Minutes of Audit Working Group of 11 August 2006
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NORTHERN JOINT POLICE BOARD AUDIT WORKING GROUP Minute of Meeting of the Audit Working Group held in Committee Room 3, Council Headquarters, Glenurquhart Road, Inverness on Friday 11 August 2006 at 10.30 a.m. Present Representing Comhairle nan Eilean Siar Mr D MacLean Representing The Highland Council Mr W J Ross Representing Orkney Islands Council Mr A Drever Representing Shetland Islands Council Mr J Nicolson (Substitute) Officials in attendance: Chief Superintendent L Stewart Mr P Fraser, Force Head of Finance Mrs E Ward, Force Budget Accountant Ms M Bruce, Senior Audit Manager, Audit Scotland Mr D Robertson, Head of Accounting, Treasurer’s Office Mr G Munro, Head of Internal Audit and Risk Management, Treasurer’s Office Mrs C Nicoll, Clerk’s Office Mr D MacLean in the Chair 1. Apologies Apologies were intimated on behalf of Mr P Corbett, The Highland Council, and Mr W Tait, Shetland Islands Council. 2. Statement of Unaudited Accounts 2005/06 There had been circulated Report No. Aud4/06 comprising the Statement of Unaudited Accounts for 2005/2006. In speaking to the report, the Treasurer informed Members that the Board’s actual expenditure in 2005/06 had been £53.267M compared with the budgeted expenditure of £52.988M, resulting in an overspend of £0.279M. However, there had been a small overall increase of £0.52M in revenue reserves arising from an increase in the sum held as an earmarked balance for ...
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NORTHERN JOINT POLICE BOARD
AUDIT WORKING GROUP
Minute of Meeting of the Audit Working Group held in Committee Room 3, Council
Headquarters, Glenurquhart Road, Inverness on Friday 11 August 2006 at 10.30 a.m.
Present
Representing Comhairle nan Eilean Siar
Representing The Highland Council
Representing Orkney Islands Council
Representing Shetland Islands Council
Mr D MacLean
Mr W J Ross
Mr A Drever
Mr J Nicolson (Substitute)
Officials in attendance:
Chief Superintendent L Stewart
Mr P Fraser, Force Head of Finance
Mrs E Ward, Force Budget Accountant
Ms M Bruce, Senior Audit Manager, Audit Scotland
Mr D Robertson, Head of Accounting, Treasurer’s Office
Mr G Munro, Head of Internal Audit and Risk Management, Treasurer’s Office
Mrs C Nicoll, Clerk’s Office
Mr D MacLean in the Chair
1.
Apologies
Apologies were intimated on behalf of Mr P Corbett, The Highland Council, and Mr W
Tait, Shetland Islands Council.
2.
Statement of Unaudited Accounts 2005/06
There had been circulated Report No. Aud4/06 comprising the Statement of Unaudited
Accounts for 2005/2006.
In speaking to the report, the Treasurer informed Members that the Board’s actual
expenditure in 2005/06 had been £53.267M compared with the budgeted expenditure of
£52.988M, resulting in an overspend of £0.279M.
However, there had been a small
overall increase of £0.52M in revenue reserves arising from an increase in the sum held as
an earmarked balance for commuted pension payments, due to police officers who had
been eligible to retire in 2005/06 but had chosen not to do so.
Total revenue reserves at
31 March 2006 were £2.984M, comprising a general reserve of £1.75M and £1.099M for
commuted sums. The Balance Sheet was negative due to the application of Financial
Reporting Standards 17 on retirement benefits, but this was not unusual for a small public
sector body and preparation of the accounts on a going concern basis had been previously
accepted by External Audit.
In conclusion, the Working Group was advised that the full
Board accounts would be finalised towards the end of September 2006.
In response to a query raised regarding the increase in support staff in 2005/06, Chief
Superintendent Stewart explained that 15 support staff members had been recruited in
2005/06, including Operations Centre, Registration Monitoring and Northern Camera
Safety Partnership staff.
Thereafter, the Working Group
NOTED
the report.
3.
Audit Scotland Briefing Note 2005/06
There had been circulated Report No. Aud5/06 by Audit Scotland outlining
the Audit
Briefing Note for 2005/06.
The Senior Audit Manager informed Members that the main focus of the audit would be
the review of the financial statements and supporting working papers to enable the
Auditor to provide an independent opinion on the financial statements by 30 September
2006.
In addition, it was planned to review:
•
progress made in implementing the recommendations included in the 2004/05 Audit
Report
•
the arrangements for the provision of internal audit services within the Board,
including the collecting, recording and publishing of the statutory performance
indicators
•
the Board’s preparations for the 2006/07 National Fraud Initiative in Scotland, which
was to be undertaken throughout all Councils, police and fire authorities in Scotland
•
the Board’s arrangements for collecting, recording and publishing directed
performance information; the Auditor would also give an opinion on the reliability of
the indicators to enable compilation of national reports on performance.
The Auditor would also be required to audit the Civil Defence and Police Grant Claims as
part of the 2005/06 audit and submit the certified claims to the Scottish Executive.
The Working Group
NOTED
the report.
4.
Audit Scotland – Financial Statements Strategy 2005/06
There had been circulated Report No. Aud6/06 by Audit Scotland outlining the Financial
Statements Strategy for 2005/06.
In speaking to the report, the Senior Audit Manager reported that, following the
introduction of new international audit standards, auditors were now required to advise
the Board of the scope of any forthcoming audit, outlining the approach that would be
taken and advising that consideration would be given to the ‘materiality’ of the
information (information defined as “material” ‘if its omission or misstatement could
influence the economic decisions of users taken on the basis of financial statements’).
The audit would also consider national and local issues that would impact on the financial
statements for 2005/06 and would include:
•
operation of the Prudential Code in funding capital investment
•
development in international accounting standards
•
accounting for commuted sums for officers eligible to retire but who had yet to do so
•
disclosures relating to FRS17 (Retirement Benefits)
•
the application of capital accounting
•
disclosures in the Statement on the System of Internal Financial Control.
The Working Group
NOTED
the report.
5.
Internal Audit Annual Report 2005/06
There had been circulated Report No. Aud7/06 dated 14 July 2006 by the Head of Internal
Audit and Risk Management, The Highland Council, comprising his Annual Report for
2005/06 and summarising the operations undertaken by the Internal Audit Section on
behalf of the Board and the Constabulary.
The Head of Internal Audit and Risk Management reported that the Force’s key operating
systems were operating soundly, there were no fundamental breakdowns of control and he
was satisfied that reasonable assurance could be placed upon the adequacy and
effectiveness of the Force’s internal control system.
There were still a number of areas
where improvements could be made, including:
•
Creditors: Corporate Credit Cards
•
Procurement: Central Stores
•
Corporate Governance
•
Financial Regulations
•
Performance Indicators.
The report also informed Members of the Audit Section’s performance against the
planned activity for 2005/06 and identified the tactical plan for the year 2006/07. The
Force Head of Finance reported that updated revisions to the Board’s Financial
Regulations would be submitted for consideration to the Board meeting in November and
that the existing Corporate Governance arrangements were currently being reviewed
against the CIPFA/SOLACE framework.
Members were also informed that work was
ongoing on e-procurement.
It was intended that the new e-procurement system would
address both the utilisation of the Corporate Credit Cards and the provision of an adequate
recording system for the Central Stores.
The Working Group
NOTED
the terms of the report, including the tactical plan for
2006/07.
6.
Internal Audit Review
There had been circulated Report No. Aud8/06 dated 27 July 2006 by the Head of Internal
Audit and Risk Management, The Highland Council, outlining work undertaken by the
Internal Audit Section since the previous meeting of the Working Group held on 28
November 2005.
There had also been circulated confidential final internal audit reports
on Operational Support – Road Policing Section, Statutory Performance Indicators,
Provision of Service, Central Stores and Budget Monitoring – Overtime.
The Head of Internal Audit and Risk Management commented on issues arising from the
final internal audit reports and confirmed that the Force had satisfactory procedures in
place to address the required action plans.
The Force Head of Finance reported that work
was ongoing to address the recommendations arising from the review and thanked the
audit staff for their valuable assistance during the review process.
The Working Group welcomed the positive outcome of the audit review and thereafter
NOTED
the position.
7.
Monitoring of Retirements
There had been circulated and
NOTED
Report No. Aud9/06 dated 26 June 2006 by the
Payroll and Pensions Manager, The Highland Council, advising Members on the number
of retirements of Northern Joint Police Board members of the Local Government Pension
Scheme for the year to 31 March 2006.
The meeting ended at 11.30 a.m.
