Minute Audit and Standards 20 April
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THE HIGHLAND COUNCIL AUDIT AND STANDARDS COMMITTEE Minutes of Meeting of the Audit and Standards Committee held in Committee Room 3, Council Headquarters, Glenurquhart thRoad, Inverness on Thursday, 20 April 2006 at 10.30 a.m. PRESENT Mr D W Briggs Mr R J Lyon Mr W Fernie Mr L Fraser Mr M Macmillan Mr F D S Black Mr I MacDonald Mr W Clark NON MEMBER ALSO PRESENT: Mrs G McCreath Officials in attendance: Mr G Munro, Head of Internal Audit and Risk Management Ms R Pieroni, Head of Committee Services Mr B Williams, Head of Corporate Finance Mr G McCaig, Head of Business Support, Housing and Social Work Mr N Rose, Principal Auditor, Internal Audit Miss L MacKay, Auditor Miss J MacLennan, Principal Administrator, Corporate Services Also in attendance: Mr R Scott, Audit Scotland Mr J Convery, Audit Scotland Mr D W Briggs in the Chair BUSINESS 1. APOLOGY FOR ABSENCE An apology for absence was intimated on behalf of Mr A MacKay. 2. MINUTES OF PREVIOUS MEETING – 16 FEBRUARY 2006 There had been circulated for information the Minutes of Meeting of the Committee held on 16 February 2006 – which were NOTED. 3. INTERNAL AUDIT REVIEWS PERIOD – 27 JANUARY TO 31 MARCH 2006 rdThere had been circulated Report No. AS/5/06 dated 3 April 2006 by the Head of Internal Audit and Risk Management which summarised the final reports issued since the date of the last meeting, together with other information relevant to ...
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THE HIGHLAND COUNCIL
AUDIT AND STANDARDS COMMITTEE
Minutes of Meeting of the Audit and
Standards Committee held in Committee
Room 3, Council Headquarters, Glenurquhart
Road, Inverness on Thursday, 20
th
April 2006
at 10.30 a.m.
PRESENT
Mr D W Briggs
Mr W Fernie
Mr M Macmillan
Mr I MacDonald
NON MEMBER ALSO PRESENT:
Mrs G McCreath
Mr R J Lyon
Mr L Fraser
Mr F D S Black
Mr W Clark
Officials in attendance:
Mr G Munro, Head of Internal Audit and Risk Management
Ms R Pieroni, Head of Committee Services
Mr B Williams, Head of Corporate Finance
Mr G McCaig, Head of Business Support, Housing and Social Work
Mr N Rose, Principal Auditor, Internal Audit
Miss L MacKay, Auditor
Miss J MacLennan, Principal Administrator, Corporate Services
Also in attendance:
Mr R Scott, Audit Scotland
Mr J Convery, Audit Scotland
Mr D W Briggs in the Chair
BUSINESS
1.
APOLOGY FOR ABSENCE
An apology for absence was intimated on behalf of Mr A MacKay.
2.
MINUTES OF PREVIOUS MEETING – 16 FEBRUARY 2006
There had been circulated for information the Minutes of Meeting of the Committee held
on 16 February 2006 – which were
NOTED.
3.
INTERNAL AUDIT REVIEWS
PERIOD – 27 JANUARY TO 31 MARCH 2006
There had been circulated Report No. AS/5/06 dated 3
rd
April 2006 by the Head of
Internal Audit and Risk Management which summarised the final reports issued since
the date of the last meeting, together with other information relevant to the operation of
the Internal Audit Section.
Speaking to the report, the Head of Internal Audit and Risk Management highlighted the
reviews which had been undertaken as follows:-
Community Ownership Project – confirmed that an approved Project Plan was in place
against which progress was regularly monitored as well as a Staff Communication and
Consultation Plan. A further Plan was to be developed in relation to Communication
with Tenants. A Project Board was also in place although it had still to define its remit.
Overall, the project had been well planned and progress was being closely monitored and
reported in order to ensure that the ballot took place and, if applicable, the transfer was
completed on target. There had been one recommendation made with a prioritisation
classification of 2.
Lochaber Area – Heating Oil Contract – confirmed that the packaging of the Equipment
and Adaptations installations had been inefficient, ineffective and uneconomical. Also,
no clear and consistent specification had been issued and there had been a reliance on the
‘good faith’ of the contractors concerned due to an absence of inspections. Although
elements of the installation work had been subject to Building Regulations, warrants had
either not been obtained or had been granted without the performance of appropriate
checks. It had also been noted that there had been no qualified or experienced Building
Services Inspectors at the time when the works had been commissioned. Overall, a
substantial number of shortcomings had been identified which had resulted in the need
for remedial works at all the properties concerned. However, measures had now been
identified to ensure that there was no recurrence of the problems which had been
identified.
Risk Management – confirmed that there was no framework for identification of the
risks affecting the Council’s business objectives on an ongoing basis and no corporate
risk register containing all of the risks identified by Service Management teams. There
was also no clear link between the Service Risk Registers, Management Action Plans,
Service Plans, Service Goals and the Corporate Plan. In addition, there were
inconsistencies in both the way in which risks were recorded and linked to plans and in
the level to which the process had permeated across different Services. Overall, twelve
recommendations had been made to address areas of concern – two at Grade 1, three at
Grade 2 and seven at Grade 3 – and it had been recommended that all should be
addressed within the following six month period.
Following discussion, it was
AGREED
that a short presentation should be made to the
next meeting to update Members on the strategy adopted by the Council in Risk
Management.
Capital Budgetary Control – confirmed that it had been found that, after initial
agreement of the budget, adjustments to budgets had not been highlighted in the
narrative part of the monitoring report. Also, all reports focused on the current year and
no reference or summary was presented at the conclusion of a major capital project. In
addition, monitoring statements were not presented to every Service Committee. Overall,
four recommendations had been made – one at Grade 1 and three at Grade 3 – all of
which were due to be implemented with the following twelve month period.
Highland Opportunity Ltd – confirmed that, although the procedural guidance stated that
personal references should be taken up in respect of loan applications, this was not
always the case. Also, where the loan was for less than £5,000, it could be approved by
delegated powers but it had been found that there was not always formal authorisation on
file in this regard. Overall, two recommendations had been made – one at Grade 3 and
one at Grade 2 – both of which had been implemented by 31 March 2006.
Income and Recovery (Manual Receipting etc) – confirmed that overall there were good
income manual receipting procedures but these were being undermined by poor holiday
cover and the distances between those involved in processing income onto the Oracle
system. As a result, problems were also being caused with the reconciliation process at
Headquarters. Three recommendations had been made – all at Grade 3 – which were to
be addressed by the Oracle 11i project team during the development of the new package
and completed by April 2006.
Social Work – Duplicate Payment – confirmed that a review had established that there
had been three contributory factors surrounding an overpayment to a Day Centre,
namely all grant payments to Voluntary Organisations were being paid centrally from
Headquarters for the first time, an invoice had been sent to the Area Social Work Office
from the Centre when this had not been required and the Team Leader had failed to
scrutinise the payment request details sufficiently prior to authorising the payment. It
was however considered that this had been a one-off occurrence which, if the
recommended action was taken, should not happen again. Overall, four
recommendations had been made – two at Grade 2, one at Grade 3 and one at Grade 4 –
all of which had been accepted by management and were due to be fully implemented by
April 2006.
Following general discussion, the Committee otherwise
NOTED
the terms of the report
as circulated.
4.
EXTERNAL AUDIT REVIEWS
There had been circulated Report No. AS/6/06 dated 4
th
April 2006 by the Director of
Finance which contained reports from the Council’s External Auditors (Audit Scotland)
as follows :-
Financial Strategy
Following the Public Pound
The report detailed the recommendations made in the activities reviewed and included an
Action Plan which had been agreed by the relevant Service Managers.
In regard to Financial Strategy, it was confirmed that overall the Council had well
developed procedures in place, particularly in regard to budgetary control mechanisms,
Member involvement in the Budget Working Group, effective treasury management
procedures and useable reserves and balances. Key areas where it was considered that
arrangements could be improved included linking resource allocation to Council
priorities within the Corporate Plan and Service/Operational Plans, developing a
systematic approach to ensure that the Council’s financial performance and strategy was
integrated with wider performance management, progressing medium and long term
revenue and capital planning in line with the approach approved by the Budget Working
Group and ensuring that asset management plans for all of the Council’s assets showed
that investment decisions were soundly based.
Following discussion, it was
AGREED
that, in relation to the recommendation to
introduce a structured programme of staff development and training on financial issues,
specific consideration should be given to including Members where appropriate.
It was also
AGREED
that, in relation to the recommendation for the preparation of an
asset management plan for all services, specific consideration should be given to the
inclusion of information in relation to the Council’s land assets in terms of possible
future financial advantage from land sales, etc.
In regard to Following the Public Pound, it was confirmed that overall the Council had
effective arrangements in place, including an approved Voluntary Sector Policy,
Corporate Guidance, standard Service Level Agreements, clear separation of duties
between officers and a right of access to key records etc for External Audit. Areas for
improvement included the need to maintain a corporate register of all support provided
to arms length external organisations (ALEOs), use of existing policies on the
community use of school buildings and sub market leases in the development of a
corporate policy on non- cash support for ALEOs, introduction of a formal corporate risk
assessment process for service departments to apply before entering into funding
arrangements with ALEOs, the issue of further guidance on the monitoring of financial
and operational performance for significant funding arrangements and confirmation that
appropriate insurance cover and indemnity arrangements were in place in order to
safeguard Members and Officers from potential risks in their dealings with external
bodies.
Thereafter, the Committee otherwise
NOTED
the terms of the report as circulated.
5.
TACTICAL AUDIT PLAN 2006/07
There had been circulated Report No. AS/7/06 dated 5
th
April 2006 by the Head of
Internal Audit and Risk Management which contained details of the annual review which
had been undertaken during January and February in order to revise Audit Plans for the
financial year 2006/07. In accordance with best practice, the previous 3 year ‘Strategic’
plan had been replaced with an annual ‘Tactical’ plan which reflected the current and
future pace of change within the authority and was the result of needs assessment
undertaken with the support of Service Directors, including consideration of the current
Risk Assessment methodology adopted by the Council.
The Committee
NOTED
the terms of the report as circulated.
6.
STANDARDS COMMISSION: COUNCILLORS’ CODE OF CONDUCT:
INVESTIGATIONS INTO COMPLAINTS
There had been circulated Report No. AS/8/06 dated 12
th
April 2006 by the Director of
Corporate Services which advised of complaints received by the Standards Commission
during the period August 2005 to March 2006 in relation to alleged breaches of the
Councillors’ Code of Conduct by four Members of Highland Council and of the outcome
of the Standards Commission’s investigations into these complaints.
During a summary of the report, it was confirmed that, in respect of the complaints dealt
with over the period, the Standards Commission had made no findings of breach of the
Code of Conduct and there were no cases outstanding at the present time.
During discussion, a number of Members questioned the wording within Section 2 of the
Code whereby it was stated that Councillors “
must respect
all other Councillors and all
Council employees…” and it was suggested that this would be better phrased in terms of
“
respect must
be shown
to all other Councillors…”. Members were also of the view that
the requirement to show respect should be extended to cover other individuals present at
any meeting where the Councillor was representing the Council.
It was
AGREED
that Officers should ask the Standards Commission whether there was
likely to be an opportunity for further consultation on the Code of Conduct in the future
which would enable these points to be made.
The meeting ended at 11.40 a.m.
