There were no apologies for absence.

There were no disclosures of interest.

The minutes of the meeting held on 30th June 2009 were submitted and signed

The Committee received a report of the Head of Legal & Property Services attaching a copy of the Ombudsman's Annual Review on its dealings with the Council for the financial year 2008/2009

A Member commented that, in his view, the way the Ombudsman's report was presented was not very clear, particularly the table at Appendix 2. There was a lot of information but it did not provide a very clear picture of the overall position. A Member also asked whether the type of complaints received were monitored and whether similar complaints were received each year.

The Committee received a review of the Council's Treasury Management performance for the five months ending 31st August 2009/2010.

The Interim Head of Finance introduced the report. He drew the Committee's attention specifically to 3.3 of the report which advised on the main proposals contained in the CIPFA revisions to its Treasury Management Code and officers' responses.

He also drew Members' attention to paragraph 4.1 - Average Investment Rates and paragraph 5.0 which referred to Treasury Management Practice for 2009/2010. He advised Members that, whereas previously only deals with the top 6 building societies by asset size would be considered, increasing the counterparty list to the top 10 would currently increase returns to between 1.5 and 1.9%. Whilst the asset size of these building societies varied, even the 10th on the list had an asset base of approximately £5 billion.

He asked the Committee to note the officers' recommendation that Sector Treasury Services contract be extended for a further two years.

The Chair said he was pleased that reports were to be submitted quarterly. The Portfolio Holder stressed the importance of constant updating and monitoring in what was an ever changing environment. It was important to keep the Strategy up to date and ensure that it was followed.

A Member referred to Appendix A of the report and said she would like to know what sort of sums were involved. The Portfolio Holder explained that this information was confidential but could be sent to members of the Committee separately.

The Committee endorsed the officers' recommendation that the list of building societies with whom the Council dealt was extended to the top 10.

The Committee received a report of the Audit Manager on the work undertaken by Internal Audit in the period 1st April 2009 to 31st August 2009.

The Audit Manager explained that, for reporting purposes, it had been a fairly quiet period but, as outlined in Appendix 1 of the report, there was a lot of work underway. He also drew the Committee's attention to paragraph 3.4 of the report and said that officers were still working through data matches which was very time consuming. A number of fraudulent/potentially fraudulent benefit claims were being investigated.

In response to a question from the Chair, the Audit Manager confirmed that there had been no slippage in the timescale of 1st April 2010 when the internal audit service for both Watford and Three Rivers DC would be undertaken by the Watford Internal Audit Team.

This report had been submitted late due to the pressure in achieving the tight timetable for the closure and audit of the accounts. This had meant that the auditor's report could not be published in line with the Committee agenda deadlines. As the Council was required to have the auditor's report approved by the end of September 2009 the report needed to be considered by this Committee.

The Committee was asked to receive the external auditor's Annual report to those charged with governance for the financial year 2008/09.

Martin Grundy and Richard Lawson of Grant Thornton attended the meeting and presented their report.

Martin Grundy informed the Committee that the findings were very positive and that the auditors were issuing an unqualified opinion on the accounts. Very few adjustments had been identified. He referred to the recommendations contained in Appendix D of the report, specifically the need to contact the Audit Commission regarding the completion of the 2006/7 housing subsidy claim. He also referred to the pension adjustment deficit, which was quite large, and the need to look at how the property portfolio was valued.

Richard Lawson added that this was the second year he had worked with Nigel Kennedy and this year had been even smoother than last. He expressed his thanks to Nigel and his team.

In response to a question from the Chair about the outstanding housing subsidy claim, Martin Grundy advised that there were two issues; whether the money would be claimed back and closure of the HRA which had to be kept open until the claim was resolved.

The interim Head of Finance explained that this issue related to the Audit Commission and not to Grant Thornton or the Council. Once the claim was resolved, an application could be made to the Secretary of State to close the HRA. If the situation was not resolved by the end of March then the account would remain open. He added that the Audit Commission had indicated that they had done the work and that he would now make arrangements to bring this to a close.

In response to another question from the Chair, Richard Lawson confirmed that the audit of the impairment charge to the fixed assets with regard to a current assessment of rent levels for the Harlequin and Charter Place had now been confirmed.

A Member asked about the situation in respect of the building control account and the need to return the account to a surplus position.

The Interim Head of Finance responded that he was aware of the issue and was in the process of looking at the support costs which had been applied to the account. There was also a proposal to look into the possibility of a shared building control service with Three Rivers DC which was due to go to Cabinet later in the year.

A Member queried the phrase …"presents fairly view….." in the letter at attached at Appendix C to the report and was advised that this was standard audit terminology.

The Portfolio Holder drew the Committee's attention to the Audit recommendations in Appendix D of the report and asked Members to formally note the management responses and actions.

In conclusion, Martin Grundy referred the Committee to Appendix A of the report "independence" and advised that the bullet point relating to fees would need to be revised.

The Chair thanked the external auditors and the Finance Team for their work.