The preparation and publication of an Annual Governance Statement (AGS) was necessary to meet the statutory requirement set out in the Accounts and Audit Regulations 2003 (amended 2006 and 2011).

This report explained the requirement for the Authority to produce the AGS declaring the degree to which it meet the Governance Framework.

Cabinet had considered the AGS at its meeting on 14 April 2011.  The AGS has now been revised to provide further information.  The revised statement was presented for approval and was at Appendix A to the report.

The published Annual Governance Report informed that the District Auditor planned to qualify the Value for Money conclusion drawing "attention to weakness identified in the arrangements for securing value for money in respect of the Highways and Engineering Services (HESPE) contract and other governance and internal control issues arising from the whistleblowing issues and from the recording and control of assets".

The Committee considered the issues raised during the consideration of this report and during the consideration and deliberations of the Statement of Accounts 2010/11 and the Annual Governance Report.  Of particular concern to Members was that the District Auditor had identified that the Council was not able to provide information on activity and performance of the (HESPE) contract to determine whether it was receiving better value for money spent.  The District Auditor had indicated that this would be the basis for a qualified conclusion in respect of the Council’s Value for Money Statement.  The Committee queried whether other matters of concern would be of sufficient seriousness for the District Auditor to give a qualified report.

Members asked a number of questions.  They queried why the HESPE contract had been signed when the benefit to be derived from it were still unclear, some 2½ years later.  They considered that system must be put in place and relevant date collected to measure value for money.  The Audit Manager was in attendance at the meeting and she told Members that she was hoping to bring a report to the next meeting which would answer their questions.  It was appropriate that they know exactly what they got before the contract and from the contract.  Making a decision to let a contract on price alone did not demonstrate value for money.  It was vital that the tender specification was water tight and there were issues over how a contract was managed.

The Committee sought clarification over the line management of the Internal Audit Section because of the criticisms levied at audit reports produced and actions not being taken.  Assurances were also sought.  The Deputy Chief Executive/Director of Finance informed that Internal Audit was managed by the Chief Internal Auditor and if there were any concerns about the Finance Department the Chief Internal Auditor would report directly to the Chief Executive or the Leader of the Council on them.

RESOLVED: That

(1)  the Annual Governance Statement be agreed; and

(2)  the Director of Technical Services be requested to attend a meeting of this Committee  ...  view the full minutes text for item 24