Agenda and minutes

Resolved that Councillor McKay be appointed Chairman of the Audit Committee for the municipal year 2017/18.

Resolved that Councillor A Turner be appointment Vice-Chairman of the Audit Committee for the municipal year 2017/18.

As detailed above.

Members and officers will disclose any pecuniary and any other significant interests they may have in relation to the matters under consideration.

None.

To approve as a correct record Minutes of the last meeting of the Audit Committee held on 7 March 2017.

In relation to minute Audit 38, the Head of Governance spoke of the one-to-one meetings and that three were still outstanding with members, namely: Cllr’s Ballard and E Anderton and that she would be contacting them shortly to arrange. Cllr Collinson will be contacted following her competition of the mayoral year.

The minutes of the Audit Committee meeting held on 7 March 2017, were confirmed as a correct record.

Presentation by the Head of Finance / Section 151 Officer.

The Head of Finance / S.151 Officer gave a detailed presentation to Members in advance of the requirement for the Audit Committee to approve the 2016/17 Statement of Accounts. She set the scene that the accounts must be prepared and signed off by the S.151 officer by 30 June and approved, audited and published on the website no later than 30 September. However those dates are to be brought forward again in 2017/18 to 31 May and 31 July respectively. The presentation concluded with a series of fourteen ‘orientation’ questions and a summary of the 2016/17 updates; compliance with delivering Good Governance Framework (2016), Comprehensive Income and Expenditure Statement – presentation changes, the ‘new’ Expenditure and Funding Analysis – and Non-Financial Performance Information (reminder that this was new in 2015/16).

A copy of the presentation is attached to the minutes.

Cllr Moon asked a question on page 12 Non-Financial Performance Indicators – the biennial resident survey and how Wyre’s performance compared to other local authorities. The Head of Finance / S.151 Officer responded that there was no national database for satisfaction surveys of this type but that where possible, we do benchmark with other local authorities on for instance, IIP employee satisfaction surveys.

Cllr Moon asked about Heritage Assets and what the valuations were based on. The Head of Finance responded that insurance values were used.

Cllr Moon asked about the Reserves and Balances and was this position sustainable. The Head of Finance/ S.151 Officer responded that the ambition is to always be in a position to top-up balances but that there were challenges ahead but that this was giving us time and flexibility to plan for the funding cuts. Cllr Moon asked for details on Housing Benefits and where this was captured in the statement of accounts. The Head of Finance directed Cllr Moon to the reference in the Narrative Statement on page 9 but advised that a more detailed question and answer would form part of the following meeting’s agenda and asked to deal with this in more detail then.

RESOLVED

The Audit Committee Members thanked the Head of Finance / S.151 Officer for the presentation and looked forward to receiving the Statement of Accounts for 2016/17 at the next meeting.

Report of the Head of Finance / Section 151 Officer.

The Head of Governance introduced the report which relates to the requirement for the authority to undertake an annual review of the effectiveness of the system of internal audit.

The Head of Governance explained that the annual review / self-assessment, using the Public Sector Internal Audit Standards was also required to be externally assessed every 5 years with Wyre’s peer review scheduled for March 2018. She explained that as it is a self-assessment, she was looking forward to an independent opinion and would welcome any recommendations for improvement.

Cllr E Anderton asked the Head of Governance to explain her reporting lines of accountability. The Head of Governance stated that she reported to the Head of Finance / S.151 Officer in relation to internal control and to the Director of Performance and Innovation in relation to her governance and other managerial responsibilities. Cllr E Anderton also asked the Head of Governance how she remained independent considering her managerial responsibility for areas she would be auditing. The Head of Governance explained that either Lancashire County Council or Mazars would be used for any audit work where she had operational responsibility.

Cllr Moon asked whether five years was an appropriate gap in-between self-assessments. The External Auditor responded that this was entirely in keeping with current practice.

Resolved

The Audit Committee Members noted the Internal Audit Annual Report, the Risk Management Progress Report and the Strategic Risk Management Review.

Report of the Head of Finance / Section 151 Officer.

The Head of Governance presented the Internal Audit Annual Report for 2016/17.

The Senior Auditor summarised the reviews that have been performed and those reports issued in 2016/17. She also confirmed that at the time of publishing the overall audit opinion, there were two reports still at ‘fieldwork’ stage, but these were now completed and that no significant issues were identified and would not change the overall audit opinion within the report. The reports for both pieces of work would be issued shortly,

Cllr E Anderton asked for clarification on when the Gifts and Hospitality register comes before Audit Committee. The Head of Governance reminded members that the register would come to a meeting later in the year. Cllr E Anderton also asked whether a process is in place for escalating uncompleted actions. The Head of Governance advised that there was a procedure in place. However escalating uncompleted actions was carried out by exception rather than the norm and that the team were aware of who might need additional support so could generally work with them to ensure actions were implemented.

The Senior Auditor presented the Strategic Risk Management Review and explained that the committee had received this previously at an earlier meeting. Cllr Moon asked whether O&S should be challenging the risk registers and how strategic risks are scored. The Head of Governance reminded the committee of the strategic risk workshop approach and how the operational risk registers were reviewed. The Head of Governance stated that it was not the function of O&S to scrutinise or challenge the risk registers.

Resolved

The Audit Committee Members noted the Internal Audit Annual Report for 2016/17, the Risk Management Progress report concerning Operational Risks and the Strategic Risk Management Review.

Report of the Head of Finance / Section 151 Officer

The Head of Governance introduced the report explaining that the Annual Governance Statement (AGS) was a high level strategic document which had been prepared following a workshop with a number of key officers throughout the council. She explained that since the last AGS, CIPFA have published a new good governance framework. The framework requires local authorities to demonstrate in their AGS how they meet the seven new principles of good governance

Cllr Moon requested that where it stated within Core Principle A that “There is an effective Standards Committee”, could this be amended from ‘effective’ to ‘efficient’ owing to the reduced powers of this committee. The Head of Governance agreed that this was a suitable change and would be reflected.

The Head of Governance was asked by Cllr McKay to provide more detail around information governance considering this has been documented as a significant issue. The Head of Governance explained that the council has some work to complete around data sharing and storage and retention to ensure they would be compliant with the new General Data Protection Regulations due to come into force in May 2018.

Cllr E Anderton asked whether the information governance issues should be documented in the strategic risk registers. The Head of Governance responded that owing to a project plan being in place it was an operational risk being managed. Having it as an area of significant concern in the AGS was a way of generating more impact and raising its profile to a greater degree.

Resolved

That Audit Committee members, having reviewed the document, formally approve the Annual Governance Statement 2016/17, noting that it incorporates the council’s Code of Corporate Governance.

Letter from the Council’s External Auditors, KPMG

The External Auditor introduced KPMG LLP’s Annual Audit Fee Letter dated 21 April 2017. The letter was self-explanatory with a planned fee for the audit for 2017/18 of £48,662 (plus VAT) which was the same as the planned fee for 2016/17 and also a “to be confirmed” fee for the Certification of housing benefit grant claims for 2017/18.

The External Auditor informed the committee they were awaiting the Code of Audit Practice and Public Sector Audit Appointments Ltd.’s (PSAA’s) published work programme and fee scales. She did confirm that should there be any significant audit risks, then there would be a change to the fees.

Resolved

That Audit Committee Members note the contents of the External Audit - Annual Audit Fee letter for 2017/18.

The letter dated March 2017 was self-explanatory and explained that there were no changes to the overall work programme for 2017/18 and therefore scale fees have been retained at the same level as the scale fees applicable for both 2015/16 and 2016/17, as set by the Audit Commission before it closed in March 2015.

Resolved

That Audit Committee Members note the contents of the Public Sector Audit Appointments for the 2017/18 work programme and scale fees.

Each year, Audit Committee Members are given the opportunity to speak to the External Auditors (KPMG LLP) in confidence, in accordance with the Audit Committee work programme.

The Head of Finance / S.151 Officer, Head of Governance, Senior Auditor and the Democratic Services Officer left the room for this item.

Tuesday 25 July at 6pm

Audit Committee Meeting, Tuesday 25 July 2017 at 6pm in the Council Chamber.