It was noted that apologies for absence had been received from Councillor Warner.

It was noted that Councillor Daley was substituting for Councillor Warner.

There were no Visiting Members.

With regard to the exempt report of the Assistant Director of Regeneration and Cultural Services relating to the Maidstone Museum East Wing project, Councillor Daley stated that he was a Director Trustee of the Maidstone Trust, the fundraising capability of which had been used to gain external funding for the project.  The Committee was informed that the Audit Review of the fundraising arrangements was not a matter for discussion at this meeting.

With regard to the Minutes of the meeting held on 11 June 2012, and, specifically, Minutes 13 (Internal Audit Annual Report 2011/12 insofar as it included details of the review in relation to community halls) and 14 (the Annual Governance Statement, which included reference to Parish Council funding), Councillor Burton wished to reiterate that he was a Trustee of Fusion, the booking agents for Heather House, and a Member of Langley Parish Council.

There were no disclosures of lobbying.

RESOLVED:  That the item on Part II of the agenda be taken in private as proposed.

RESOLVED:  That the Minutes of the meeting held on 11 June 2012 be approved as a correct record and signed.

(1)  Minute 10 (1) – Appointment of Independent Member of the Audit Committee

The Head of Finance and Customer Services updated the Committee on the efforts being made to recruit an Independent Member of the Audit Committee.  He explained that following the last meeting he had contacted the one remaining person who, it was understood, might still be interested in the appointment, and he had indicated that he did not wish to take the matter further.  The options appeared to be to re-advertise the position; to consider alternative methods by which the Committee might receive independent professional advice; or to defer consideration of the matter until the meeting of the Committee scheduled to be held on 26 November 2012 with a view to putting arrangements in place to support the Committee when reviewing the next Statement of Accounts.

In response to questions by Members, the Director of Regeneration and Communities explained that it was not a requirement to have an Independent Member.  However, there were advantages to be gained in having an Independent Member with a relevant financial background to support the Committee in discharging its duties in relation to overseeing the financial reporting process and, in particular, in approving the Statement of Accounts.  Approaches had been made by the Officers to neighbouring authorities, the Kent-Wide Auditors Group, the Chamber of Commerce, the Federation of Small Businesses and local accountancy firms, but there had been no expressions of interest.  The feedback received was that this was because no remuneration was being offered for the role, other than the payment of expenses.

RESOLVED:  That consideration of the appointment of an Independent Member of the Audit Committee be deferred until the meeting of the Committee scheduled to be held on 26 November 2012, but, in the meantime, the Officers be requested to follow up the suggestion that the Leader of the Council be requested to seek expressions of interest in the appointment through his contacts within the business community.

(2)  Minute 13 – Training for New Members and Substitute Members of the Audit Committee

In response to questions by Members, the Head of Audit Partnership explained that although some provisional dates had been set for the induction training, they had, of necessity, been used for other Council business.  Arrangements would be made for the training to take place before the next meeting of the Committee on 17 September 2012.

The Committee considered the report of the Head of Finance and Customer Services setting out the un-audited Statement of Accounts for 2011/12 which had been produced in accordance with the CIPFA Code of Practice on Local Authority Accounting in the United Kingdom 2011/12.  It was noted that:-

·  Under the amended Accounts and Audit Regulations 2011, there was no longer a requirement for Members to approve the Statement of Accounts prior to it being submitted for external audit.  Instead, the Statement had to be signed by the Director of Regeneration and Communities, as the responsible officer, by 30 June and then approved by the Audit Committee by 30 September following the external audit.  Notwithstanding these revised arrangements, it was considered appropriate to provide an early opportunity for Members to review the Statement and ask questions.

·  After the introduction of International Financial Reporting Standards in the 2010/11 Code of Practice there was only one significant change in 2011/12, this being the introduction of a category for Heritage Assets.  These were defined as assets with historical, artistic, scientific, technological, geophysical or environmental qualities that were held and maintained principally for their contribution to knowledge or culture.  Following a review of assets a number of Heritage Assets had been identified and valued where it was practical and cost effective to do so.  Full details were disclosed in a note to the Accounts, and the Balance Sheet for 2010/11 had been restated to reflect the position had this category been in existence then.

·  The Statement provided evidence that the Council had been able to continue to effectively manage its resources through the particularly difficult economic conditions of the last few years, and that it was in a good position to deal with the continuing economic uncertainty.

·  Key messages from the Statement were as follows:-

The value of Long Term Assets had decreased by £9.9m.  The major part of this decrease was a significant downward revaluation of the Maidstone Leisure Centre.  The new value was a reflection of a different set of assumptions used by the valuer in arriving at the figure compared to those used in the previous valuation.  (A new valuer was engaged for this year).  Subsequently, the External Auditor had suggested that the change be dealt with as a prior period adjustment and that last year’s balance be re-stated.

Current Assets had decreased by £7.1m.  This was due, in the main, to a reduction in the value of cash investments at the end of the financial year, and reflected the continuing use of resources to fund the capital programme which included major projects at the Museum, Mote Park and in the High Street.

Current Liabilities had decreased by £6.0m reflecting changes in monies owing to Central Government at the end of the financial year in respect of Housing Benefits and Business Rates.

There had been an increase in Long Term Liabilities of £15.4m, which was primarily due to a change in the projected deficit on the Pension Fund, which had increased from £30.3m  ...  view the full minutes text for item 26.

RESOLVED:  That the public be excluded from the meeting for the following item of business because of the likely disclosure of exempt information for the reasons specified, having applied the Public Interest Test:-

The Committee considered the exempt report of the Assistant Director of Regeneration and Cultural Services updating the position with regard to the actions being taken in relation to the Maidstone Museum East Wing extension construction project.  The report included details of the negotiations regarding the final account; the claim in relation to inaccurate surveying; and the progress being made on the review of the project commissioned by the Cabinet.  Having received replies to its questions, the Committee gave instructions to the Officers as to the way it wished to proceed.

6.30 p.m. to 8.10 p.m.