Agenda and minutes

Audit Committee
Thursday, 22nd September, 2016 7.00 pm

Venue: Civic Offices, St Nicholas way, Sutton, SM1 1EA

Contact: Fiona Bywaters, Committee Services Team Leader  Tel: 020 8770 5122 | Email:  fiona.bywaters@sutton.gov.uk

Items
No. Item

13.

Member Development

Member development on the topic of ‘Annual Accounts’.

 

Minutes:

Michael Mackie, Head of Finance Business Data and Reporting, gave a presentation explaining the statement of accounts and how they were structured.

14.

Apologies for absence

Minutes:

There were no apologies for absence.

15.

Declaration of interests

Minutes:

There were no declarations of interest.

16.

Minutes of the Last Meeting pdf icon PDF 139 KB

To approve as a correct record the Minutes of the meeting held on 30 June 2016.

 

Minutes:

The minutes of the meeting held on 30 June 2016 were agreed as a correct record and signed by the chair subject to an amendment to item 5 Annual Governance Statement 2015/16 that paragraph 6 state the Risk Register process will be brought to the committee periodically.

 

This change was made as the Chair clarified that the role of the Committee was to review the process rather than the risk register, which was the remit of the Strategy and Resources Committee.

 

17.

Treasury Management Quarterly Report pdf icon PDF 125 KB

This report is the treasury management review for the quarter ending 30 June 2016. It summarises the Council’s treasury management operations during the first three months of 2016/17. It is presented for the purpose of monitoring and review and meets best practice as suggested by the Treasury Management Code of Practice.

 

Additional documents:

Minutes:

The Treasury and Investments Manager presented the report which summarised the Council’s Treasury Management position for the first quarter of 2016/17.

Questions from members focused on:

 

·          HRA financing

·          Borrowing and Lender Option Borrower Option (LOBO) loans

·          Municipal Bond Agency (MBA)

·          New banking arrangements and credit points.

 

Officers advised that as part of the financial planning process HRA expenditure would be reviewed. When the Council had entered into LOBO loans these had been risk assessed and the LOBO loans were fixed interest in a similar way to the Public Works Loans Board (PWLB) loans. Officers would seek a reply from the South London Legal Partnership (SLLP) on the local authority financing framework for the MBA, prior to Council’s approval. In relation to new banking arrangements officers advised that the decision to change banks had followed a contract framework exercise and the credit rating of the Council was not an issue.

 

Resolved

That the Treasury Management activity undertaken during the first three months of the year be noted.

 

18.

2015-16 Statement of Accounts pdf icon PDF 108 KB

This report sets out the responsibilities of the Committee in relation to signing off the Statement of Accounts and proposes responses to the matters raised by the External Auditors on the 2015/16 Statement of Accounts.

 

Additional documents:

Minutes:

The Executive Head of Finance introduced the report which set out the responsibilities of the Audit Committee in relation to signing off the Statement of Accounts. The Executive Head of Finance explained that there had been one material error in the draft accounts which had been adjusted in the final version. This error was in relation to the fixed asset register.

 

Before voting on the recommendations the Committee also considered the 2015-16 Audit Findings Report (agenda item 7) and the 2015-16 Pension Fund Audit Findings Report.

 

Members asked questions focussed on:

·         review of the fixed asset register to prevent further errors

·         the misclassification of assets under construction.

·          

The Executive Head of Finance confirmed that in relation to the fixed asset register, figures had been overstated, but the error was understood and a review of the system would be concluded by the end of December and reported back to the committee.

 

Resolved

 

1.      That Grant Thornton’s Audit Findings Report on the 2015/16 main Sutton Accounts Audit, the comments made and the unqualified opinion given be noted.

 

2.      That Note Grant Thornton’s Audit Findings Report on the 2015/16 Pension Fund Audit, the comments made and the unqualified opinion given be noted.

 

3.      That the two Letters of Representation to the Auditors, and the responses to the Action Plans set out in the Audit Findings Reports be agreed.

 

4.      That the final 2015/16 Statement of Accounts as amended including the Council’s Annual Governance Statement be agreed.

 

5.      That the unqualified Value for Money conclusion included in the Audit Findings Report be noted.

 

6.      That the Executive Head of Finance should report back to next Committee on progress in correcting the errors in the Asset Register.

19.

2015-16 Audit Findings Report pdf icon PDF 325 KB

This Audit Findings report highlights the key findings arising from the audit for the benefit of those charged with governance (in the case of London Borough of Sutton, the Audit Committee), as required by International Standard on Auditing (UK & Ireland) 260, the Local Audit and Accountability Act 2014 and the National Audit Office Code of Audit Practice.

Minutes:

In signing off the statement of accounts the Committee considered the 2015-16 Audit Findings Report.

20.

2015-16 Pension Fund Audit Findings Report pdf icon PDF 531 KB

This Audit Findings report highlights the significant findings arising from the audit for the benefit of those charged with governance (in the case of Sutton Pension Fund, the Audit Committee), as required by International Standard on Auditing (UK & Ireland) 260, the Local Audit and Accountability Act 2014 and the National Audit Office Code of Audit Practice.

 

Minutes:

In signing off the statement of accounts the committee considered the 2015-16 Pension Fund Audit Findings Report.

21.

Risk Management Arrangements and Corporate Risk Register pdf icon PDF 92 KB

This report provides a brief description of the Council’s risk management arrangements and a copy of the current corporate risk register for the Committee’s information. This is intended to support the Committee’s function to monitor the effective development and operation of risk management and corporate governance in the Council, as set out in Section 2, Article 8.5 of the Council Constitution.

 

Appendix A available in supplementary agenda

Additional documents:

Minutes:

The Executive Head of Finance introduced the report which outlined the Council’s risk management arrangements. Members asked about the process for how the risk register developed and was monitored internally. Officers advised that this was through departmental management team meetings and the corporate management team. It was suggested that the next member development session prior to the Audit Committee focus on risk management and the how the internal performance management processes work.

 

Resolved

That the Council’s risk management arrangements be noted.

 

22.

Role and Effectiveness of the Audit Committee pdf icon PDF 91 KB

This report sets out a proposed approach to consideration and clarification of the role of the Audit Committee, including, but not limited to, making a clear distinction from the role of the Scrutiny Committee. Clarity of role will help to determine the knowledge and skills required by Committee members and will contribute towards improving the Committee’s effectiveness.

 

Minutes:

The Executive Head of Finance introduced a report which outlined proposals to review and improve the role and effectiveness of the Audit Committee. Members discussed establishing a task and finish panel and who should take part. It was agree that the task and finish panel would meet twice, once to review the role of the committee itself and secondly to consider how the committee interacts with the Scrutiny function.

 

The chair requested that substitute members of the Audit Committee be invited to take part. Members discussed the availability of members to take part in a group meeting during the day and discussed inviting comments from members outside of the committee via a survey. The Executive Head of Finance notified the committee that subject to availability the group could be facilitated by an officer from the South West London Audit Partnership.

 

Resolved

 

1.    That a task and finish group on the role and effectiveness of the Audit Committee be established.

 

2.    That the proposed terms of reference for the group (as set out in paragraph 3.3 of the report be agreed.

 

3.    That the process for inviting members to take part in the task and finish group as set out above be agreed.

 

 

23.

Audit Committee Work Plan pdf icon PDF 57 KB

The Committee’s Work Plan is attached.

Minutes:

The committee noted the work plan subject to adding risk management as the member development session and an item on Appointment of Auditors – methodology and process for the December meeting.

24.

Any urgent items brought forward at the discretion of the Chair

The Chair must approve the reason for urgency.

Minutes:

There was no urgent business.

25.

Date of next meeting

The next meeting of the Audit Committee will take place on 8 December 2016.

Minutes:

The date of the next Audit Committee meeting was confirmed as 8 December 2016.