Pwyllgor Archwilio   Audit Committee 12.01.06

Pwyllgor Archwilio Audit Committee 12.01.06

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AUDIT COMMITTEE, 31.07.06 AUDIT COMMITTEE, 31.07.06 Present: Councillor Gwilym O. Williams (Vice-chair in the Chair); Councillors: Tom Ellis, E.H. Griffith, Selwyn Griffiths, Brian Jones, Charles Wyn Jones, Michael Sol Owen and W. Tudor Owen; Peredur Jenkins (Portfolio Leader). Also present: Dilys A Phillips (Head of Administration and Public Protection), Dafydd Edwards (Head of Finance), William E. Jones (Senior Finance Manager), Dewi Morgan (Audit and Risk Manager), Ffion Madog Evans (Finance Manager – Resources and Corporate), Helen L. Williams (Capital and Control Accountant), Nia Wyn Jones (Pensions and Investments Officer) and Eirian Roberts (Committee Officer). Apologies: Councillors Edward Dogan, Huw P. Hughes, Robert J. Hughes, Henry Jones, Dewi Lewis and Godfrey Northam. 1. MINUTES The Chairman signed the minutes of the meeting of this committee held on 5 June 2006 as a true record. 2. FINAL ACCOUNTS 2005/06 Submitted – the statutory statement of the Council’s accounts for 2005/06. The Portfolio Leader – Finance, gave a presentation on the relevant background, noting (1) that this committee was requested to adopt the statutory financial statements for publication and audit. (2) that the purpose of the statutory statements of account was to contribute towards appropriate governance, showing the Council’s financial situation in standard format. (3) that detailed attention was given to specific funds in the ...

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AUDIT COMMITTEE, 31.07.06
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AUDIT COMMITTEE, 31.07.06
Present:
Councillor Gwilym O. Williams (Vice-chair in the Chair);
Councillors: Tom Ellis, E.H. Griffith, Selwyn Griffiths, Brian Jones, Charles Wyn Jones, Michael
Sol Owen and W. Tudor Owen; Peredur Jenkins (Portfolio Leader).
Also present:
Dilys A Phillips (Head of Administration and Public Protection), Dafydd Edwards
(Head of Finance), William E. Jones (Senior Finance Manager), Dewi Morgan (Audit and Risk
Manager), Ffion Madog Evans (Finance Manager – Resources and Corporate), Helen L.
Williams (Capital and Control Accountant), Nia Wyn Jones (Pensions and Investments Officer)
and Eirian Roberts (Committee Officer).
Apologies:
Councillors Edward Dogan, Huw P. Hughes, Robert J. Hughes, Henry Jones, Dewi
Lewis and Godfrey Northam.
1.
MINUTES
The Chairman signed the minutes of the meeting of this committee held on 5 June 2006
as a true record.
2.
FINAL ACCOUNTS 2005/06
Submitted – the statutory statement of the Council’s accounts for 2005/06.
The Portfolio Leader – Finance, gave a presentation on the relevant background, noting
(1)
that this committee was requested to adopt the statutory financial statements for
publication and audit.
(2)
that the purpose of the statutory statements of account was to contribute towards
appropriate governance, showing the Council’s financial situation in standard
format.
(3)
that detailed attention was given to specific funds in the Finance Technical Task
Group on 13 June 2006 and that the task group’s relevant recommendations
were submitted to the Resources and Finance Scrutiny Committee on 29 June
and to the Council Board on 4 July.
By now the statutory statements of the
Funds and Reserves on pages 39-41 of the accounts book reflected those
decisions.
(4)
that two reports on the Council’s services final financial situation was submitted
to the Resources and Corporate Scrutiny Committee on 29 June – one on “Final
Revenue Accounts” and the other on “Capital Expenditure 2005/06” – and that
they showed the underspend or overspend of every service in order to determine
the sums to be carried forward to 2006/07.
The recommendations of the Scrutiny
Committee had by now been submitted to the Council Board on 4 July and the
Revenue Account on page 11 of the account book reflected the relevant
decisions.
(5)
due to a change to the statutory requirements, that the Audit Committee had to
adopt the 2005/06 accounts by the end of July of this year (compared with the
end of September in past years) and that the accounts would have to be adopted
by the end of June from next year onwards.
To close, the Portfolio Leader thanked the staff of the Finance Service for undertaking all
AUDIT COMMITTEE, 31.07.06
the work within a very tight timescale and recommended that the members adopt the
accounts book.
Then the following officers expanded on the contents of the noted sections of the
accounts book, inviting questions from the floor.
Officer
Section of the Accounts Book
Page
Head of Finance
1 – Foreword
1-5
2 – Statements and Accounting Principles
6-10
Senior Finance
Manager
3 – Revenue Account and Notes to the Revenue
Account
11-20
4 – Appendix A – Expenditure Analysis of Services 64-66
5 – Housing Revenue Account and Notes to the
Housing Revenue Account
21-24
6 – The Balance Sheet and Notes to the Balance
Sheet
25-36
7 – Movement in Reserves and Notes on the
Movement in Reserve
37-43
Finance Manager
(Resources and
Corporate)
8 – Cash Flow and Notes on the Cash Flow
44-46
9 – Group Accounts
47-49
10 – Trusts
50-51
Head of Finance
11 – Pension Fund and Notes to the Pension Fund 52-61
12 – District Auditor’s Opinion and Certificate
62-63
Many questions were raised on a number of aspects of the accounts book, including the
account policies, the comparative value of the specific reserves and balances, matters
regarding trusts and adequacy of the Pension Fund.
Full verbal replies were provided
for these by the Head of Finance, the Senior Finance Manager, the Finance Manager
(Resources and Corporate) and the Capital and Control Accountant.
The following
questions lead to two requests for further action –
(1)
The Revenue Account and Notes to the Revenue Account – Note 10 – Payments
to Workers (page 16) – The accuracy of the table “
Number of employees who
received more than £60,000
” was questioned.
It stated that no employee
received £80,000 or more in 2004/05 and the Senior Finance Manager agreed to
investigate the matter and to explain directly to the member who raised the
question.
(2)
The Revenue Account and Notes to the Revenue Account – Notes 16 and 17 –
The Council Tax and the National Non-Domestic Rates (pages 18-19) –
Reference was made to the “
Provision for Bad Debts
” in the tables that analyse
the net income accruing to the Council from these rates and a question was
raised as to how many bad debts were written off by the Council.
The Head of
Finance agreed to bring the relevant figures before the members in the next
meeting of the Audit Committee.
In this context, the Portfolio Leader – Finance,
assured the members that every effort was being made to recover debts and the
Senior Finance Officer explained that the figures appeared worse this year due
to the need to close the account earlier.
RESOLVED to adopt the statutory financial statements of the Council accounts for
2005/06 for publication and audit.
3.
INTERNAL CONTROL STATEMENT 2005-06
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AUDIT COMMITTEE, 31.07.06
Submitted – the report of the Audit and Risk Manager submitting the Statement on
Internal Control for 2005/06 for committee approval.
The Audit and Risk Manager reported –
(1)
that local authorities in Wales were required to produce an annual Statement on
Internal Control (SIC) pursuant to regulation 4(2)(a) in accordance with the
Accounts and Audit Regulations (Wales) 2005.
Although the authority had been
required (due to recommended practice rather than legislation) to produce a
Statement on Internal Financial Control as part of its account for the past three
years or so, the new requirement for a SIC was far wider as it contained
elements of the corporate risk management, governance and internal control
environment
(2)
that the SIC must be published with the final accounts.
(3)
that it was essential that evidence was in place in order to support the contents
before the document was published and that the Wales Audit Office would review
the evidence in place as part of their review of the Council’s work
(4)
that the development of a framework that contained a portfolio of evidence to
support the SIC had been one of the Internal Audit Section’s key tasks and that
the framework was based on guidelines incorporated in CIPFA publications.
Statements, comments and declarations from key officers and from various
strategies and the Council policies were used to write the SIC.
The Head of Finance reported that the Statement on Internal Control will have been
included with the accounts statements and policies as part of the Council’s final
accounts book following audit.
RESOLVED to approve the document as Gwynedd Council’s Statement on Internal
Control for the 2005/06 financial year and the period since the balance sheet date.
The meeting commenced at 10.30am and concluded at 11.55am
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