Agenda and draft minutes

To receive any apologies or substitutions for the meeting.

Apologies for absence were received from:

·       Cllr Chuck Berry

·       Cllr Adrian Foster, who was substituted by Cllr Ross Henning, and

·       Ian Howse from Deloitte

To confirm and sign the minutes of the meeting held on Tuesday 23 July 2024.

The minutes of the meeting held on 23 July 2024 were presented for consideration, and it was,

Resolved:

To approve and sign the minutes as a true and correct record.

To receive any declarations of disclosable interests or dispensations granted by the Standards Committee.

There were no declarations of interest.

To receive any announcements through the Chairman, including:

·       Statement of Accounts update

Statement of Accounts update

It was announced that the committee would be receiving updates from both Deloitte and Grant Thornton at the meeting on their work, (although it was noted that Ian Howse from Deloitte was unwell and therefore had tendered apologies), however it was felt appropriate to update the committee first on the legislative dates for the accounts and audit processes and completion of the backlog. 

On 30th July 2024 the government announced its intentions to pursue proposals to clear the backlog and set statutory backstops to clear outstanding accounts.  The calling of the general election caused delays to parliamentary procedures to progress changes to the regulations that were required.  It had now been announced that all accounts up to an including the financial year 2022/23 had a backstop date of 13 December 2024, with the accounts for the 2023/24 financial year having a backstop date of 28 February 2025, which would ensure that the processes were not affected by pre-election periods.  The external auditors would explain in greater detail in their updates later in the meeting.

The Council welcomes contributions from members of the public.

Statements

If you would like to make a statement at this meeting on any item on this agenda, please register to do so at least 10 minutes prior to the meeting. Up to 3 speakers are permitted to speak for up to 3 minutes each on any agenda item. Please contact the officer named on the front of the agenda for any further clarification.

Questions

To receive any questions from members of the public or members of the Council received in accordance with the constitution.

Those wishing to ask questions are required to give notice of any such questions in writing to the officer named on the front of this agenda no later than 5pm on Thursday 10 October 2024 in order to be guaranteed of a written response. In order to receive a verbal response questions must be submitted no later than 5pm onMonday 14 October 2024. Please contact the officer named on the front of this agenda for further advice. Questions may be asked without notice if the Chairman decides that the matter is urgent.

Details of any questions received will be circulated to Committee members prior to the meeting and made available at the meeting and on the Council’s website.

There were no public statements or questions received.

To consider the Internal Audit Charter and Mandate.

Sally White, Assistant Director, South West Audit Partnership (SWAP) briefly presented the Internal Audit Mandate and Charter, which started at page 17 of the agenda pack and would be taken as read. The charter was usually brought to the Committee in April every year. However, due to the Chartered Institute of Internal Auditors (SWAP’s professional body) launching a new set of standards, bringing the charter to the Committee was delayed so that the new standards could be incorporated.

Members of the Committee then had the opportunity to ask questions. In response it was explained that changes to the charter included some essential elements that the Audit & Governance Committee must undertake to support the internal audit mandate. The charter now also ensured quality. It was not that these things were not happening previously, but they were not included in the charter, so it had now been updated to include them.

In response to a further query, it was stated that the last external quality assurance assessment was in 2020. These had to be undertaken every 5 years. SWAP was being assessed again in November 2024 and the results would be brought to the Committee.

On the proposal of the Chairman, seconded by Cllr Pip Ridout, it was,

Resolved:

To approve the Internal Audit Mandate and Charter.

Note: Following approval, the internal audit mandate and charter was signed by the Chairman, and the signed version is appended to these minutes.

To receive the Internal Audit updates from SWAP.

Becky Brook, Principal Auditor, SWAP, presented the internal audit update report, which started at page 25 of the agenda pack and would be taken as read.

Headlines included that SWAP were reporting 5 limited assurance audits, these were:

·       Landlord compliance fire safety – general fund assets, this was also a significant corporate risk to the organisation, and SWAP would work with the service until there was improvement.

·       Procurement processes

·       Accounts payable – post Oracle go live

·       Accounts receivable – post Oracle go live, and

·       Main accounting – post Oracle go live

Details on these limited assurance audits could be found at pages 33 – 37 of the agenda pack.

There was no update on the ICT Network Boundary Defences audit previously reported to the Committee, but SWAP would continue to monitor progress and bring any relevant updates to future meetings.

Internal audit coverage by strategic risk was detailed at page 27. There was no coverage for the Special Education Needs and Disabilities (SEND) risk, so SWAP were working with Directors to see where assessment would be most useful.

Implementation of management actions were detailed at page 30. There were now only 3 overdue actions, which had decreased from 9 in July. It was noted that this did not include actions where dates had been revised. SWAP were working with managers to make sure they considered everything relevant which may affect deadline dates.

It was noted that the 5 limited assurance audits all had their own separate agenda items later in the agenda and therefore questions on those would be taken within those agenda items.

Members queried managers revising deadline dates for management actions and why this occurred. It was stated that managers needed to be mindful when setting dates and ensure that they had considered everything. For example, if there were longer term projects as part of the action plan, these needed to be taken into consideration.

Lizzie Watkin, Director of Finance & Procurement (S151 Officer), stated that there may be some optimism bias when setting deadlines which managers then failed to realise. However, it was not thought that there were systemic issues. Officers would take this away for any management actions which had seen slippage. It was highlighted that SWAP kept a watchful eye on this and would challenge the position to push dates back, as well as reporting any concerns to the S151 officer.

Coverage of strategic risks was discussed further. Members were uneasy about the lack of coverage for the SEND and Climate Impacts risks. SWAP stated that these were strategic risks as assessed by Wiltshire Council and details were available in the papers for Cabinet. In relation to the lack of internal audit coverage, timing came into it. The Climate Impact risk was not above appetite on the risk register. SWAP met with the Director of Finance and Procurement (S151) and the Director Legal and Governance regularly to talk through potential work to mitigate risk. 

Lizzie Watkin explained that with regards to the SEND risk that the  ...  view the full minutes text for item 51.

To receive management action plans in relation to financial key controls limited assurance audits.

Lizzie Watkin, Director of Finance and Procurement (S151), introduced the item, explaining that there had been 5 limited assurance audits since the last meeting, and the Committee would now get an update on the weaknesses identified and actions agreed. This item covered the 3 financial key controls audits, which were:

·       Main accounting – post Oracle go live

·       Accounts payable – post Oracle go live and

·       Accounts receivable – post Oracle go live

These areas were key financial controls as they ensured the accounts were not exposed to error, misstatement or fraud, so it was very important.

Main accounting – post Oracle go live

Sally Self, Chief Accountant, presented the slides for the main accounting audit, which were also included in the agenda, starting on page 39. These detailed the findings of the audit, the actions planned in response, and progress against those actions.

Following the presentation Members had the opportunity to ask questions. A summary of topics covered, and points raised is below.

·       Finding 1: Bank reconciliations

In response to a question the officer clarified that bank reconciliation took place monthly. The officer explained that she had reviewed the reconciliation, however had not signed it off as was unhappy with what was presented. In response to further questions regarding this, the officer explained that she had been reviewing the reconciliation and signing it off under the old system (SAP). Following the move to Oracle, she had performed the review but had questions regarding some of the data and there was an unreconciled amount, which is why she did not sign it off. The issues had now been identified, so she could sign it off.

·       Finding 2: Monitoring of Civica cash receipting system

In response to a question, it was explained that when going live with a new Enterprise Resource Planning (ERP) system, there was exposure to the way data transferred between systems. Civica cash receiving into Oracle did not post correctly and there were no controls in place to identify that it was not posting correctly. So, there was risk in the early days of implementing the new system. However, it was identified, and new processes were being put in place. There was still a way to go as it was a massive task.

·       Finding 3: Suspense Accounts

Members expressed concerns as they felt that suspense accounts should be cleared frequently. Officers stated that there was a team working on clearing the suspense account on a daily basis, however, there were about 7000 items a day, so it was quite a task. There were performance targets, and performance was reviewed at Performance Outcome Groups (POGs) and Boards (POBs). The suspense account did not always get zeroed every day.

·       Finding 4: There is no Finance Manual in place

Officers explained that not everyone in the council had finance responsibility, but there were quite a lot of devolved systems in many different services, which is why a central manual for anyone that required it would be useful. There were many different guides,  ...  view the full minutes text for item 52.

To receive the External Audit progress report from Grant Thornton.

Liam Royle, Public Sector Audit Manager, Grant Thornton and Jackson Murray, Director, Public Sector Audit, Grant Thornton, presented the Wiltshire Council and Pension Fund external audit progress report.

The representative stated that in the last update at the July meeting, it was stated that the intention was to bring the 2023/24 audit plan to this meeting and there was an indicative audit plan in the appendix to the report. This showed what work would have been undertaken. However, Grant Thornton were not going to be able to undertake the 2023/34 audit, as there was not enough time before the backstop date of 28 February 2025 to do the audit and publish the accounts. So those accounts would receive a backstop disclaimer opinion. It was highlighted that Grant Thornton did want to undertake the audits, although there were clearly going to be caveats around what the audit opinions might mean. They would like to give assurance where they could, as this would give a better starting point for 2024/25. There was an impact from draft accounts preparation for the preceding years so there had been some difficulty in progressing work that they could have done this year.

Grant Thornton had made some good progress in the pension fund audit and hopefully they would bring the final pension audit to next meeting. Materiality had been reduced and was lower than normal due to the anticipated backstopping of prior periods. There would be a £15,000 fee variation for additional work undertaken. Also, a smaller variation of £3,765 would be raised as the Public Sector Audit Appointments (PSAA) had not included this. The pension fund audit would get signed off alongside the main Wiltshire Council accounts, and therefore was delayed as they could not issue opinions on those until they were issued for the main accounts. 

Grant Thornton had also been engaging with Deloitte regarding the outstanding audit opinions.

The backstop date of the 13 December 2024 for the accounts up to 2022/23 was highlighted and it was stressed that in order for that to happen the 2022/23 accounts would need to published for 30 days ahead of consideration, so would need publishing soon. The draft 2023/24 accounts would need to be published mid-January 2025. A letter sent to the Chairman of the Committee explaining the situation in further detail was highlighted and could be seen at page 105 of the agenda.

It was stated that 5 years of no assurance external audits was significant to come back from. This could make the 2024/25 audit difficult as how could they gain assurance? It normally took about 3 years to get back to a clean audit opinion. The regulatory bodies were trying to work out details as to how things would work.

The Chairman called a recess at 12.50pm. At which point Cllrs Howard Greenman, George Jeans and Pip Ridout left the meeting due to other commitments.

The meeting reconvened at 1.00pm.

Members queried the reduction in the level of materiality. In response it was  ...  view the full minutes text for item 53.

To receive an External Audit planning report on the 2020/21, 2021/22 and 2022/23 audits from Deloitte.

The Chairman explained that Ian Howse of Deloitte had been due to present the external audit planning report for the 2020/21 to 2022/23 audits. Unfortunately, however, Mr Howse was unwell and had tendered apologies, so the report would be taken as read.

At the Chairman’s invitation Lizzie Watkin, Director Finance and Procurement (S151) explained that the report was in relation to the outstanding Statements of Accounts (SoAs).

There was a date in the calendar for an extraordinary meeting of the Committee to consider the accounts. It was stated that this meeting would likely need to be moved back to the first week of December so there would be time to get the accounts published (for the public inspection period) ahead of the meeting. Mr Howse would be at that meeting. The council were expecting a backstop disclaimer opinion on all 3 sets of accounts to be considered at that meeting, and now for the 2023/24 accounts as well, which was disappointing.

On the proposal of the Chairman, seconded by Cllr Stuart Wheeler, it was,

Resolved:

To note the external audit planning report on the 2020/21, 2021/22 and 2022/23 audits, from Deloitte.

To receive the annual governance update regarding Stone Circle.

Perry Holmes, Director Legal and Governance, presented the Stone Circle Annual Governance update.

The officer explained that this report was about the governance framework around Stone Circle. It was not about the performance of the companies, although some details regarding performance had been provided for information. The governance framework involved Cabinet, the Cabinet Shareholder Group, the Audit and Governance Committee, and now Scrutiny had got involved as well. The companies had Board meetings, and a Wiltshire Council director was on the Board. The council Business Plan encouraged the company to own more houses which supported the Business Plan objective to

grow the economy by facilitating the provision of affordable homes and developing new housing on public land.

Members were pleased to see the governance framework that was in place and the involvement of scrutiny. It was noted that the investment of £42 million was becoming significant and Members queried what was being done to protect that investment for the benefit of Wiltshire.

The officer explained that by adopting a best practise governance framework as described in the report, this was the best way to protect the investment. There was regular contact with the company’s directors, quarterly shareholder group meetings and their aim was to look at what the council was getting for the investment and whether it was safe. The portfolio included 168 houses, which were rented, and the rent was sufficient to cover the debt. The model was similar to the Housing Revenue Account (HRA). There was more risk in building houses to sell, however there was a housing need, so there was a market. The company could also sell the houses back to the rental company to rent out.

Members questioned whether there was any customer/tenant involvement or engagement, similar to that within council housing stock. The officer stated that the company had a significant interest in managing that relationship. The council had a very skilled set of colleagues who managed the relationship with HRA tenants. Stone Circle had some learning to do in this area and this was encouraged.

Members queried whether the Corporate Director Resources leaving Wiltshire Council would affect the governance arrangements for the companies and who would take on the lead role. The officer explained that the Chief Executive would seek to appoint an interim Corporate Director Resources, however for now, the Director of Finance and Procurement could act up in that regard. Also, the Director Adult Social Care was on the Board. Members expressed concern for the workload of the Director of Finance and Procurement.

The Chairman stated that there were 2 proposals within the report, these were that the Audit and Governance Committee:

1.    Note the updates to governance arrangements for the Stone Circle companies since the previous report to the committee in September 2023.

2.    To comment and make suggestions on the future governance framework for the Stone Circle companies as they see fit.

The Committee did not have any formal comments or suggestions and therefore, on the proposal of the  ...  view the full minutes text for item 55.

To receive a presentation detailing action plans on Landlord Compliance Fire Safety – General Fund Assets, following a limited assurance audit.

Ashley Byers, Interim Head of Health and Safety and Nick Darbyshire, Head of Strategic Asset & FM gave a presentation on the Landlord Compliance Fire Safety - General Fund Assets action plans, the presentation is appended to these minutes.

In addition to the presentation, the officers explained that when the audit was undertaken, within the vast majority of Wiltshire Council sites, the local responsible person idea was well established and there were no weaknesses in the main buildings, such as hubs and leisure centres. However, there were a few pockets were there was some ambiguity. Those gaps were now being filled and there were clear lines of responsibility.

In response to questions, it was explained that there was a fire risk assessment programme, and these were usually undertaken every 3 years, unless there had been a major change to the building. When the audit was undertaken, the fire risk assessor was on sick leave, which was unfortunate timing. However, it did identify fragility in the system that was previously in place. They could have commissioned an external provider.

It was explained that SWAP had not undertaken this specific audit before, but they had completed a premises health and safety audit in 2019, which had included fire safety. Some of these points had been identified in that audit.

Officers confirmed that fire drills were undertaken in all major buildings, however, there had been a weakness in recording that. There were some properties where drills were overdue, and they were working quickly to rectify that.

In response to a question regarding policies and practices for sites owned by third party contractors, such as some recycling facilities, it was stated that this would be covered within the contract management process. Furthermore, there was a high degree of assurance for council owned schools.

It was explained that the Health and Safety policy was due for a review in September 2024, the new draft was nearly finished and would follow the correct internal processes for policy approvals. In response to a question, it was confirmed that there was a Health and Safety policy prior to the current one, the officer was unsure why the date of issue was September 2023, this was possibly because it was radically reviewed. Members again stated that they would like the policy review process to come to a future meeting.

On the proposal of the Chairman, seconded by Cllr Martin Smith, it was,

Resolved:

To note the presentation and management action plans in relation to Landlord Compliance Fire Safety - General Fund Assets - Action Plans.

Jennifer Geddes and Cllr Stuart Wheeler left the meeting at 2.10pm.

To receive a presentation on the procurement action plan, following a limited assurance audit.

Deborah Bull, Head of Procurement, gave a presentation on the Procurement action plan, which was also included in the agenda pack, starting on page 171.

Following the presentation there were no questions, and on the proposal of the Chairman, seconded by Cllr Ross Henning, it was,

Resolved:

To note the presentation and Procurement Action Plan.

Members discussed the Forward Work Programme (FWP) which started at page 185 of the agenda. It was requested that the policy review process was added to the FWP. Members also wanted progress updates on all the action plans discussed at the meeting.

Officers advised that SWAP would follow up on all the audits and action plans and update the Committee.

On the Chairman’s proposal, seconded by Cllr Gavin Grant, it was,

Resolved:

To note the FWP with the addition of the policy review process.

To note that there will be an extraordinary meeting of the Committee at 1.30pm on 28 November 2024, to consider the Statement of Accounts 2020/21 to 2022/23. 

To note that the next regular meeting of the Committee will be held at 10.30am on 29 January 2025. 

There was an extraordinary meeting scheduled for 28 November 2024, to consider the Statement of Accounts 2020/21 to 2022/23. However, as explained earlier in the meeting, this would be moved back to the first week of December.

The next ordinary meeting of the Committee would be held at 10.30am on 29 January 2025.

There would be an additional extraordinary meeting scheduled for mid-February 2025, to consider the 2023/24 accounts.

There were no urgent or part II (private) items, so the Chairman thanked everyone for attending and closed the meeting.