Audit Committeeannual Report 2013
Audit CommitteeAnnual Report 2013
Kildare County Council
Audit Committee
ANNUAL REPORT 2013
Contents
Section 1:Introduction3
Section 2: Chairman’s Statement4
Section 3:Role of the Audit Committee7
Section 4:Audit Committee Charter7
Section 5:Internal Audit and Checking Section7
Annual Report 2011
Section 6Internal Audit Plan 20127
Section 7:Briefings from Senior Management8
Section 8:Audit Committee Objectives for 20128-14
and Related Outcomes
Section 9Conclusion14
Section 1:Introduction
Section 5 of the Local Government (Business Improvement Districts) Act 2005 provides for the establishment of Audit Committees in Local Authorities and Circular Fin 11/07 of 23 May 2007 also refers. Kildare County Council’s Audit Committee was established by way of resolution of the Council dated 22 October 2007 and the external members were approved by the Council on the nomination of the CountyManager following consultation with the Mayor. The members of the Audit Committee are as follows:
Mr Denis Doherty, Chairman
Mr Sean Carey, Vice-Chairman
Senator Mary Ann O’Brien
Mr Charlie Carri
Councillor John McGinley
Councillor Senan Griffin
Councillor Liam Doyle
The committee is supported and assisted by Mr Eamonn O’Sullivan, Director of Services, Corporate Services, Human Resources and ICT and Ms Paula Comerford, Staff Officer, Corporate Services.
During the course of 2013 the Audit Committee met on the following dates:
26 February 2013
28 May 2013
30 July 2013
29 October 2013
3 December 2013
This is the sixth annual report of the Audit Committee to the elected members of Kildare County Council.
Section 2:Chairman’s Statement
Statement by the Chairman of Kildare County Council’s Audit Committee
I am pleased to present the Annual Report of the Audit Committee for 2013. This is our sixth report and it is also the final report we will publish during the lifetime of the current County Council. Local Government reform will take effect during 2014. I should like to thank the members of the outgoing Council and especially the members who sit on our Committee for their valued support of our work at all times.
Our role is advisory rather than supervisory. We are in a position to provide an independent view of the financial reporting process, internal controls and the audit functions. Our main aim is to contribute to enhancing the corporate governance function of Kildare County Council.
In recent years, the continuing economic recession and the measures introduced by government to restore economic stability have impacted significantly on the funding and staffing of Kildare County Council. The Council, management and staff of the Council have maintained a constructive and positive approach in meeting financial obligations by transforming services, pursuing value for money and continuing to improve standards.
The Audit Committee attaches a high priority to good risk management. During the year the Committee noted with approval the greater focus being placed on the more significant risks, their potential impact and degree of risk involved.
The Council has established a fulltime team of three to lead and oversee the Council’s obligations under Health and Safety legislation and as good employers. The cost of complying with best health and safety practice is onerous, especially at a time of severe financial constraint. The Committee endorses the policy of not compromising on standards even when that results in works having to be deferred.
Internal audit is an important component of good governance. As the function evolves there is an improved alignment between the internal audit priorities and the priorities of the Council, which increases the perceived relevance and value of the internal audit function. The Committee noted that in nearly all cases, the recommendations contained in internal audit reports are being responded to in a timely fashion.
Work on developing the property interest register is continuing in a satisfactory manner. At year end 1191properties had been registered. The stage has now been reached where the register has become a valuable practical resource to staff in a number of sections of the Council as well as meeting its’ primary purpose of recording accurately and comprehensively the property assets of the Council.
The need to achieve good value for money continues to be a priority of the Council and of our Committee. We received a detailed briefing from representatives of a number of sections and functions on the policies and projects being pursued in 2013. We noted that progress made in earlier years is being maintained.
During the year the Committee considered Progress Reports 4&5 produced by the Local Government Audit Services. One dealt with processes and procedures for the operation of development contributions and the other with management and maintenance of vacant dwellings. Reports of this nature are useful in that they enable comparisons to be made between the Council we are familiar with and others we know very little about. We were pleased to note that Kildare Co. Co. compares favourably with the best.
Local Government Reform will be implemented in 2014. The scale of the reforms together with the coming into being of Irish Water as a service provider will result in major structural change, systems change and new governance arrangements. In recognition of this important development our Committee decided that Local Government Reform would be a standing item on our agenda. Our Committee was kept well informed of developments at all our meetings.
The County Manager attended one of our meetings at which a wide-ranging and very useful discussion took place. Our Committee received the support and co-operation of staff in all areas of the Council and the secretarial support supplied was, as always, of the highest standard.
Section 3:Role of the Audit Committee
The Audit Committee has an independent role in advising the Council on financial reporting processes, internal control, risk management and audit matters, as part of the systematic review of the control environment and governance procedures of the Council. The committee has a role in promoting good accounting practices, ensuring better and more informed decision-making, and improving the focus on value for money throughout the organisation. The committee also supports the work of the Internal Audit Unit and advises the CountyManager in relation to the operation and development of the Unit.
Section 4:Audit Committee Charter
The Audit Committee’s Charter was adopted by the members of Kildare County Council at their meeting on 31 March 2008. The Charter sets out the role, functions and membership of the committee. It also deals with matters such as the holding of meetings, working procedures and reporting structure. A copy of the Audit Committee Charter is attached hereto at Appendix 1.
Section 5:Internal Audit and Checking Section Annual Report 2012
The Internal Auditor presented the Internal Audit and Checking Section Annual Report 2012 to the committee at their first meeting of the year. He outlined changes to audit procedures which had been carried out during the year and pointed out specific target areas for the Internal Audit Team.
Section 6:Internal Audit Plan 2013
In preparing the Internal Audit Plan for 2013 the Internal Auditor met with each Director of Services, agreed priority areas and presented the Plan to Management Team for approval.
At their meeting on 26 February 2013 the committee was briefed on the content of the Plan and noted that a status update, including dates for each audit,had been included.
Section 7:Briefings from Senior Management
The committee met with the County Manager and several members of the Senior Management Team during the year including:
▪Head of Finance
▪Acting Head of Finance
▪Director or Services – Corporate, Human Resources and ICT
▪Director of Services – Water and Environmental Services
▪Director of Services – Housing, Community and Culture
▪Director of Services – Roads and Transportation
▪Director of Services – Planning & Economic Development
During 2013 the committee continued to receive regular briefings on the following areas, which had been identified as areas of priority. This year Local Government Reform was also identified as an area of priority:
▪Corporate Risk Register
▪Register of Lands
▪Value for Money Initiatives
▪Local Government Reform
The Audit Committee noted with the work undertaken during the year.
Section 8:Audit Committee Objectives for 2013 and Related Outcomes
Risk Management
The committee was updated with regard to the status of the Risk Register during the course of the year as follows:
Risk Management Policy
The Committee wasbriefed on the risk management policy objectives and the risk management cycle and it was also outlined to the committee how the purpose of the risk management policy is to formalize and embed the process in the culture and ethos of the Council. The key responsibility of the Audit Committee in relation to the
Corporate Risk Register was also highlighted.
Corporate Risk Register
The committee was briefed on the Corporate Risk Register at their July Meeting. The register reflected the most significant risks in terms of impact and likelihood, identified as facing the Council. The various categories were highlighted to the committee and they were informed that new policy proposals at national level entitled ‘Putting People First’ while presenting many new opportunities for the local authority section, will also bring challenges.
Risk Anticipation Measures
At the December meeting the Committee were circulated The Corporate Risk Register
Report (July 2013) and were briefed on the following three areas of risk anticipation that
are being focused on by the Council:
- Personnel – risk of the loss of corporate knowledge and monitoring and management of resources. .
- Budgetary and Financial – difficulty in budgetary management.
- Intra-agency – issues of governance and compliance.
Health and Safety
The Committee was briefed on Health and Safety and informedthat regrettably there had been three serious incidents in 2013 which are currently under investigation. The Committee were advised that in 2013 a team of three fulltime staff was established inthe Health and Safety Section. The team are constantly reviewing policies and procedures and maintain close contact with colleagues in neighbouring authorities. The cost of implementing the Health and Safety procedures adds another 30% to the cost of every job undertaken by the Council. The Committee were informed that the emphasis is on doing the job safely and if it can’t be done safely, then it will not be done.
Property Interest Register
The Property Interest Register [PIR] Project Team was established in 2009 in order to develop and maintain an up-to-date Register of Council owned properties. Two presentations were made by the PIR Project Team and the committee also received an update on progress at each meeting throughout the year.
During their presentation at meeting held on the 30 July 2013 the team informed the committee that 1032 assets had been captured and outlined the main activities of the team to date.
At their meeting held on 3 December 2013 the team detailed works undertaken in 2013 and informed the committee that 1191 assets had beencaptured. The team also outlined some sample projects which had been undertaken during the year and outlined objectives for the coming year which included the co-ordination of the Town Council folios, and the transfer of public water service Folios following the establishment of Irish Water as a semi-state company under the Water Services Act 2013.
Financial Reports
The Head of Finance briefed the committee at intervals during the year in relation to the financial position of the organisation as it stood at that time and kept the committee informed of emerging and developing financial issues
At the meeting held on 28May 2013 the Head of Finance informed the Committee that the Annual Financial Statement for 2012 had been completed and had been referred to the Local Government Auditor for audit.
The Committee were briefed on the main points of the Annual Financial Statement with emphasis on the balances on revenue and capital accounts.
They were also briefed on the collection of accounts and rates arrears which amounted to €12.6m and the metered water arrears which amounted to €7.3m. It was noted that the Finance Department was focusing on improving the debt collection rates in both of these areas.
Financial Overview
The committee were presented with a Financial Overview at their meeting on 3 December 2013. They were informed that there would be no increase in the rateable valuation of 2014, but the budget had yet to be finalised and was proving quite difficult to balance. They were also informed that the year ahead will prove challenging as the roads grant has been cut by 25% for 2014 and the local government fund is also expected to be reduced.
Value for Money Initiatives
The Committee were given a detailed presentation on Efficiency Initiatives by the Director of Services, Corporate Services, Human Resources and ICT. The presentation was broken as follows: Retention/Consolidation, Productivity and Performance, ICT initiatives, Shared services and In-house savings. The Committee were informed that significant savings have been achieved to date in the following areas: payroll, sale of domestic refuse collections and franchise of civic amenity, the introduction of E billing and LVP cards, the setting up of electronic payments and the introduction of shared services. It was also highlighted to the committee that the challenge now will be to maintain the current savings and to continue to deliver savings.
Local Government Reform
The committee received an update on Local Government Reform at each meeting throughout the year.
At the meeting held on 28 May 2013 the committee were informed that a working group had been set up to address issues relating to Local Government Reform. The committee were informed that while awaiting the publication of the Boundary Commissions report they were concentrating on identifying issues that they felt wouldmost impact Kildare County Council with particular emphasis on the financial and staff resources implications.
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During the meeting held on 3 December 2013 the committee were informed that Mr E O’Sullivan was appointed Chairperson of the Integration Working Group, but as the Local Government Reform Act had not yet been adopted and more information was awaited, the Group was very much working in a vacuum. Any work that can be done early for the integration of the town councils in June is being done. There will be huge public and political expectation around this reform and financial constraints will have to be taken into account.
Internal Audit
At the first meeting of 2013 the Internal Auditor presented the Internal Audit and Checking Section Annual Report 2012 to the committee. It outlined changes to the audit procedure which had been carried out during the year and pointed out specific target areas for the Internal Audit Team for 2013.
During the year the Audit Committee placed strong emphasis on the follow up of Internal Audit recommendations expressed the view that the response overall hasimproved but that there is a need to continue to improve and that the committee will retain their interest in this area.
During the course of the year the committee received special briefings on the following matters:
- Halting Sites – Receipt of Payments
- Traffic Management Unit (Procedures and Operations)
- Newbridge Sports & Leisure – The Committee were briefed in relation to operational and management issues that had arisen at the sports and leisure centre. They werealso briefed on the measures being taken as a result of the consideration given to the issues that had been identified. They formed the view that the matter had been worked through in a sound and professional manner.
At the final meeting of the year the Internal Auditor presented the Internal Audit Progress Report to the Committee. The Internal Auditor informed the Committee that
10 audits had been completed, 1 audit at draft stage, 2 audits are at discussion doc stage, 1 audit is in progress and 1 investigation is in progress. The review of checking procedures is ongoing, spot checks on completed audits and reviews of audit recommendations are ongoing.
The Committee were presented with the Internal Audit Plan 2014.
Local Government Audit Services Progress Reports
At the meeting held on 3 December 2013 the Audit Committee were presented with reports on the Local Government Audit Services Progress Reports Nos. 4 and 5 as follows:
Report from Planning on Local Government Audit Services Progress Report No. 4.
The Committee were briefed on the progress of the implementation of the recommendations, relating to the review of processes and procedures for the operation of development contributions. The Committee were informed that the Planning Department are compliant with the majority of recommendations in the report and that development levy receipts are up since a direct debit system of collection was set up last year