May 2010

last updated:August 2010

Meeting of Executive Commitee, 18 May 2010

2010-11 Revised Budget 
Paul Hellmuth, Acting Head of Finance summarised the budget changes proposed and the impact on the underspends in 2009/10 of the Remit Review and Licence to Practise demands.  The Chair of the Finance and General Purposes Committee stated the importance in 2010/11 of having greater confidence in the accuracy of financial expenditure predictions by budget managers.  The Chief Executive provided clarification on the non receipt of the 400k grant and emphasised that the activity that had been budgeted for will still go ahead. The Financial Accountant mentioned the impact on the budget arising from any future increase in VAT.

In response to a Member question as to how the Technical Expert Group were looking to prevent the historical pattern of under spending by budget managers, the Chair of the Financial and General Purposes Committee stated that Service Committees would be given more information regarding expenditure for activities within their jurisdiction and there would be more methodical assumptions about activity costs.  In response to a Member question regarding a review of the investment strategy the Acting Head of Finance gave a brief summary and the Committee understood the importance of balancing higher interest returns against higher risks.

Committee:

• noted the impact on the 2010-11 budget arising from the preliminary outturn from 2009-10 and the proposed changes to the 2010-11 budget
• approved the proposed revisions to the 2010-11 budget, to be funded from general reserves
• approved the transfer of an additional £0.6m to the casework reserve to provide for the known costs of higher numbers of case referrals
• approved the additional ICT expenditure of £0.2m, to be funded separately through the ICT strategy reserve.

Internal Audit Report on the Role of the Executive Committee 
Nicki Crail Director (Grant Thornton) presented the findings of the Internal Audit Report on the role of the Executive Committee and the paper set out the recommendations and the management’s response and action plan.  At the outset the Committee were informed that the Internal Audit Paper was here for comment prior to its consideration by the Audit Committee at its June meeting.  She highlighted the key areas of the findings.

The Committee, whilst broadly accepting the recommendations in the report including the Management responses, were concerned with a number of factual inaccuracies contained within the Internal Audit Executive Summary and detailed findings that needed correcting by the auditors. They particularly cited the assertion that the Committee referred back issues to Council at their January meeting and the wording in the Internal Auditor’s opinion set out in paragraph 1.3 of the Executive summary regarding assurance.

The Committee were unhappy that the opinions and recommendations had been formed on the basis of the observation of one meeting and were of the view that the evidence from the observations made at the particular Committee meeting did not justify some of the findings of the report.

The Committee in welcoming the recommendations to increase the effectiveness of the Committee through training and performance management noted that these areas of development were being considered by the Chief Executive as part of the Corporate Governance 2012 programme and also current work with the Chair and Vice Chair.

Further discussion by the Committee covered issues relating to co-option and they asked the Chief Executive to particularly look at the position of the Chair of Audit Committee having observer status on the Committee, declarations of interest procedures and concluded that whilst the Committee were not currently a “board” there was a good range of skills and experience in its membership. In considering the recommendations in the covering paper the Committee agreed as follows:-

Committee:

• reviewed and commented on the findings of the draft audit report (Appendix 1) and asked that their comments on factual accuracy be addressed in the final report
• confirmed the proposed actions arising as set out in the management response - with specific reference to the matters outlined in section 4.1 of the paper and authorised the Chief Executive to proceed accordingly 
• asked the Chief Executive to discuss the Executive Summary of the report with the Director of Grant Thornton in the light of the comments made by Members and prior to the final report being submitted to the Audit Committee.
  

Draft Pre-Audit Annual Report and Financial Statements
The Director of Corporate Services introduced the paper and the Acting Head of Finance highlighted some of the key areas, including depreciation of assets, variations in expenditure from 2008/9, the surplus for the financial year, the position regarding general reserves and that this was the first year the GTCE had been required to prepare its accounts in line with International Financial Reporting Standards.

The Committee noted that various textual amendments would be provided in respect of Communications, the inclusion of reference to suitability work and some other textual amendments which would be put forward by the Leadership Team.  The Committee discussed the positioning of the looking ahead section and felt that it should be at the beginning of the document.  Further discussion covered the text relating to the financial review section which at the appropriate time would need wider circulation as it provided a context to the difficult financial year in 2009/10.

The Committee then examined the Management Accounts and reason for the individual areas of significant under expenditure such as contractual difficulties or capacity problems particularly the impact of diverting the resources required for work on Licence to Practise.  The Chair of the Finance and General Purposes Committee stated that the Technical Expert Group were working on preventative measures to avoid future significant under spends and to ensure assumptions in the budget process were more accurate.

Committee:

• reviewed the Annual Report especially noting the management commentary review of achievements of the year against the Corporate Plan objectives
• reversed the £150,000 reduction in the casework reserve approved at the mid-year review and retain the level of this reserve at £250,000
• reviewed the accounts, in the light of their ongoing familiarity with the Management Accounts during the year and note the key issues and additional information disclosed due to IFRS, and agree the proposed allocation into the designated reserve funds.           

Amendment to the GTC Code to Include an Appropriate Reference to Gender Identity
The Director of Policy introduced the paper and the rationale for the recommended minor textual amendment to the Code.

Executive Committee approved the change to the Code text set out in paragraph 4.5 of the paper.