Agenda and minutes

Apologies for absence were received from Councillors Arbour, Knight and True.

[In the absence of the Chairman and Vice-Chairman, the Committee agreed that Councillor Orchard should chair the meeting.]

Minutes of the meeting held on 26 June 2005 attached.

The Minutes of the meeting held on Tuesday 28 June 2005 be received and approved and the Chairman be authorised to sign them.

Members are asked to declare any interests in matters for consideration at the meeting.

Councillor Lourie declared a personal interest in Agenda Item 5 by virtue of being a board member of the London Pension Fund, Kingston Hospital Board, and the Local Authorities Mutual Investment Trust.

None.

The Auditing Standard entitled ‘Reporting to those charged with corporate governance’ (SAS 610) requires the external auditor to report issues arising from the audit of the accounts before giving his audit opinion on the Council’s financial statements.  The SAS 610 is intended to encourage greater openness and accountability. The District Auditor will be attending the Committee to answer any questions Members may have.

Report of the Director of Finance and Corporate Services attached.

The draft SAS 610 report be noted.

[The District Auditor, Mike Haworth-Maden, presented the draft SAS 610 report to the Committee. He commented that the audit of the Accounts was substantially progressed, although work remained to be completed in a number of areas, in particular on the disclosure of bank and cash and prior year comparatives. Should any further matters arise in concluding the outstanding work that required reporting, they would be raised with the Chairman of the Committee.

He emphasised the two significant issues set out in the report, namely the disclosure and presentation of the Accounts, including the continual review of quality and accessibility to the public (which also links to the Comprehensive Performance Assessment); and the issues raised in the Statement of Internal Control (SIC) relating to the new payroll and accountancy systems. He informed Members that the latter issue had already been reported to Audit Committee, and that he would be drawing attention to it in his Annual Audit Letter.

Mr Haworth-Maden clarified the purpose of the SAS 610 to Members, which was to enable the communication of issues between the auditor and those charged with corporate governance. He also provided clarification of his role as an independent auditor, appointed by the Audit Commission.

In response to a question from Councillor Lourie, the Director of Finance and Corporate Services outlined the control issues highlighted in the report relating to payroll and finance. With regards to payroll, there had been concern regarding the controls around the set up of new starters and the removal of leavers from the system. He reported that the process had been tightened, and checks had been carried out to ensure that the system was secure. Internal Audit were satisfied with the changes, and Councillor Jowit confirmed that this had been discussed by Audit Committee.

The Director of Finance and Corporate Services also outlined the security issues relating  to the new SAP financial system; there was a possibility that Serco staff had access to user passwords. This issue had now been resolved. Councillor Jowit reported that Audit Committee had discussed this issue. It had been established that Serco had not followed the correct procedures, and a senior Serco representative had attended to provide a full apology for the breach.

Members also raised the following issues:

Interim arrangements for Internal Audit - following the departure of the Head of Internal Audit and Risk Management; this would be considered at the next Audit Committee meeting.

Apparent discrepancies between different tables in the Statement of Accounts - the Director of Finance and Corporate Services agreed to provide a written answer to all Committee Members.

Cllr Lourie questioned the current level of bad debt provisions and the Director of Finance and Corporate Services confirmed that current levels would be subject of review during the current financial year.

Councillor Lourie declared a personal interest in this item by virtue of being a board member of the London Pension Fund, Kingston Hospital Board, and the Local Authorities Mutual Investment  ...  view the full minutes text for item 18.