The Committee considered its first Annual Report to Council covering the period May 2008 to June 2009.  The Committee agreed the Report for submission to the Council.  A copy of the Report is attached as an Appendix to these Minutes.

RECOMMENDED:  That the Audit Committee’s Annual Report to Council 2008/09, a copy of which is attached as an Appendix to these Minutes, be noted.

Apologies for absence were received from Councillor Nelson-Gracie.

It was noted that Councillor Moss was substituting for Councillor Nelson-Gracie.

There were no Visiting Members.

RESOLVED:  That Councillor Horne be elected as Chairman of the Committee for the Municipal Year 2009/10.

RESOLVED:  That Councillor Warner be elected as Vice-Chairman of the Committee for the Municipal Year 2009/10.

There were no disclosures by Members or Officers.

RESOLVED:  That the item on Part II of the Agenda be taken in public.

RESOLVED:  That the Minutes of the meeting held on 30 March 2009 be approved as a correct record and signed.

COUNCILLOR COLIN PARR- FORMER MEMBER OF THE COMMITTEE

The Committee wished to place on record its thanks to Councillor Parr for his valuable contribution to its deliberations over the last few years.

RESOLVED:  That the following Members be appointed as Spokespersons for their respective Political Groups for the Municipal Year 2009/10:-

Councillor Horne - Conservative Group

Councillor Warner - Liberal Democrat Group

The Committee considered the report of the Chief Executive setting out the draft Annual Governance Statement 2008/09 to be signed by the Chief Executive and the Leader of the Council and included in the Statement of Accounts.  It was noted that best practice had identified that the Annual Governance Statement should be considered separately from and before consideration of the Statement of Accounts.  The Statement of Accounts would be submitted to the meeting of the Committee scheduled to be held on 15 June 2009 and the combined Statements would be submitted to the Council for approval on 24 June 2009.  The Head of Finance advised the Committee that he wished to amend paragraph 5.2 (a) of the Annual Governance Statement concerning audit reports with a level of assurance lower than substantial to make clear that five areas were outstanding at March 2009 relating to aspects of Section 106 Agreements, Refuse Collection Contract Management, Gypsy Sites, Climate Change and Freedom of Information.  Of these, Refuse Collection Contract Management, Gypsy Sites and Climate Change had already been reviewed and the level of assurance had increased to substantial.

The Committee asked a number of questions of the Officers and the representatives of the Audit Commission relating to, inter alia, the difference between the old Statement of Internal Control and the Annual Governance Statement; the expectation of reciprocal action from partners in terms of consultation and joint working; the Council’s complaints management system and the identification and analysis of trends with a view to improving service delivery; the scope to accelerate reporting of and reaction to performance and risk management issues; and the approach to partnership working depending on the different groups involved. 

RESOLVED:  That, having considered the replies to its questions, the Committee endorses the Annual Governance Statement, as amended by the Head of Finance, for inclusion in the Statement of Accounts.

The Committee considered the report of the Chief Executive asking that it consider and approve an amended Local Code of Corporate Governance based on a CIPFA/SOLACE publication entitled “Delivering Good Governance in Local Government”.  It was noted that the amended Code included the Core Principles and the Supporting Principles of Corporate Governance and detailed the current practice of the Authority in delivering good governance.

The Committee asked a number of questions of the Officers relating to, inter alia, the precise meaning of the words “the Authority”; the definition of the words “robust scrutiny” in paragraph 2.2 (6) of the Code; and how the effectiveness of the Scrutiny function was measured.

RESOLVED: 

(i)  That, having considered the replies to its questions, the

Committee approves the amended Local Code of Corporate Governance subject to reference being made under Core Principle 4 (The Authority will take informed and transparent decisions which are subject to effective scrutiny and manage risk), Supporting Principle (Ensure it uses its legal powers to the full benefit of the citizens of communities in its area) to how the Council uses its powers in relation to wellbeing and under the Sustainable Communities Act 2007; and

(ii)  That the Cabinet be requested to consider the suggested

amendment to the Local Code of Corporate Governance.

The Committee considered the report of the Head of Internal Audit and Risk Strategy setting out details of the work of the Internal Audit Section over the financial year 2008/09 and the opinion of the Head of Internal Audit on the overall adequacy and effectiveness of the Council’s control environment.  It was noted that:-

·  The statutory Code of Practice for Internal Audit in Local Government in the United Kingdom required the Head of Internal Audit to submit a written report to those charged with governance, timed to support the Annual Governance Statement.

·  It was the opinion of the Head of Internal Audit and Risk Strategy that substantial reliance could be placed on the Council’s control environment in terms of the overall adequacy and effectiveness of the controls and processes that were in place to achieve the objectives of the Authority and there were no qualifications to that opinion.

·  The opinion on the control environment was formed principally through the results of Internal Audit work during the financial year, but other factors had also been considered such as the results of external audit work during the year; the effectiveness of the Council’s risk management arrangements; significant control breakdowns during the financial year, whether they were found by Internal Audit or not; the results of any other form of external inspection or assessment; and the effectiveness of senior management in resolving control weaknesses.

·  36 audit projects were completed between April 2008 and March 2009.  The work of the Internal Audit Section had established that for the majority of the areas examined, substantial controls were in place.  Where weaknesses had been identified, they had been reported to the appropriate Heads of Service who had since taken the necessary action to address those weaknesses.

·  With regard to the proposed Internal Audit Partnership between Maidstone, Ashford, Swale and Tunbridge Wells Borough Councils, the decision of Tunbridge Wells Borough Council regarding the appointment of the Head of Internal Audit Partnership in designate was awaited.

  The Committee asked a number of questions of the Officers relating to, inter alia, the payment made by Ashford Borough Council to off-set the salary costs of the Head of Internal Audit and Risk Strategy who also managed the Audit Team at Ashford; whether the Corporate Property Group should meet more frequently; the adequacy of the risk and project management arrangements in respect of Growth Point projects, including monitoring of individual schemes against the Capital Programme; the benefits arising from GSi approval certification; the risks and benefits associated with Chairmanship of the Kent Audit Group; and the designation of the Head of Internal Audit and Risk Strategy as the lead Officer for the Mid-Kent Improvement Partnership proposal to create a four-way Internal Audit Partnership and the risks and rewards associated with the proposed Partnership.

  RESOLVED:  That, having considered the replies to its questions, the Committee:-

1.  Notes the Head of Internal Audit and Risk Strategy’s opinion

  that substantial reliance can be placed on the Council’s control environment in terms of  ...  view the full minutes text for item 14.

The Committee agreed that the exempt report of the Head of Internal Audit and Risk Strategy setting out details of two special investigations carried out by the Internal Audit Section over the financial year 2008/09 should be considered in public.  It was noted that the investigations related to allegations against Council Officers and suspected fraud. 

  RESOLVED: That the outcome of the two special investigations be noted and that the Committee’s satisfaction with the outcomes be confirmed.

6.30 p.m. to 7.50 p.m.