Agenda and minutes

The Democratic Services Officer opened the meeting and asked for nominations for Chair.

Councillor Rendell proposed and Councillor Higgs seconded Councillor Ibison.

Following a vote, it was resolved that Councillor John Ibison was elected as Chair of the Audit and Standards Committee for 2023/24.

Councillor Ibison proposed and Councillor Rendell seconded Councillor Ken Minto.

Councillor A Walker proposed and Councillor Duffy seconded Councillor Wells.

Following a vote, Councillor Minto, in his absence, was elected as Vice-Chair of Audit and Standards Committee for 2023/24.

Members had a discussion around the future potential of opposition Vice-Chairs and whether the procedure rules could include asking nominees to give reasons as to why they should be elected as Chair and Vice-Chair. It was agreed that this would be suggested to the Leader by the Chair.

To receive any declarations of interest from any members of the Committee on any item on this agenda.

None.

To confirm as a correct record the minutes of the last meeting of the Audit Committee held on 28 February 2023.

The minutes of the meeting of the Audit Committee held on the 28 February 2023 were approved as a correct record by those in attendance.

Report of the Corporate Director Resources (Section 151 Officer) Clare James, presented by the Audit and Risk Manager.

The Corporate Director Resources (S151 Officer) submitted a report to aid the committee in undertaking its required annual review of the effectiveness of the system of Internal Audit.

The Audit and Risk Manager (Chief Internal Auditor (CIA)) introduced the report. She explained to members that the Accounts and Audit Regulations (2015) and the Public Sector Internal Audit Standards (PSIAS) (2013) required local authorities to carry out an annual review of the effectiveness of Internal Audit. The purpose of this was that her audit opinion which was to be discussed at the next item, could be relied upon as a key source of evidence in the Annual Governance Statement. The CIA told members that an application note published by the Chartered Institute of Public Finance Accountants (CIPFA) contained a checklist which was used during this review to assist in measuring the performance to these standards. The review itself, completed by the Audit Risk and Performance Lead, was included in the agenda pack and would be independently validated during their next external peer review in July 2023. However, the completed document had been scrutinised by herself, the Head of Governance and Business Support and the Section 151 Officer.

The CIA told members that following the review, she could confirm that the council was compliant with best practice and the PSIAS and that there were only four areas which were highlighted as requiring attention.

She asked the committee to consider the results of the review.

The committee considered the evidence that the council had an effective internal audit function.

Report of the Corporate Director Resources (Section 151 Officer) Clare James, presented by the Audit and Risk Manager.

The Corporate Director Resources (S151 Officer) submitted a report for the committee to consider the Internal Audit Annual Report for 2022/23 (1 April 2022 – 31 March 2023) and review the progress in relation to risk management activity.

The Audit and Risk Manager introduced the report. She explained that this report was produced to meet the requirements of the PSIAS and the Accounts and Audit Regulations (2015). The report set out the progress made and the work carried out in relation to internal audit and risk management in the year 2022/23. Based on the outcome of the work, it would allow her to make an overall opinion in relation to internal control, risk management and the governance processes across the council. This would then be used as a key piece of evidence in the completion of the Annual Governance Statement.

She highlighted to members that pages 87-107 of the agenda pack detailed the reports completed in house by the Audit Team during 2022/23. For some of the work completed, no reports were issued but an opinion on the controls in these areas was given for the purpose of the overall annual audit opinion. She told members that copies of these reports could be found on the Internal Audit page on the Councillor Portal for the new members of the committee.

She also brought to the attention of members all the other work undertaken during 2022/23 detailed on pages 108 - 113.

She explained to members that the internal control system was a key element to the report, which could be found at page 114 of the agenda pack. In accordance with the Accounts and Audit Regulations, she was required to form an opinion on the adequacy and effectiveness of the council’s internal control environment, based on the work completed during 2022/23. Pages 115-116 explained the opinions given to each piece of work completed as well as a summary of her annual audit opinion. She told members that only one piece of work had been given a minimal opinion, which related to the Theatres, and a further three areas of work were given a limited opinion. She reassured members that work would continue on these areas until the opinion was improved. One piece of work was still in progress, and two pieces of work had not yet been started and would be included in the 2023/24 audit plan.

The CIA said that with the exception of the work on the theatres and the procurement breach which had occurred in 2022, there had only been one other significant issue raised in her opinion, which related to the delay of the l sign-off of the 2020/21 and 2021/22 accounts. 

Following all the work detailed in the report, it was her overall opinion that reasonable assurance could be given on the adequacy and effectiveness of the council’s governance and risk management processes. This meant that generally, there was a sound system of internal control, governance and risk management and that controls were in place  ...  view the full minutes text for item 6.

Report of the Corporate Director Resources (Section 151 Officer) Clare James, presented by the Head of Governance and Business Support.

The Corporate Director Resources submitted a report to the committee for them to approve the draft Annual Governance Statement (AGS) for 2022/23 for inclusion in the Annual Statement of Accounts following a review of the council’s governance arrangements.

The Head of Governance and Business Support introduced the report. She explained to the committee that the council was required, through the Accounts and Audit Regulations, to publish a statement annually of how the council demonstrated its good governance framework, particularly in relation to the CIPFA guidance on good governance.

She gave an explanation as to how the AGS was put together and explained it was a statement on behalf of the organisation, pulled together by key officers of the organisation through the AGS workshop which took place at the end of the financial year. Officers would go through the CIPFA good governance notes and check which areas of the council complied with these and where they did not. She praised the work of the organisation in its transparency and honesty of what the council did not do well. The statement, for the benefit of the new committee members, was in draft form and would stay so until September 2023 and members were encouraged to review previous audit reports and documents held on the Councillor Portal to gain the assurances required prior to agreeing the  final version in September.

She read out two statements, from the outgoing Chief Executive and the outgoing Chair of the committee to give members assurances on the draft AGS 2022/23.

She pointed members to pages 138-150 of the agenda pack which set out the core principles and evidence of demonstrating core values. Any identified gaps would either be included in the report or the action plan. She made reference to the hard work of the Audit Team in implementing a new risk management system (GRACE) and also gave details of her evaluation of the assurances given by the Audit and Risk Manager on the effectiveness of internal control. She also made comments on paragraphs nine, the “Value for Money Commentary” and ten, the “Significant Governance Issues Identified” section.

Members raised questions over the significant governance issues identified and the process by which members would receive and review this work.

The Head of Governance and Business Support explained to members that the draft AGS for 2020/21 and 2021/22 was still in draft form, as the Statement of Accounts had not yet been signed off. Another issue she wanted to draw members’ attention to within her report was the procurement breach experienced in 2022 which had been raised at committee previously. Members raised questions over this procurement breach and the controls in place to ensure this was not repeated.

Overall, she had no other significant governance issues needing referring to in her report. She told members that a supplementary action plan would be available in due course.

She said to members she would present the AGS to the Chief Executive and the Leader of the Council in July 2023;  ...  view the full minutes text for item 7.

Presentation circulated by the Corporate Director Resources (Section 151 Officer) Clare James. Members can click here for the link to the recording.

The Corporate Director Resources had circulated a recorded presentation, along with the slides and some guidance documents from CIPFA and Grant Thornton, for the committee to review prior to the meeting. It was circulated with the June committee meeting to allow members enough time to review the presentation and guidance documents before the meeting in September 2023 when they were expected to go through the accounts. She explained that at this meeting, the committee would go through a robust Q&A discussion format on the council’s finances and this would be directed through a pre-prepared Q&A pack circulated at the meeting. This was a format previously used and had received positive feedback, but it had been noted that a more interactive session was valued particularly for new committee members. This would occur at the September committee meeting with the Head of Finance in attendance.

She encouraged the committee to watch the recorded presentation prior to the meeting and review any of the accompanying documents they find useful.

Verbal update from the Council’s external auditors – Deloitte.

Paul Hewitson and Stuart Kenny, the external auditors from Deloitte, were in attendance virtually at the meeting and presented the committee with the progress on the 2020/21 and 2021/22 audits and an update to the 2022/23 audit plan.

Paul Hewitson updated the committee on the three years’ worth of audits currently open; this represented the remainder of the terms of appointment as the council’s external auditors.

The 2020/21 audit was the oldest still open, but he reassured the committee that the work on this had significantly progressed and it had been agreed for a member of his team to be booked to commence the final bits of work in July 2023 with a view to conclude the work in September 2023.

The 2021/22 audit work had been commenced and though a lot still needed to be done, a team had been booked to begin this work between September and November 2023.

The 2022/23 audit plans were still in progress, as it was difficult to run two years’ worth of account concurrently. It was likely this would commence in the new year, with an end goal of March 2024 but more details on this would be available once the previous accounts had been completed or progressed to completion.

He confirmed to the committee that there were no financial penalties for late filing for local authorities, and that this was a national problem for this sector. He himself had six other local authorities experiencing this issue of a lack of local government auditors in the sector.

The Chair thanked the external auditors for their attendance at the meeting.

Tuesday 25 July 2023 at 6pm in the Council Chamber.

The next meeting of the Audit and Standards Committee would be held on Tuesday 25 July at 6pm in the Council Chamber.