Agenda item

Report of the Finance Manager Shared Services

This report provides the Committee with an opportunity to ask questions of the external auditor concerning his ‘Report to those charged with Governance (ISA260)’ and to approve the Statement of Accounts for 2012/13.

The Committee received a report of the Finance Manager Shared Services inviting the Committee to question the external auditor on his ‘Report to those charged with Governance (ISA260)’ and to approve the Statement of Accounts for 2012/2013.  

Richard Lawson introduced the draft report and explained that this comprised two main elements:

·        the Statement of Responsibilities to be signed by the Director of Finance and the Chair of the Audit Committee

·        the Audit Report which detailed information on the accounts and the Council’s due processes

Richard Lawson then advised on salient parts of the report.

Page 5 (Executive Summary):      No problems were anticipated.  It was noted that the accounts had been submitted at an earlier time than in previous years. 

Pages 9 – 13 (Audit Findings):      This section highlighted work plans as submitted in the June 2013 report.

Page 16 (Misclassifications and disclosure changes):              Improvements over the previous year were noted.

Pages 20 – 25:        

·        An assessment regarding the security of financial resilience had produced good results. 

·        Benchmark data compared the Council’s level of error overpayments; this showed that Watford stood at the highest level in Hertfordshire. 

Richard Lawson then invited questions from Members.

Councillor Brandon referred to the Local Authority (LA) error overpayments and asked whether the current situation would continue in the 2013/2014 financial year. 

The Director of Finance replied that it was probable that a similar result would be seen at the end of the year and that Watford would remain in the current category.  She pointed out, however, that a recent review had noted that the current level of overpayments was just below the higher limit.  It was anticipated that a figure of 0% would be achieved by the end of the financial year. 

The Director of Finance then advised on practice in the Revenues and Benefits Service.  She explained that processing time for the administration of Changes in Circumstance was of necessity protracted and that this impacted on statistics.  She added that the service was working hard to lessen the time to process these changes: the average was currently 24 days which equated to a slight improvement.  

Councillor Williams drew attention to the Auditors’ finding on Risk (page 10 in the draft report) and noted that it was considered that the Shared Finance Service did not have up-to-date journal authorisation policies.  He asked whether there had been any progress in this regard. 

The Finance Manager explained that the services which had amalgamated to form ‘Shared Services’ had originally had different procedures.  These had not been written into determined policies.  It was intended, however, that these would be agreed and written policies brought up-to-date in the near future. 

Daniel Bird added that detailed testing of journal transactions had been performed and no problems had been identified.  He agreed that it would be as well to have written policies in place. 

In reply to a question from Councillor Taylor, the Director of Finance advised that at the end of June 2013 the Changes in Circumstance procedure had taken an average of 45 days in Watford.  She added that officers at Watford processed New Claims at an average of 14 days which was below the National average time at the end of March 2013. 

Councillor Khan expressed his concern at the error overpayments table on page 23 of the report which showed Watford as having the highest number in Hertfordshire.  He asked whether this was likely to continue and whether correct budget assessments had been put in place.

Richard Lawson replied that this problem had been identified, the budget had been raised and that the Auditors were satisfied with the processes in place.

Councillor Khan noted the increase in the budget and asked what would transpire if it were found that more funding was required.

Director of Finance noted Richard Lawson’s comments with regard to the increase in the budget and explained that a balance was needed.  She advised that it was imperative to determine the correct funding for sufficient staff to deal with the workload.  She added that the caseload was currently considerably higher than it had been in past years but that she was confident that current funding and processes were now in place. 

Councillor Khan’s second concern centred on IT issues.  He said that the national criteria with regard to security must be adhered to and noted that the Council’s IT security polices had not been reviewed or updated since 2005. 

The ICT Client Manager agreed that it was a mandatory requirement that such policies should be periodically updated and advised that officers were currently working on this matter.  She assured the meeting that PSN policies and procedures would be fully in place by the end of October 2013. 

The Chair expressed the Committee’s thanks to all those officers and auditors, both internal and external, who had contributed to the considerable quantity of work involved in the report and presentation. 

RESOLVED –

1.                  That the Committee notes the external auditor’s report to those charged with Governance.

2.                  That the Committee noted information concerning the Statement of Accounts for 2012/2013

3.                  That the Committee confirms that it is satisfied that the accounting policies adopted are the most appropriate

4.                  That the Statement of Accounts for 2012/2013 be approved