The Deputy Chief Executive/Director of Finance presented the Committee with the Annual Governance Report (AGR).  The report summarised the findings from the 2010/11 audit which was substantially complete.  It included the messages arising from the audit of the financial statements and the results of the work the District Auditor had undertaken to assess the Council’s arrangements to secure value for money in its use of resources.

The District Auditor circulated his draft report as at 22 September 2011 of his qualified Value for Money Conclusion and reported that the paragraph in the ‘basis for qualification’ in the draft AGR had not changed very much and not at all in the message.  The actual conclusion was still ‘with the exception of the matter reported in the basis for qualified conclusion, that he was satisfied that in all significant respects the Council had put in place proper arrangements’.  What had changed was the ‘report by exception’.  In the draft AGR the District Auditor had a high level message referring to governance and internal control weaknesses.  On the advice of his technical section, he had been far more explicit and made specific reference to the key issues, including the two independent reports.

The basis for the qualified conclusion was that, in considering the Council’s arrangements for challenging how it secured economy, efficiency and effectiveness, the District Auditor had identified that the Council was not able to provide information on activity and performance of the Highways and Engineering Services Procurement Exercise (HESPE) contract to determine whether it was receiving better value for money spent.  He had concluded that, having regard to guidance on the specified criteria published by the Audit Commission in October 2010, with the exception of the matter reported in the basis for qualified conclusion, he was satisfied that in all significant respects the Council had put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ending 31 March 2011.

The Audit Commission’s guidance also required the District Auditor to report, by exception, on any other significant additional matters that came to his attention and which he considered to be relevant to proper arrangements to secure economy, efficiency and effectiveness in the use of resources.  Such matters had come to his attention relating to significant weaknesses in:

·  Promoting and demonstrating the principles and values of good governance

The District Auditor had identified that the Council’s Constitution required updating and the current Contract Procedural Rules had not been followed for term contracts.  Also, an independent review of bullying and harassment made a number of significant criticisms of individual officers and collective behaviour within and across the whole Council and another independent review had concluded that Wirral Council’s corporate governance arrangements were, and probably remained, inadequate.  Without good governance, risks increased and priorities might not be achieved.

·  Managing risks and maintaining a sound system of internal control

The District Auditor had identified weaknesses in corporate arrangements for risk management, policies, procedures and internal control arising  ...  view the full minutes text for item 23