25 September 2014

Present:

Councillors Edgell (Chairman), Channon, Clarance, Hannan, Hannon and Hughes.

(NB: Councillor Hannon was present up to and including minute *41)

*37 Minutes

RESOLVED that the Minutes of the meeting held on 27 June 2014 be signed as a correct record.

*38 Audit Findings Report

The Committee considered the Report of Grant Thornton (CT/14/201 - text only | pdf | supplementary information CT/14/201) outlining the findings arising from the audit of the County Council s financial statements and the work undertaken in relation to the value for money conclusion. The report also described the work undertaken by the external auditors to address the risks identified in the Audit Plan, presented to the Committee in March 2014.

The Report stated that the audit was substantially complete and it was anticipated that an unqualified opinion on the financial statements would be provided. Grant Thornton brought to the Committee s attention the inclusion of the PFI liability for St Peter s VA School onto the balance sheet for 20,000,000. While the Council had implemented the recommendation made in last year s report and had presented the transaction as an adjustment to opening balances, Grant Thornton advised that the accounting treatment according to the Code would have been to record the transaction through the Comprehensive Income and Expenditure Account to be reversed out of the General Fund through the Movement in Reserves. However Grant Thornton advised the Committee that there was no impact on the General Fund, and that in their view these additional adjustments were not necessary.

A qualified value for money conclusion was provided due to, in Grant Thornton s view, insufficient progress having been made in addressing the issues raised by Ofsted in 2013 relating to children s services, based upon comments made in the letter dated 31 July 2014 from the Department for Education to the Strategic Director of People referred to in the Report.

The Committee raised concerns that all Members in their role as Corporate Parents, and in particular those Members of People s Scrutiny, had not been provided with a copy of this letter as a matter of course.

In response to suggestions made by the Committee Officers undertook to review reminders sent to County Councillors relating to declaration of interests and related party transactions.

It was MOVED by Councillor Hannon, SECONDED by Councillor Channon and

RESOLVED

(a) that Audit Findings Report be noted;

(b) that the Committee was satisfied that in relation to the presentation of the PFI liability for St Peters VA School, that there was no impact on the General Fund, and that additional adjustments were not necessary;

(c) that the Chief Executive be asked to distribute a copy of the letter from Department for Education dated 31 July 2014 to all Members of the Council, redacted if necessary.

*39 Devon Pension Fund Audit Findings Report

The Committee considered the Report of Grant Thornton (CT/14/202 - text only | pdf | supplementary information CT/14/202) outlining the findings arising from the audit of the Pension Fund for 2013/14 and described the work undertaken by the external auditors to address the risks identified in the Audit Plan, presented to the Committee in June 2014.

The Report stated that the audit was substantially complete and it was anticipated that an unqualified opinion on the Fund s financial statements would be provided.

It was MOVED by Councillor Hannon, SECONDED by Councillor Channon and

RESOLVED

(a) that the Devon Pension Fund Audit Findings Report be noted;

(b) that Grant Thornton s proposal to use valuation of the USB International Infrastructure Fund at 31 March 2014 rather than 31 December 2013 be approved;

(c) that the Peninsula Pensions Team be commended for the highly competent administration which led to the unqualified audit opinion.

*40 Statement of Accounts and Annual Governance Statement 2013/14

The Committee considered the report of the County Treasurer (CT/14/200 - text only | pdf | supplementary information CT/14/200) together with

the Statement of Accounts booklet. The Report highlighted some key messages from the

Statement of Accounts for 2013/14 including:

an increase in pension liability by 30,000,000 over the previous year;

pension liability contributed to balance sheet which showed net liability, but that the deficit would be addressed in the long run;

no new borrowing had been undertaken;

a marginal increase in earmarked reserves;

131,000,000 of asset values had been derecognised due to transfers to academy and cooperative school governing bodies;

the inclusion of landfill site maintenance and PFI school liability for St Peters Voluntary Aided School within the authorities accounts;

the change to Accounting Policy as a result of the CIPFA Code of Practice.

It was MOVED by Councillor Edgell, SECONDED by Councillor Clarance and

RESOLVED

(a) that the Letters of Management Representation for the Devon Pension Fund and the County Council be approved;

(b) that the Statement of Accounts for 2013/14 be approved;

(c) that the Pension Fund Statement of Accounts for 2013/14 be approved;

(d) that the Annual Governance Statement 2013/14 be approved.

*41 Internal Audit Progress Report

The Committee received the Report of the County Treasurer (CT/14/203 - text only | pdf | supplementary information CT/14/203) outlining the progress made to address weaknesses identified through the internal audit process. The Report stated that overall, progress was being made against the agreed recommendations, although in a number of instances actions were still ongoing and therefore it was not possible to form a new overall audit opinion.

*42 Report of the Corporate Risk Management Group

The Committee received the Report of the Head of Services for Communities (SC/14/29 - text only | pdf | supplementary information SC/14/29) providing an update on risk management practice in the Council. Two risks were identified as having increased and these were Market Capacity for Adult Social Care and Health and Safety following a fatal incident within the Youth Service earlier in the year, along with increased risks associated with the transfer of services and assets into the community.

The Committee discussed the risk of the potential lack of residential care capacity in the County.

*43 Future Meetings

Monday 1 December 2014 and Friday 27 March 2015 at County Hall at 2 pm.

*DENOTES DELEGATED MATTER WITH POWER TO ACT

The meeting started at 2.15 pm and finished at 3.45 pm.

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