Agenda and minutes

To approve as a correct record and sign the Minutes of the meeting held on 17 June 2015.

The Minutes (copies of which had been circulated) of the meeting held on 17 June 2015 were approved as a correct record and signed by the Chair.

Councillors and officers to declare any interests which they have in any of the items on the agenda for the meeting.

Councillors and officers were invited to declare any interests they had in any of the items on the agenda for the meeting.

The following interests were declared:-

Personal Interests

To report any urgent action taken under the Constitution since the last meeting of the Committee.

No urgent decisions were reported.

Members of the public are invited to put questions to the Chair on any matters within the powers and duties of the Committee, subject to the exclusions set out in the Code of Practice. (Questions must be submitted prior to the commencement of the meeting on the card provided. These are available at the meeting. You can also submit via the Council’s website at www.stockport.gov.uk/publicquestions)

No public questions were submitted.

To consider a report of the Corporate Director for Corporate and Support Services.

The report contains the final version of the Council’s Annual Governance Statement (AGS) for 2014/15. The draft statement was approved by the Audit Committee at its meeting on 17th June 2015. There has been no material change in governance issues up to the date of this meeting.

The Audit Committee is requested to approve the Annual Governance Statement prior to signing by the Leader of the Council and the Chief Executive.

Officer Contact: John Pearsall on Tel: 474 4033 or email: john.pearsall@stockport.gov.uk.

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) containing the final version of the Council’s Annual Governance Statement (AGS) for 2014/15. The draft statement had been approved by the Committee at its meeting on 17 June 2015.

RESOLVED – That the final Annual Governance Statement be approved prior to signing by the Leader of the Council and the Chief Executive.

To consider a report of the External Auditor.

The report highlights the key matters arising from the external audit of Stockport Metropolitan Borough Council's group and Council financial statements for the year ended 31 March 2015.

The Audit Committee are invited to consider and comment on the report.

Officer Contact: Sarah Howard on Tel: 953 6370 on email: sarah.howard@uk.gt.com.

The External Auditor submitted a report (copies of which had been circulated) highlighting the key matters arising from the external audit of the Council’s financial statements for the year ending 31 March 2015.

The following comments were made/issues raised:-

·         Members welcomed the positive Value for Money conclusion which was consistent with the previous year;

·         the increase in value by approximately £60m for ‘other land and buildings’ was substantial;

·         the External Auditor worked to challenge the valuation of the Authority’s assets by requesting evidence of why the valuation had changed and through access to national information for comparison;

·         the valuation of the Authority’s assets were done on a five year rolling programme, however there were plans to seek valuations on the main block of assets on an annual basis and the lesser block of assets on a three year programme;

·         clarification was sought on the amendment of £982,000 to the Other Housing Services account balance.

RESOLVED – That the report be noted.

To consider a report of the Corporate Director for Corporate and Support Services.

The report presents the Audit Committee with the final Statement of Accounts for 2014/15. Grant Thornton LLP is the Council’s external auditor and has undertaken the audit of the Council’s Statement of Accounts.

The Audit Committee are asked to consider the issues that have arisen during the audit and approve the final Statement of Accounts.

Officer Contact: Christine Buxton on Tel: 0161-474-4124 or email: Christine.buxton@stockport.gov.uk.

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) providing the Committee with the final Statement of Accounts for 2014/15.

It was reported that the Statement of Accounts for 2014/15 were ready for approval 6 weeks earlier than they had been the previous year. Changes to the Statement from its draft format were highlighted in yellow and amendments made to typographical errors were distributed to the Committee.

The following comments were made/issues raised:-

·         The Council’s balance sheet showed over £1bn of assets and asset recognition & valuation provided a key challenge in preparing the Statement of Accounts;

·         there had been a collection fund surplus of £2.643m in 2014/15 due to the Council being prudent in its assumptions of the effect on the tax base of the Local Council Tax Support Scheme in 2013/14;

·         it was confirmed that the Council had £79.342m of Lenders Option Borrowers Option (LOBO) loans which constituted a quarter of all borrowings with an annual interest payment of £3m per year;

·         concerns were raised about whether lenders intended to raise the interest rates on the £67.5m of LOBO loans that had a call-in date in the following 12 months;

·         there were no penalties incurred for exercising the Authority’s right to repay a LOBO loan early;

·         concerns were raised regarding the increased deficit for Stockport Market despite an increased investment and it was confirmed that the future operating model for the market was included in the Investing in Stockport business case which would go through the scrutiny process;

·         an increase in payment to Life Leisure had occurred as a result of advice from Price Waterhouse Cooper (PWC) who recommended that payment to Life Leisure for managing the Council’s leisure facilities should be treated as a VAT’able management fee as opposed to a grant payment, in order to allow the Council to recover the VAT from HMRC as non-business activity and for Life Leisure to retain the VAT;

·         it was difficult to anticipate the level of dividend paid from the Manchester Airport Group and how much this may vary in the future;

·         Right to Buy capital receipts had fallen by £1m compared to the previous year due to tenants’ difficulties in securing mortgages.

RESOLVED – That the 2014/15 Statement of Accounts be approved.

To consider a report of the Corporate Director for Corporate and Support Services.

The report sets out the progress made by internal audit against the approved 2015/16 internal audit plan for the period 1^st June 2015 to 31^st July 2015 (Appendix 2). The purpose of the report is to inform Members of the resources utilised by Internal Audit during the period, the activities undertaken in the reporting period, and the status of work currently being undertaken. 

The Audit Committee are invited to consider and comment on the report.

Officer Contact: John Pearsall on Tel: 474 4033 or email: john.pearsall@stockport.gov.uk.

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) outlining the progress made by internal audit against the approved 2015/16 internal audit plan for the period 1st June 2015 to 31st July 2015.

The following comments were made/issues raised:-

·         The integration of social care and health exposed the Council to significant risk, but;

·         the Internal Audit and Risk team had been involved with this project from the beginning to identify and deal with control issues;

·         there was a need for an incentive for health provision to be diverted from the hospital to community based providers;

·         pooled budgets should have specific accounting and audit arrangements in place.

RESOLVED – That the report be noted.

To consider a report of the Corporate Director for Corporate and Support Services.

The purpose of the report is to update Members on the current status of both corporate and Investing in Stockport (IiS) risks for quarter 1 2015/16.

The Audit Committee are invited to consider and comment on the report.

Officer Contact: John Pearsall on Tel: 474 4033 or email: john.pearsall@stockport.gov.uk.

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) providing an update on the status of both corporate and Investing in Stockport (IiS) risks for quarter 1 2015/16.

The following comments were made/issues raised:-

·         Priority should be given to ensuring that the Council was moving towards an increase in digital services and that online reporting was robust and effective;

·         the Executive had approved the investment of £7.5m into the Digital by Design Programme;

·         concerns were raised that Digital Capacity posed a greater risk than had been identified within the report.

RESOLVED – That the report be noted.