Transcript KPMG Report Portrait Template 1

INFRASTRUCTURE & GOVERNMENT
Annual External
Audit Report
2005/06 - Draft
Wyre Forest District
Council
December 2006
AUDIT
Content
The contacts at KPMG
in connection with this
report are:
Jon Gorrie
Director
KPMG LLP (UK)
Tel:
Fax:
0121 232 2741
0121 232 3578
[email protected]
Ian Skipp
Senior Manager
KPMG LLP (UK)
Tel: 0121 232 2401
Fax: 0121 232 3578
[email protected]
Georgina Dickson
Assistant Manager
KPMG LLP (UK)
Tel:
Fax:
0121 232 3694
0121 232 3578
[email protected]
Page
Executive summary
•
•
•
•
Scope of this report
Summary of findings
Forward look
Acknowledgements
Audit of accounts
•
•
•
•
•
•
•
•
Findings of the accounts audit
Financial position
Questions and objections from electors
Legality of financial transactions
Internal audit
Standards of financial conduct and the prevention and detection of fraud and corruption
Certification of grant claims and returns
6
Scope of our work
Summary of our assessment
Governance arrangements
Assessment against the Audit Commission’s KLOEs
Findings of data testing
Use of Resources
•
•
•
4
Scope of our work
Audit of data quality
•
•
•
•
•
2
11
Scope of our work
Use of Resources conclusion
Best Value Performance Plan
This report is addressed to the Authority and has been prepared for the sole use of Wyre Forest District Council. We take no responsibility to any member of staff acting in their individual capacities, or to third
parties. The Audit Commission has issued a document entitled Statement of Responsibilities of Auditors and Audited Bodies. This summarises where the responsibilities of auditors begin and end and what is
expected from the audited body. We draw your attention to this document.
External auditors do not act as a substitute for the audited body’s own responsibility for putting in place proper arrangements to ensure that public business is conducted in accordance with the law and proper
standards, and that public money is safeguarded and properly accounted for, and used economically, efficiently and effectively.
If you have any concerns or are dissatisfied with any part of KPMG LLP’s work, in the first instance you should contact Will Carr, who is the engagement director to the Authority, telephone 0121 232 3308, email
[email protected] who will try to resolve your complaint. If you are dissatisfied with your response please contact Trevor Rees on 0161 236 4000, email [email protected], who is the national contact
partner for all of KPMG’s work with the Audit Commission. After this, if you are still dissatisfied with how your complaint has been handled you can access the Audit Commission’s complaints procedure. Put your
complaint in writing to the Complaints Team, Nicholson House, Lime Kiln Close, Stoke Gifford, Bristol, BS34 8SU or by e mail to: [email protected]. Their telephone number is 0117 9753131,
textphone (minicom) 020 7630 0421.
© 2006 KPMG LLP, the UK member firm of KPMG International, a Swiss cooperative. All rights reserved. This document is confidential and its circulation and use are
restricted.
KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
1
Section 1
Executive summary
1.1
Scope of this report
This letter reflects our responsibilities under the Code of Audit Practice and summarises our audit work for
our findings and recommendations in relation to our:
the 2005/06 year. In particular, this report includes
Audit of accounts (section 2);
Audit of data quality (section 3); and
Work on the Authority’s Use of Resources (section 4).
This report also includes:
A summary of recommendations and action plan for the current year (Appendix A);
A follow up of recommendations from the previous year (Appendix B);
Our statutory report on the Best Value Performance Plan (Appendix C); and
A summary of the audit reports issued during the year (Appendix D).
1.2 Summary of findings
1.2.1 Audit of accounts
On 29 September 2006, we issued our opinion on the Authority’s 2005/06 financial statements. At the same
concludes our statutory responsibilities as auditors for that year.
time, we issued our audit certificate, which
We are awaiting the submission of a completed Whole of Government Accounts (WGA) return from the
with the statutory accounts.
Authority which we will review for consistency
1.2.2 Use of resources
We reported our conclusion on the Authority’s use of resources as part of our accounts audit report on 29
conclusion, indicating that the Authority has achieved the criteria
specified by the Audit Commission.
September 2006. This was an unqualified
Our responsibilities under the Audit Commission’s Code of Audit Practice also include the review of topics
relevant to the Authority’s use of resources which
have been determined through a risk assessment and are
detailed in the 2005/06 Annual Audit and Inspection Plan.
In this report we summarise our findings on our work on management arrangements for data quality and the
review of the Authority’s BVPIs. The findings of
our assessment against the updated 2005 Key Lines of
Enquiry will be presented in the Annual Audit & Inspection Letter.
1.2.3
Audit of data quality
During August and September 2006, we completed our first review of data quality at the Authority, following
Commission. This work forms part of our 2006/07 audit year.
a methodology developed by the Audit
We reviewed the management arrangements that the Authority has in place to ensure data quality.
Following this work we awarded a score of 2 out of
a maximum of 4 as we consider the Authority’s data
quality arrangements to be adequate. The key issues identified, and recommendations raised, have
been
presented in detail in Section 3 to this report.
We were also required to review a number of the Best Value Performance Indicators included in the
Authority’s 2006/07 Best Value Performance Plan.
The review resulted in the amendment of two indicators, however in all other respects we consider that the BVPP is consistent with the relevant guidance and we have
issued an unqualified opinion (see Appendix C)
© 2006 KPMG LLP, the UK member firm of KPMG International, a Swiss cooperative. All rights reserved. This document is confidential and its circulation and use are
restricted.
KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
2
Section 1
Executive summary
1.3
Forward Look
The Authority faces another challenging year in 2006/07. Some of the challenges faced are detailed in our
Authority in March 2006.
2006/07 audit plan. This plan was issued to the
The key issues identified in the 06/07 plan were:
Financial Standing - the Authority faces a number of challenges in relation to its ongoing financial standing
including the setting of council tax precept levels
over the medium term, limited opportunities to draw on
capital receipts to finance capital expenditure and a need to generate further efficiency savings.
Joint Working - It is likely that there will be increased use of joint working with neighbouring forces and
authorities designed to address regional budget
pressures and to develop capacity to deliver wider efficiency
savings. These arrangements will require careful monitoring to ensure they are effectively governed
and deliver agreed outcomes.
1.4
Acknowledgements
We would like to take this opportunity to thank the officers and Members for their help and co-operation given
to us throughout our work.
© 2006 KPMG LLP, the UK member firm of KPMG International, a Swiss cooperative. All rights reserved. This document is confidential and its circulation and use are
restricted.
KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
3
Section 2
Audit of Accounts
2.1
Scope of our work
Our Interim Memorandum, issued on 29 September 2006, set out our findings in relation to the Authority’s
controls and internal audit function. Further to
this document, our ISA260 Report to Those Charged with
Governance gave our findings and initial conclusions in relation to the Authority’s accounts.
This report sets out our findings in greater detail, including our recommendations for improvements in
financial control and financial reporting procedures.
2.2
2.2.1
Findings of the accounts audit
Opinion and certificate
We issued an unqualified opinion and certificate on the accounts on 29 September 2006. This means that we
believe that the accounts present fairly the financial
affairs of the Authority and of the income and expenditure recorded by the Authority during the year.
For the first time this year, our audit report incorporated a conclusion on the Authority’s use of resources.
This is discussed in more detail in section 4 and in
our ISA260 Report to Those Charged with Governance,
Issued on 30 September 2006. The detailed findings of our assessment against the 2005 KLOEs will
however be presented in our Annual Audit and Inspection Letter in March 2007.
We have no further issues to report other than those in our ISA 260 Report to Those Charged with
Governance.
2.2.2 Accounts production and adjustments to the accounts
We received a complete set of draft accounts by the agreed deadline and they were supported by good
quality working papers.
The accounts were amended for a number of errors and presentational disclosures, however, none of these
were considered to be material. There were no
uncorrected errors.
2.2.3 Statement on Internal Control
We reviewed the information provided to support the Authority’s Statement on Internal Control for 2005/06
and concluded that it was consistent with our
understanding of the Authority.
2.2.4
Internal Audit
We concluded that we were able to place reliance on the work of Internal Audit in 2005/06. We noted
however that Internal Audit raised a number of
recommendations aimed at improving the Authority’s
financial controls throughout the year which we continue to support.
2.3 Financial position
2.3.1 Revenue
For the year ended 31 March 2006 the Authority reported a surplus of £0.55 million, bringing its general fund to £5.54 million. The year end surplus represents
an underspend of £0.49 million against its total 2005/06 budget of £12.02 million. The main area of increased income facilitating the surplus is the receipt of
increased Housing Benefit subsidy of £0.23 million, an increase of £0.11 million against budget of external
interest, and savings of £0.11 million relating to
staff vacancies.
The Authority has set a balanced revenue budget for 2006/07 of £15.01 million, and currently forecasts a
year end underspend of £0.50 million, relating
primarily to an increase in interest rates received, slippage of
direct revenue funding and salary savings.
This is partly offset by extra costs of £0.24 million, relating to payments to travel operators, and a reduced
contribution from Worcestershire County Council.
2.3.2 Capital
The Authority approved a capital programme of £8.71 million for 2005/06, against which only £4.17 million
was incurred. The underspend represents total
slippage of 52% against budget, relating mainly to the receipt
of a £6 million allocation from the Housing Corporation which funded a number of schemes which
would have been funded through Affordable Housing Grants within the capital programme.
Contractual issues have led to further slippage, and these will have to be carefully managed in the current
year to avoid recurrence.
Cabinet approved a revised 2006/07 capital programme of £7.08 million, of which £1.78 million had been
spent at the end of quarter two. The main area of
underspend relates to the Wyre Forest Glades scheme,
and the use of Affordable Housing Grants. Although the Authority is confident of spending its
planned capital
programme by the year end, contractual issues encountered within 2005/06 will need to be carefully
managed to avoid
unnecessary slippage.
© 2006 KPMG LLP, the UK member firm of KPMG International, a Swiss cooperative. All rights reserved. This document is confidential and its circulation and use are
restricted.
KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
4
Section 2
Audit of Accounts
2.3.3
Reserves and balances
The Authority reported levels of specific revenue reserves of £3.84 million at the end of 2005/06, and
£1.53 million in 2006/07 will still enable the Authority to
maintain a positive reserves balance.
2.4
working balances of £0.70 million. Planned use of
Questions and objections from electors
Electors of Wyre Forest District Council are entitled by law to raise with the auditor questions or objections
require us to investigate the issue raised.
to items of account. These queries can then
We have not received any such questions or objections during the audited year.
2.5
Legality of financial transactions
We are required to review the arrangements that the Authority has in place, to identify whether transactions
consequence and contracts that are entered into are legally
sound.
undertaken that might have a significant financial
We have not identified any significant weaknesses in the framework established by the Authority for
transactions.
ensuring the legality of its significant financial
2.6
Internal Audit
We reviewed the quality and scope of Internal Audit’s work under the Managed Audit approach to assess
the extent to which reliance could be placed on its
annual coverage of the Authority’s main financial
systems. We have concluded that we were able to place reliance on their work in forming our
opinion on the
Authority’s financial statements for 2005/06.
Internal Audit’s overall assessment is that the Authority has an adequate framework of control. It should be
noted that Internal Audit has made a number of
recommendations throughout the year to further strengthen
the Authority’s overall control environment and we support and encourage the adoption and
implementation
of their recommendations.
2.7
Standards of financial conduct and the prevention and detection of fraud and corruption
The Authority’s management are responsible for governance arrangements and for taking all reasonable
steps to prevent and detect fraud and other
irregularities. We are required to review the adequacy of the
Authority’s arrangements to manage its affairs in accordance with proper standards of financial
conduct and
to prevent and detect fraud and corruption.
We have, therefore, assessed the Authority’s arrangements over a number of related activities, including:
 ensuring compliance with appropriate codes of conduct;
 ensuring compliance with Standing Orders and Financial Regulations; and
 the monitoring of its policies for the prevention and detection of fraud and corruption.
We discussed with officers the arrangements and controls currently in place and we continue to maintain
open communication lines with Internal Audit to
ensure we are made aware of any developments or
potential irregularities that could have a significant impact on our audit.
The Authority has good arrangements in place for the detection of fraud and corruption and to maintain
have not been made aware of any fraud and corruption
incidents during the year.
2.5
standards of financial conduct during the year. We
Certification of grant claims and returns
We are currently in the process of reviewing and certifying the Authority’s grant claims and returns for the
financial year 2005/06.
We have no issues to report relating to our work to date.
© 2006 KPMG LLP, the UK member firm of KPMG International, a Swiss cooperative. All rights reserved. This document is confidential and its circulation and use are
restricted.
KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
5
Section 3
Audit of data quality
3.1
Scope of our work
The Audit Commission has introduced a new review of local authorities’ data quality arrangements in 2006/07.
The work is timely since, with the continued development of the performance management framework in
many organisations, there is increased reliance on
information for decision-making, consequently the accuracy
of the information is vital for effective management of the organisation.
Data is also important to external stakeholders wishing to assess authorities’ performance. Our work includes
Audit Commission’s CPA process.
stages:
Our review of data quality was informed by the Audit Commission’s Audit Guides specified by the Audit
the validation of certain indicators to assist the
Commission. These divide our work into three
•
Stage 1: Review of management arrangements. We consider the Authority’s arrangements in place for defining its objectives for data quality and aims to ensure that
they are achieved. The results of this stage form part of the assessment of the Authority’s overall use of resources as part of the Use of Resources conclusion, as
discussed in Section 4 of this report.
•
Stage 2: Comparison to other authorities. This involves responding to the Audit Commission where they raise questions on the Authority’s indicators. These
questions may arise through analysis of historical trends or comparison to other authorities. The results of this stage are reported to the Audit Commission via the
Electronic Data Collection (EDC) system.
•
Stage 3: Data testing. We perform detailed testing on a number of indicators selected by the Audit Commission, carrying out the tests specified in the Audit Guide.
The number of indicators tested is dependent upon our assessment of the adequacy of arrangements in Stage 1. The results of this stage are reported to the Audit
Commission via the Electronic Data Collection (EDC) system.
This section of the report focuses on our findings from Stages 1 and 3.
Review of Management arrangements
The Authority has been awarded a score of two out of a possible four, for each of the five areas, giving an overall score of two.
A summary of the areas assessed and the score awarded is shown below:
Table 1: Management arrangements assessment
3
2
1
Using data
effectively
People and
skills
Information
systems and
processes
Policy
framework
0
Governance
arrangements
Score (1-4)
4
Area
© 2006 KPMG LLP, the UK member firm of KPMG International, a Swiss cooperative. All rights reserved. This document is confidential and its circulation and use are
restricted.
KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
6
Section 3
Audit of data quality
Comparison to other authorities
We received no queries from the Audit Commission in respect of the Authority’s indicators.
Data testing
As part of our work on data quality we are required to review a number of indicators, based on our assessment of the arrangements surrounding data quality.
Three indicators were selected for review. Of these, two were amended to comply with reporting criteria, and one was not subject to any amendment.
Table 2: Results of data testing
4
3
2
1
0
Number of indicators
tested
Number amended
Number unreliable
© 2006 KPMG LLP, the UK member firm of KPMG International, a Swiss cooperative. All rights reserved. This document is confidential and its circulation and use are
restricted.
KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
7
Section 3
Audit of data quality
3.8
Findings of data testing
Testing
Number
Number of indicators tested
3
Number of indicators amended
2
Number of reservations placed
0
As a result of our assessment of data quality arrangements a total of three indicators were selected for testing.
brief explanation of why they were selected for review.
Performance Indicator
The indicators selected are listed below along with a
Reason for selection
BV 82A – recycling performance
Significant indicator
BV 82B – composting performance
Significant indicator
BV 183 – average time in temporary accommodation
Significant indicator
Of the three indicators tested the results were the following:
Performance Indicator
Results of work
BV 82A – recycling performance
Amendment made to outturn to reflect the requirement to report to two decimal places in line
with definition
BV 82B – composting performance
No amendments required
BV 183 – average time in temporary accommodation
Total of ten items out of circa 120 tested failed to meet the required criteria. Indicator revised as
appropriate
The results of our findings indicate a weakness in the Authority’s quality control processes.
Recommendation 1: Review process for BVPIs prior to submission
The Authority should implement a robust and independent review process prior to the submission of BVPIs. This should include a review of the indicator for
full compliance against definitions. This is especially important for those indicators which are new, or whose indicators have changed from prior year.
Assessment against the Audit Commission’s Key Lines of Enquiry (KLOEs) for Data Quality
The Authority has satisfied the criteria for level two, meaning we consider that the Authority’s arrangements
are adequate.
The Authority should seek to improve its data quality arrangement during 2006/2007 by performing a self
assessment against the level 3 and 4 data quality
KLOEs. This will enable the Authority to both identify where
progress has been made, and where scope for further improvement remains.
Recommendation 2: Routine self assessment against the Audit Commission’s Data Quality Key Lines of Enquiry
The Authority should enhance its data quality arrangements by routinely self assessing against the Audit Commissions Key Lines of Enquiry for Data Quality.
This would highlight areas where the Authority can make improvements to its data quality arrangements.
© 2006 KPMG LLP, the UK member firm of KPMG International, a Swiss cooperative. All rights reserved. This document is confidential and its circulation and use are
restricted.
KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
8
Section 4
Use of Resources
4.1
Scope of our work
Our responsibilities under the Code of Audit Practice in relation to the Authority’s use of resources, and where
Area
Timing of work
Report
Report date
Use of Resources conclusion
2005/06
August 2005-June 2006
Report to those charged with
governance 2005/06
September 2006
Use of Resources scored
judgement
August-October 2006
Annual Audit and Inspection Letter
2005/06
March 2007
Use of Resources topics from
2005/06 Audit and Inspection
Plan
April 2005-June 2006
Interim Report 2005/06
June 2006
Annual External Audit Report
2005/06
October 2006
This document only covers those issues set out in the 2005/06 Annual Audit and Inspection Plan which have
4.2
we report these, is set out in the following table.
not previously been reported.
Use of Resources conclusion
We have undertaken our review of Use of Resources in line with the Code of Audit Practice and have no
unqualified Use of Resources conclusion was issued on 29
September 2006.
We will present the results of our Use of Resources scored judgement in our Annual Audit and Inspection
4.3
Best Value Performance Plan
We have reviewed the Authority’s 2006 Best Value Performance Plan, as part of our 2006/07 audit work, to
requirements.
issues to raise as a result of the review. An
Letter, in March 2007.
ensure that its contents comply with statutory
Our opinion is included in Appendix C.
© 2006 KPMG LLP, the UK member firm of KPMG International, a Swiss cooperative. All rights reserved. This document is confidential and its circulation and use are
restricted.
KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
9
Appendices
Appendix A: Summary of Recommendations and Action Plan
This appendix summarises the two recommendations that we have identified while preparing this annual external audit report. We have given each of our observations a
risk rating (as explained below) and agreed with management what action they will need to take. We will follow up our recommendations as part of our audit in
2006/07.
Priority rating for recommendations raised
Priority one: issues that are fundamental and material to
your system of internal control. We believe that these
issues might mean that you do not meet a system
objective or reduce (mitigate) a risk.
Priority two: issues that have an important effect on
internal controls but do not need immediate action. You
may still meet a system objective in full or in part or
reduce (mitigate) a risk adequately but the weakness
remains in the system.
No.
Recommendation
1

(two)
BVPI review process
The Authority should implement a robust and independent review
process prior to the submission of BVPIs. This should include a
review of the indicator for full compliance against definitions. This is
especially important for those indicators which are new, or whose
indicators have changed from prior year.

(two)
Data Quality self assessment against Audit Commission KLOEs
The Authority should enhance its data quality arrangements by
routinely self assessing against the Audit Commissions Key Lines of
Enquiry for Data Quality. This would highlight areas where the
Authority can make improvements to its data quality arrangements.
2
Priority three: issues that would, if corrected, improve the
internal control in general but are not vital to the overall
system. These are generally issues of best practice that we
feel would benefit you if you introduced them.
Management response
© 2006 KPMG LLP, the UK member firm of KPMG International, a Swiss cooperative. All rights reserved. This document is confidential and its circulation and use are
restricted.
KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
10
Appendices
Appendix B: Follow Up of Last Year’s Principal Recommendations
2004/05 Recommendation
Progress made by the Authority
Recommendation 1 – CPA Improvement Plan
The Council should review its CPA improvement plan and re-prioritise its actions to
set deliverable targets for year
Recommendation 2 – Performance management framework
The Council should monitor its progress against the recommendations made in
KPMG's report on the Council's Performance Management Framework and establish
whether the recommendations are being addressed within the originally envisaged
timescale. The Council should take actions as appropriate to ensure the objectives
of improving the Performance Management Framework are achieved, for example by
allocating individual Officers the responsibility of implementing recommendations.
Recommendation 3 – Partnership working
The Council should consider reviewing its partnership arrangement to ensure there
is a strong framework of accountability and corporate governance that is based on
clear leadership, a culture of scrutiny and challenge and a focus on user’s views and
experiences. Together, these factors should positively influence the shape and
delivery of the Council’s strategic priorities.
Recommendation 4 – Financial working papers
In order to accommodate the increasing pressures of having to produce and publish
its accounts a month earlier than last year, the Council should:
Ensure that all working papers supporting the accounts fully explain, and are
sufficiently detailed, to support the figures in the accounts.
Ensure that a comprehensive senior review of the accounts is performed to address
presentational and financial issues.
Recommendation 5– Financial reporting
In order the further improve the Members understanding of the accounts and to
ensure that key highlights and variances are clearly brought to their attention, the
Council should consider tabling an explanatory paper when the accounts are
presented to Members. This paper should provide an overview of the financial
stability of the Council, any key income streams and significant revenue and capital
spends. In addition the paper should link to the Council's medium term financial
strategy ('MTFS') and provide commentary on whether the actual results are in line
with the MTFS and if not the actions being taken by the Council to address the
variances.
Recommendation 6– Summary accounts / annual report
The Council should consider the production of a summary set of accounts and/or
annual report which is separate to its detailed financial statements. As part of this
process the Council should establish a clear process of consultation with a range of
stakeholders to establish their requirements in respect of the publication of summary
accounts and/or an annual report.
© 2006 KPMG LLP, the UK member firm of KPMG International, a Swiss cooperative. All rights reserved. This document is confidential and its circulation and use are
restricted.
KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
11
Appendices
Appendix B: Follow Up of Last Year’s Principal Recommendations
2004/05 Recommendation
Progress made by the Authority
Recommendation 7 – Budget preparation
The Council's budget setting process should be refined and based on realistic assumptions of
the resources likely to be in place, to fairly reflect and estimate the true cost of services
expected in the forthcoming year. The budget setting process should include a comprehensive
challenge process with members given sufficient opportunity to challenge budget holders'
assumptions. In addition the Council should consider providing training to budget holders to
make them aware of the advantages of submitting budgets that are based on realistic
assumptions whilst remaining challenging to achieve.
Recommendation 8 – Budget reports
The Council should consider updating its budget reports to readily highlight significant
variances, this could be achieved, for example by highlighting adverse variances. In addition
the Council should consider expanding the budget information to include balance sheet data
and operational information. This will provide the users of the information with greater clarity
on how the Council is performing.
Recommendation 9 – Capital programme
The Council should consider providing additional training to budget-holders to address any
gaps in project management skills and to ensure that slippage of the capital programme is
identified at an early stage and remedial measures adequately arranged.
Recommendation 10 – Capital programme
The Council should consider:
developing a set of local performance measures in relation to assets that link its asset use to it’s
corporate objectives;
communicating to its stakeholders, the results of performance management and benchmarking
relating to it’s asset base; and
developing an approach to integrate the reporting of asset management information with
organisational financial information.
Recommendation 11 – Efficiency savings
Following the implementation of improved budget setting procedures, the Council should
review its efficiency savings target to establish its continued validity and/or whether further
savings can be achieved.
Recommendation 12 – Risk management
The Council should develop further its risk management arrangements and in particular:
Write specific risk management responsibilities into the terms of reference for its Audit
Committee;
Ensure that the Audit Committee receives regular reports on risk management and that risk
management is reported to full Council at least annually;
Updating the risk management strategy to assess risks for their likelihood and impact, and any
mitigating controls.
Review and update the risk management process at least annually;
Include all partnership risks within the risk register ;
Present the Statement of Internal Control for Member review and scrutiny; and
Continue to train all staff and members to manage risk within their own working environment.
© 2006 KPMG LLP, the UK member firm of KPMG International, a Swiss cooperative. All rights reserved. This document is confidential and its circulation and use are
restricted.
KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
12
Appendices
Appendix B: Follow Up of Last Year’s Principal Recommendations
2004/05 Recommendation
Progress made by the Authority
Recommendation 13 – Value for money
The Council should consider the areas for development in relation to KPMG's Value for
Money judgements and include them within its overall corporate improvement processes, in
particular:
The scope for improving cost effectiveness needs to be kept under review and scrutiny to
achieve clear improvements in value for money;
The Council should continue to have value for money as a priority of the Council. This
priority could be extended by assessing where the Council has higher costs / lower satisfaction
than its peers and, if appropriate, develop action plans to improve the value for money
presently offered; and
The Council should also develop and document clear policies and effective processes for
reviewing and improving value for money.
© 2006 KPMG LLP, the UK member firm of KPMG International, a Swiss cooperative. All rights reserved. This document is confidential and its circulation and use are
restricted.
KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
13
Appendices
Appendix C: Auditor’s Statutory Report on the Best Value Performance Plan
Auditor’s Statutory Report on the Best Value Performance Plan
Auditor’s Report to Wyre Forest District Council on its Best Value Performance Plan
for the 2006/07 financial year
Certificate
We certify that we have audited the Best Value Performance Plan of Wyre Forest District Council (“the Authority”) in accordance with section 7 of the Local Government Act
1999 (“the Act”) and the Audit Commission's Code of Audit Practice. We also had regard to supplementary guidance issued by the Audit Commission.
This report is made solely to the Authority, in accordance with section 7 of the Act. A copy of this report will be sent to the Audit Commission under 7(5)(b) of the Act in
relation to our recommendation to the Audit Commission under section 7(4)(e). A copy of this report will be sent to the Secretary of State under 7(5)(c) of the Act if we
include a recommendation under section 7(4)(f) that the Secretary of State should give a direction under section 15 of the Act.
Our audit work has been undertaken so that we might state to the Authority, to the Audit Commission and (where necessary) to the Secretary of State those matters we are
required to state to them in such an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than (i) the Authority, for our audit work, for this report, or for the opinions we have formed, (ii) the Audit Commission, for our recommendation under section 7(4)(e)
and (iii) the Secretary of State, for our recommendation (if positive) under section 7(4)(f) of the Act.
Respective Responsibilities of the Authority and the Auditor
Under the Local Government Act 1999, the Authority is required to prepare and publish a Best Value Performance Plan summarising its assessments of its performance and
position in relation to its statutory duty to make arrangements to secure continuous improvement to the way in which its functions are exercised, having regard to a
combination of economy, efficiency and effectiveness.
The Authority is responsible for the preparation of the Plan and for the information and assessments set out within it. The Authority is also responsible for establishing
appropriate performance management and internal control systems from which the information and assessments in its Plan are derived. The form and content of the Best
Value Performance Plan are prescribed in section 6 of the Act and statutory guidance issued by the Government.
As the Authority's auditors, we are required under section 7 of the Act to carry out an audit of the Best Value Performance Plan, to certify that we have done so, and:
to report whether we believe that the Plan has been prepared and published in accordance with statutory requirements set out in section 6 of the Act and statutory guidance
and, where appropriate, recommending how the Plan should be amended so as to accord with statutory requirements;


to recommend:
-where appropriate, procedures to be followed in relation to the Plan;
-whether the Audit Commission should carry out a Best Value inspection of the Authority under section 10 of the Local Government Act 1999; and
-whether the Secretary of State should give a direction under section 15 of the Local Government Act 1999.
Opinion
Basis of this opinion
For the purpose of forming our opinion as to whether the Plan was prepared and published in accordance with the legislation and with regard to statutory guidance, we
conducted our audit in accordance with the Audit Commission’s Code of Audit Practice. In carrying out our audit work, we also had regard to supplementary guidance issued
by the Audit Commission.
We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide an opinion on whether the Plan
has been prepared and published in accordance with statutory requirements.
© 2006 KPMG LLP, the UK member firm of KPMG International, a Swiss cooperative. All rights reserved. This document is confidential and its circulation and use are
restricted.
KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
14
Appendices
Appendix C: Auditor’s Statutory Report on the Best Value Performance Plan
In giving our opinion, we are not required to form a view on the completeness or accuracy of the information or the realism and achievability of the assessments published by
the Authority. Our work therefore comprised a review and assessment of the Plan and, where appropriate, examination on a test basis of relevant evidence, sufficient to satisfy
ourselves that the Plan includes those matters prescribed in legislation and statutory guidance and that the arrangements for publishing the Plan complied with the
requirements of the legislation and statutory guidance.
Where we have qualified our audit opinion on the Plan, we are required to recommend how the Plan should be amended so as to comply in all significant respects with the
legislation and statutory guidance.
Unqualified opinion
In our opinion, Wyre Forest District Council has prepared and published its Best Value Performance Plan in all significant respects in accordance with section 6 of the Local
Government Act 1999 and statutory guidance issued by the Government.
Recommendations on procedures followed in relation to the Plan
Where appropriate, we are required to recommend the procedures to be followed by the Authority in relation to the Plan.
For the current financial year, we have not made any such recommendations.
Recommendations on referral to the Audit Commission/Secretary of State
We are required each year to recommend whether, on the basis of our audit work, the Audit Commission should carry out a Best Value inspection of the Authority or
whether the Secretary of State should give a direction.
On the basis of our work:
we do not recommend that the Audit Commission should carry out a Best Value inspection of Wyre Forest District Council under section 10 of the Local Government Act
1999; and
we do not recommend that the Secretary of State should give a direction under section 15 of the Local Government Act 1999.
KPMG LLP
Chartered Accountants
Birmingham
31 December 2006
© 2006 KPMG LLP, the UK member firm of KPMG International, a Swiss cooperative. All rights reserved. This document is confidential and its circulation and use are
restricted.
KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
15
Appendices
Appendix D: Audit Reports Issued
Report title
Date issued
Audit and Inspection Plan
31 March 2006
Interim Memorandum
29 September 2006
Report to those charged with governance
29 September 2006
Accounts opinion
29 September 2006
Value for Money conclusion
29 September 2006
Data Quality opinion
29 September 2006
© 2006 KPMG LLP, the UK member firm of KPMG International, a Swiss cooperative. All rights reserved. This document is confidential and its circulation and use are
restricted.
KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
16