Agenda and minutes

To receive any apologies or substitutions for the meeting.

Apologies were received from:

Cllr Andy Philips

Cllr Mike Hewitt

Cllr Pip Ridout

Cllr Stuart Wheeler who was substituted by Cllr Peter Evans

To confirm and sign the minutes of the meeting held on 7 November 2019.

RESOLVED

The minutes of the meeting held on the 7 November 2019 were approved.

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

There were no declarations of interest.

There were no Chairman’s announcements.

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 (4 clear working days, e.g. Wednesday of week before a Wednesday meeting) in order to be guaranteed of a written response. In order to receive a verbal response questions must be submitted no later than 5pm on (2 clear working days, eg Friday of week before a Wednesday meeting). 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 members of public were present.

To receive an update on the signing off of the accounts.

Ian Howse, Deloitte, informed the committee that the accounts were not yet signed off. A new system to record the values of fixed assets had been implemented. This had changed the gross value and the depreciation of the assets by  £50 million but had no change on the net values.  More testing was being carried out to verify the changes and it was hoped that the accounts would be in a position to be signed off in the next couple of weeks. It was noted that neither the council tax or general fund out turn figures would be impacted and  there is no net effect.

The committee noted that they were all happy with the current delegation for the Chairman in consultation with the S151 officer to sign off the accounts.

The Chairman thanked Ian for the update.

To consider the external auditors audit plan for 2020/21.

To receive refresher training on ‘The Anatomy of an External Audit’.

Ian Howse, Deloitte, presented the external audit plan and gave details of the ‘anatomy of an external audit’.

It was noted that the elements of an external audit included:

·         The first step was to create an audit plan which involved reviewing the previous audit plan, carrying out a risk assessment to identify the areas with: the most risk, which produced key financial data and where the most complex work was carried out and reviewing the Internal audit reports to identify any issues. 

·         Following the audit plan being agreed an interim audit is carried out which involved the checking and testing of controls, process designs and manual entries. Following the results of the interim audit the approach of the full audit may be adjusted. 

·         Once the accounts were published a full audit would take place.

·         Following the full audit a final report would be presented to the Audit Committee and depending on whether any issues were identified, the accounts would be signed off.

The key points of the external audit plan included:

·         The key risks identified were: property valuation, completeness of accrued expenditure, valuation of the council’s share of the Wiltshire pension fund net liability and management override of controls. No risks had been identified in relation to the Value for Money assessment. Any additional significant risks would be reported to the Audit Committee. 

·         The three key areas within the scope of the audit were: Financial Statements, Annual Governance Statement and the Value for Money conclusion.  The approach to audit these areas would be to liaise with internal audit, obtain an understanding of controls relevant to the audit by evaluating the design of the controls and determining whether they had been implemented and high quality and simplified reporting.

·         Materiality was explained noting that it had been set at £17m.

In response to questions asked it was noted that:

·         The auditing of the reserves was included within the Value for Money and medium term financial strategy. The auditors role was not to say what level the reserves should be. The National Audit Office was currently carrying out a consultation on the work involved with the Value for Money assessment and it was expected that auditors would have to do more work assessing the reserves.

·         Materiality was set at 1.7% which was a calculation based on expenditure.

·         Procurement was audited while examining major expenditure.

·         External auditing aimed to identify discrepancies in accounts and did not aim to discover fraud, internal audit carried out more work in that area.

·         Deloitte had considered coronavirus and currently had a team working on business continuity processes. Procedures had been put in place to restrict travel. They did not expect to be impacted by the virus.

·         There was a lack of strong purchase order control in place, the relevant officers understood the need to improve the system. 

To consider the Q3 internal audit report from SWAP and note the outstanding audit recommendations.

Charlotte Wilson, SWAP, introduced the report noting that a high risk level and no assurance opinion had been given to gross loans due to a lack of compliance. Five recommendations had been made and were in the process of being implemented by the end of the financial year. Management had provided an update noting that a new system had been implemented and there had been changes in personnel. Work was taking place to ensure that the process was robust, documented and up to date. A further internal audit would take place in the first quarter of 20/21.

Deferred payments had been given a partial assurance opinion,  recommendations were made to improve the reporting arrangements and oversight, it was also suggested that the procedural guidance be updated.

In response to questions asked it was noted that:

·         The draft audit plan would be available at the next audit committee.

·         Changes to the IA plan would be brought to the committee meeting.

·         There had been some resource issues which had caused the audit projects to run later than expected, more resources were being brought in to help. Some of the projects would run into the next financial year and SWAP would review their priorities. 

·         The review of partnership governance had been split into two parts. The first part to identify all partnerships had been carried out by the council and the second part to review the governance arrangements would be carried out by SWAP.

·         SWAP would be reviewing the outstanding recommendations as many of them may have been superseded and SWAP recognised that having outstanding recommendations from October 2018 was unacceptable.

·         The process of limiting the reporting of outstanding recommendations to 120 was questioned, it was decided that a meeting would take place outside of the committee to review the best reporting process going forward.

·         Work had been ongoing since summer 2019 to bring reconciliations up to date and the project was making good progress and due to be completed mid February. Invoices would also be on track to go out on time within the next five weeks.

The Chairman thanked SWAP for their update.

To receive a report from SWAP on the outcome of their triennial external assessment of their compliance with international Internal Audit standards.

David Hill, SWAP, introduced the report noting that there was a requirement to undertake the assessment every five years. SWAP had opted to undertake the assessment every three years. The assessment included with the agenda was a self-assessment which had identified some areas for improvement. External assessors had also carried out an assessment looking at what could be improved and the full report would be brought to the next meeting.

To receive a presentation from Peter Binley, Head of Highways, on the processes involved in the corporate approach to governing risk within Highways.

Peter Binley, Head of Highways Asset Management & Commissioning, introduced the item and gave an overview of the service area, their responsibilities and the high risk environment they work in.

The service area relied on external suppliers to carry out work, as such, risk was managed in a number of ways; by getting good suppliers, having a partnership approach and having joint and corporate mitigation plans in place. Part of the contractual system was for suppliers to inform the council on how they managed risks. They were also encouraged to work with the council to jointly manage shared risks. Suppliers had their own risk registers regarding issues which were not relevant to the council. The council and suppliers would agree which risks were shared and which were separately owned. The officer noted that there was a need for trust and openness in order for the service to operate effectively with regular meetings to identify and communicate risks and develop mitigation plans.

In response to questions, it was noted that some risks were extremely high and although mitigation plans were in place these still remained red risks.

To receive an update.

David Bowater, Senior Corporate Support Manager, introduced the report which provided a update on the current status of improvement actions identified in the Annual Governance Statement for 2019.

The audit committee would have oversite over the principles outlined within the report via the internal audit plan and as part of the Annual Governance statement. It was noted that within principal B – Review the Wiltshire Compact and role of Wiltshire Assembly, a refresh of the national compact was taking place although it was not known when this would take place. For this reason the VCSE strategy would be launched regardless.

The Chairman welcomed the report noting the good progress being made and thanked the officer.

To receive an update on the appointment of a Finance Director.

Cllr Simon Jacobs, Cabinet Member for Finance and Procurement, confirmed the committee that the new finance director would start on 1 March 2020. The current interim director would remain in post for an additional month to oversee specific projects.

The committee took the opportunity to thank Deborah Hindson, Interim Director for Finance, for her work.

To note the Forward Work Programme.

The forward work plan was noted.

Any other items of business, which the Chairman agrees to consider as a matter of urgency.

There were no urgent items.

To note that the next regular meeting of the Committee will be held on 29 April 2020.

The date of the next meeting was noted.

To consider passing the following resolution:

To agree that in accordance with Section 100A(4) of the Local Government Act 1972 to exclude the public from the meeting for the business specified in Item Number 19 because it is likely that if members of the public were present there would be disclosure to them of exempt information as defined in paragraph 7 of Part I of Schedule 12A to the Act and the public interest in withholding the information outweighs the public interest in disclosing the information to the public.

Reason for restricting the item:

Paragraph 14.4.7 of Part 5 of the Constitution: Information relating to any action taken or to be taken in connection with the prevention, investigation or prosecution of crime.

This item is in Part 2 of the Agenda because the audit concerns matters that relate to a potential prosecution and in all the circumstances the public interest in maintaining the exemption outweighs the public interest in disclosing the information at this stage.

RESOLVED

To agree that in accordance with Section 100A(4) of the Local Government Act 1972 to exclude the public from the meeting for the business specified in Item Number 19 because it is likely that if members of the public were present there would be disclosure to them of exempt information as defined in paragraph 7 of Part I of Schedule 12A to the Act and the public interest in withholding the information outweighs the public interest in disclosing the information to the public.

Reason for restricting the item:

Paragraph 14.4.7 of Part 5 of the Constitution: Information relating to any action taken or to be taken in connection with the prevention, investigation or prosecution of crime.

This item is in Part 2 of the Agenda because the audit concerns matters that relate to a potential prosecution and in all the circumstances the public interest in maintaining the exemption outweighs the public interest in disclosing the information at this stage.

Item(s) during consideration of which it is recommended that the public should be excluded because of the likelihood that exempt information would be disclosed

The following items were discussed in private.

To consider the Court of Protection report.

Ian Gibbons, Director Legal, Electoral and Registration, informed the committee that the item was being held in part II due to a potential prosecution and in all the circumstances the public interest in maintaining the exemption outweighs the public interest in disclosing the information at this stage.