Meeting documents

1 THE ISSUE

1.1 To invite the Council Executive to determine its response to the District Auditor's Statement of Reasons.

2 RECOMMENDATIONS

That the Council Executive:

2.1 Notes that the District Auditor has determined an objection to the 1998/9 accounts and has found the Council incurred expenditure which is contrary to law in relation to certain obligations.

2.2 Notes that the Auditor has decided not to make an application to the Court for a declaration under Section 17 (1) (of the Audit Commission Act 1998).

2.3 Notes the District Auditor has also not upheld allegations of wilful misconduct against the three individuals.

2.4 Notes that the District Auditor has decided not to issue a Public Interest report but will keep the matter under review when considering outstanding objections.

2.5 Notes the considered opinion of Messrs Eversheds that the District Auditor has reached an incorrect conclusion on the matter and that there are errors of law in his decision.

2.6 Resolves not to take any action to challenge the Auditor's decision.

2.7 Agrees that the action proposed in paragraphs 4.3 to 4.6 adequately addresses the issues of wider concern raised by the District Auditor.

3 FINANCIAL IMPLICATIONS

3.1 The Council is required by law to pay in full the costs of the District Auditor in considering and determining any objections to the accounts, which costs include the costs of the District Auditor's legal advisers. The cost to date is in the region of £190,000.

3.2 The Council also incurs costs in the engagement of its legal advisers.

3.3 The sum allocated by the Council in the budget for this year is £100,000 as it was in 2002/3 financial year for the payments in 3.2. It is difficult to estimate accurately the cost of any legal challenge to the decision but it is likely to be in the region of £20,000 - £60,000 for the costs of both parties.

4 THE REPORT

4.1 Messrs Eversheds have been advised the Council in connection with the Objections to the Accounts since September 2000. Their engagement was necessary in view of the number of serious allegations made by the objector against the conduct of Senior Council Officers which could have given rise to suggestions of conflicts of interest.

4.2 The District Auditor's Statement of Reasons, together with the advice of Messrs Eversheds in respect of it, is attached.

4.3 It is considered there are two aspects which should be particularly considered by the Council Executive. The first of those is the need (outlined at paragraph 23) for the Council to pay particular regard to the provisions of the Code of Practice on Local Authority Publicity. Whilst it can be seen from Messrs Eversheds' report they consider that the Council did not behave improperly or unlawfully, it is nevertheless correct that the Council Executive be satisfied that adequate arrangements are in place concerning the Council's legal obligations.

4.4 The need to comply with the Code of Practice is a matter which is the subject of regular review and full details are available both on the Council's internal website and actively managed by the Council's Communication and Marketing Manager. Any instances which give rise to concern are the subject of careful consideration and appropriate advice is given by the Solicitor to the Council as necessary to Officers and Members.

4.5 The other issue raised by the District Auditor which needs to be considered is the Council's need to ensure that it does not give undertakings it will not comply with which will have the effect of subsequently presenting a distorted or one-sided picture of an issue where it says it will be balanced and objective. Whilst the advice of Eversheds is that this is not, in fact, what happened in this case nevertheless there could be situations where the Council was consulting when it might appear that it was predisposed to have favoured one course of action and did not adequately present all the arguments.

4.6 The Solicitor to the Council intends to issue guidance to all Council officers on the need to ensure that consultation material is balanced and impartial.

9.7.03ReportObjectionsto Accounts vfh

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