Venue: Council Chamber - County Hall, Bythesea Road, Trowbridge, BA14 8JN. View directions
Contact: Tara Hunt Senior Democratic Services Officer email: email@example.com
To receive any apologies or substitutions for the meeting.
Apologies were received from:
· Cllr Antonio Piazza
· Cllr Adrian Foster, who was substituted by Cllr Ross Henning.
Minutes of the Previous Meeting
To confirm and sign the minutes of the meeting held on 27 September 2022.
The minutes of the meeting held on 27 September 2022 were presented for consideration and it was,
To approve and sign the minutes as a correct record.
Declarations of Interests
To receive any declarations of disclosable interests or dispensations granted by the Standards Committee.
There were no declarations of interest.
To receive any announcements from the Chairman.
The Chairman made the following announcements:
· Public Sector Audit Appointments (PSAA) Update
Following on from the approval of the Committee to join the PSAA national contract for external audit services from the accounts for the financial year 2023/24 onward, the Chairman confirmed that the procurement process had been concluded and the PSAA had offered contracts to six suppliers. Services from three existing PSAA suppliers had been retained, Grant Thornton, Mazars and Ernst & Young, and former supplier KPMG has also been successful in gaining a contract. Two new suppliers, Bishop Fleming and Azets Audit Services had also been awarded contracts. Our incumbent External Auditor, Deloitte were not part of this national contract arrangement and the Council would therefore have a change of auditor for the audit of the financial statements for 2023/24. The bid prices that were received in the procurement reflected a significant increase compared to the previous procurement in 2017. At this stage the advice from PSAA was to anticipate a major re-set of total fees for 2023/24 involving an increase of the order of 150% on the total fees for 2022/23. The actual total fees would depend on the amount of work required. The Council factored this increase into the working Medium Term Financial Strategy (MTFS) assumptions and the issue of the increased fees had been raised by the PSAA with Department for Levelling Up, Housing and Communities (DLUHC).
· External Audit Update from Deloitte
Ian Howse (Deloitte) explained that Deloitte did not go forward for the PSAA contract, as there were issues with the complexity of local authority accounts and the regulations they had to work within made it challenging.
Members asked officers to raise the issues regarding the regulation and standards required for local authority audits with government as many authorities were experiencing problems. Members also thanked Deloitte for their work.
Mr Howse also explained that the backlog in the accounts were a symptom of issues in the market and agreed that the system needed to change.
The 2019/20 accounts were ongoing, infrastructure assets were an issue for all accounts that were not yet signed off. Guidance was awaited but it was thought that infrastructure disclosures would need to be removed. In January 2023 the Chartered Institute of Public Finance and Accountancy (CIPFA) guidance and statutory instruments should be available and that would support working towards closing the accounts. There were still issues to be resolved, as any changes made had a knock-on effect elsewhere.
The team had been working on the 2020/21 accounts. A lot of work had bene undertaken around the fixed assets register. The 2021/22 accounts were also not complete, Deloitte would work with Wiltshire Council to develop a timeline of when these may be completed. Deloitte would issue a written report to Members detailing the above. At the end of the process a letter of representation would be issued. Deloitte would be asking the Committee to challenge officers on the work undertaken to issue the representations and to ensure that everyone was comfortable ... view the full minutes text for item 56.
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.
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 16 November 2022 in order to be guaranteed of a written response. In order to receive a verbal response questions must be submitted no later than 5pm on18 November 2022. 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.
No public questions or statements were received.
Internal Audit updates
· Internal Audit updates
· Outstanding Audit actions
· Internal Audit Q3 plan for information and Internal Audit Q4 plan for approval
· A presentation on the future of Internal Audit
At the Chairmans invitation, David Hill (SWAP) presented the Internal Audit (IA) reports.
Mr Hill highlighted page 12 of the agenda pack which gave an overview of the IA update. The overall opinion was reasonable. One significant risk was identified, which had a limited assurance opinion, this was the Pension Payroll Reconciliation Project. A lot of issues had been identified and the opinion given would have been no assurance, however the service had already completed some of the actions, hence the limited assurance opinion. The Section 151 officer had been aware of issues and had requested SWAP to look at the project. Some outside resources were being deployed to help with the reconciliation.
Regarding the Outstanding Priority 1 and 2 actions, there were still quite a lot to be completed which was disappointing.
In response to questions Lizzie Watkin (Assistant Director Finance and deputy S151) explained that the Wiltshire Pension Fund Committee and Pensions Board would look at the Pension Payroll Reconciliation Project. Members could discuss with the Chairs of those committees to ensure that they got assurance. It was confirmed that ultimate responsibility lay with the Audit and Governance Committee.
The officer stated that officers may consider the need to create task groups that report back to the Audit and Governance Committee, similar to the process used by the Overview and Scrutiny Management Committee, so that everyone got the required feedback and assurance.
Ian Howse (Deloitte) stated that Deloitte audit the Pension Fund as well. There were not any material discrepancies, but the issues did need to be resolved.
The outstanding management actions were discussed. While the number had decreased which was positive, there were still many which had been not been completed which was concerning. Discussions were underway with SWAP on how the actions could be monitored.
Lizzie Watkin explained that she as working closely with SWAP to review the actions and get the evidence to ensure they had been implemented. This was a very manual and time consuming task, so the process needed some work. Performance Outcome Boards should also look at the actions and mitigate the risks. They were working through the new system SWAP were implementing to see what it can do and how it could make things more effective for officers and the Committee.
In response to a question regarding the impact of negative media/social media coverage on Council, where there had been no IA coverage, Perry Holmes (Director, Legal and Governance) stated that there would be gaps occasionally due to resourcing, but there was a capable communications team who managed this.
Councillor Mark Connolly proposed a motion which was seconded by Councillor Chuck Berry and it was,
· To note the November 2022 Internal Audit Update Paper and Summary of Outstanding Priority Actions.
· To note the 20022/23 Q3 Internal Audit Plan.
· To approve the 2022/23 Q4 Internal Audit Plan.
Mr Hill then gave a presentation on IA which is appended to these minutes. Some of the main points covered included that the size ... view the full minutes text for item 58.
Anti-Fraud risk update
To receive an update on anti-fraud activity, including baseline risk assessments and actions.
Lizzie Watkin (Assistant Director Finance and Deputy S151) presented a report on anti-fraud activity. The officer stated that this was the first update of its kind that the Committee had received in a very long time. It supported progress and gave updates in base risk exposure to fraud. It also covered aspects of the Anti-Fraud, Bribery and Corruption policy approved by the Committee in April 2022.
Base line risk assessments were part of governance arrangements and were about assessing that we had policies, a framework and best practise in place. The assessments were made against best practise as detailed in section 7 of the report. SWAP undertook the baseline assessments and Appendix B (page 75) set out red and amber risks, recommendations made, actions, lead officer and the implantation date for each one. This was a key part of mitigation against fraud and ensured good governance and financial control.
The Chairman as lead Member for anti-fraud, requested that the Committee receive updates on this at least annually.
In response to questions, the officer explained that there was no regulatory requirement to do this. It was about best practise and protecting the public purse, the policy was the backbone. The Council had signed up to CIFAS, the UK’s fraud prevention community. Teams with a higher risk of exposure to fraud had also had a session with CIFAS. In regard to Covid-19 business grants, they were awarded according to government criteria. Some post payment and pre-payment fraud checks were undertaken. Deloitte confirmed that they would be looking at business grants as part of the 2020/21 audit.
In response to a question regarding risk 2a (page 75) and whether there was awareness, the officer stated that service managers were notified after the policy was approved. The officer was sharing the 3 policies with the Corporate Leadership Team (CLT) along with bullet points so that they could actively cascade to teams. There would also be targeted training with officers. There was awareness but it needed to be increased. Members requested that the outcome of the review of the corporate risk register was shared with them when ready.
In regard to risk 6a (page 78), which Members queried, the officer confirmed that there would be other councils who had mechanisms. The issue was the policy landscape. All investigations went through the SWAP anti-fraud team, but there may be other types of investigation that should be included. As more data was captured it was hoped that the gap could be closed.
There was a discussion regarding academies, which covered who was responsible for them; land owned by the local authority which was now on long lease to academies; risk to the council as landlord; what happened if the schools got into financial trouble; fraud effecting schools; what happened when schools covert to academies and their governance arrangements.
It was explained that there are various types of schools, Community Schools and Voluntary Controlled Schools were maintained schools, or local authority schools. Schools which were not local authority ... view the full minutes text for item 59.
Forward Work Programme
To note the Forward Work Programme
The FWP was considered, it was noted that the SoA 2020/21 was unlikely to be ready for the February meeting. It was,
To note the FWP.
Any other items of business, which the Chairman agrees to consider as a matter of urgency.
There were no urgent items.
Date of Next Meeting
To note that the next regular meeting of the Committee will be held on 8 February 2023.
The next regular meeting of the Audit and Governance Committee would be held on 8 February 2023.
The Chairman thanked everyone for attending and closed the meeting.