Agenda and minutes

Audit, Governance & Standards
Thursday, 22nd September, 2016 7.00 pm

Venue: Committee Room 2 Town Hall. View directions

Contact: Debbie Parker-Jones  Tel: 01527 881411

Items
No. Item

13.

Apologies and named Substitutes

To receive the apologies for absence and details of any Councillor nominated to attend the meeting in place of a member of the Committee.

 

Minutes:

Apologies for absence were received from Borough Councillors Rachael Smith and Pat Witherspoon, Dave Jones (Independent Member for Audit and Governance) and Megan Harrison (Independent Person for Standards and unofficial Observer).

 

14.

Declarations of Interest

To invite Councillors to declare any Disclosable Pecuniary Interests and/or Other Disclosable Interests they may have in items on the agenda, and to confirm the nature of those interests.

 

Minutes:

There were no declarations of interest.

 

15.

Minutes pdf icon PDF 284 KB

To confirm as a correct record the minutes of the meeting of the Audit, Governance and Standards Committee held on 7th July 2016.

 

(Minutes attached)

 

Minutes:

The minutes of the meeting of the Audit, Governance and Standards Committee held on 7th July 2016 were submitted.

 

RESOLVED that

 

the minutes of the meeting of the Audit, Governance and Standards Committee held on 7th July 2016 be confirmed as a correct record and signed by the Chair.

 

16.

Monitoring Officer's Report - Standards Regime pdf icon PDF 151 KB

To receive a report from the Monitoring Officer, together with any oral updates from the Feckenham Parish Council Representative, on any standards regime matters of relevance to the Committee.

 

(Report attached)

 

Minutes:

Members received a report from the Monitoring Officer outlining the current position in relation to standards regime matters.

 

No complaints against Members had been received since the previous meeting of the Committee in July 2016.  The Member training information detailed in the report was noted, in particular the county-wide Grant Thornton Governance training event on 11th October 2016 which was being hosted by Redditch Borough Council.

 

It was noted that any standards-related updates from the Feckenham Parish Council Representatives would now be included within the Monitoring Officer’s report.  Feckenham Parish Councillor Alan Smith advised that the Parish Council currently had 2 vacancies.

 

RESOLVED that

 

the Monitoring Officer’s report and Feckenham Parish Council Representative’s update be noted.

 

17.

Grant Thornton - Audit Findings Report 2015/16 pdf icon PDF 77 KB

To present Members with Grant Thornton’s Audit Findings Report in relation to the final accounts for 2015/16.

 

(Report attached – appendices to follow)

 

 

Additional documents:

Minutes:

Members were presented with Grant Thornton’s Audit Findings Report in relation to the final accounts for 2015/16.  Report appendices 1 and 2 – Audit Findings Report and management’s Letter of Representation – had been circulated under cover of Additional Papers in advance of the meeting. 

 

Mr Percival provided a general overview of the report.  As the Council’s external auditors Grant Thornton were required to report whether, in their opinion, the financial statements gave a true and fair view of the financial position of the Council and its income and expenditure for the year, and whether they had been properly prepared in accordance with the Code of Practice on Local Authority Accounting.  Grant Thornton also needed to satisfy themselves as to whether the Council had made proper arrangements to secure economy, efficiency and effectiveness in its use of resources; the ‘value for money’ conclusion. 

 

Whilst the audit was almost complete some procedures were currently in the process of being finalised, including clearance of audit queries and final review of audit work relating to consideration of investment properties and PPA (purchase price allocation) disclosure of Threadneedle House.  Work was currently being undertaken on certification of the Council’s Housing Benefit subsidy claim on behalf of the Department for Work and Pensions.  This was due to be finalised at the end of November and the outcome of this would therefore be reported via a later report to Committee.

 

Mr Percival stated that the Council was a long way ahead of where it had been this time last year with the 2014/15 accounts.  However, whilst there had been improvements in the quality of the financial statements and supporting working papers, further improvements were still needed in this area, specifically:

 

·       working papers to support entries in the accounts to be available at the start of the audit, which should clearly link to items in the financial statements; and

·       audit queries needed to be resolved in an efficient and timely way to support delivery of the audit.

 

Significant governance issues relating to Grant Thornton’s statutory recommendations had not been adequately explained in the draft version of the Council’s Annual Governance Statement, and it had been agreed with Officers that amendments would be made to give more information regarding the responses to the recommendations.  Control issues had also been identified as part of the testing process in relation to:

 

·       complexity of the ledger coding structure;

·       inaccuracies in payroll payments; and

·       supporting evidence for charges.

 

No new issues had been identified which required Grant Thornton to apply their statutory powers and duties for 2015/16.  At the end of the 2014/15 audit four recommendations had been issued under section 11 of the Audit Commission Act 1998.  Whilst it was Grant Thornton’s overall view that improvements had been made since they had issued their recommendations, further progress on these was needed.  The key actions they expected the Council to take were to:

 

·       improve the quality and timeliness of financial statements production and the supporting working papers and resolution of audit queries,  ...  view the full minutes text for item 17.

18.

Statement of Accounts 2015/16 pdf icon PDF 85 KB

To approve the Statement of Accounts for 2015/16.

 

(Report attached – appendix to follow)

 

 

Additional documents:

Minutes:

The Committee was asked to approve the Council’s Statement of Accounts for 2015/16.  A copy of the Statement of Accounts had been circulated under cover of Additional Papers in advance of the meeting and Officers tabled four replacement pages to this at the meeting, relating to Additional Papers pages 64, 65, 95 and 96.

 

Officers explained the Investment Property revisions to the Balance Sheet at page 64, as referred to under the previous agenda item, which included restated amounts for 2014/15.  Adjustments to the Cash Flow Statement at page 65 were also highlighted. 

 

RESOLVED that

 

subject to the adjustments detailed in the replacement pages circulated by Officers at the meeting, as detailed in the preamble above, the 2015/16 Statement of Accounts be approved.

 

19.

Internal Audit - Progress Report pdf icon PDF 494 KB

To present a progress report of internal audit work for 2016/17 and the residual 2015/16 audit work.

 

(Report attached)

 

 

Minutes:

The Committee considered the Internal Audit Progress Report, which presented Members with progress on internal audit work for 2016/17 and the residual 2015/16 audit work.

 

The Head of Internal Audit Shared Service presented the report and highlighted the outcomes of the Allotments and Consultancy and Agency audits, both of which had resulted in Limited Assurances.  Both areas were implementing changes as a result of the findings and Internal Audit Officers were working with service managers on improvements to ensure that Audit’s recommendations were implemented.  The Allotments Team in particular were ahead of schedule and would be implementing the majority of their changes by the end of September.

 

Delivery against the Internal Audit Plan for 2016/17 as at 31st July 2016 was noted.  There had been some natural turnover of staff within Internal Audit towards the end of the 2015/16 financial year.  Three new replacement members of staff had been appointed, which constituted 50% of the Internal Audit Team.      

 

Members noted the ongoing issues concerning the monitoring and reconciliation of income relating to Worcestershire Regulatory Service (WRS) activities, with there being no centralised control to ensure the financial information held by the shared service accurately represented the actual transactions that were taking place within each authority.  In response to a Member’s question, Officers advised that the Council was receiving the appropriate level of income from WRS however work was required to enhance the internal controls for this.  

 

RESOLVED that

 

the report be noted.

 

20.

Re-appointment of Lead Fraud and Risk Members on the Committee

Members are asked to consider whether they wish to re-appoint to the roles of Lead Fraud Member and Lead Risk Member on the Committee.  These positions are currently held by Councillor David Thain and Mr Dave Jones, Independent Member for Audit and Governance, respectively.

 

Should the Committee determine that it wishes to re-appoint to these roles then consideration should also be given as to the length of any such appointments, bearing in mind that there are no local elections taking place in 2017.

 

(Oral report)

 

Minutes:

The Committee was asked to consider whether it wished to re-appoint to the roles of Lead Fraud Member and Lead Risk Member on the Committee; positions which were currently held by Borough Councillor David Thain and Mr Dave Jones, Independent Member for Audit and Governance, respectively.  If agreeing to continue with these roles, Members were also asked to determine how long they wished to appoint to the positions for given that no local elections would be taking place in 2017.

 

Officers advised that as Mr Jones had tendered his apologies in advance of the meeting, Mr Jones had been asked whether he would be willing to continue as Lead Risk Member should the Committee determine that it wished to continue with this role.  Mr Jones, whom it was noted had been very proactive in the role, had confirmed that he would be happy to continue with this.

 

Notwithstanding the changes which had taken place in relation to housing benefit fraud investigations following the transfer of this work to the Single Fraud Investigation Service in February 2016, Members felt that it was important for both Lead Member roles to continue and that these should be appointed to for a further year. 

 

It was noted that Officers would be bringing the first of a new style ‘Fraud Compliance Update’ report to the Committee’s next meeting in February 2017.  The report would set out details of the work carried out by the Fraud Investigation Team over the previous year, together with the outcomes and findings in this regard.

 

RESOLVED that

 

1)          Councillor David Thain continue as the Committee’s Lead Fraud Member for a further 12 months; and

 

2)          Mr Dave Jones continue as the Committee’s Lead Risk Member for a further 12 months.

 

21.

S11 Recommendations Update pdf icon PDF 73 KB

To present Members with the latest progress update on the Section 11 recommendations which were first noted by the Committee on 28th January 2016.

 

(Report attached)

 

 

Additional documents:

Minutes:

Members were presented with the latest update on progress against the external auditors Section 11 recommendations, which had first been reported to Committee on 28th January 2016. 

 

Whilst unqualified opinions had been given on the accounts for 2014/15, the S11 recommendations covered Grant Thornton’s concerns in relation to financial accounting and budget monitoring which needed to be addressed for the 2015/16 closedown and financial management of budgets for 2016/17. 

 

The Council had now successfully completed all of the recommendations relating to the closedown of the final accounts and the 2015/16 Statement of Accounts had been signed off by the statutory deadline on 30th June 2016.   There were two further recommendations relating to financial management of budgets which were ongoing, as detailed in the appendix to the report.

 

Officers proposed that the cross-party working group which had been established by the Committee in January 2016 to monitor the Section 11 Recommendations Action Plan in future form part of the Budget Scrutiny Working Group, which Members agreed to.

 

RESOLVED that

 

1)          the report be noted; and

 

2)          the cross-party working group established by the Audit, Governance and Standards Committee in January 2016 to monitor the Section 11 Recommendations Action Plan in future form part of the Budget Scrutiny Working Group.

 

22.

Corporate Governance and Risk pdf icon PDF 86 KB

To consider the 6 monthly review of the Corporate Risk Register.

 

(Report attached)

 

 

Additional documents:

Minutes:

Members were asked, as part of the Corporate Governance and Risk report, to consider a 6 monthly review of the Corporate Risk Register.

 

The Corporate Risk Register had been developed by the management team to address issues of a strategic nature which were seen as areas that had potential to impact on the delivery of the Council’s Strategic Purposes.  The Register, which had been approved by the Committee in April, was appended to the report.  Updates to this to September had been included against each Corporate Risk and there were no issues to report in relation to actions that had not been progressed.   

 

RESOLVED that

 

the position following the 6 monthly review of the Corporate Risk Register be noted.

 

23.

April - June Financial Savings Monitoring Report 2016/17 pdf icon PDF 128 KB

To report on the monitoring of savings for 2016/17, including the delivery of savings and additional income for the period April to June 2016.

 

(Report attached)

 

 

Additional documents:

Minutes:

Members received the first of a new style report which had been established to monitored savings for 2016/17, and which included the delivery of savings and additional income for the period April to June 2016. 

 

The report provided a statement to show the savings against the Council’s Strategic Purposes and the delivery of savings for the financial year.  The report was separate to the main financial monitoring report that was presented to the Executive Committee as it focused on the delivery of savings rather than the overall financial position of the Council.  For 2016/17 the report also presented other savings and additional income that had been generated across the Council. 

 

Grant Thornton, the Council’s external auditors, had recommended that the delivery of savings be monitored more closely to ensure the Council was meeting savings in the way that was expected when the budget had been set.  Appendix 1 to the report confirmed that for April to June 2016 savings to budgets had been delivered, together with additional savings/income that had not been included in the original budget projections.  Officers highlighted that the £139k savings generated from a service review of Environmental Services was in addition to the £190k of savings identified in the 2015/16 budget round for 2016/17 onwards as a result of the service review.

 

RESOLVED that

 

the financial position for savings for the period April 2016 to June 2016, as presented in the report, be noted.

 

24.

Committee Action List and Work Programme pdf icon PDF 136 KB

To consider the Audit, Governance and Standards Committee’s Action List and Work Programme.

 

(Action List and Work Programme attached)

 

 

Additional documents:

Minutes:

Officers advised that there were not many updates to the Action List at this stage as a number of these involved Mr Dave Jones, the Independent Member for Audit and Governance, who wished to update the Committee at the next meeting in February 2017.

 

Officers confirmed that Action Reference 5 was now complete as an Action Plan had been included in the Annual Governance Statement.  It was agreed that this item could therefore be removed from the Action List.  

 

The Committee’s Work Programme was noted without amendment.

 

RESOLVED that

 

the Committee’s Action List and Work Programme be noted and the amendments and updates highlighted be agreed.