Audit Committee

Tuesday, 24 September 2002 at 3.30 pm

Present:  Provost Roach, Councillors Calvert, Jackson, Mitchell, McCabe, McGhee and White.

Chair:    Councillor Mitchell presided.

In attendance:  Chief Executive, Depute Chief Executive, Director of Community & Protective Services, Director of Finance with Mr G Allan, Senior Internal Auditor, Director of Legal & Support Services and Managing Solicitor (Committees/Contracts).

Present also: Mr Gordon Jack and Ms Sarah Arnott, Messrs PricewaterhouseCoopers, Internal Audit Partners and Mrs Angela Cassels, Audit Scotland, External Auditor.

Apologies:  Councillors O’Rourke and Robertson (Y).

749

PricewaterhouseCoopers - Possible Conflict of Interest

749

There was submitted a report dated 2 September 2002 by the Director of Legal & Support Services on a request received from Councillor Campbell on behalf of the Liberal Democrat Group that the Committee consider a possible conflict of interest as a result of  PricewaterhouseCooper’s role as the Council’s Internal Audit Partners and their appointment to the Schools Public Private Partnership Project Steering Group.  (Councillor McGhee entered the meeting during consideration of this item of business).

Councillor Campbell was present and spoke on the request.

Following discussion, Councillor Mitchell moved that the Committee note the appointment of PricewaterhouseCoopers as financial advisers for the Schools Public Private Partnership Project but express the view that a mistake had been made due to a conflict of interest.  As an amendment, Councillor Jackson moved that the Committee note the appointment made under the delegated powers granted by the Council to the Chief Executive on 27 June 2002 (Para 593).  On a vote, 2 Members voted for the motion and 4 for the amendment which was declared carried.

Decided:  that the Committee note the appointment of PricewaterhouseCoopers as financial advisers for the Schools Public Private Partnership Project under the powers delegated by the Council to the Chief Executive on 27 June 2002 (Para 593).

   750

Reconciliations Update - Position at 22 August 2002

750

There was submitted a report dated 3 September 2002 by the Director of Finance on the current position of the main reconciliations carried out by Finance and Housing Services as at 22 August 2002.  The report advised that the outstanding issues in relation to Housing reconciliations were systems-related and would be addressed in the medium term as new Housing and Finance systems were put in place.  It was further reported that there were a number of outstanding unreconcilable balances which would be the subject of separate reports requesting write-off to the Health Improvement Committee but that daily checks during 2002/03 had shown that the position had ¹stabilised over the last few months.

Decided:  that the current position of the main reconciliations carried out by Finance and Housing Services and the action being taken by Officers to address the outstanding issues be noted.

   751

Internal Audit - Quarterly Report

751

There was submitted a report dated 13 September 2002 by the Director of Finance appending the quarterly monitoring report on Internal Audit activity for the period 1 April to 30 June 2002.

Decided: 

(1) that the Committee welcome the continued progress made in the Internal Audit Service; and

(2) that the Director of Finance submit progress reports on a quarterly basis to the Committee.

   752

“A Job Worth Doing” - Update

752

There was submitted a report dated 13 September 2002 by the Director of Finance providing a quarterly update to 10 September 2002 on the progress made in improving Internal Audit Services in response to the External Audit Report “A Job Worth Doing”.

(Provost Roach entered the meeting during consideration of this item of business).

Decided:

(1)  that the progress made in responding to the External Audit Report “A Job Worth Doing” be noted; and

(2)  that further progress reports be submitted to the Committee as appropriate.

   753

Internal Audit - Operational Plan 2002/03 - October 2002 to March 2003

753

There was submitted a report dated 13 September 2002 by the Director of Finance appending the Internal Audit Operational Plan 2002/03 covering the period 1 October 2002 to 31 March 2003.

Decided:  that the Internal Audit Operational Plan 2002/03 covering the period 1 October 2002 to 31 March 2003 be approved.

   754

Internal Audit Strategic Audit Plan 2002/03 to 2004/05

754

There was submitted a report dated 13 September 2002 by the Director of Finance on the Internal Audit Needs Assessment and Strategic Audit Plan 2002/03 to 2004/05.

Decided: 

(1)  that the Strategic Internal Audit Plan 2002/03 to 2004/05 appended to the report be approved; and

(2)  that the Committee acknowledge the input made by participants in the Risk Workshop and other management and staff who provided information to complete the Internal Audit Needs Assessment and the Strategic Audit Plan.

   755

Corporate Governance Framework

755

There was submitted a report dated 12 September 2002 by the Director of Legal & Support Services appending the proposed Compliance Status and Action Plan in respect of the Corporate Governance Framework which was developed by the CIPFA Directors of Finance Group and adopted by the Council at its meeting on 9 May 2002.

Decided:

(1)  that the approach being adopted with regard to the Corporate Governance Framework be endorsed;

(2)  that the Committee confirm that progressing compliance with the Framework be given a high priority;

(3)  that it be agreed that an Action Plan identifying the steps required to comply with the Framework be prepared and submitted to the Committee for approval; and

(4)  that thereafter reports on progress against the Action Plan be submitted to the Committee on a six monthly basis.

It was agreed in terms of Section 50(A)(4) of the Local Government (Scotland) Act 1973 as amended, that the public and press be excluded from the meeting for the following items on the grounds that the business involved the likely disclosure of exempt information as defined in the respective paragraphs of Part I of Schedule 7(A) of the Act as are set out opposite each item.

Item                                                                            Paragraph(s)

Internal Audit Services                                              1 & 6

Leisure Trust Audit Report                                       6

   756

Leisure Trust Audit Report

756

There was submitted a report dated 13 September 2002 by the Director of Finance on the summarised findings of the review of the Waterfront Leisure Centre undertaken by the Internal Audit Team of Inverclyde Council and the Committee agreed to note the additional requirements placed on the Board of Inverclyde Leisure and other matters, all as detailed in the Appendix.  Councillor Jackson declared an interest in this item as Chairman of Inverclyde Leisure.

Mr Jack and Ms Arnott of PricewaterhouseCoopers left the meeting at this juncture.

   757

Internal Audit Services

757

There was submitted a report dated 30 August 2002 by the Director of Finance recommending that the current partnership with PricewaterhouseCoopers for the provision of Internal Audit Services be extended by one year until 30 October 2003.

Decided:

(1)  that agreement be given to the extension of the Internal Audit Partnership with PricewaterhouseCoopers for a period of one year to 30 October 2003;

(2)  that a further report be submitted to the Committee in June 2003 on proposals for an in-house Internal Audit structure and the specialist services to be procured from the private sector; and

(3)  that it be remitted to the Director of Finance to clarify the role and responsibility of the Senior Internal Auditor in consultation with Personnel Services.