Agenda and minutes

Audit Committee - Friday 12th February, 2016 2.30 pm

Venue: Lonsdale Room (G36), Allerdale House

Contact: Dean Devine  01900 702556

No. Item


Minutes pdf icon PDF 117 KB

To sign as a correct record the minutes of the meeting held on 23 November 2015.


The minutes of the meeting held on 23 November 2015 were signed as a correct record.


Declaration of Interests

Councillors/Staff to give notice of any disclosable pecuniary interest, other registrable interest or any other interest and the nature of that interest relating to any item on the agenda in accordance with the adopted Code of Conduct.


5.  Assurance Risk and Audit Quarter 3 report 2015/16


  Councillor D Fairbairn; Disclosable pecuniary interest as Vice Chairman of Solway Coast AONB



To answer questions from members of the public – 2 days’ notice of which must have been given in writing or by electronic mail.


None received.


Assurance Risk and Audit Quarter 3 report 2015/16 pdf icon PDF 156 KB

Reporting the progress of Assurance Risk and Audit work for the period 1 October 2015 to 31 December 2015.

Additional documents:


The Assurance, Risk and Audit Manager presented the Assurance, Risk and Audit report for the quarter ending 31 December 2015 (quarter 3). The report set out the work performed by the Assurance, Risk and Audit Section in the financial year 2015/16 and compared the work undertaken against the approved annual plan.


Members noted the level of chargeable time achieved for quarter three was 85.63% which was below the planned target of 87.04%, mainly due to the increased amount of training provided by the team for the new Assurance, Risk and Audit Assistant. Councillor D Fairbairn praised the Assurance, Risk and Audit Section on their excellent performance in terms of sickness absence, with 14 months without any sickness absence to date.


The Committee noted the following two reports which were submitted during quarter 3:


·  Creditors 2014/15

·  Council Tax 2014/15


Members noted the status of the audit reviews which were in progress at 30 September 2015.


It was noted that of the 16 agreed actions due for implementation within the quarter, at the time of writing the report 4 actions had been implemented, 11 actions were in progress, 11 actions were overdue from previous quarters and 1 action had no progress.


With regard to the Car Parks Audit 2014/15 agreed action 1, as set out in the actions report, Councillor D Fairbairn asked how much income had been lost due the ticket machines on car parks having faults and the number of days that the machines had experienced these faults in the last year. The Assurance, Risk and Audit Manager agreed to ask the Interim Parking Manager and report back to the Committee with an answer to this.


Councillor D Fairbairn asked whether the income generated from ticket machines on car parks flowed into the Council’s general funds or if the money was hypothecated. The Interim Accountant agreed to follow up on this and provide a response to the Committee.


Members noted the Integrated Assurance Strategy December 2015. Councillor J Colhoun asked if the 21 principles of good governance and risk management improvements alluded to in the report could be circulated to Committee members. The Assurance, Risk and Audit Manager agreed to circulate the document.


Councillor J Colhoun asked if it was worth providing refresher training on the role of the Audit Committee to members of the Committee. The Assurance, Risk and Audit Manager informed Members that the Chair of the Committee was in the process of completing a self-assessment document and when completed she intended to circulate it to them prior to the next Audit Committee meeting. The Committee was informed that there would be some training on Audit Planning an hour before its next meeting.


Members discussed the Corporate Risks and Issues Log. With regard to the significant unbudgeted expenditure arising from severe weather conditions risk set out in the report, Councillor J Colhoun had information on the provision of funding to support the repair/replacement of damaged sea defences and asked if the Council was also providing funding toward this.  ...  view the full minutes text for item 336.


Treasury Management Strategy and Investment Strategy pdf icon PDF 220 KB

Additional documents:


The Interim Accountant presented a report which sought the Committee to approve the proposed Treasury Management Strategy Statement, Annual Investment Strategy and Minimum Revenue Provision Policy Statement for 2016/17.


The Treasury Management Strategy Statement set out the Council’s proposed treasury management activities for the year – based on budget proposals, interest rate forecasts and economic outlook and covered the following issues:


·  The current treasury position

·  Treasury indicators required by CIPFAs Prudential Code for Capital Finance in Local Authorities and Treasury Management in the Public Services: Code of Practice and accompanying sector guidance

·  Economic background and prospects for interest rates

·  Borrowing strategy

·  Policy on borrowing in advance of need

·  Debt rescheduling

·  Policy on the use of derivatives

·  The process adopted for reviewing and addressing the training needs of officers and Members in relation to treasury management

·  Use of treasury management consultants including services provided and procedures employed for monitoring the quality of those services


The Annual Investment Strategy set out the Council’s policies for the prudent financial management of its investments and for giving priority first to the security of those investment and secondly, to their liquidity. It included:


·  Procedures for determining the counterparties with whom investments may have been placed, including the Council’s approach on the use of credit ratings and other sources of information to assess credit and counterparty risk

·  The types of investment instruments that may have been used

·  Limits placed on the amount that may have been invested with any single institution or group of institutions

·  Limits on the maximum period for which funds may have been prudently committed

·  Reporting arrangements


The Minimum Revenue Provision Policy Statement (MRP) set out how the Council would discharge the duty under the Local Authorities (Capital Finance and Accounting) (England) Regulations 2003 (as amended) to make prudent MRP in the financial year and included the following:


·  A description of what MRP intended to achieve

·  Commentary on the Council’s underlying duty to make prudent provision and ensure that debt is repaid over a period commensurate with that over which the capital expenditure provided benefits, or – for borrowing supported by central government funding (Revenue Support Grant) – over the period implicit in the determination of that funding

·  Consideration of the ‘options’ for calculating MRP outlined in the statutory guidance on MRP and the restrictions on their use

·  The policy proposed for the forthcoming year


The Interim Accountant provided the Committee with updated estimates on the ratio of financing costs to net revenue stream. The estimate for 2016/17 was updated from 8.8% to 8.5%, the estimate for 2017/18 was updated from 11.5% to 11.3% and the estimate for 2018/19 was updated from 12.4% to 12.2%.


The estimates for the incremental impact of capital investment decisions were updated. The estimate for 2016/17 was updated from £2.06 to £1.21 for the 2016/17 capital programme only and the capital programme 2016/17 to 2018/19; the estimate for 2017/18 was updated from £0.24 to £1.37 for the 2016/17 capital programme only and from £0.85 to £1.98 for the  ...  view the full minutes text for item 337.


Audit Committee Update pdf icon PDF 349 KB


J Bellard, Grant Thornton presented an Audit Committee update report to inform the Committee of the progress made by the external auditors on delivering their responsibilities as at February 2016. The report also included a summary of emerging national issues and developments relevant to the Committee.


The progress at February showed that the 2015-16 Accounts Audit Plan, interim accounts audit, 2015-16 final accounts audit and Value for Money (VfM) conclusion were each on track


Members noted the report.




That the report be noted.


Certification Letter pdf icon PDF 57 KB


R Robinson, Grant Thornton presented the external auditors’ annual letter on certification work for the year ended 31 March 2015. The letter provided the Committee with information on the claims and returns submitted by Allerdale Borough Council that the external auditors had been required to certify.


Members noted that one claim had been certified for the financial year 2014/15 relating to subsidy received of £26.8 million for housing benefits payments.


The Committee commended the work of the Revenues and Benefits staff.




That the annual certification of claims and returns letter for the financial year 2014/15 be noted.