minutes

The Minutes of the Meeting held on 19 September 2011 (Minute Nos. 262 - 271) 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 audit letter 2010/11

The District Auditor (Audit Commission) introduced the Annual Audit Letter 2010/11. The report summarised the findings from the 2010/11 audit which comprised two elements: the audit of the Council's financial statements and the assessment of the Council's arrangements to achieve value for money in its use of resources.

In relation to the Council's financial statements, the District Auditor concluded that the Council had made significant improvements in performance, particularly given the introduction of International Financial Reporting Standards (IFRS). With regard to value for money, the District Auditor advised that the Council had shown a clear focus in taking difficult decisions and prioritising resources. He commended Officers on their work throughout the year. He stressed the importance of continuing to maintain high standards especially as new legislation, such as welfare reform and changes to the benefits system, may impact on the financial stability of councils.

A Member asked whether the introduction of IFRS had benefits. The District Auditor considered that there was a wider national benefit in that Private Finance Initiative schemes had to be shown on organisations' accounts, which improved transparency of these schemes. At a local level he considered that the disclosure of pension liabilities was clearer.

part b minutes for information

treasury management half year review

The Head of Finance introduced the report which reviewed the mid-year outturn position on treasury management transactions for 2011/12 including compliance with treasury limits and Prudential Performance Indicators. He advised that due to the downgrading of many of the major banks the Council's only bank counterparties were Barclays and HSBC. The Treasury Management Strategy would be reported to Cabinet on 8 February 2012 with advice from Arlingclose, the Council's treasury management advisors.

audit commission - protecting the public purse

The Head of the Internal Audit Partnership introduced the recently published report from the Audit Commission 'Protecting the Public Purse'. He explained that this was an annual report from the Audit Commission which brought together national information relating to fraud against local government. The report highlighted trends regarding increases in the value of staff fraud and procurement fraud. He stressed the importance of the Council being vigilant to key fraud risks and advised that a report would be submitted to a future Audit Committee meeting setting out the Council's arrangements for fighting fraud.

The District Auditor advised that the Audit Commission reviewed how local authorities responded to the report and he reported that Swale had taken positive action to fraud issues, including participation in the National Fraud Initiative.

In response to a question, the Head of the Internal Audit Partnership agreed to include a comparison of Swale's arrangements against other local authorities in Kent.

Members discussed the report. The Head of Finance and the Head of the Internal Audit Partnership advised that any fraud issues would be reported to the Audit Committee and all allegations would be thoroughly investigated.

A Member referred to Ashford Borough Council's success with tackling housing fraud. The Head of the Internal Audit Partnership advised that would discuss Ashford's approach with Swale's Benefits Team to share good practice, and to explore whether a similar exercise could be undertaken in Swale.

internal audit - six monthly interim report

The Audit Manager introduced the report and appendices which provided details of the work of the Internal Audit Team between April and September 2011.

A Member referred to the audit of Section 106 agreements and raised concern at the Council's arrangements for monitoring agreements. He considered that it was difficult for Councillors to monitor progress with Section 106 agreements and the process needed to be more transparent.

Members discussed this further and stressed the importance of this issue for the Council and local communities and the need to maximise Section 106 contributions from developers. They agreed that the Head of Planning should be invited to a future Audit Committee meeting to update the Committee on improvements to the Council's arrangements for monitoring Section 106 agreements. A Member also requested that the Cabinet Member for Planning be invited to attend the meeting.

A Member queried the policy for payment of housing benefits for people living on caravan sites; the Audit Manager agreed to raise this issue with the Benefits Team and provide a response to the Member.

the role of the head of internal audit

The Head of the Internal Audit Partnership introduced the Chartered Institute of Public Finance and Accountability (CIPFA) Statement on the role of the Head of Internal Audit. He considered that the current internal audit arrangements at Swale met the standard outlined in the Statement.