Minutes

Minutes of the Audit Panel held on 8 March 2001 held in Room AG23, Romney House, 43 Marsham Street, Westminster SW1P 3PY.

Present

Members

• Sir John Quinton (Chair)
• Roger Evans (Deputy Chair)
• John Biggs
• Elizabeth Howlett

MPA staff

• Peter Martin (Treasurer)
• Peter Tickner (Director of Internal Audit)

MPS staff

• Robert Alexander (Head of Finance)

Also in attendance: Jon Hayes (Audit Manager – District Audit), Kevin Murphy (Director – KPMG), Kash Pandya (District Auditor – District Audit), Rona Sutherland (External Audit Manager – KPMG)

Plus three members of the press and public.

Part 1

20. Apologies

(Agenda item 1)

No apologies were received.

21. Minutes of audit panel held on 8 February 2001

(Agenda item 2)

The minutes of the meeting held on 8 February 2001 were agreed as a correct record.

Resolved:
the minutes of the last meeting be agreed.

22. External audit 2000/1 fees

(Agenda item 3)

At the last Audit Panel meeting Members resolved that the external audit fees be discussed at a further meeting. Members received a report setting out the Audit Commission's fee recommendations and further information in support of the proposed fee.

It was suggested that the Panel be provided with a breakdown after completion of the audit (it terms of hours and costs) of how the fee was arrived at. The External Auditor agreed, but wished the Panel to note that the audit was output based, 10 to 20 staff of differing skills would be employed at various tasks and for varying lengths of time.

Resolved:
the external audit fee be agreed.

23. Internal audit exception reporting

(Agenda item 4)

A report was received proposing a system to monitor the progress of MPS line management in responding to Internal Audit reports and the subsequent implementation of accepted audit recommendations. It recommended a process by which failures to take appropriate action on higher risk audit recommendations would be brought to the Audit Panel, and set out arrangements for identifying potential savings as the result of Internal Audit's work. The Director of Resources stated that he was keen to ensure that the audit recommendations became part of standard management practise as part of management accountability.

Resolved:

1. the proposed process for ensuring that MPS line management respond in an appropriate and timely manner to reports issued by Internal Audit be approved;
2. the process by which audits are reported to the Panel be agreed;
3. the system whereby failure to implement internal audit recommendations would be reported to the Panel be endorsed; and
4. the proposed arrangements for dealing with internal audit recommendations that identify potential or actual savings be endorsed.

24. External audit management letter (1999/000)

(Agenda item 4)

Members had been supplied with a copy of the 1999/00 Audit of Account Management Letter. The Treasurer stated that the Letter related to the period before the MPA came into existence, and showed that the MPS had a long way to go in having the sophisticated financial systems required of such a large organisation. It had been circulated as a starting point for future work.

A discussion followed on the need for more qualified staff to manage the finance function and develop financial systems. The Head of Finance stated that he would like about 20 further accountants. At present, processing staff filled most Finance Department posts, as up until now finance functions had been primarily process driven. The Treasurer added that he needed a robust financial system, so he might have confidence in the financial information with which he was provided.

It was felt the need for investment should be reconsidered in the light of the Letter. It was agreed that the Director of Resources would prepare a business case for the funding of these staff. This would be circulated to Audit Panel Members before going to the Finance, Planning and Best Value (FPBV) Committee in April. The business case would include the view that it was not appropriate to devolve MPS budgets further, until an appropriate infrastructure was in place.

Resolved:
a business case for the funding of appropriate staff for Finance Department be circulated to Panel members, before going to FPBV Committee.

The meeting finished 3.00pm.

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