Audit And Risk Management Sub-committee - 16/05/2005
At a MEETING of the AUDIT AND RISK MANAGEMENT SUB-COMMITTEE OF THE FINANCE COMMITTEE held at Dundee on 16th May 2005.
Present:-
BAILIES
Charles D P FARQUHAR
Neil I C POWRIE
COUNCILLORS
Jill SHIMI (substituting for Councillor George Regan)
Nigel DON
In Attendance:-
Pearl Tate, Senior Audit Manager, Audit Scotland
Grietje Menger, Computer Auditor, Audit Scotland
Councillor SHIMI, in the Chair.
Unless marked thus * all items stand delegated.
I RISK MANAGEMENT ACTION PLAN 2004-2007
There was submitted Report No 329-2005 by the Principal Insurance and Risk Management Officer providing an update of the 2004-2007 Risk Management Action Plan for Elected Members' information. Particular reference was made to Risk Registers and the preparation of detailed Business Continuity and Contingency Plans. The forthcoming Civil Contingencies Bill would impose statutory business continuity obligations on Councils.
In response to Councillor Don, the Principal Insurance and Risk Management Officer advised that he was currently working with Departments to ensure that Council business in Dundee would continue in a "worst case" scenario.
The Sub-Committee noted the progress being made with the 2004-2007 Risk Management Action Plan.
II RISK MANAGEMENT INFORMATION SYSTEM
There was submitted Report No 330-2005 by the Principal Insurance and Risk Management Officer providing the Sub-Committee with a progress report on the embedding of the Council's new Risk Management Information System.
The Sub-Committee acknowledged the progress made to date in embedding the Council's new Risk Management Information System and requested the Principal Insurance and Risk Management Officer to report on future progress with the development in reporting capabilities of the system.
III CROSS DEPARTMENTAL RISK MANAGEMENT GROUP
There was submitted Report No 331-2005 by the Principal Insurance and Risk Management Officer providing information of the establishment of the Council's Cross Departmental Risk Management Group. The inaugural meeting of the Group was held on 9 May 2005 with all departments of the Council represented. The appendix to the report gave details of the overall terms of reference and key tasks allocated to the Group which would be chaired by the Depute Chief Executive (Finance) or his nominated Senior Manager.
The Sub-Committee noted the establishment of the Group and its terms of reference.
IV EXTERNAL AUDIT REPORTS
There was submitted Report No 302-2005 by External Audit's Senior Audit Manager advising the Sub-Committee of External Audit reports finalised since the last Sub-Committee meeting in January 2005. The following reports relating to the 2004/05 audit had been finalised:-
7 Website Overview
7 Review of Previous Years Action Plans
7 Social Work Debtors
7 Prudential Code
The Senior Audit Manager and the Computer Auditor of Audit Scotland briefly reviewed each of the reports. The Senior Audit Manager emphasised that it was management's responsibility to action the points raised and the Head of Finance confirmed that the Corporate Finance Section of the Finance Department would introduce arrangements to ensure that agreed recommended action points were implemented and reported back to the Sub-Committee. The Senior Audit Manager pointed out that local authorities were now being allowed more freedom to decide how to allocate capital expenditure. She noted that working papers were not available to confirm that there had been no incremental impact arising from capital investment decisions and Council Tax and Housing rents. It was also noted that the margin between the Capital Financing requirement and external borrowing had narrowed year on year but forecasts beyond the three year projections had not been considered.
The Head of Finance commented that a statement on the impact on Council Tax and Housing rents was now available and no capital schemes had been approved unless included in capital plans or funded from existing revenue resources.
The Sub-Committee noted the terms of the report.
VAUDIT SCOTLAND OVERVIEW OF THE LOCAL AUTHORITY AUDITS 2004
There was submitted Report No 332-2005 by the Head of Finance presenting to the Sub-Committee the Audit Scotland report entitled Overview of the Local Authority Audits 2004. The report commented on reports back from external auditors in Scotland to the Accounts Commission and identified areas of good practice and concerns raised.
The report commented on three main areas as follows:-
7 Governance
7 Financial Stewardship
7 Service Performance
The Head of Finance pointed out that Dundee City Council currently had an uncommitted reserve of approximately 4 million (or 1.6% of net expenditure) - other monies held had been allocated for specific projects. Bailie Powrie and Councillor Don felt that the Dundee reserve of 4 million was prudent and not excessive.
In response to Councillor Don, the Chief Executive undertook to check out the reporting arrangements on the condition of the City Council's roads.
The Sub-Committee noted the information contained in the report.
VI UPDATE ON THE INTERNAL AUDIT ANNUAL PLAN 2005/06
There was submitted Report No 333-2005 by the Chief Internal Auditor providing the Sub-Committee with an update on the Internal Audit Annual Plan for the 2005/06 financial year. The amended Plan showed that the principal change was the total number of days available for audit work which could now be estimated at 1330 days. In addition, a small number of the reviews contained in the original submission had been replaced with projects to reflect changing priorities.
The Sub-Committee noted the information contained in the report.
VII INTERNAL AUDIT ANNUAL REPORT 2004/05
There was submitted Report No 334-2005 by the Chief Internal Auditor providing the Sub-Committee with the Internal Audit Annual Report which summarised the activities of the Council's Internal Audit Service for the 2004/05 financial year. A total of 43 internal audit reports had been drafted covering a wide range of systems across the Council. The majority of the Executive Summaries for these reports had been reported to the Audit and Risk Management Sub-Committee and those that were still in the process of being finalised would be submitted in due course.
In response to Councillor Don, the Chief Internal Auditor advised that two vacant posts had been filled recently. Bailie Powrie referred to sickness absence being partly responsible for the reduction of days available for direct audit work - the Chief Executive pointed out that the Management Team monitors sickness absence monthly and it was the intention to improve the current situation.
The Sub-Committee noted the information contained in the report.
VIII INTERNAL AUDIT REPORTS
There was submitted Report No 335-2005 by the Chief Internal Auditor providing the Sub-Committee with a summary of the internal reports finalised since the last Sub-Committee meeting in January 2005. The Executive Summaries both referred to the Education Department - Devolved School Management and School Funds.
Councillor Don asked whether if devolved school management involved school staff having to spend time on financial management instead of teaching. Councillor Shimi commented that this was a matter for the Education Best Value Review Group and Councillor Don should raise this issue in that forum. Further to School Funds, Councillor Don was advised that they were administered by Head Teachers and support staff rather than by parents.
The Sub-Committee noted the information contained in the report.
The Sub-Committee resolved under Section 50(A)(4) of the Local Government (Scotland) Act 1973 that the public and press be excluded from the meeting for the undernoted items of business on the grounds that they involved the likely disclosure of exempt information as defined in paragraph 8 of Part I of Schedule 7A of the Act.
IX EXTERNAL AUDIT REPORT
There was submitted Report No 336-2005 providing details from the External Audit Report on Dundee Energy Recycling (DERL).
The Sub-Committee noted the information contained in the report.
X INTERNAL AUDIT REPORTS
There was submitted Report No 337-2005 by the Chief Internal Auditor providing the Sub-Committee with a summary of the Internal Audit Reports finalised since the last Sub-Committee meeting in January 2005.
The Chief Internal Auditor advised that the departments concerned, Education, Leisure and Arts, and Environmental Health and Trading Standards had embraced the recommendations made and taken remedial action.
The Sub-Committee noted the information contained in the report.
XI INSURANCE AND RISK MANAGEMENT APPOINTMENT
The Sub-Committee noted the appointment detailed in Agenda Note AN217-2005 and wished the appointee well.
JILL SHIMI, Convener.
APPENDIX II