Meeting documents

Audit Committee
Tuesday, 30th June, 2015 7.00 pm

NumberItem
 Minutes for this Meeting 
 Agenda Front Sheet 
 Agenda Papers 
1.Apologies/Substitutes
2.Declarations of Interest
3.Minutes – To approve the Minutes of the Meeting of this Committee held on the 3rd March 2015 (attached) 
4.Part I – For Decision
 This report provides and update on the work of the Corporate Enforcement Support and Investigations Team. Through changes to Welfare Reform some of the teams work will transfer to the Government Single Fraud and Investigation Service (SFIS) but the Council has committed to maintaining its counter fraud resources and to develop the team into a wider corporate enforcement and investigation resource expanding its remit into all areas of council activity. Over the course of the year the teams activity has identified fraudulent activity of over half a million pounds. Action varied from solely correcting a benefit claim or account through to prosecution action through to taking possession action to recover social housing.The team itself has seen changes in personnel. Fraud awareness training was conducted over the year further reiterating the prevention message and the anti-fraud culture for the Council as a whole.The team has successfully bid for funding from KCC as part of an initiative to optimise the benefit from the county wide data matching exercise that is underway.
 Fraud Annual Report 2014/15 
5.The report presents the 2014/15 Head of Audit Opinion and supporting work behind that opinion. The report also provides a more wide-ranging update on the audit service.
 Internal Audit Annual Report 2014/15 
6.The 2014/15 annual report of activity of the Audit Committee in discharging the responsibilities set out for it in the Council’s constitution
 Annual Report of the Audit Committee 2014/15 
7.Each year the Council must produce and approve an Annual Governance Statement (AGS). AGS are designed to summarise for members residents and external stakeholders the Council’s approach to governance and show how the Council fulfils the principles for good corporate governance in the public sector. The AGS needs to draw conclusions based on evidence throughout the past year about the effectiveness of the Council’s arrangements.The AGS must be published alongside the Council’s formal audited financial statements though need not be agreed at the same time. The full financial statement and the auditor’s findings and proposed opinion will be considered by the committee in September. It is after that when the AGS is published along with the accounts.This year’s AGS builds on previous statements providing updated information where needed.Our governance arrangements are well-developed and pervade all that we do in a variety of forms but they evolve. Their various components are subject to ongoing development with principal developments summarised in the AGS.Work to review significant governance issues highlighted last year progressed well. Following input from the Leader and others there are further developments needed and these are highlighted at the end of the draft.In conclusion governance arrangements remain appropriate effective and adaptive to change as circumstances dictate.
 Approval of Annual Governance Statement 2014/15 
8.Each year in support of the external audit of the council's financial statements it is necessary to provide two assurance letters to the auditors. These are important statements on which the auditors rely for their opinion work. The two completed letters are attached. One is from the chairman on behalf of the committee. The second is from the Deputy Chief Executive on behalf of management. They cover similar points to assurance letters in the past and have already been shared in draft with our auditors. They cover assurances relating to such matters as disclosures of material facts affecting the statements fraud contingent liabilities and legal issues affecting the statements
 2014/15 Financial Statements - Letters of Assurance to external Auditors 
9.Part II – Monitoring/Information Items
 Outcome of Independent Audit Review of the Council’s Affordable Housing Programme 
10.On 31 March the Audit Commission closed and its remaining functions transferred to a number of other bodies. Closure was originally signalled in an announcement by the former Coalition Government in 2010 when it announced its intention to introduce legislation to close the Commission with the eventual transfer of responsibility for local public audit procurement to councils and other audited bodies.This information report provides further background to the Council’s responsibilities to procure local public audit services when the current audit contract with Grant Thornton UK expires. A further and more comprehensive report will be presented to the September meeting of the Audit Committee.
 The Future of Local Public Audit 
11.Attached are two reports from Grant Thornton UK LLP. The first sets out the external audit plan for work associated with the 2014-2015 financial statements and this year’s value for money assessment. Interim work completed has not highlighted any material issues to draw to management or members’ attention.The second contains the latest general update from Grant Thornton. As well as some details on the progress of audit work at Ashford the report provides details of Grant Thornton’s national reports covering a number of themes. All documents mentioned have been received by the council and the contents will feed into officers and members’ work over the coming months. Not all issues mentioned in these reports are directly for the Audit Committee to consider however. Due to the importance of the topics it is suggested that key points be the subject of pre-committee briefings as well as more formal reports to members in due course. Copies of the guidance to understanding local authority accounts will be circulated separately to members of this committee.
 External Audit 2015 Plan and Audit Update 
12.Each year the external auditor currently Grant Thornton UK LLP submits its agreed fee scale to the council. Grant Thornton’s letter is attached to this report. The fees result from the former Audit Commission’s procurement of external audit services for local government and the health sectors which resulted in the current contract with Grant Thornton for the south east region. That first procurement covering 70% of the Commission’s work at that time resulted in a 40% reduction in fee costs locked in for five years. Last year the remaining 30% of the Commission’s work was awarded and results in a further 25 per cent reduction to scale audit fees and indicative certification fees for most audited bodies. The Commission was asked to set the fees for 2015/16 before it closed on 31 March 2015. The contracts with audit firms run until 2017 with a possibility of extension for up to three years. The Department for Communities and Local Government will make a decision about whether to extend the contracts in due course. The Local Government Association will consult councils on the options. There will be a full report to the Audit Committee in September setting out these options and the implications for the council in the lead up to all councils having the ability to select their external auditor at a future point.
 External Audit Programmed Work and Fees 2015/16 
13.Report Tracker and Future Meetings