Agenda for Audit, Standards and Governance Committee on Thursday 8th December 2016, 6.00 p.m.

Agenda and minutes

Audit, Standards and Governance Committee
Thursday 8th December 2016 6.00 p.m.

Venue: Parkside Suite - Parkside. View directions

Contact: Amanda Scarce  Jess Bayley

Items
No. Item

29/16

Apologies for Absence and Named Substitutes

Minutes:

Apologies were received on behalf of Councillors S. R. Colella, C. J. Spencer P. L. Thomas and P. M. McDonald, with Councillor S. Shannon attending as a substitute for Councillor McDonald.

 

Parish Councillor C. Scurrell also sent his apologies.

 

30/16

Declarations of interest and Whipping Arrangements

Minutes:

There were no declarations of interest nor of any whipping arrangements.

 

Mr R. Percival confirmed that in respect of Minute No. 38/16 the appointment of External Auditors for financial year 2018 onwards he had an interest and would leave the meeting for this item.

 

31/16

Minutes pdf icon PDF 185 KB

Minutes:

The minutes of the meeting of the Audit, Standards and Governance Committee held on 15th September 2016 were submitted.

 

RESOLVED that the minutes of the meeting of the Audit, Standards and Governance Committee held on 15th September 2016 be approved as a correct record.

 

32/16

Standards Regime - Monitoring Officers' Report pdf icon PDF 150 KB

Minutes:

The Head of Legal, Equalities and Democratic Services presented the Monitoring Officer’s report and in so doing highlighted the following points:

 

·         The Member to Member (both district councillors) complaint remained with Group Leaders for resolution.

·         The complaint in respect of a Member’s involvement in a planning decision – the Planning Committee’s decision and the Member’s involvement was appropriate and they had operated entirely within the rules.

·         A general standards issue in respect of an interest not being correctly disclosed had been dealt with by the Monitoring Officer speaking the Member concerned and the relevant Group Leader.  The Independent Person for Standards was advised and confirmed his agreement with the resolution proposed.

·         A Member training event had been held in respect of Data Protection.

 

The Member Development Steering Group had been asked to investigate governance training arrangements and it was reported that the Group were grateful for the Committee’s input and would investigate as appropriate.  Members did question the additional cost that this may bring and it was confirmed that it was unlikely training from an external provider could be sourced without any charge and this was something which would be considered by the Member Development Steering Group in due course.

 

RESOLVED that the Monitoring Officer’s report be noted.

 

33/16

Pensions - Presentation

Minutes:

The Chairman welcomed Mr Ian Kirk, Principal, Mercer, the Council’s pension actuaries and thanked him for taking the time to attend the meeting.

 

Mr Kirk provided Members with a number of documents (attached as appendices to these minutes) which cover a number of areas.  This included detail around the funding of the pension scheme and where these sat within the accounting process, the main areas of consideration were the measurement date, methodology and assumptions together with experience, for example inflation and salary growth.  The Pension Scheme accounting figures as at 31st March 2016 were also included together with the 2016 Actuarial Valuation Preliminary Results which detailed the agreed contribution plan results for 2013.

 

During the presentation of the documents Mr Kirk highlighted a number of areas, which were discussed with Members, including:

 

·         A summary of the current position with a deficit of £32m being shown, taking into account assets and liabilities.

·         The impact of current market conditions and key drivers.

·         The prescribed methodology – an increase in yields resulted in the reduction in liabilities. 

·         Since March 2016 yields had increased slightly, this was a positive sign, although it was noted that the markets continued to be sensitive.

·         A full valuation of the scheme was carried out this year which would set the contribution requirement of the scheme.  This produced a shortfall of just under £18m primarily.

·         The need for a stable contribution with an 18 year recovery plan.  This resulted in significant interest being paid over that period.

·         The need to try and balance and stabilise the contributions, although it was acknowledge that this was difficult due to the budget constraints local government was facing and therefore an element of flexibility was also needed.

·          Detailed asset breakdown and the different categories.  Members questioned whether leaving the European Union could impact on some areas of investment.

·         The impact on the scheme in various circumstances, such as a member of staff taking early retirement.  It was explained that this was an entitlement and therefore assumptions were made to allow for it.  In respect of redundancies then the fund would expect the employer to cover cost for any strain which was put on the scheme.  These costs would be paid as the circumstances occurred.

·         An increase in general life expectancy would also be taken into account as a matter of course.

 

Mr Kirk confirmed that currently there was little that the Council could do, but ensure that it continued to balance its own budget, which was more important, if it continued to be prudent then the current position would improve.

 

34/16

Grant Thornton Annual Audit Letter pdf icon PDF 88 KB

Additional documents:

Minutes:

Mr. R. Percival presented the Annual Audit Letter on behalf of Grant Thornton which detail their findings and recommendations as a result of the work undertaken as part of the final accounts for 2015/16.  This included Financial Statements, Value for Money Judgement and Grants Claims.

 

An unqualified opinion on the Council’s financial statements had been issued on 27th September 2016.  Mr. Percival drew Members’ attention to the following:

 

·         The Action Plan attached to the report – there was continued progress in the financial statements production to ensure it meets the earlier closedown of the accounts.

·         The reporting of the annual budget and medium term financial statement should continue to improve.

·         The clarity and consistency of the in year budget reporting continues to improve.

 

Mr. Percival was satisfied that the Council had responded appropriately to the recommendations, but confirmed that Grant Thornton had not carried out any follow up work to date.  Officers confirmed that a substantial amount of work had been carried out around the accounts timetable to ensuring everything was achievable in order to submit the accounts earlier.  A four year budget was currently being worked on with the Corporate Management Team.  The team was currently working on the Medium Term Financial Plan with Cabinet receiving a number of reports.  An Overview and Scrutiny Board Finance and Budget Working Group had been set up and received regular reports and reported its findings back to Cabinet.  The Chairman confirmed that he was a Member of that Group and believed its work was very effective.

 

RESOLVED that the Grant Thornton Annual Audit Letter 2015/16 be noted.

 

35/16

Grant Thornton - Progress Report pdf icon PDF 128 KB

Additional documents:

Minutes:

Mr. R. Percival, Associate Director, Grant Thornton presented the report explaining that it was largely for information and the update reflected the current position in respect of the audit process.  The following areas were highlighted:

 

·         The opinion on the financial statements and VFM conclusion was issued on 27th September 2016.

·         The housing benefit grant claim was certified on 28th November 2016.

 

Mr. Percival took the opportunity to inform Members that Ms. S. Joberns would be leaving Grant Thornton in the near future and be replaced by Mr. N. Priest would take over her duties on behalf of the Council.

 

RESOLVED that the Grant Thornton Update Report November 2016 be noted.

 

36/16

Internal Audit Monitoring Report pdf icon PDF 303 KB

Additional documents:

Minutes:

Mr. A. Bromage, Head of Internal Audit Shared Service, presented the report and in so doing highlighted to Members that there were in fact two reports, the Internal Audit Monitoring Report and the 2017/18 Provisional Internal Audit Plan Report.

 

Internal Audit Monitoring Report

 

This was a routine report received at every meeting of the Audit, Standards and Governance Committee which provided an update on the actions and work carried out and gave a view of the audits which had been completed since the last meeting.  There were three with reported assurance levels of moderate or above, with a number ongoing which would be reported in due course.

 

The report also contained an overview of the delivery of the plan, includes days delivered so far and also the position in respect of forecasted days.  Key performance indicators were also included and it was highlighted that service productivity was down due to the arrival of three new auditors in the first quarter and a further auditor late in quarter two, but were confident that it would pick up towards the end of the financial year.  The report included an overview and assurance that work undertaken was being followed up and appropriate action taken where necessary.

 

Following presentation of the report a number of areas were raised by Members, including:

 

·         Assurance that areas where controls needed to be strengthened were monitored to ensure these were put in place.

·         Confirmation that the service would be delivered in respect of the productivity KPI.

·         Concern as to whether a problem which was identified would be brought before the Committee, if it was not part of the planned work.

 

After further discussion it was

 

RESOLVED that the Internal Audit Monitoring Report be noted.

 

The 2017/18 Provisional Internal Audit Plan Report

 

The draft plan was for information and then Members would be asked to approve the final plan at its meeting in March 2017.  The report contained details around the aims and objectives of the service.  By bringing the provisional plan before the Committee Members were able to have a positive input into the audit work programme for 2017/18.  The number of days has not been reduced this year, as had been the case in previous years, as it felt about right for coverage considering the size of the authority.  Areas within the Council have been considered across service functions and outlined within the plan.  The KPIs have been slightly amended to give better coverage and assurance moving forward and again will be reported on a regular basis throughout 2017/18.

Members raised a number of points within the report:

 

·         The management of the risk and how this is identified.

·         Areas for inclusion in 2017/18 and the allocation of days to those areas.

·         The audit of Land Charges – due to the anticipated change in legislation, it will ensure everything is in place to ensure the changes run smoothly.

·         The role and benefit of the KPIs.

 

RESOLVED that

 

a)    The Audit Plan for 2017/18 be noted; and

b)  ...  view the full minutes text for item 36/16

37/16

Quarter 2 (June to September 2016) Financial Savings Update Report pdf icon PDF 130 KB

Additional documents:

Minutes:

Officers explained that following a recommendation from the External Auditors, Grant Thornton, that the delivery of savings should be monitored more closely the ensure that the Council is meeting those savings in the way that was expected, the attached report has been designed to address this recommendation.

 

The report showed the savings which had been delivered from April to September 2016 and that all projected savings would be realised in line with the original estimated.  In addition further savings/additional income had been made of £270k with full details being provided within the report.

 

RESOLVED that the financial position for savings as presented in the report for the period April to September 2016 be noted.

38/16

Appointment of External Auditors for financial year 2018 onwards pdf icon PDF 153 KB

Additional documents:

Minutes:

The Chairman confirmed to Members that the report before them made it clear as to the options available.  Officers explained that this was the new process for appointing external auditors from 2018/19, when the contract with Grant Thornton ceased.

 

The recommendation from officers was to accept the offer from the Public Sector Audit Appointments (PSAA) to opt in to the sector led appointment of external auditors for five years commencing 1st April 2018.  If Members decided not to take up this option then a tender process would have to take place which would involve the appointment of an independent panel, without officers or Member involvement, which could be a costly process with a similar outcome to that of the PSAA.

 

Following further discussion it was

 

RECOMMENDED that the Council accepts Public Sector Audit Appointments’ (PSAA) invitation to ‘opt in’ to the sector led option for the appointment of external auditors for five financial years commencing 1st April 2018.

39/16

Risk Management Group Monitoring Verbal Update

Minutes:

Officers confirmed there would be a new Corporate Risk Register from March 2017 which would identify the risk exposure of the Council including the level of risk and reward.

 

40/16

Risk Champion - Verbal Update Report (Councillor Phil Thomas)

Minutes:

In the absence of the Risk Champion, Councillor P. L. Thomas, officers provided an updated which confirmed that he had met with both, John Godwin, Head of Leisure and Cultural Services, and Judith Willis, Head of Community Services and discussed their risk registers.  He was satisfied that there were no unidentified risks at this stage and that identified risks were being mitigated appropriately.

 

It was noted that it had been minuted at the previous meeting that a more detailed written update be provided in respect of the Corporate Risk Register and the Chairman agreed to discuss this with the Risk Champion before the next meeting of the Committee.

 

RESOLVED that the Chairman speak to the Risk Champion to request the provision of a written update in respect of the Corporate Risk Register.

41/16

Audit, Standards and Governance Committee Work Programme pdf icon PDF 81 KB

Minutes:

Members considered the content of the Audit, Standards and Governance Committee’s Work Programme.

 

RESOLVED that the Work Programme be noted subject to the inclusion of a written update being received at the March 2017 meeting of the Committee, in respect of the Corporate Risk Register.

Appendices pdf icon PDF 12 KB

Additional documents: