester Improvement Plan

Overall the District Auditor reported that overall the Council's direction of travel showed continuing and sustained improvements, strong and vibrant partnerships and a high level of user satisfaction with services provided or commissioned.

Reference was made to the District Auditor's comments regarding the continuing high number of unwanted teenage pregnancies and a member asked whether due account was taken of the fact that many pregnant teenagers gravitated to charitable support agencies in Manchester from surrounding districts, and, if not, if this could be factored into future audit assessments.  Members also commented on the increase in the housing waiting list and the fact that in the light of housing stock transfers the city's social housing stock could no longer meet the increased level of demand, and concern was expressed that the District Auditor may consider this to be an area in which the Council was not performing well.  It was agreed that the Communities and Neighbourhoods Overview and Scrutiny Committee should be asked to consider these concerns.

The Chair referred to the comments made regarding health inequalities and asked whether the District Auditor had taken account of the on-going transformational changes in local health structures as an inhibitor to securing the necessary improvements in life expectancy.

The District Auditor indicated that the new more focused structure of health management in Manchester should lead to improvements but these could only be fully assessed over time, however, he believed that there was more that could be done between the partners in the field of preventative work and health education, particularly where young people were concerned.

Decision

To thank the District Audit for his presentation and to note the many positive aspects of his review of the Council's performance, including his recognition of the Council's achievements in securing Council Tax levels below those of near neighbours over the past decade, and to note also those areas where the need for further improvement has been identified..             

AS/07/15 Audit Commission - Audit and Inspection Plan 2007/8

A report of the District Auditor was submitted detailing the plan of audit and inspection work to be undertaken in the 2007/2008 financial year, based on the Audit Commission's risk assessment approach to audit planning and the requirements of the Comprehensive Performance Assessment

Decision

To note the Audit and Inspection Plan.         

AS/07/16 Annual Accounts 2006/2007 (Delegated)

The Committee considered a report of the City Treasurer presenting the Council's Annual Accounts for 2006/2007 for scrutiny and onward referral to the Audit Commission.
The City Treasurer presented the accounts and responded to questions in relation to (a) the experience of producing the accounts for the first time using the SAP system (b) issues relating to the Housing Revenue Account and the impact of delayed stock transfers (c) the income streams in relation to school catering and other catering due to the variable number of 'feeding days (d) on-going employee costs following the settlement of equal pay claims (e) Council Tax write-offs from 2005/6 (indicating that action had been deferred due to the implementation of a new computer system but that recovery action would be initiated in 2006/7, and (f) the arrangements made in relation to the valuation of the Council's estate following stock transfers.

Decision

1. To approve the Statement of Internal Control for 2006/2007.    

2. To note the officers' responses to the specific issues raised and to approve the Annual Accounts for 2006/2007 and to authorise the officers to submit these to the Audit Commission by 30 June 2007.       

3. To exercise urgency powers in relation to the foregoing decisions on the grounds that the legal and financial position of the Council would be prejudiced if these decisions were not implemented before 30 June 2007.     

AS/07/17 Internal Audit Plan

The Committee received a report of the City Treasurer in relation to the Internal Audit Plan for the period July 2007 - June 2008.

Concerns were expressed regarding the existing difficulties in relation to recruitment within the Audit Service and the constraints that this might involve for the achievement of the full programme as submitted.  The Acting Head of Audit acknowledged these concerns but  highlighted the management action that could be taken to mitigate the effects of any increased vacancy levels.  A member sought a view from the District Auditor about the risks of not completing the full programme of inspections; he indicated that the management of audit inspection plans often represented a fine balancing act as individual inspections grew beyond their initial scope whilst others were completed in less days than planned, and a pragmatic approach to the management of such plans always needed to be adopted to identify which low risk inspections could be de-prioritised to a later programme.   The Committee noted that quarterly reports would be submitted to subsequent meetings to enable the Committee to monitor the implementation of the Plan.

Decision

To approve the Internal Audit Plan.         

AS/07/18 Internal Audit Terms of Reference

The Committee received a report of the City Treasurer proposing revised Terms of Reference to govern the effective operation of Internal audit following the required annual review.

Decision

To agree the Terms of Reference and to refer them to the City Solicitor for inclusion in he next review of the Council Constitution.