IRVINE, 18 May 2005 - At a Meeting of the Audit and Standards Committee of North Ayrshire Council at 2.00 p.m.
Present
Thomas Barr, Ian Clarkson and Robert Rae.
In Attendance
I. Snodgrass, Chief Executive; A. Herbert, Assistant Chief Executive and I. Gibson, Chief Internal Auditor (Finance); I. T. Mackay, Assistant Chief Executive and A. Fraser, Manager, Legal Services (Legal and Protective); J. Ward, Head of Service (Educational Services); and M. McKeown, Corporate and Democratic Support Officer (Chief Executive's).
Also In Attendance
R. Brown, PriceWaterhouseCoopers.
Chair
Councillor Barr in the Chair.
Apologies for Absence
Gordon Clarkson, Drew Duncan, Jean Highgate, Peter McNamara, Margaret Munn and Richard Wilkinson.
1. Minutes
The Minutes of the Meeting of the Committee held on 8 December 2004, copies of which had previously been circulated, were confirmed.
Submitted report by the Assistant Chief Executive (Finance) on the external auditor's proposed approach to the audit of the Council's accounts for financial year 2004/05.
Each financial year the Council's external auditors PriceWaterhouseCoopers, prepare a plan setting out how they intend to undertake the audit of the previous financial year's accounts. The outline audit approach in respect of the audit of the 2004/05 accounts, a copy of which was appended to the report, has been drawn up in line with Audit Scotland's Code of Audit Practice and will examine aspects of the Council's corporate governance, financial management, and performance management arrangements. It is planned that a report on the outcome of the audit will be submitted to the Council in October 2005.
Noted.
3. Internal Audit Annual Report
Submitted report by the Assistant Chief Executive (Finance) on the annual report of the work carried out by Internal Audit during 2004/05, and on the resulting assessment of the Council's internal control environment.
The Internal Audit Plan for financial year 2004/05 was approved by the Committee in May 2004. The annual report, a copy of which was appended to the report, provides information on the activities of Internal Audit during the year and reports on a range of reviews carried out by Internal Audit in a number of areas to ensure that the Council's internal control framework is appropriate and operating effectively and that resources are being managed effectively.
The Annual Report concludes that the Council's systems of internal control are adequate and effective, and provide reasonable assurance that management policies are being adhered to, assets are being safeguarded, reliable financial information is being produced, and statutory requirements are being met.
Noted.
4. Internal Audit Plan 2005/06
Submitted report by the Assistant Chief Executive (Finance) on the Internal Audit Plan for 2005/06.
The Council's Internal Audit Strategy, which was approved by the Committee in May 2004, is supported by an Internal Audit planning process which includes rolling strategic and annual audit plans. The strategic plan covers a 5 year period during which all major systems within the Council should be audited. In addition each year an annual plan is prepared breaking down the strategic plan into a schedule of audit assignments to be carried out by Internal Audit in the ensuing year.
The Internal Audit Plan for 2005/06, a copy of which was appended to the report, sets out the audit assignments that will be carried out during the year. The Plan provides for:-
Reviews of internal controls within financial systems
Reviews of IT system controls
Reviews of the Councils corporate governance arrangements
Reviews of compliance with Following the Public Pound
Audit of statutory performance indicators
Compliance visits to Council establishments
Other regularity audit testing
Data matching and special investigations
Contingency for unplanned work
The Committee (a) approved the Internal Audit Plan for 2005/06 as set out in the appendix to the report; and (b) agreed to receive progress reports on the Plan during the year.
5. The Standards Commission for Scotland: Annual Report 2003/04
Submitted report by the Assistant Chief Executive (Legal and Protective) on the operation of the Standards Commission for Scotland during 2003/04.
The Standards Commission for Scotland was established under the Ethical Standards in Public Life Etc (Scotland) Act 2000 and came into being on 27 January 2002. Each year the Commission is obliged to present an annual report to the Scottish Parliament on its activities and to circulate this report to all relevant public bodies. The latest annual report covers financial year 2003/04.
During the year, the Commission received a total of 139 complaints, 138 against Councillors and 1 against a member of another public body. The report summarised the source and nature of these complaints. The Commission completed 59 investigations in respect of these complaints, with 80 investigations ongoing. In the majority of cases the investigations concluded that no breach of the Code of Conduct had occurred. 3 investigations did result in decisions of breach and, after appropriate Hearings had been held, 3 Councillors were suspended for limited periods.
Arising out of this item, the Assistant Chief Executive (Legal and Protective) advised the Committee of draft Guidance issued by the Standards Commission on the conduct of Members and Officers attending Council and Committee Meetings. The aim of the Guidance is to supplement the Code of Conduct for Members and to provide advice to Committee Chairs, Members and Officers on how they should conduct themselves when attending Council or Committee meetings. The Commission is seeking comments on the draft Guidance by 17 June 2005.
The Committee agreed (a) to note the contents of the Standard Commission's annual report 2003/04; (b) to receive progress reports on the work of the Commission at future meetings; and (c) that the Assistant Chief Executive (Legal and Protective) (i) circulate the draft Guidance to all Members for comment; and (ii) prepare a response to the Standards Commission's consultation on the Guidance for approval by the Council at its meeting to be held on 7 June 2005.
6. Following the Public Pound: Monitoring Reports
6.1 Fullarton Community Association
Submitted report by the Corporate Director (Educational Services) on the utilisation of grants awarded to the Fullarton Community Association during 2004/05.
During the year, the Association received a grant of £25,800 from the Educational Services Community Development Grants budget. The report summarised how the Association utilised the grant to deliver its aims and objectives i.e.
to promote the benefits of the Association to the residents in the Fullarton area of Irvine;
to co-operate with the local authority in the maintenance and management of Fullarton Community Centre;
to work with voluntary organisations and the Community Learning and Development (CLD) Service to address the educational, social and recreational needs of the local community;
to foster community spirit.
The report summarised the range of activities and community learning and development classes provided at the Community Centre. On balance, the Monitoring Officer concluded that the Council is receiving an appropriate return for its investment in Fullarton Community Association. Additional support is, however, required to enable the Association to attract new members, to extend the range of its activities, and to secure additional sources of funding. The Association's programme of activities and events will be included within Community Learning and Development's publicity, and the Council's Grants Officer will provide advice and support to the Association to identify possible sources of external funding.
The Committee agreed to (a) note the monitoring report; and (b) approve the actions being taken by Community Learning and Development to assist the promotion and development of the Association's activities.
6.2 Redburn and Vineburgh Community Association
Submitted report by the Corporate Director (Educational Services) on the utilisation of grants awarded to the Redburn and Vineburgh Community Association in 2004/05.
During the year, Redburn and Vineburgh Community Association received a grant of £50,358 from the Educational Services Community Development Grants budget. The report summarised how the grant was utilised to promote the Association's aims and objectives, and to deliver a range of activities and community learning and development classes at the Redburn Community Centre. The Centre has received significant investment through the Better Neighbourhood Services Fund resulting in a new computer suite being installed, and ongoing works to refurbish the main hall and kitchen area. The Centre is currently closed to allow these works to be carried out.
The Monitoring Officer's report concludes that the Council is receiving an appropriate return for its investment in Redburn and Vineburgh Community Association. Additional support is, however, required to enable the Association to attract new members, to extend the range of its activities, and to secure additional sources of funding. The Association's programme of activities and events will be included within Community Learning and Development's publicity, and the Council's Grants Officer will provide advice and support to the Association to identify possible sources of external funding.
The Committee agreed to (a) note the monitoring report; and (b) approve the actions being taken by Community Learning and Development to assist the promotion and development of the Association's activities.
6.3 North Ayrshire Ventures Trust
Submitted report by the Assistant Chief Executive (Legal and Protective) on the activities of North Ayrshire Ventures Trust which was established by the Council in 1999 to promote economic development in North Ayrshire through participation in joint ventures.
North Ayrshire Ventures Trust and the EDI Group, Edinburgh, both hold a 50% shareholding in North Ayrshire Ventures Ltd. The Council has made a number of land transfers to the Trust, the value of which has been matched by a capital contribution by the EDI Group. This has allowed North Ayrshire Ventures Ltd., to access European grants and to borrow funds to facilitate the creation of 10,000 sq ft of office accommodation at Kyleshill, Saltcoats, and 20,000 sq ft of office accommodation at Pennyburn Road, Kilwinning. These assets have been successful in attracting jobs to North Ayrshire, and job opportunities continue to be developed. The Accountants in Bankruptcy have determined that North Ayrshire will be the location for their relocated offices, but have yet to make a decision on where they will be based. Discussions continue with the agency to determine their interest in the building on Pennyburn Road, Kilwinning.
The Trust, through its involvement with North Ayrshire Ventures Ltd., owns a significant stake in these assets. To date there has been no disbursement of profits from either of these ventures. At the point at which surpluses are generated by North Ayrshire Ventures Ltd., they will be either reinvested by that company into further economic development in North Ayrshire, or passed back to EDI and North Ayrshire Ventures Trust. The Trust may then disburse these profits in line with its charitable aims.
The Committee agreed (a) to approve the monitoring report; and (b) that the Assistant Chief Executive (Legal and Protective) submit annual updates on the activities of North Ayrshire Ventures Trust to the Committee.