ESSEX FIRE AUTHORITY
MINUTES OF THE MEETING OF THE AUDIT SUB COMMITTEE
HELD ON
WEDNESDAY 17 JULY 2013
ON THE RISE OF THE AUDIT, GOVERNANCE & REVIEW COMMITTEE
Present:
Draft Minutes Audit Sub Committee 17 July 2013
Page 4 of 4
Councillor A Erskine
Councillor M Maddocks
Councillor P Wexham
The following Officers were present:
Mike Clayton, Finance Director & Treasurer
Shirley Jarrett, Deputy Clerk and Monitoring Officer
Dan Harris, RSM Tenon
Martina Lee, Ernst & Young
Minute Secretary, Laura Needham
15. apologies for absence and substitution notices
Apologies for absence were received from Councillor Danvers, Evans, Knapman and Wood.
16. Election of a chairman
The Deputy Clerk and Monitoring Officer supervised the election of a Chairman of the Audit Sub Committee for 2013/14.
Councillor Wexham nominated Councillor Knapman. This was seconded by Councillor Erskine.
There were no other nominations.
Councillor Knapman was elected as Chairman of the Audit Sub Committee for 2013/14. In the absence of Councillor Knapman those present agreed that Councillor Maddocks as Vice Chairman of the Audit, Governance & Review Committee would chair the meeting.
17. declarations of interest
There were no declarations of interest made by Members in respect of items on the agenda.
18. minutes
The Committee received the minutes of the meeting held on 17 April 2013.
Resolved:
The minutes were noted and signed by Councillor Maddocks.
19. AUDIT REPORTS
The Finance Director & Treasurer presented his report, EFA/075/13. The paper provided one internal audit report and the annual review from the Service’s Internal Auditor. The Finance Director & Treasurer asked Mr Harris from RSM Tenon to go through the report with those Members present.
Mr. Harris referred to the Internal Annual Audit Report, referencing point 1.2 on page one of the report. He added that he was satisfied that enough work had been undertaken, and that the one point which had been disagreed, did not have any impact on the year end agreement. Members were also informed that at the top of page four of the audit report which showed adequate progress had been made on implementing recommendations, and similarly at the foot of page four in point 2.3, that the additional work which had been carried out at the request of the Audit Sub Committee did not create a conflict of interest.
Councillor Wexham asked how this relates to the external audit. Mr. Harris stated that the papers were solely related to the internal audit and that there would be a further paper presented in this meeting which would update Members as to the audit plan for 2013/14. Mr. Harris did state that there was one area which posed a potential overlap in key financial controls, however he was satisfied that measures were in place to keep internal and external audits separate.
Mr. Harris referred Members to the capital projects report and added that the recommendations were outlined on pages 4 and 5, and that in relation to financial projects there was a well designed control framework in place.
Resolved:
It was resolved that Members;
1. Noted the contents of the reports
20. AUDIT RECOMMENDATIONS
The Finance Director & Treasurer presented his report EFA/076/13. The paper reported on the progress against the action plans developed by the Service in response to audit reports. Members were informed that items reported as completed in the previous quarter’s report had been deleted from the table.
Members were notified that the table shown in the appendix is updated regularly and also any changes to completion dates are highlighted.
Resolved:
It was resolved that Members;
1. Reviewed the progress of recommendations from the audit report.
21. NATIONAL FRAUD INITIATIVE 2012/13
The Finance Director & Treasurer presented his report, EFA/077/13. The purpose of the paper was to brief Members on the results of the Audit Commission’s National Fraud Initiative (NFI) data matching exercise 2012-13.
The Finance Director & Treasurer advised Members that this was a data matching exercise and the table on page two of the report showed all possible types of matches. Members were advised of two possible areas which may have potential issues; however Members were assured that investigations will be carried out where required.
Resolved:
It was resolved that Members;
1. Noted the contents of the report.
22. UPDATED INTERNAL AUDIT STRATEGY 2013/14
Mr. Harris presented his report EFA/078/13 on behalf of the Finance Director & Treasurer. Members were advised that the role of the internal auditor is to provide an in depth opinion on items which may prevent the Authority from achieving its objectives and then provide them with assurance that management of risk is in place and being robustly enforced.
Mr. Harris referred to point 2.1 on page one of the report which outlined the key discussion areas. Members were informed that the risk register had been reviewed and updated to reflect changes in the risk profile. It was agreed that a joint scope audit with Bedfordshire and Cambridgeshire & Peterborough Fire Authorities would be undertaken and best practice shared across the organisations.
Councillor Wexham asked Mr. Harris how many auditors were on his team. Mr. Harris stated that there were 300 auditors but these were spread across the country, and that they were not employed by the Fire Authority. Councillor Wexham stated that he had previously thought internal auditors were Service employees. The Finance Director & Treasurer advised Members that a contract was up in place with RSM Tenon in order for an independent and objective organisation to undertake certain tasks and draw on their expertise. Mr. Harris stated that RSM Tenon would get an expert in payroll to undertake a payroll audit, and ICT expert would undertake an ICT audit. Mr. Harris added that RSM Tenon ‘leads in sector knowledge’ and can share best practice from working with many other Fire and Rescue Services.
Resolved:
It was resolved that Members;
1. Noted the contents of the report.
23. ANNUAL AUDIT FEE
The Finance Director & Treasurer presented Ernst & Young’s letter to the Authority, EFA/079/13. Members were informed that the audit fee for 2013/14 would be the same as 2012/13, also that this fee was not determined by the Service.
Ms. Lee also advised Members that scale is set by the audit commission and asked Members if they had any questions.
Resolved:
It was resolved that Members;
1. Noted the content of the letter from Ernst & Young.
24. AUDIT PROGRESS REPORT
The Finance Director & Treasurer asked Ms. Lee from Ernst & Young to present EFA/080/13. Ms. Lee advised Members that this report related to the previous financial year. Members were also informed that the previous Audit Sub Committee had set out a plan of work and the report set out where work had been completed and a timetable for outstanding tasks to be completed.
Ms. Lee reported that there were no significant risks to report back to the Authority at the present time. Members were advised that all value for money work was on track and also that there would be an additional report to the Authority’s Policy & Strategy Committee in September.
Resolved:
It was resolved that Members;
1. Noted the content of the report from Ernst & Young.
Signed………….………………………………………………..
Chairman, 9 October 2013