Apologies were received from Councillor Martins

There were no disclosures of interest.

The minutes of the meeting held on 30th September were submitted and signed.

Paul Dossett and Richard Lawson from Grant Thornton attended the meeting to present the Annual Letter and to answer questions.

Paul Dossett introduced the report including the context and key issues for Council action. He referred specifically to the significant challenge posed by the International Financial Reporting Standards. The Council's progress was on track but would continue to be monitored as part of the Auditors' planned programme of work for 2010/11.

He also drew Members' attention to the section in the Letter on the more targeted approach to local value for money audit work from 2010/11 concentrating on securing financial resilience and prioritising resources within tighter budgets.

The Chair asked about the situation with regard to the Council's payroll which had been outsourced to Northgate Arinso. Richard Lawson responded that there had been some problems following the initial transfer of the service from HCC to Northgate but controls were becoming more robust. The Audit Manager added that an audit was currently being carried out and the situation was improving.

The Portfolio Holder confirmed that this was the case and that pressure from Shared Services had brought about improved controls with procedures being tested earlier in the process.

In response to a question from a Member, Paul Dossett explained the bullet points in 2.11 of the report which, he said, related to IT controls and protocols around access.

Another Member asked whether the 2007/8 Housing Revenue Subsidy had now been resolved. Richard Lawson responded that it had been and that it should be finalised by the end of the month.

A further Member referred to the current ICT problems and said he presumed the report had been produced before these problems had occurred.

The Audit Manager explained that Deloittes were carrying out a review and the results should be available soon. The Portfolio Holder added that the problems related to hardware and not policies and procedures. The main issues related to the email server and problems associated with migrating Watford and Three Rivers to a common platform. Protocols and procedures had to be robust to ensure correct access and this would be tested by the audit.

The Head of Strategic Finance re-assured the Committee that the integrity of the system was not a problem.

He went on to speak about the 2009/10 benefits subsidy and was pleased to advise the Committee that the Council had received a clean bill of health from the Department of Work and Pensions; grant claims were fine and there was no claw-back.

He also said that he welcomed the Grant Thornton approach to value for money. The Council had been heavily engaged in service prioritisation rather than "salami slicing" ; it had been a very thorough and diligent process.

The Committee received a report setting out findings from work in the assessment of the Council's Use of Resources and specific work on locally identified audit risks which contributed to the value for money conclusion.

Richard Lawson from Grant Thornton presented the report. He referred specifically to the headline findings and suggestions for development. He drew Members' attention to the suggestion that the Council should formalise the reporting of the results of their carbon management strategy - especially as a lot of good work had been done in this area.

The Head of Strategic Finance stressed the importance of following up the actions outlined in Appendix A and delivering before next year.

In response to a question from the Chair about the difficulties with International Financial Reporting Standards (IFRS), Paul Dossett explained that this was more challenging for those authorities with a wide asset portfolio. The fact that it also coincided with the large budget challenges currently faced by councils added to the difficulties. The Council was, however, in a strong position as it was entering the process with good performance on its accounts for the previous year and had been rated as on track for the implementation of IFRS.

The Head of Strategic Finance advised the Committee that Grant Thornton arranged workshops to help practitioners and this was much appreciated.

The Committee received a report on the work undertaken by the Internal Audit Team in the period 1st September to 30th November 2010.

The Audit Manager presented the report. He referred specifically to ICT issues and progress being made to deal with the weaknesses identified. Reports had also been submitted to the Audit Committee at Three Rivers DC. It was likely that all the issues would be addressed by the end of April but he would continue to keep both committees informed.

The Portfolio Holder gave a detailed explanation of some of the ICT problems that had arisen relating to Shared Services, specifically the number of servers in use at Three Rivers. He said it was about building in resilience and was quite a job to sort out.

The Committee received a report highlighting any lack of progress in implementing the Internal Audit recommendations. It was noted that the recommendations reported last time had been addressed.

This item was deferred until March.

The Head of Strategic Finance explained that there had been a Treasury Management report to Cabinet in November where there had been a lively debate. It had therefore been agreed that a report to the March meeting, majoring on Treasury Management would be more beneficial. He would arrange for advisers to attend and take Members through the Council's investment performance up to December 2010. It would provide a good opportunity to go through the policy and strategy in depth.

The Committee received the half year report of requests made under the Freedom of Information Act 2000.

From 1st April 2010 until 30th September 2010 the Council had received 125
requests all but 19 of which were replied to in the required time. A list of the
requests were attached as appendices to the report.

Members suggested that it would be helpful to see the responses to the requests and asked for the Head of Legal & Property Services to be invited to the next meeting to explain the process in more depth and also how it was managed by other authorities.