Audit and Standards Committee
5 October 2005
IRVINE, 5 October 2005 - At a Meeting of the Audit and Standards Committee of North Ayrshire Council at 2.00 p.m.
Thomas Barr, Ian Clarkson, Jean Highgate, Robert Rae and Richard Wilkinson.
I Snodgrass, Chief Executive; A Herbert, Assistant Chief Executive (Finance); I Mackay, Assistant Chief Executive (Legal and Protective); J Ward, Head of Service (Educational Services) and J Bannatyne, Corporate and Democratic Support Officer (Chief Executive's).
Also In Attendance
M Mazzucco and R Brown (PricewaterhouseCoopers).
Councillor Barr in the Chair.
Apologies for Absence
Gordon Clarkson, Drew Duncan, Peter McNamara and Margaret Munn.
The Minutes of the Meeting of the Committee held on 18 May 2005, copies of which had previously been circulated, were confirmed.
2. Annual Accounts 2004/05 - Auditors' Report
Mr M Mazzucco of PricewaterhouseCoopers, the Councils External Auditors, reported that the Annual Accounts for 2004/05 have been signed and that they are unqualified.
Following the introduction of SAS 610, the auditors are required to report all unadjusted differences and to invite management to adjust them. A summary of the unadjusted differences was tabled by the auditors at the meeting and they confirmed their agreement that no action be taken to adjust the unadjusted differences which relate to the 2004/05 accounts. The adjustments will require to be made in the 2005/06 accounts which will make available a £167,000 surplus.
One objection to the annual accounts has been received and is currently being addressed by the auditors.
PricewaterhouseCoopers will submit a more detailed report on the accounts for 2004/05 to the Audit and Standards Committee later in the year.
3. Revenue Budget 2004/05: Final Outturn
Submitted report by the Assistant Chief Executive (Finance) on the final outturn position for the Council's Revenue Budget at the end of financial year 2004/05.
As part of the monitoring procedures of the financial situation of the Council, budgetary control reports have been and continue to be submitted on a regular basis to the Service Committees. The report submitted to the Corporate Policy Committee on 22 March 2005 was based on figures available to the end of January 2005.
The Accounts for 2004/05 have now been audited and the report provided details of the Council's position at the end of financial year 2004/05 together with explanations for major variances against budgeted expenditure.
The report submitted in March 2005 predicted a year-end surplus of £7.666m on the General Fund. The actual surplus achieved was £7.624m, with a subsequent Council agreement to transfer £0.750m to the Repairs & Renewal Fund. The Housing Revenue Account will carry forward to 2005/06 a surplus of £5.778m which will be required to meet the liabilities arising to achieve the outcomes within the agreed business plan for the Housing Revenue Account.
The report gave details of surpluses generated by the former Direct Service and Direct Labour Operations for 2004/05, deemed to be Trading Operations, in accordance with the Local Government in Scotland Act 2003. These amounted to £2.170m, of which £1.182m was refunded to the HRA by the Building Services Operation. The Council previously agreed that Catering, Building, Cleaning, Transport Building Services and Roads Operations would be Statutory Trading Operations from 1 April 2005. The level of reserves and balances as at 31 March 2005 is considered to be sufficient to meet any emergency situations or unforeseen liabilities which may arise in the short to medium term.
A review of the performance of Trading Accounts, both statutory and discretionary, set up in 2005/06 will be undertaken.
4. Following the Public Pound
4.1 Audit Scotland
Submitted report by the Assistant Chief Executive (Legal and Protective) on the outcome of a review of the Council's awards of financial assistance to outside bodies, initiated by Audit Scotland and undertaken by the Council's external auditors, PricewaterhouseCoopers.
Following a study initiated by Audit Scotland approximately 2 years ago, it became clear that there was a wide variation in the way in which public bodies made awards of financial assistance to outside bodies and how such funding was monitored. As a result, all council external auditors were instructed to undertake a full review of the processes adopted by their councils.
PricewaterhouseCoopers issued a survey document requiring details of all significant Council funding provided, together with details of monitoring procedures and held discussions with officers from Finance and Legal and Protective Services. Thereafter an Action Plan was submitted to the Council in July 2005 setting out the key areas for improvement, which also called for the identification of lead officers and a timescale for completion of the action required. An executive summary of the auditor's report, together with a copy of the Action Plan agreed with officers of the Council were attached as appendices to the report.
Although some criticism has been recorded over the lack of a central database of information on external funding within the Council, the report does however, recognise areas of strength, including the Council's Code of Guidance for Officers. This code will, however, require to be enhanced to assist services in ensuring complete compliance with the principles of Following the Public Pound. The Action Plan addresses the areas where improvement is sought and, in discussions with the Chief Internal Auditor, agreement has been reached on the actions to be followed, by whom and by what date.
A report will be submitted to Committee in due course on the implementation of the proposals set out in the Action Plan and the report prepared by PricewaterhouseCoopers.
4.2 Programme of Monitoring
Submitted report by the Chief Executive on the arrangements in place to monitor those external bodies in receipt of funding from the Council in terms of the Council's Code of Practice for Funding of External Organisations.
In November 2003, the Committee agreed to limit its detailed annual scrutiny of external bodies in receipt of Council funding to those which received either funding in excess of £45,000 in 1 year, or a sum which represented more than 30% of that organisation's annual funding. In May 2004, the Committee approved a programme of monitoring reports in respect of the following organisations:-
Scottish Maritime Museum
North Ayrshire Citizens Advice Service
North Ayrshire Women's Aid
North Ayrshire Leisure Ltd
Fullarton Community Association
Redburn & Vineburgh Community Association
North Ayrshire CCTV Ltd
West Kilbride Hall Management Committee and
North Ayrshire Venture Trust
The Ayrshire and Arran Tourist Board was also included on the list but has since disbanded.
In addition to continuing monitoring of these organisations during 2005/06, it was proposed that the programme should also include the Volunteer Centre North Ayrshire (VCNA). A Service Level Agreement has recently been negotiated with VCNA and an SLA Monitoring Group has been established which will meet on a quarterly basis.
The Committee agreed (a) to continue to receive monitoring reports in respect of the above organisations over the next year; (b) that the Scottish Maritime Museum monitoring report be submitted to the next meeting; and (c) that the Volunteer Centre North Ayrshire (VCNA) be included in the annual programme of monitoring and that a report be submitted in due course.
4.3 West Kilbride Public Hall
Submitted report by the Corporate Director (Educational Services) on the utilisation of grants awarded to West Kilbride Public Hall.
In April 2000, the West Kilbride Community Initiative (WKCI) Limited took over a 15 year lease of the facility. The terms of the lease have been extended to 30 years in order to enable WKCI Limited to apply for external funding in order to upgrade the Public Hall.
The building is well maintained and the Management Group and the Council work in partnership to ensure that external repairs are carried out as required. Phase 1 of the development of the Hall in 2000/01 focused on general improvements including the installation of fans, new alarms, storage facilities and general decor. The main focus of future developments will be replacement of the boilers and radiators and the upgrading of lighting and sound systems for stage production.
The sum of £10,100 has been awarded to the West Kilbride Management Group in financial year 2005/06 from the Educational Services revenue account to fund the running costs of the property. Additional funding is generated through the letting of the Public Hall to community groups and organisations and through fundraising events.
The report summarised the range of activities and classes provided at the Public Hall and details of user groups were provided in an appendix to the report. The Educational Services Monitoring Officer has concluded that the Council is receiving an appropriate return for its investment.
The meeting ended at 3.00 p.m.