Agenda and minutes

No apologies for absence were received.

Councillor Mrs E J Sneath wished that it be noted that in relation to agenda item 4, page 22, her grandson was in receipt of home to school transport.

RESOLVED

            That the minutes of the meeting held on 21 July 2014 be agreed as a         correct record and signed by the Chairman.

(To receive a report which provides an update on progress made against the Audit Plan 2014/15 and provides summaries of all audits completed within the period April to August 2014)

Consideration was given to a report which provided an update on progress made against the Audit Plan 2014/15 and provided summaries of all audits completed within the period April to August 2014.

It was reported that during this period, 11 County audits had been completed, 8 to final report and 3 to draft report stage, as well as 9 schools audits.  Overall, 25% of the plan had been completed.

Members were advised that there were two auditors working almost full-time advising/support the Agresso implementation project.  The input of Internal Audit was a significant part of the work over the year, and represented 10% of the audit plan.  Regular highlight reported would be provided to the Section 151 Officer and Project Board, and updates would also be brought to the Committee over the coming year.

It was also noted that there were eight audits in progress, as well as additional work being undertaken on the Birth to Five Service, the Libraries Judicial review and Information Governance.  Visits to each of the Academies for which the County Council carries out internal audit work had also been undertaken.

Members were informed that the assurance levels provided for 2014/15 had been amended in response to the introduction of other UK Public Sector Internal Audit Standards and were based on the Institute of Internal Auditors professional practice.  The new levels of assurance would be as follows:

·         Effective

·         Some improvement needed

·         Major improvement needed

·         Inadequate

Members were provided with the opportunity to ask questions to the officers present in relation information contained within the report as well as audits where assurance had been assessed as 'no' or 'limited', and some of the points raised during discussion included the following:

·         The Agresso implementation would be complicated as it was a self-build, which would give the authority the resource to maintain and monitor the system itself.  It was noted that the project had now reached the build phase.  The financial systems were broadly on target, however, payroll was behind target due to a lack of resources from Serco and Mouchel.  It was expected that this would be back on target by the end of October.  It was also expected that the build phase would be complete by the end of October 2014, the system would then enter the testing phase, and three parallel runs with the payroll system would be carried out.  Members were advised that there were contingency plans in place in the event of problems, but the liability would be with Serco to resolve them;

·         A package of financial services had been put together which schools would be able to buy back, and meetings with schools had taken place to explain what would happen;

·         The new Agresso system would be more user friendly than the SAP system;

Coroners – Limited Assurance/Major Improvement Needed

·         Major improvement had been asked for, and so some challenge was expected;

·         There were two part-time senior Coroners covering two areas/jurisdictions, and were line managed by the Chief Coroner or Lord Chief  ...  view the full minutes text for item 20.

(To receive a report which provides the Committee with the opportunity to consider the Council's Annual Governance Statement 2014)

Consideration was given to a report which provided the Committee with the opportunity to consider the content of the Council's Annual Governance Statement 2014.

It was reported that each year the Council was required to reflect on how well the Council's governance framework has operated during the year and identify any governance issues that needed to be drawn to the attention of Lincolnshire residents.  Good governance underpinned everything the Council did and how services were delivered often came under close scrutiny.

Members were advised that a 'good' Annual Governance Statement was an open and honest self-assessment of how well the Council had run its business – with a clear statement of the actions being taken or required to address any areas of concern.  One of the roles of the Audit Committee was to oversee the development of the Annual Governance Statement and to recommend its adoption by the Council.

It was noted that all the issues highlighted by Members in the draft Annual Governance Statement had been addressed, including more explanation in relation to the outcomes of the judicial review.  It was hoped that the document did now accurately reflect how the Council ran and that the actions identified had been amended.

It was commented that in relation to the Counter Fraud work the Statement did not seem to show any of the successes that the team had had.  However, members were reassured that this information had been brought together in the Audit Committee's Annual Report.

Members were advised that the outcome of the Judicial Review into the libraries consultation did not mean that the proposals were unlawful, just that there were flaws in the consultation.

RESOLVED

1.    That the Annual Governance Statement accurately reflects how the Council was run;

2.    That the Statement includes the significant governance issues/key risks it would have expected to be published;

3.    That the Audit Committee approve the Statement and recommend it for adoption by the Council.

(To receive a report which sets out the external Auditors findings in their ISA 260 report to Those Charged with Governance for the County Council's Statement of Accounts and for the Pension Fund Accounts)

The Statement for Accounts for Lincolnshire County Council and for Lincolnshire County Council Pension Fund for the financial year 2013/14 had been completed and independently audited.

Consideration was given to a report which set out the External Auditors findings in their ISA 260 Report to Those Charged with governance for the County Council's Statement of Accounts and for the Pension Fund Accounts.

It was the role of the Audit Committee to seek assurance over the adequacy of the External Audit Opinion on the Financial Statements and the Council's Value for Money arrangements and to ensure any issues/risks identified by the External Auditor were being effectively managed.

Members were advised that the External Auditors proposed to issue an unqualified audit opinion on the financial statements.  The audits had been completed and there were no outstanding issues.

The Committee was guided through the reports, with attention drawn to the Headlines and Specific VfM (Value for Money) risks.  It was noted that there was one error found in the Pension Fund Statement of Accounts, as the value of an investment was actually in euro's but had been listed in sterling.  This had let to an overstatement of the value of the investment.  However, this had now been corrected and additional procedures had been put in place to ensure foreign exchange rates were accurate and consistent.

It was noted that the Letter of Representation was very similar to the letter that was approved the previous year.

RESOLVED

1.    That the External Auditors Report to Those Charged with Governance (ISA 260) for Lincolnshire County Council and the appropriateness of management responses be noted;

2.    That the External Auditors Report to Those Charged with Governance (ISA 260) for Lincolnshire County Council Pension  Fund and the appropriateness of management responses be noted; and

3.    That the Letter of Representation on behalf of the Council be approved to enable the Audit opinion to be issues.

(To receive a report which presents the final Statement of Accounts for Lincolnshire County Council for the financial year 2013/14 for approval)

Consideration was given to a report which presented the final Statement of Accounts for Lincolnshire County Council for the financial year 2013/14 for approval.

It was noted that Members of the Committee had listened to comments from the External Auditors in relation to the Statement of Accounts and it now for the Audit Committee to approve them. 

The Audit Committee was presented with the draft Statement of Accounts for 2013/14 at its meeting on 21 July 2014, where members scrutinised and made comment on the accounts.  Members reported that they had found the new format of the session where they considered the accounts to be more helpful than previous years.

The Chairman congratulated officers on the production of the Statement of Accounts and noted that good feedback had been received.  On behalf of the Committee the Chairman passed on their congratulations and thanks to the team for all the work that had taken place, in particular the quality of work which had gone into the Energy from Waste facility accounting work.

The External Auditor requested that if any issues emerged between the date of the meeting and when the accounts were submitted, that they be dealt with by the Chairman of the Committee and the Section 151 Officer.

In relation to usable reserves, it was noted that the Council intended to add a substantial amount to the financial volatility fund, in order to help with the funding reductions that the council would be receiving in 2015, as there would be a requirement to save £90m over the next four years.  Earmarked reserves would also be subject to a review when setting the Council's budget for 2015/16.

RESOLVED

1.    That the explanatory foreword to the accounts help the public understand the authority's financial management of public fund; and

2.    That the Statement of Accounts for 2013/14 be approved.

(To receive a report which seeks to show how the Audit Committee has discharges its terms of reference and has positively contributed to how well the Council has been run)

Consideration was given to a report which sought to show how the Audit Committee had discharged its terms of reference and had positively contributed to how well the Council had been run.

It was noted that reference to IT business continuity and disaster recovery had been included due to historic concerns of this Committee.

Members were informed that it was planned to set up a dedicated Governance page on the Council's website, and once the Annual Report was approved it would be available to view through this page.

It was noted that the final version of the Annual Report would be approved at full Council at its meeting on 19 December 2014.

It was requested that a picture and some narrative be included for the Independent Added Person, Mr D Finch.

RESOLVED

1.    That the draft Annual Report adequately reflects the work done;

2.    That any changes identified be made;

3.    That the Chairman present the final version of the Audit Committee Annual Report to the meeting of full Council on 19 December 2014.

(To receive a report which provides the Committee with information on the core assurance activities currently scheduled for the 2014/15 work plan)

The Committee considered a report which provided information on the core assurance activities currently scheduled for the 2014/15 work plan.

It was reported that there were no additional items which needed to be added to the November meeting.  However, it was commented that it was likely that there would be a progress report following the Judicial Review into the Libraries Consultation.

It was noted that some time would be set aside following the November 2014 meeting to provide the Committee with the opportunity to meet with the external auditors.

RESOLVED

1.    That the Audit Committee's work plan be reviewed and amended as necessary to ensure it contained the assurances necessary to approve the Annual Governance Statement 2015;

2.    That the action plan be noted and the way forward/delivery of the actions be approved.