3.2 We carried out a review of three companies to ascertain:• how clear the Council is about its reason for delivering servicesthrough companies;• how well the Council understands the financial commitment and risk towhich it is exposed through companies;• how effective the Council’s arrangements are for monitoring thefinancial and service performance of companies, maintainingaccountability and for ensuring audit access;• where members or senior officers are appointed to the board of armslength companies, how clear are they about their role?3.3 Although this audit report identifies certain risk areas, it is the responsibility ofmanagement to decide the extent of the internal control system appropriate toStirling Council. We would stress, however, that an effective control systemis an essential part of the efficient management of any organisation. Also, itshould be noted that risk areas highlighted in this report are only those thathave come to our attention during our normal audit work in accordance withour Code of Audit Practice and therefore are not necessarily all of the riskareas that may exist.3.4 The Arms Length Companies audit report is attached to this report. The auditreport also includes formal action planned by Management to address the riskareas identified in the audit.4 POLICY/RESOURCE IMPLICATIONS AND CONSULTATIONSPolicy ImplicationsDiversity (age, disability, gender, race, religion, sexual orientation)Sustainability (community, economic, environmental)Corporate/Service PlanExisting Policy or StrategyRiskResource ImplicationsFinancialPeopleLand and Property or IT SystemsConsultationsInternal or External ConsultationsNoNoYesYesYesYesYesNoYesPolicy Implications4.1 For the Council to determine.Resource Implications4.2 For the Council to determine.
Consultations4.3 The draft report was circulated to the Chief Executive for circulation, commentand completion of the action plan.5 BACKGROUND PAPERS5.1 “Associated Bodies and Companies: Governance and ReportingArrangements to Council” Governance and Audit Committee 27 th April 2010.5.2 “Associated Bodies and Companies: Governance and ReportingArrangements to Council” Governance and Audit Committee 16 th February20105.3 “The Code of Guidance on Funding External Bodies and Following the PublicPound”, Accounts Commission/Convention of Scottish Local Authorities 1996Author(s)Name Designation Tel No/ExtensionRachel BrowneAudit Manager, AuditScotland0131 625 1976Approved byName Designation SignatureMark TaylorAssistant Director, AuditScotlandDate 28 May 2010 Reference