Agenda and minutes

Agreed that Councillor John Ibison be appointed Chair of the Audit and Standards Committee for the municipal year 2024/25.

Councillor Ken Minto was nominated for Vice Chair.

Councillor Ruth Duffy was nominated for Vice Chair.

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Following a vote it was agreed that Councillor Ken Minto be appointed Vice Chair of the Audit and Standards Committee for the municipal year 2024/25.

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 and Standards Committee held on 27 February 2024.

The minutes of the meeting of the Audit and Standards Committee, held on the 27 February 2024, were confirmed as a correct record by those in attendance.

Report of the Audit and Risk Manager, Karen McLellan.

Presented by the Audit and Risk Manager, Karen McLellan.

The Audit and Risk Manager (Chief Internal Auditor (CIA)) submitted a report to the committee to consider the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Self-Assessment of Good Practice contained within the updated CIPFA publication ‘Audit Committees - Practical Guidance for Local Authorities and Police 2022’ and identify the actions necessary to ensure that the Audit and Standards Committee met best practice guidance and provided value to the authority.

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The Audit and Risk Manager introduced the report. She informed the committee that the self-assessment was completed by eight members and based on the responses received, the assessment had been compiled and the following areas were identified where further improvement was considered beneficial:

·         The committee’s annual report to Full Council would be expanded to include details of this annual assessment, the actions arising from this and the development work undertaken by the committee;

·         Consideration would be given to updating the committee’s terms of reference at the next review in February 2025 to include the three major areas of risk management indicated in the CIPFA guidance;

·         All committee members to complete a strengths and development questionnaire to identify any areas of expertise/skills and areas of knowledge requiring further development;

·         A link to the CIPFA guidance had been supplied to all committee members and after studying this, members were to notify the CIA of any additional training required; and

·         Feedback on the committee’s performance would be formally discussed at the committee meeting following completion of the self-assessment and during the periodic private discussion with the CIA.

Councillor Duffy asked a question regarding the feedback that was given to the Leader on the appointment of the Chairman and Deputy. The Audit and Risk Manager stated that she would get back to Councillor Duffy with a response.

The committee considered CIPFA’s Self-Assessment of Good Practice at Appendix 1 and approved an improvement plan for the Audit and Standards Committee.

Report of the Audit and Risk Manager, Karen McLellan.

Presented by the Audit, Risk and Performance Lead, Dawn Allen.

The Audit and Risk Manager submitted a report to aid the committee in undertaking its required annual review of the effectiveness of the system of Internal Audit.

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The Audit, Risk and Performance Lead introduced the report. She explained to the committee 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 behind this was to ensure that the opinion in the annual audit report issued by the Audit and Risk Manager could be relied upon as a key source of evidence in the Annual Governance Statement (AGS) for 2023/24.

She highlighted that the Chartered Institute of Public Finance Accountants (CIPFA) had produced an application note which included a checklist for measuring the performance of Internal Audit against the standards, as part of the quality assurance and improvement programme. She confirmed that she had completed the checklist and the document had been securitised by herself, the Audit and Risk Manager, the Assistant Director of Governance and Legal (Monitoring Officer) and the Section 151 Officer. Following the review, she confirmed that the Council were compliant with best practice and the PSIAS and that there were only three minor areas that had been highlighted which required attention.

Paul Taylor praised the comprehensive review.

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Councillor Walker asked questions regarding the arrangements in place to procure additional audit days from Lancashire County Council and if the additional days could have been used to assist with delayed audit reviews, in particular the elections expenses audit.

The committee considered the results of the May 2024 review of the effectiveness of Internal Audit detailed at Appendix 1.

Report of the Audit and Risk Manager, Karen McLellan.

Presented by the Audit and Risk Manager, Karen McLellan.

The Audit and Risk Manager submitted a report to consider the Internal Audit Annual Report for 2023/24 (1 April 2023 – 31 March 2024) and review the progress in relation to risk management activity.

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The Audit and Risk Manager introduced the report. She explained that the report was produced in order to meet the requirements of the Public Sector Internal Audit Standards (PSIAS) and to assist in meeting 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 during the year 2023/24. 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 (AGS).

She highlighted to members that pages 116-134 of the agenda pack detailed the reports completed by the in-house Audit Team and Lancashire County Council during 2023/24. She explained, that 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 reminded the committee that copies of these reports could be found on the Councillor Portal.

Councillors Rushforth and Duffy asked questions regarding the Fleetwood Market CCTV system and the data breach.

The Audit and Risk Manager clarified the action plan and priority levels.She also brought to the attention of members all the other audit work undertaken during 2023/24, detailed on pages 134-142.

She explained to members that the internal control system was a key element to the report, which could be found at page 141 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 2023/24.

The Audit and Risk Manager took the committee through her overall opinion on Page 143 and how she had arrived at that opinion. She explained that the only significant governance issue reported following the AGS workshop was the delay to the formal sign-off of the 2021/22 and 2022/23 accounts.

The Audit and Risk Manager summarised the risk management progress report which highlighted the strategic, operational and ICT risks. A strategic risk workshop had taken place in January 2024 and was attended by the Corporate Management Team and the Chair of the committee. Risks preventing the achievement of the council’s business plan objectives were identified and rated, and the results of the workshop were included within the agenda pack at pages 147 and 156. She clarified the risk profile at Appendix A.

Councillor Duffy and Paul Taylor asked questions regarding the difference in current risk scores between theatres and leisure centres.

Operational risk workshops were also held following the strategic risk workshop, with each service identifying  ...  view the full minutes text for item 7.

Report of the Corporate Management Team.

Presented by the Assistant Director of Governance and Legal (Monitoring Officer).

The Corporate Management Team submitted a report to the committee for them to approve the draft Annual Governance Statement (AGS) for 2023/24 for inclusion in the Annual Statement of Accounts following a review of the council’s governance arrangements.

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The Assistant Director of Governance and Legal (Monitoring Officer) introduced the report.She explained to the committee that in accordance with the Accounts and Audit Regulations 2015, the council was required to prepare an AGS.She highlighted that the statement would be returning to the committee in September 2024 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 clarified that the AGS enabled the council to explain to the community, service users, taxpayers and other stakeholders its governance arrangements and how the controls it had in place manage risks of failure in delivering its outcomes.

She gave an explanation as to how the AGS was put together and explained that it was a corporate document, pulled together by numerous statutory officers, however ownership did fall to the Corporate Management Team.  She directed members to pages 180-192 of the agenda pack which set out the core principles and evidence of demonstrating core values. She referred to the annual audit opinion and internal audit effectiveness. She also made comments on the ‘significant governance issues identified’ section and highlighted that the AGS for 2021/22 and 2022/23 remained in ‘draft’ owing to the accounts for both these years having yet to be audited and signed-off. She informed members that she would work with the Corporate Management Team and other statutory officers to produce an action plan which would sit at the back of the AGS, following which she would then present the AGS to the Chief Executive and the Leader of the Council for final approval.

Councillor Walker asked a question regarding capacityand recruitment. 

The committee resolved to formally approve the draft AGS and resolved to grant delegated authority to the Section 151 Officer to make minor amendments and any changes requested by External Audit or the Corporate Management Team.

Presentation by the Director of Finance and Governance (CFO – S.151 Officer) Clare James to follow.

The Director of Finance and Governance 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.

She confirmed that the deadline for publishing the draft statement of accounts for 2023/24 was 31 May 2024, which the council did achieve. The audit of the statement of accounts for 2021/22 and 2022/23 were still delayed and due to the general election, the backstop solution which was meant to be in place by September had now also been delayed.

She explained that at the next meeting in July, 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.

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

Presentation given by KPMG, the external auditors.

Salma Younis, the external auditor from KPMG, attended the meeting and presented the committee with?their audit plan and strategy for the year ending 31 March 2024.

She summarised the audit plan and value for money risk assessment.

Councillor Bolton asked a question regarding the significant risks and other audit risks matrix. 

She confirmed that they had agreed with management an audit cycle and timetable that reflected their aim to sign their audit report by May 2025 as per the backstop date. However, they would not be able to sign off until there was a resolution on the previous two years.

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The Chair thanked the external auditor for her attendance at the meeting.

The next scheduled meeting of the Audit and Standards Committee is Tuesday 23 July 2024 at 6pm in the Council Chamber.

The next scheduled meeting of the Audit and Standards Committee was Tuesday 23 July 2024 at 6pm in the Council Chamber.