Meeting documents

Finance, Audit and Risk Committee
Monday, 19th September, 2011 7.30 pm


Time:	7.30pm	Place:	Committee Room 1, Council Offices, Gernon Road, Letchworth Garden City

PRESENT:	Councillor David Levett (Chairman),Councillor John Booth (Vice-Chairman), Councillor Bill Davidson, Councillor David Kearns, Councillor Marilyn Kirkland, Councillor Lawrence Oliver (Substitute).
IN ATTENDANCE:	Norma Atlay - Strategic Director of Finance, Policy and Governance Andy Cavanagh - Head of Finance, Policy and Asset Management Tim Neill - Accountancy Manager Helen Maneuf - Head of Assurance, Shared Internal Audit Service Margaret Mulkerrin - Audit Manager, Shared Internal Audit Service Nigel Schofield - Committee and Member Services Officer Denis Thorpe - Grant Thornton Phil Westerman - Grant Thornton
ALSO PRESENT:	Councillor Terry Hone - Portfolio Holder for Finance and IT (part-time) Councillor Michael Paterson - Vice - Chairman, Overview and Scrutiny Committee Brendan Sullivan - Scrutiny Officer One member of the public

Item	Description/Resolution	Status	Action
PART I
16	APOLOGIES FOR ABSENCE An apology for absence was received from Councillor Paul Clark and in accordance with the agreed procedures of North Hertfordshire District Council it was confirmed that Councillor Lawrence Oliver would be his substitute. The Chairman also advised that Fiona Timms the Performance and Risk Manager had tendered her apologies due to a family emergency.	Noted
17	MINUTES Minutes RESOLVED: That the Minutes of the Meeting of the Finance, Audit and Risk Committee held on 6 June 2011 be confirmed as a true record of the proceedings and be signed by the Chairman.	Agreed
18	NOTIFICATION OF OTHER BUSINESS There was no other item of business tabled.	Noted
19	CHAIRMAN'S ANNOUNCEMENTS The Chairman welcomed everyone to the meeting, and to Margaret Mulkerrin on her return to NHDC for a Committee Meeting as Audit Manager - Shared Internal Audit Services. The Chairman reminded Members that, in line with the Code of Conduct, any Declarations of Interest should be declared immediately prior to the item in question.	Noted
20	PUBLIC PARTICIPATION There was no public participation.	Noted
21	FIRST QUARTER REVENUE MONITORING 2011-2012 Report Appendix A Appendix B The Accountancy Manager (AM) presented the report of the Strategic Director of Finance, Policy and Governance which was in a draft format prior to presentation to Cabinet on 27 September 2011 and identified the summary position on income and expenditure for the period April to June 2011 for the General Fund and the Council's trading account for Careline. The AM advised the Committee that the forecasted net revenue expenditure was Â£142K higher than had been expected and the anticipated year end balance in the general fund reserve of Â£1.566M was Â£112K lower than the last estimate reported to Members. However, with a revision to the allowance for financial risks this met the recommended minimum balance of General Funds as agreed when the budget was set for 2011-2012. The AM referred the Committee to Table 1 which highlighted the significant changes to the General Fund including the reduction in car park ticket sales of 4.7 per cent. The AM advised that although car park ticket sales had fallen the comparable income had increased and that this did appear to mirror a national trend. The Committee expressed concern at the lack of achievement of all the employee savings in 2011-2012 but, it was noted that although the costs had carried over into this financial year the full savings would be achieved in 2012 - 2013. The AM next referred the Committee to Tables 2- 7 and Appendices A and B which detailed Carry Forward Budgets, Efficiency Proposals, Efficiency Budgets at Amber or Red Status, Key Corporate â€˜health' indicators, Earmarked Reserves for 2011 - 2012 respectively and Appendices A and B which detailed the General Fund Summary and Revenue Budget Indicators respectively. The Committee discussed at some length the various amendments to the revenue budget and the clarifications made by the AM and officers with confirmation that Â£29K would be transferred from the Strategic Reserve to give the reserve balance of Â£1.566M. Members requested that more information should be provided on the car parking data and comparison with the last 12 months, and town by town. And that consideration should be given to a risk rating that reflected the Â£142K increase in spend that affected the General Fund. In response to an enquiry the AM confirmed that more than 95 per cent of the amount paid out as Housing and Council Tax Benefit payments was received as a grant. RESOLVED: (1)That the information provided on the Draft Report: Revenue Monitoring - First Quarter 2011 - 2012 which is to be presented to Cabinet on 27 September 2011 be noted; (2)That the Accountancy Manager be requested to consider the provision of a comparison on NHDC car parking income and usage for the previous 12 months in the second quarter revenue monitoring report. REASON FOR DECISION: To allow the Finance, Audit and Risk Committee comment as appropriate on the draft report First Quarter Revenue Monitoring for 2011-2012.	Agreed	Accountancy Manager
22	FIRST QUARTER CAPITAL MONITORING 2011-2012 Report Appendix A Appendix B Appendix C The Accountancy Manager (AM) presented the report of the Strategic Director of Finance, Policy and Governance which was in a draft format prior to presentation to Cabinet on 27 September 2011 and was an update on the capital programme for 2011-2012 at 30 June 2011. The AM referred the Committee to Appendices A, B and C which summarised the capital programme by priorities, by service the overall funding analysis and projected availability of capital receipts; the full capital programme, the revised costs of schemes, the provisional programme from 2011-2012 to 2013-2014; and the anticipated funding source for each capital scheme respectively. The AM advised the Committee that the projected expenditure for 2011-2012 was now Â£7.790M which was a decrease of Â£1.916M from that reported in June 2011. The Committee noted that this reduction was partly due a revised timetable for the completion of schemes which would lead to a slippage of Â£1.934M in 2012-2013, due to a net decrease of spend on schemes of Â£132K. The Committee reviewed the schemes that had slipped from the original schedule listed at Table 1 and commented on the non progress with a rebuild of Jackman's Pavilion. It was apparent that there could be little progress if no external groups had been asked to consider participation in this scheme and Members requested that action should be taken by the appropriate officers to rectify this omission by confirmation that external groups would be approached. At Table 2 the Committee questioned the additional delays and costs (+Â£37K) incurred for the relocation of the IT server room, although this was offset by a savings of (-Â£169K) for the installation of gym equipment at Hitchin and Royston Fitness Centres. The AM advised the Committee that one capital scheme for the replacement of the roof at Westmill Community Centre shown in the draft report had been removed at this stage pending a decision to be taken on the future of the Community Centre at the next meeting of the Community Regeneration Project Board (after the next meeting of Cabinet). Whilst accepting that the future of this building was uncertain it was the Members view that more structural damage might occur due to a leaking roof if repairs were not carried out and repair costs could be much more expensive. The Committee agreed that Members should be advised in more detail about the delays to repairs at Westmill Community Centre and terms of any new lease. The Chairman commented that there always seemed to be an under spend of the Capital Budget from dropped or delayed schemes and that there was a large carry over into 2012-2013 and the Strategic Director for Finance, Policy and Governance advised that the Capital Programme should be viewed as a five year programme. The SD confirmed that the cash value of each scheme remained as originally estimated unless a report was brought forward to request a change. RESOLVED: (1)That the information provided on the Draft Report: Capital Monitoring - First Quarter 2011 - 2012 which is to be presented to Cabinet on 27 September 2011 be noted; (2)That the Accountancy Manager be requested to prepare an Information Note for Members of this Finance, Audit and Risk Committee on the current status of Jackman's Pavilion (rebuild) and Westmill Community Centre (new roof) with knowledge that any decision on the Westmill Community Centre would not be known until the next meeting of the Community Regeneration Project Board. REASON FOR DECISION: To allow the Finance, Audit and Risk Committee comment as appropriate on the draft report First Quarter Capital Monitoring for 2011 - 2012.	Agreed	Accountancy Manager
23	TREASURY STRATEGY MID-YEAR REPORT 2011/12 Report Appendix A Appendix B The Accountancy Manager (AM) presented the report of the Strategic Director of Finance, Policy and Governance which was in a draft format for presentation to Cabinet on 27 September 2011 with a statement on the mid year Treasury Management position. The AM advised the Committee that the total interest from investments in 2011 - 2012 was expected to be in the region of Â£1.09M. The Committee were pleased to note that there was an increase of Â£88K on the original estimate reflected by an increase from an average interest date of 1.75 per cent for new deals to a new average interest rate of 2.27 per cent in the period April to August 2011, influenced in part by the increase to Â£20M in total for long term investments by Cash Managers. It was noted that Cash Managers had taken differing views on investment strategy. The AM referred the Committee to Appendix A - Treasury Strategy Statement and Appendix B - Treasury Management Activity and confirmed that there were no proposed changes to the Treasury Management Strategy. In response to a question the AM confirmed that a full year report on Treasury Management would be presented to Full Council and he agreed to provide an update to Members via the Members Information Service on the Treasury Strategy. RESOLVED: (1)That the information provided on the current Treasury Management Strategy at mid year be noted; (2)That the maintenance of the current Treasury Management process be noted; (3)That the Accountancy Manager be requested to place in Members Information Service a note to Members on the Treasury Management process (i.e. no change). REASON FOR DECISION: To allow the Finance, Audit and Risk Committee comment as appropriate on the draft report Treasury Strategy Mid - Year 2011-2012.	Agreed	Accountancy Manager
24	USE OF CONSULTANTS Report Appendix A.1 Appendix A.2 Appendix A.3 Appendix B Appendix C Appendix D Appendix E The Head of Finance, Performance and Asset Management (HF) advised the Committee that this report was to bring together details on the use of Consultants within NHDC, what they were used for and the current level of expenditure as requested at the meeting of this Committee on 6 June 2011 (Minute 13 (6) refers). In addition this report clarified in detail all procedures and findings behind the Consultants Audit. The HF confirmed that Consultants were engaged for three primary reasons: additional resources or specialist skills, expert knowledge and to provide an objective or independent view or new and innovative thinking. The HF advised that NHDC would always need to engage a variety of consultants due to its small size and unanticipated workload such as Hitchin Rail Curve. The HF referred the Committee to Table 2 which detailed some of the significant spend on Consultants in 2010 - 2011. The Committee noted the specific expenditure by budget code at Appendices A1, A2 and A3 with the main items: Management Support Finance and Report Consultants, Planning Control Consultants, Nominations Consultants, Howard Parks and Gardens Consultants and Strategy and Regional Planning Consultants. In response to a question the Strategic Director for Finance, Policy and Governance advised that â€˜Nominations' related to Housing Allocations for vulnerable applicants or specialist medical reasons on behalf of North Hertfordshire Homes and this was a statutory duty performed by NHDC prior to referral to a Housing Association. The HF also provided the costs incurred when former employees came back to work at NHDC as consultants that had occurred on two occasions , one of which was supported by a specific grant that was confirmed on an annual basis and had taken place after three years. The other circumstance had involved an employee providing short term cover for a staff shortage. The HF assured the Committee that approval had been given by the Strategic Director in both cases. The HF referred the Committee to Appendix C which detailed the audit procedure and clarification of the findings from the Consultants Audit. The test schedule was presented at Appendix D and the key findings were detailed at Appendix E together with the agreed actions which included further training for staff, monitoring of consultants expenditure by the Contracts and Procurement Group and the application of suitable management controls for significant appointments. The HF advised the Committee that the stated expenditure on Consultants in the original audit was over stated. In response to a question on a sum of Â£147,380 spent on Consultants in 2009-2010 for Swim Centres the AM confirmed that this sum was a fee paid in respect of a VAT rebate of Â£500K. Members enquired as to how Consultants Fees were allocated against a budget code and the Head of Finance advised that each Directorate could set up a â€˜Consultants' budget often as part of a project budget and costs would be recorded as part of the overall budgetary control. Comment was also made as to the breakdown of the full project costs which included the identification of the costs for Consultants. The Chairman thanked the Head of Finance, Performance and Asset Management for the excellent report and clarification on the costs and Use of Consultants at NHDC. RESOLVED: (1)That the Head of Finance, Performance and Asset Management be thanked and congratulated for the comprehensive report; (2)That the information provided in the report be noted; (3)That the clarification of the term â€˜Consultants' and the correct use of budget codes and descriptions be noted. REASON FOR DECISION: To allow the Finance, Audit and Risk Committee comment as appropriate on the Use of Consultants Report.	Noted
25	RISK MANAGEMENT UPDATE Report Appendix A Appendix B Appendix B.1 The Head of Finance, Performance and Asset Management (HF) presented the report which sought to provide the Committee with an update on the management of the Strategic /Corporate risks owned by the Senior Management Team. The HF confirmed that the Senior Management Team had reviewed and challenged the Top Risks on 23 August 2011 and that Cabinet on 26 July 2011 had considered the report on Risk Management which was presented to Council on 8 September 2011 (Minute 35 refers). The HF was pleased to advise the Committee that where appropriate changes had been made to the scope of the risk and updates to progress against any mitigating actions. The HF referred the Committee to Appendix A which held details of all risks. The HF next referred the Committee to the changed assessments (impact/probability score) for two Top Risks viz. â€˜Implementing the Sustainable Community Strategy' - reduced likelihood of a â€˜1' and an overall matrix score of â€˜1' for the risk and: The â€˜Workforce Planning Risk' which had an increased probability score of â€˜2'. After a short discussion the Committee agreed to these proposals and that Cabinet should be invited to endorse these proposals. The HF next addressed the Committee on proposed deletions from Cabinet Risks viz. Corporate Plan or Priorities for the District and: The Office Accommodation Risk which was closed due to the successful vacating of the offices above Letchworth Museum and Town Lodge. The Committee noted that there were residual risks attached to the future use of Town Lodge and District Council Offices and that these risks would be monitored via the Asset Management Risk. The HF advised the Committee that the Business Continuity Management Risk had been removed from the Top Risks for SMT as the re-launch of the Council's Business Continuity Plans had been completed but there would still be monitoring via a Risk Register entry. The Committee were pleased to note that the Top Risk â€˜ Implementing Town Centre Strategies' had been removed as work in Baldock and Royston and Letchworth was complete. The HF provided details of two new risks assigned to the Senior Management Team i.e. Shared Services programme with East Herts DC and Stevenage BC and Procurement Challenges and referred the Committee to Appendix B for clarification of these risks. The Committee noted that the SMT would put mitigation actions in place to protect NHDC from procurement challenges and improve the procurement processes to make them more straightforward. The HF advised that this risk had now been listed as a Top Risk for SMT although this item had been a Risk Register entry since 2008 - 2009. The HF concluded his presentation with comment on the Equality Act of 2010 which created a new Public Sector Equality Duty on 5 April 2011 and that the risk of NHDC failing in this duty was recorded on the Risk Register. The approach was holistic and would take account of commercial and physical risks and would also consider the risks of the non - delivery of a service in an equitable and accessible manner. Led by the Chairman the Committee reviewed the Risk Matrix as presented at Appendix A and during the discussions it was clear that the Committee were concerned about the level of probability and impact for two large projects that the Council were currently managing: North Herts Museum and Community Facility at Hitchin Town Hall and the redevelopment of Howard Park and Gardens, Letchworth. The Committee considered that recent delays to these projects enhanced the risk factor where contract dates had not been met and consequently due consideration should be given to increasing both projects to a high level risk until both projects had made a good advance against the project work schedule. Comment was also made as to any risks that might be determined on the development of Shared Services between NHDC and other local authorities. A Member suggested that more use should be made of Covalent where a full description of a Risk and status of monitoring was required. Assurance was given that the detailed risk in the Covalent system covered the concerns and following a short discussion it was agreed that the use of the projector at meetings to give access to the Covalent System might be an improvement and as a support it was agreed to provide training for Members on the use of Covalent at a date to be agreed. The Chairman thanked the HF for the report and the Committee agreed to forward two recommendations on Risks to Cabinet for agreement. RESOLVED: (1)That the amendments to the Top Risks (Implementing the Sustainable Community Strategy and Corporate Plan/Priorities for the District and Office Accommodation) as presented at Paragraph 4 and Appendix A be noted and agreed; (2)That the reduction in the probability assessment to a â€˜1' of the Implementing the Sustainable Community Strategy be referred to Cabinet for approval at the meeting to be held on 27 September 2011; (3)That the proposal to delete the Top Risk â€˜Corporate Plan/Priorities for the District and Office Accommodation be agreed and recommended to Cabinet for approval at the meeting to be held on 27 September 2011; (4)That the potential increase in the likelihood of the Senior Management Team - Workforce Planning Risk be noted; (5)That the proposal to re-assign the Senior Management Team Business Continuity Management and Implementing Town centre Strategy Risks as Risk Register entries rather than Top risks be noted and agreed; (6)That the proposal for the Senior Management Team to manage the following Top Risks - New Ways of working and Procurement, Tendering and Letting of Contracts as detailed at Appendix B be agreed; (7)That the Performance and Risk Manager be requested to arrange at a future date training on the use and access to COVALENT with specific reference to Risks that require monitoring for members of the Finance, Audit and Risk Committee. RECOMMENDED TO CABINET: (1)That Cabinet be requested to consider the recommendation made by the Finance, Audit and Risk Committee that the reduction in the probability assessment to a â€˜1' of Implementing the Sustainable Community Strategy be agreed; (2)That Cabinet be requested to consider the proposal made by the Finance, Audit and Risk Committee that the deletion of the Top Risk â€˜Corporate Plan/Priorities for the District and Office Accommodation be agreed. REASON FOR DECISION: For the Finance, Audit and Risk Committee to consider and review the recommendations made at Paragraph 4 made in accordance with the NHDC Risk and Opportunities Management Strategy and to recommend to Cabinet any decisions regarding Top Risks.	Agreed	Performance and Risk Manager
26	ANNUAL GOVERNANCE STATEMENT Report Appendix A The Head of Finance, Performance and Asset Management advised the Committee that the report detailed the final Annual Governance Statement (AGS) for 2010-2011 and Action Plan as presented at Appendix A and advised the Committee that the AGS had been endorsed at the meeting of Council held on 8 September 2011 (Minute 36 refers). The HF referred the Committee to Appendix A and described the four updates to the Action Plan as detailed at Paragraphs 4.2 to 4.5. AGS 004 - Value for Money was complete; AGSD 021.001 VAT fuel receipts required from Members, reminder issued; AGS 022.001 Control of Legionella, improved monitoring and amendment to policy but completion date moved back to 30 November 2011; and AGS 023.001 The Anti Bribery and Corruption Policy had been approved with the Staff Code of Conduct sent to all NHDC staff in the July 2011 issue of Team Talk. The HF was pleased to advise the Committee that the external auditors Grant Thornton were consulted on the Annual Governance Statement and the AGS incorporated findings and recommendations from the Annual Audit and Inspection letter for 2009-2010 The Chairman thanked the Head of Finance, Performance and Asset Management for the report. RESOLVED: (1)That the Finance, Audit and Risk Committee note that the final version of the Annual Governance Statement for 2010-2011 was approved by Council on 8 September 2011 and signed by the Chief Executive and Leader of the Council; (2)That the progress against the Action Plan as presented at Appendix A arising from the AGS 2010-2011for delivery in 2011-2012 be noted. REASON FOR DECISION: For the Committee to be assured that NHDC was monitoring and improving its governance arrangements.	Noted
27	ANNUAL REPORT TO THOSE CHARGED WITH GOVERNANCE Introduction Report Mr Phil Westerman - Partner, Assurance from the NHDC external auditors - Grant Thornton thanked the Chairman for the opportunity to present the Annual Report to those charged with Governance. Mr Westerman wished to place on record the thanks of Grant Thornton to officers for good supporting papers and the excellent assistance and co-operation provided by members of the Finance Team at NHDC and congratulated officers for the excellent preparation of the accounts in accordance with the International Financial Reporting Standards, although some improvement in presentation had been suggested. Grant Thornton had issued unqualified opinions on The Financial Statements and Value for Money, however, there had been two significant adjustments: Write down of Â£1.8M of value for the councils share of Hitchin Town Hall emanating from errors in the valuation workings, and recognition of a Â£400K Performance Reward Grant income from â€˜receipts in advance'. The Committee were pleased to note that there were no other adjustments that impacted on the Council's income and expenditure position. Mr Westerman described the key audit issues ( Accounting under IFRS, Accounting for housing benefit debts, Revaluation of fixed assets and Use of estimates and judgements) to the Committee and advised that Grant Thornton had not altered or changed the planned approach. Mr Westerman referred the Committee to Appendix B which detailed the Audit Adjustments in three categories: Misstatement, Classification and Disclosure. The Committee expressed some concern at the loss in the balance sheet of Â£1.8M which related to the changed valuation of Hitchin Town Hall. Members were advised that the valuation methodology for Hitchin Town Hall had changed in line with IFRS requirements and it was valued at this new figure for the first time in the draft accounts submitted to audit and that subsequently the valuation had increased by Â£1.8M. The Head of Finance, Performance and Asset Management explained how the differing valuations based had occurred and confirmed that there would be a review of 12 properties whose valuations had also changed to assess if they might have to be re-adjusted. The valuation had been against the new IFRS regulations and there were no other valuation reports of this nature. Members questioned whether the increase of valuation of Â£1.8M had ever been challenged and that great care must be taken to ensure that the value of the property portfolio was correct because of the effect on the balance sheet. The Accountancy Manager advised the Committee that the valuation of Hitchin Town Hall was based on the cost of a rebuild with depreciation and that the 12 properties to be re-valued were on the balance sheet at Â£10M and that the worst case scenario could be a loss of Â£3-4M. The HF emphasised that the finance team had to follow the rules and the Strategic Director for Finance, Policy and Governance reminded Members that although officers would take all possible steps to ensure that valuations were as accurate and as scientific as possible and that all figures were valuations on paper and not until there was testing in the market place. Mr Westerman concluded his presentation by reference to the Action Plan as presented at Appendix C of which two were at high priority, one at medium priority and two at low priority. Mr Westerman confirmed that there would be a presentation in more detail of the findings in the Value for Money Audit to the next meeting. The Chairman thanked Grant Thornton for the report but reiterated the concerns of the Committee over the problems with Hitchin Town Hall and the new valuation and whether this would have any bearing on the redevelopment of the Town Hall for the North Hertfordshire Museum Service and Community Facility and why the significant change in valuation was not challenged by officers. RESOLVED: (1)That Grant Thornton be thanked for the excellent presentation in this report; (2)That the two significant adjustments to the financial statements for; a.write down of Â£1.8M in relation to the Council's owned share of Hitchin Town Hall and b.recognition of Â£400K Performance Reward Grant Income from â€˜receipts in advance', be noted; (3)That the unqualified opinion on the Financial Statements and the unqualified opinion on Value for Money be welcomed and noted. (4)That the Strategic Director of Finance, Policy and Governance be requested to take note of the concerns of the Committee on the revaluation of Hitchin Town Hall where there was no indication that the revision had been challenged by officers; (5)That the Head of Finance, Performance and Asset Management be requested to take note of the concerns of the Committee on the revaluation on Hitchin Town Hall and ensure that a thorough review of the property portfolio is undertaken as a matter of urgency. REASON FOR DECISION: To allow the Finance, Audit and Risk Committee review and comment on the report from Grant Thornton.	Noted
28	AUDIT STATUS REPORT Introduction Mr Denis Thorpe - Audit Manager at Grant Thornton advised the Chairman that a full report on Audit Progress would be made at the next meeting of this Committee to be held on 8 December 2011.	Noted
29	AUDITED STATEMENT OF ACCOUNTS FOR 2010 - 2011 Report Appendix A The Accountancy Manager (AM) presented the report of the Strategic Director of Finance, Policy and Governance which provided an update on the audited statement of accounts for 2010-2011 and confirmed that the Annual Statement of Accounts for 2010-2011 was complete and presented at Appendix A. The AM reminded the Committee that once the Statement of Accounts had been signed by the Strategic Director of Finance, Policy and Governance Regulation 10 of the Accounts and Audit Regulations 2003 required that the Member (i.e. Chairman) of the Finance, Audit and Risk Committee should sign off the statutory Annual Statement of Accounts. As per the previous presentation by Grant Thornton the AM advised the Committee that there had been two major adjustments to the financial statements with reference to the valuation of Hitchin Town Hall and the Â£400K Performance Reward Grant Income. The AM confirmed that there had been several presentational changes to ensure full compliance with the specific requirements of the Code and IFRS. The AM was very pleased to report that Grant Thornton would provide an unqualified opinion on the financial statements despite the much greater amount of work required this year due to the significant changes to the accounting regulations and the need to restate the 2009-2010 Statement of Accounts. There were no questions on the accounts from the Committee but a short discussion took place on the Balance Sheet and the effect of long term investments. A Member questioned the use of unusable reserves and interest payable and the AM referred the Committee to Note 39 applicable to the Core Financial Statements which indicated Â£83.986M of unusable reserves and that accumulated gains accumulated before 1 April 2007 were consolidated into the Capital Adjustment Account. The Strategic Director of Finance, Policy and Governance advised the Committee that property and assets could be sold to achieve capital spends and that it was possible to invoke prudential borrowing, but cautioned that property and land values were not very rewarding at the moment. The Chairman thanked the Accountancy Manager for the presentation of the report and proceeded to sign the Annual Statement of Accounts for 2010 - 2011. RESOLVED: (1)That the 2010-2011 Annual Statement of Accounts as set out at Appendix A be agreed; (2)That the Chairman of the Finance, Audit and Risk Committee should sign the 2010-2011 Annual Statement of Accounts. REASON FOR DECISION: To allow the Finance, Audit and Risk Committee comment if appropriate before the signing of the Annual Statement of Accounts for 2010-2011.	Agreed
30	SHARED INTERNAL AUDIT SERVICES - AUDIT UPDATE (INCLUDING POSISTION AGAINST THE 2011-2012 AUDIT PLAN) Report The Audit Manager - Shared Internal Audit Services (AMS) at Hertfordshire County Council presented this joint report of the Head of Finance, Performance and Asset Management and the Head of Assurance (SIAS). The AMS advised the Committee that this would be the last time that the audit report would be presented in this format. There will be a new format for the SIAS report to be presented to the meeting on 16 January 2012 and comments on the new format would be welcomed. The Head of Assurance commented that the new report would incorporate elements of partner committee reports where appropriate and as agreed by the partner Chief Financial Officers at the SIAS Board meeting held on 7 September 2011. The AMS advised the Committee that the report before them included: Progress against delivery of the 2011 - 2012 Annual Audit Plan, summaries of internal audit work in the period 1 June 2011 to 22 August 2011 and proposed amendments to the delivery of the remainder of the 2011 - 2012 Annual Audit Plan. The AMS referred the Committee to Appendix A which detailed the audits completed in the period 1 June 2011 to 22 August 2011 and gave the levels of assurance for the four audits - all being substantial. The AMS next referred the Committee to Appendix B which detailed the status of follow up audits and other non-audit work undertaken in this reporting period. The AMS advised the Committee that fieldwork was underway on five audits viz. Software Licensing, Grants to Voluntary and Community Groups, Equalities and Diversity, Community Safety and Externalisation of Document Management and that preliminary work had commenced on the Treasury Management Audit and Regeneration of Howard Park and Gardens Audit. The AMS took the Committee through the proposed amendments to the original 2011 - 2012 Annual Audit Plan following the set up and implementation of SIAS and advised that adjustments had been made following a risk based review. The Committee noted that there had been 10 deferred audits and 7 audits with a reduced time allocation. The AMS concluded her presentation with confirmation that at 22 August 2011 29 per cent of the revised Annual Audit Plan had been completed and that Appendix B presented details of progress against the audit plan. However, upon the review of Appendix A and the follow up audits section of the report, concern was expressed by the Committee at the lack of information provided to Members on changes to completion dates made during follow - up audits. Particular reference was made to the Procurement and Management of IT Equipment where seven recommendations had yet to be implemented, and that revised implementation dates had been proposed. In part mitigation it was accepted that the transfer of IT from Town Lodge to District Council Offices including re-location of the server systems had taken some time on top of other delays and diverted IT resources, but the Committee agreed that it would be appropriate to request a clarification report on this audit from the Head of Revenues and Benefits at the next meeting of this Committee to be held on 8 December 2011. The Chairman thanked the Audit Manager for the report and proposed that consideration should be given to presenting any specific audit report in its entirety and not just exceptions. RESOLVED: (1)That the progress against the Annual Audit Plan for 2011-2012 as at 22 August 2011 be noted; (2)That the proposed changes (17) to the Annual Audit Plan for 2011 - 2012 as detailed at Paragraph 4.6 following the go-live of SIAS be agreed; (3)That the concerns of this Committee that changes such as revised implementation dates made at follow up audits had not been referred back for discussion and clarification (e.g. Procurement and Management of IT Equipment) be noted by officers and the Shared Internal Audit Service; (4)That the Head of Revenues and Benefits be requested in the first instance to provide written clarification in the first instance with the reasons for the non implementation of seven recommendations (two high priority and five medium priority) and revised dates - Procurement and Management of IT Equipment - (follow up audit) to the Committee and subject to the Chairman's discretion attend the next meeting of the Finance, Audit and Risk Committee to be held on 8 December 2011. REASON FOR DECISION: The Recommendations made at Paragraphs 8.1 and 8.2 were made to ensure that the Finance, Audit and Risk Committee fulfils its obligations as the Audit Committee for North Hertfordshire District Council.	Agreed	Head of Revenues & Benefits
31	DISCUSSION ITEM: FUTURE MEETINGS - POSSIBLE AGENDA ITEMS Introduction 1.The Cost of Democracy RESOLVED: That the Head of Finance, Performance and Asset Management be requested to present a report to the next meeting of this Committee on 8 December 2011 that would examine in detail all identified costs allocated to the â€˜Costs of Democracy' heading when compared with other local authority's approach, how much it costs to run and produce papers for Committee meetings, Members' allowances, cost of elections (NHDC), whether past changes to Committee structures had achieved the envisaged savings and whether savings could be made in â€˜Costs of Democracy'. 2.Code of Conduct RESOLVED: That the Chairman of the Finance, Audit and Risk Committee be requested to enter into discussions with the Chairman of the Overview and Scrutiny Committee to consider the development of a Code of Conduct at NHDC in light of the proposed demise of the Standards Board of England and Wales. 3.Service Delivery Models RESOLVED: That the Chairman of the Finance, Audit and Risk Committee be requested to enter into discussions with the Chairman of the Overview and Scrutiny Committee to consider if original outcomes had been achieved with reference to the performance and benefits of established Shared Services e.g. Careline and CCTV and what could emanate from the future sharing of services with other local authorities.	Agreed	Head of Finance/Performance and Asset Management