15 March 2013

Present:

Councillors Sir Simon Day (Chairman), Greenslade, Hannon, McMurray, Moulding, Parsons and Pennington

*119 Minutes

RESOLVED that the minutes of the meeting held on 7 December 2012 be signed as a correct record.

*120 Devon County Council Control Environment

The Committee received the report of the County Treasurer (CT/13/21 - text only | pdf CT/13/21) on the yearly requirement of the Audit Committee and s151 officer to respond to enquiries from the external auditors (Grant Thornton) regarding the overall control environment of the Council, with particular focus on the arrangements in place to ensure that the production of the financial statements were free of material error.

The Committee was required to authorise the accounts after careful consideration of the Auditor s report. The letters, attached to the report, from the Chairman and the c151 officer set out the details of the control environment that contributed to the establishment of the audit opinion.

It was MOVED by Councillor Sir Simon Day, SECONDED by Councillor Hannon and

RESOLVED that the report be noted and the letter from the Chairman to the external auditor (Grant Thornton) be endorsed.

*121 Public Sector Internal Audit Standards

The Committee considered the report of the Devon Audit Partnership (DAP) regarding the public sector internal audit standards.

The Committee noted that organisations in the public sector were currently covered by different internal audit standards, with Local Government using the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice for internal audit. Since May 2011 collaboration had taken place between CIPFA and the IIA to develop a set of internal audit standards applicable to all areas of the UK public sector. These had been developed and would come into force on 1 April 2013.

The report outlined the framework of the standards, their purpose and scope and the implications for both Devon County Council and the Devon Audit Partnership, in particular, the reference and understanding of the term Board which it was anticipated would be clarified by further guidance.

It was MOVED by Councillor Sir Simon Day, SECONDED by Councillor Greenslade and

RESOLVED that the update be noted.

*122 Updated Internal Audit Charter Terms of Reference

The Committee considered the report of the Devon Audit Partnership which described the Charter, outlining the purpose, authority and principal responsibilities of the Council s internal audit service (provided by Devon Audit Partnership).

The Charter described the meaning of internal audit, its statutory role and aim, functions and independence, code of ethics, standards, reporting lines and relationships, role and scope, access to documents, responsibilities, proficiency and due professional care and reporting processes.

The aim of the Devon Audit Partnership was described as providing a high quality, professional, effective and efficient internal audit service to members, service areas and units of Devon County Council, adding value wherever possible.

The independence of the service and how it operated as a separate entity from client authorities was a key strength.

It was MOVED by Councillor Sir Simon Day, SECONDED by Councillor Greenslade and

RESOLVED that the update be noted.

*123 Annual Internal Audit Plan 2013/2014

The Committee considered the report of the Devon Audit Partnership on the internal audit plan for 2013/2014 which outlined how the plan had been established, resources required and the planned audit coverage across corporate services, people and place, the carry forward of work, fraud prevention and detection, grant claims, other chargeable activities, advice and consultancy work and school audits.

The appendices to the report outlined the detailed analysis of proposed audit reviews for 2013/2014, which proposed 1564 days as being required for the Council.

Officers answered questions on the flexibility required for the plan, social impact bonds and how these operated, clarification on the Partnership s role in fraud prevention and that of partners including promulgating intelligence and investigations, the role of due diligence especially with shared services, audit of care homes and the use of CQC data and clarification of the content of the Interreg IVB projects (SEACS and Cordiale).

It was MOVED by Councillor Sir Simon Day, SECONDED by Councillor Greenslade and

RESOLVED that the plan be endorsed, noting that flexibility would be required in order to address any future identified risk.

*124 External Audit Update Progress Report

(Councillor McMurray declared a personal interest in this item by virtue of being a Member of Teignbridge District Council)

The Committee considered the report of Grant Thornton on progress in delivering their responsibilities as the Council s external auditors, which outlined progress against the 2012-13 Accounts Audit Plan, Interim accounts audit, 2012-13 final accounts audit and Value for Money (VfM) conclusion.

The paper also included a summary of emerging national issues and developments and posed a number of challenge questions in respect of those emerging issues.

Officers answered questions on the Council s reserves and how these had been managed in the past with Government guidance on reserves and Council Tax Reform and potential impacts on collection rates and the management of that risk.

It was MOVED by Councillor Sir Simon Day, SECONDED by Councillor Greenslade and

RESOLVED that the update be noted.

*125 2011/2012 Annual Grants Report

The Committee considered the report of Grant Thornton which summarised their overall assessment of the Council s management arrangements in respect of the certification process and drew attention to significant matters in relation to individual claims.

In summary, certification work for 2011/12 was completed in partnership between Grant Thornton and the Audit Commission. There were a total of five claims presented to the external auditors for certification, totalling 38.2m. All five were provided to audit in a timely manner, and were certified and submitted before the deadline. Of the five claims, four required no amendment, and one required a small amendment (less than 1k) to correct an arithmetical error.

It was MOVED by Councillor Sir Simon Day, SECONDED by Councillor Greenslade and

RESOLVED that the report be noted.

*126 Date of Next Meeting

The date of the next meeting was noted as Friday 28 June 2013 @ 2.15pm

Members also thanked Sir Simon Day for his Chairmanship and valuable contributions to the work of the Committee.

*DENOTES DELEGATED MATTER WITH POWER TO ACT

The meeting started at 2.15pm and finished at 3.16pm.

The Minutes of the Committee are published on the County Council s Website at:-