Finance and Audit Sub-Committee

Tuesday 12 December 2000 at 3 pm

Present:  Councillors McCabe, Mitchell, O’Rourke, Rebecchi and Robertson (Y).

Chair:  Councillor O’Rourke presided.

In attendance:  Chief Executive, Depute Chief Executive, Director of Legal and Support Services, Director of Resource Services, Director of Community and Protective Services and Chief Internal Auditor.

Attending also:  Mr Gordon Jack, Partner and Miss Shona Malcolm, Senior Manager, Messrs Price Waterhouse Coopers, External Auditors.

Apology:  Councillor Jackson.

1062

Bank Reconciliations

1062

There was submitted a report by the Chief Internal Auditor setting out her findings in relation to progress achieved towards reconciling the bank accounts and control accounts.

Decided:

(1)  that the Sub-Committee express its dissatisfaction with the current progress achieved in reconciling the bank accounts to date and await a further report on progress;

(2)  that the Sub-Committee note that external audit will shortly be carrying out a review of bank reconciliations as part of their 2000/2001 interim audit visit;  and

(3)  that the Head of Accountancy Services, who is now responsible for the control team, ensures that all reconciliations are signed by the preparing and reviewing officers, on every occasion.

1063

1999/2000 Period 12 V Out-turn Action Plan

1063

There was submitted a report dated 28 November 2000 by the Director of Resource Services setting out the action taken and progress achieved in respect of the 1999/2000 Period 12 V Out-turn Action Plan.  The report noted that 21 of the 27 items in the Action Plan had now resulted in procedures in place or action required being fully complete and the Director of Resource Services indicated that a further item (No 18) was also now complete.

Noted

1064

Progress of 1999/2000 Audit Plan - Quarter to 30 September 2000

1064

There was submitted a report by the Chief Internal Auditor advising of the performance against the audit plan during the quarter to 30 September 2000.  The report set out time spent with regard to performance indicators, systems reviews, and regularity and irregularity work and assessed performance against the audit plan.

Decided:

(1)  that the Sub-Committee note the progress on the audit plan;

(2)  the Sub-Committee note that it was anticipated that audit coverage would be extended in the future following the proposed increase in resources after the review of the audit section establishment;  and

(3)  that it be remitted to the Chief Internal Auditor to continue with reports every six weeks on the progress with regard to the bank reconciliations and control account reconciliations.

1065

External Auditors - Annual Report to Members 1998/1999

1065

There was submitted a report by the Chief Executive dated 30 November 2000 setting out his view of the Annual Report to Members 1998/99 prepared by the External Auditors, Messrs Pricewaterhouse Coopers, which Annual Report had also been circulated to Members.

The Sub-Committee was given a summary of the Annual Report by Mr Jack and Ms Malcolm who answered questions on points raised by Members.

Decided:

(1)  that the Sub-Committee note that the matters raised in respect of the audit of the 1998/1999 accounts have been addressed in the Audit Action Plan;  and

(2)  that the progress of this Plan continue to be closely monitored.

1066

Audit Action Plan Progress

1066

There was submitted a report dated 4 December 2000 by the Director of Resource Services setting out the progress in implementing the action plan relating to issues raised in relation to the 1997/98 audit of accounts and indicating the position with regard to items due for completion by November 2000.

Decided:

(1)  that the Sub-Committee note progress against the Action Plan;  and

(2)  that monitoring of the position be continued.

The Convener, being of the opinion that the undernoted report by the Director of Resource Services was relevant, competent and urgent, moved its consideration to allow the Sub-Committee to be further advised.  This was unanimously agreed in terms of the relevant Standing Order.

1067

Tax Issues

1067

There was submitted a report dated 8 December 2000 by the Director of Resource Services bringing to Members’ attention circumstances which had resulted in under declarations for income tax in respect of failure to deduct the tax from a number of sub-contractors and for Value Added Tax in respect of income received by way of direct debit by users of the Pulse Fitness Gyms within Council facilities.  The Director of Resource Services advised the Sub-Committee orally that the liability for income tax had now been calculated as possibly reaching £100,000 in addition to the £8,000 already mentioned in the report while it was noted from the report that the liability for VAT was estimated at £83,800 to which interest charges or penalties might be added.

Decided:

(1)  that the Sub-Committee note the issues and the impact upon the Revenue Budget;

(2)  that the Sub-Committee note the remedial action taken;  and

(3)  that a report on any further financial implications be made to the Sub-Committee as soon as possible.