minutes

The Minutes of the Meeting held on 25th May 2011 (Minute Nos. 24 - 33) were taken as read, approved and signed by the Chairman as a correct record.

declarations of interest

No interests were declared.

part a minutes for confirmation by council

annual governance statement

The Head of Finance introduced the Annual Governance Statement. He advised that the Council had been encouraged by the Audit Commission to review other district councils' statements. The Council had chosen to follow the Tonbridge and Malling Borough Council format, which included more detail on performance across the Council. He confirmed that the Leader and Chief Executive had signed the Annual Governance Statement to recommend its approval by the Audit Committee.

A Member made the following comments:

Paragraph 3.21 - the proposal to spend 60 per cent of the New Homes Bonus on regeneration projects. He queried the definition of 'regeneration projects' and in particular how wide the scope of the projects could be.

Paragraph 3.22 - important to use plain English, for example 'spans and layers' was not easily understandable.

Paragraph 3.40 - should include reference to the Committee being independent and non-party political, as this was identified as one of the strengths of the Committee during the external review.

He also considered that the Annual Governance Statement included a lot of positive comments and it should be more self-critical.

consultation on the future of local public audit - proposed response to government

The Head of Finance introduced the report, which set out a draft response to the Department for Communities and Local Government consultation document on the Future of Local Public Audit. He explained that the responses were a combination of comments received from Kent County Council, Ashford Borough Council and Swale Borough Council. He sought Members' views on any additional comments or amendments before the final response was prepared.

A Member considered that the response should emphasise that a strength of the Audit Committee was being cross-party but non-political. The Head of Finance confirmed that suitable wording would be included under the response for question one.

Members made the following comments:

Question 12 - amend wording from 'unnecessary step' to 'undesirable step';
Question 13 - amend reference from 'public sector' to 'private sector';
Question 25 - emphasise that auditors would be expected to comply with the auditing bodies own ethical standards;
Question 33 - Members welcomed guidance setting out minimum requirements for councils but the response should request that local authorities retain the ability to decide what was contained within their annual report beyond the minimum requirement;
Question 39 - Head of Finance requested to review wording;
Question 47 - response should confirm that a narrower scope of audit would be appropriate for smaller bodies.

The Head of Finance thanked Members for their comments and advised that a revised version would be sent to the Chairman for final approval.

treasury management practices

The Head of Finance introduced the report and explained the changes that had been imposed around governance and transparency of local authorities' treasury management practices. This included submission of a six month and 12 month report to Audit Committee and Council and compliance with three criteria: security, liquidity and yield. He confirmed that the Internal Audit work programme included an audit of the Council's treasury management practices, which would provide external assurance.

The Chairman confirmed that a training session for Committee Members would be arranged from Arlingclose, the Council's treasury management advisors.

A Member asked whether there was any requirement for council's to maintain certain levels of reserves. The Head of Finance confirmed that levels of reserves were not prescribed and councils had varying amounts.

The Audit Manager (Audit Commission) advised that, as part of their value-for-money audit, there were a number of criteria around financial resilience and they would review the Council's reserves as part of that process.

A Member referred to part one of the Treasury Management Practices document and considered that reference should be made to an annual report to Council, and under 'Principle' the wording should read 'The Council regards the key objective…'.

The Head of Finance agreed to revise the wording.

The Chairman advised that a forward plan of items for future Audit Committee meetings would be added to the next agenda and the Meeting scheduled for 28 September 2011 would be re-arranged for earlier in the month.