Agenda and minutes

To receive any apologies or substitutions for the meeting.

Apologies were received from:

·       Cllr George Jeans  

·       Cllr Pip Ridout

·       Cllr Mike Sankey

·       Cllr Stuart Wheeler

To confirm and sign the minutes of the meeting held on 28 April 2021.

The minutes of the last meeting on 28 April 2021 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.

The Chairman announced that due to technical issues in the Council Chamber the projectors were not working, therefore the slides for the meeting had been circulated to Members prior to the meeting and were available in hard copy at the meeting.

To ensure Wiltshire Council COVID-19 public health guidance is adhered to, a capacity limit for public attendance at this meeting will be in place. You must contact the officer named on this agenda no later than 5pm on Thursday 7 October 2021 if you wish to attend this meeting. Places will be allocated on a first come first served basis and all requests may not be accommodated if there is high demand.

Statements

Members of the public who wish to submit a statement in relation to an item on this agenda should submit this electronically to the officer named on this agenda no later than 5pm on 7 October 2021. 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 Monday 4 October 2021 in order to be guaranteed of a written response. In order to receive a verbal response questions must be submitted no later than 5pm onWednesday 6 October 2021. 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.

Overview, services & changes to Internal Audit.

At the Chairman’s invitation, Rupert Bamberger, Director SWAP ran through the presentation (as appended to these minutes), which gave a brief overview of SWAP’s internal audit function and what the Committee could expect from them.

Andy Brown, Corporate Director Resources, Deputy Chief Executive and s151 Officer, stated that internal audit was a management control function, where management must respond to flags raised. He highlighted that where audits offer limited assurance, or no assurance, the Committee needed to gain an understanding from management about the actions they would be taking to respond.

The Chairman thanked Mr Bamberger for his presentation.

To consider the:

·       Internal Audit Annual Opinion Report 2020/21

·       Proposed Q3 Internal Audit Plan and Revised Internal Audit Charter (also includes Q2 IA Plan for information)

·       Internal Audit Activity – September 2021, including consolidated IA outstanding management actions report

At the Chairman’s invitation Rupert Bamberger, Director, SWAP, presented the reports.

Internal Audit Annual Opinion 2020/21 - It was explained that this annual report on the adequacy and effectiveness of the organisation’s governance, risk management and internal control environment was coming to the Committee later than usual due to the scheduling issues with the Committee this year where problems such as flooding at County Hall and COVID had caused meeting to be cancelled and re-arranged. Key messages were summarised on the first page of the report. The overall opinion was reasonable.

It was stated that 3 significant risks had been identified over the year, however SWAP were confident that actions were being taken to mitigate the risks. Assurance review opinions were set out in the report. It was highlighted that 2020/21 had not been a normal year with internal audit staff helping with the pandemic response.

Q2 Internal Audit Plan, Proposed Q3 Internal Audit Plan 2021/22 and Revised Internal Audit Charter – Mr Bamberger explained that the Q2 IA plan would have come to the Committee in July, so was included for reference. SWAP had proceeded with that plan and had set out the plans for Q3. The Internal Audit Charter came to the Committee annually. It had been revised slightly and the report was attached for consideration.

The sufficiency of internal audit resources was highlighted, and it was explained that SWAP was seeing higher than usual turnover, so they were working hard to fill vacancies and reduce risk.

A debate followed where Members questioned whether SWAP staff and officers working from home the majority of the time due to the pandemic had affected audit work and monitoring. Both SWAP and Wiltshire Council officers felt that the move to remote working had been seamless and had in fact bought benefits, as people could meet more easily remotely. This model would be continued even when staff returned to the workplace. It was acknowledged that coverage may have been an issue during the height of the pandemic when staff were redeployed to work on the pandemic response.

In response to questions regarding risk coverage and in particular the chart on page 70 of the agenda pack, the internal audit view was that coverage was building. More items had adequate coverage as the quarters progressed. Whilst there were some items which had no internal audit coverage to date, there were some assurance sources on these items. Andy Brown, Corporate Director Resources, deputy Chief Exec and s151, explained that whilst there were several items in Q3 with no internal audit coverage to date, there were management lines of defence that could be trusted. It was stated that the reality was that with the demand on resources there were gaps in coverage in Q3. It was stated that there was a discussion to be had regarding what audit was going to take place on the Salisbury Recovery and probably the wider economy. It may be that they needed to focus on different things.

In response  ...  view the full minutes text for item 7.

To receive a report on the progress of the statement of accounts 2019/20.

Andy Brown, Corporate Director Resources, deputy Chief Exec and s151 presented the update report on the progress of the statement of accounts 2019/20.

The officer relayed apologies from Ian Howse of Deloitte who was unable to attend the Committee and explained that Deloitte had not been able to source anyone to attend.

The officer explained that they had hoped to bring the statement of accounts 2019/20 before the Committee today but there had been ongoing issues meaning that they were unable to do so.

It was stated that local government audit across the board was facing problems due to the very technical nature of the accounting and resourcing issues faced by external auditors. The officer explained that Wiltshire Council was not alone and that many authorities accounts were delayed. It was highlighted that the technical issues encountered did not affect the cash position of the council or the bottom line. These issues were historical, technical and related to the recording of assets.

Wiltshire Council would need to discuss timelines and the resourcing required with the external auditors in order to get the statement of accounts 2019/20 to Committee for approval. To get the accounts approved and to remove the ‘except for’ qualification was a priority.

Lizzie Watkin, Assistant Director Finance & Deputy s151 further explained that the issues faced were related to the technical financial accounting presentation of assets. There was no impact on the resources required to deliver services. Work was underway to ensure that the assets were shown at a true value and the scale of this work was significant.

Comments from Members included that the situation was frustrating, but there were issues across the public sector. The historical issues described did not affect the Councils ability to provide services, but it was hoped the issues could be resolved soon. There were concerns raised that Deloitte were not present and that the issues encountered would result in an escalation of fees.

In response to questions from Members regarding the situation officers explained that there was a new asset management system which gave more transparency and had led to the identification of further issues, resulting in more reconciliation being required. The work had previously been limited to the ‘except for’ qualification but had now broadened, so there were aspects where it was necessary to restate previous balances which was technical and difficult to do. Conversations were underway with Deloitte on the best way to achieve this. It was stated that the ‘except for’ qualification would remain for 2019/20 but they were working to get the qualification lifted for the statement of accounts 2020/21.

Regarding the recording of leases officers explained that there was new legislation for 2021/22 regarding leases and work was already being undertaken to ensure leases were reported correctly. Some adjustments would be applied to the 2019/20 accounts to ensure all leases are disclosed fully.

Officers confirmed that there was a national framework for local authority audit, but it was limited and had limited resources.

In response to  ...  view the full minutes text for item 8.

To receive a presentation on the Evolve Programme.

At the invitation of the Chairman, Stuart Honeyball, Evolve ERP Programme Lead, gave a presentation on the Evolve programme.

Details were given on the Evolve programme which included the replacement of the Enterprise Resource Planning (ERP) solution and adoption of, and compliance with, standardised business processes across the whole organisation. The officer ran through the slides as appended to these minutes.  It was confirmed that the Terms of Reference shown in the sides had now been agreed.

In response to questions the officer explained that there were 2 go live dates and testing phases as the organisation had to decide whether to go live at the end of the calendar year (the option preferred by finance) or to go live at the end of the tax year (the option preferred by payroll). 

Regarding questions on the durability of the program and staff training the officer explained that resilience was part of the reason for implementing the programme. Whilst staff resources were a concern, costs to cover this had been factored in so that roles could be back filled if required. There was a dedicated change group, which had consulted with 45 services across the Council. Lessons had been learned from the previous implementation of a new ERP in 2009 and those had shaped the programme implementation this time. The team were working to make sure that staff were engaged.

Andy Brown, Corporate Director Resources, deputy Chief Exec and s151, explained that the system addressed control issues and would bring changes and benefits across the organisation to how Wiltshire Council operates. There was a potential risk that it would be seen as an HR/finance system, but it was much more than that. Andy Brown was one of the Senior Responsible Officers on the project. He stated that it was key to identify efficiencies and cash in on those, which may mean a reduction in workforce, but it was important to adapt processes across the organisation.

To consider the Annual Governance Statement 2020/21.

The Chairman invited Perry Holmes, Director, Legal and Governance to introduce the Annual Governance Statement 2020/21.

The officer explained that in a normal year the Annual Governance Statement (AGS) was approved as part of the statement of accounts but due to the delays with the statement of accounts it would be considered separately this year and would be incorporated into the statement of accounts 2020/21 when they came to the Committee.

The AGS looked at whether there was a framework in place within Wiltshire Council to enable us to make good decisions that benefitted Wiltshire and its residents. The AGS gave assurance that there was good governance in place at Wiltshire Council and included evidence of that. However, there were always things that could be done better, so there was also a focus on areas for improvement.

The AGS was driven by the local code of governance and on Chartered Institute of Public Finance and Accountancy (CIPFA) advice. It had been co-authored by Perry Holmes, Director, Legal and Governance, Andy Brown, Corporate Director Resources, deputy Chief Exec and s151 and Jo Pitt, Director - HR & Organisational Development.

Members thanked the officer for a good document and report.

Members suggested that for full transparency, when reporting on progress made regarding improvement actions, last year’s version of the AGS should be included alongside this year’s version so that actions could be tracked. The officer confirmed that this would be possible and that uncompleted improvement actions from the previous AGS would be rolled forward into actions for this year.

Members also suggested that the acronym VCS, mentioned under improvements for principles A and B, could be expanded to Voluntary and Community Sector.

At the conclusion of the debate the Chairman proposed a motion to approve the Annual Governance Statement 2020/21, which was seconded by Cllr Chuck Berry. It was,

Resolved:

To approve the Annual Governance Statement 2020/21.

To receive a report on the governance of Stone Circle companies.

The attached report will be considered by Cabinet on 27 September 2021.

The Chairman invited Perry Holmes, Director, Legal and Governance to present the Stone Circle Reports.

The officer explained that in 2019 Wiltshire Council had set up the Stone Circle Companies in order to deliver housing which people could rent. The aim was that these would fall somewhere between Council properties and private rentals.

Wiltshire Council would lend money to the companies which would acquire properties and rent them, which was less risky but had a lower yield, and use Council owned land to build properties to rent or sell. That came with more risk but also more reward.

In February 2021 Cabinet had asked for a review of how the companies were set up and the reports were considered at Cabinet in September. The reports looked at best practise elsewhere and made some recommendations which were detailed in full at pages 133 and 134 of the agenda. In summary these were:

1.    Improving the Business Plan

2.    Quarterly reporting to Wiltshire Council

3.    Creating a shareholder group as a sub-committee of Cabinet

4.    Introducing a 3 year term for the Chair

5.    Reviewing appointments to the Board

6.    Developing and implementing an appropriate staffing structure

7.    Annual presentation of governance arrangements to the Audit and Governance Committee.

The role of the Audit and Governance Committee was to seek assurance that there was an appropriate framework of governance in place for the companies. There should be a report regarding the governance of the companies presented to the Committee annually. It was hoped that representatives of the companies may be able to attend to when the reports came so they could present details such as returns and risks.

In response to a question regarding whether the Committee could make recommendations to the companies that would be implemented, the officer explained that whilst the companies were a separate commercial entity, we did have to account for public funds being spent on it, so we did have an element of control. The Committee could make recommendations via the Cabinet sub-committee back to the board, but it would be up to the board whether to implement them.

Some Members raised concerns regarding the risk involved with the Council moving into private sector areas which they had little knowledge of and referenced problems faced by Croydon Council when they bought a hotel.

The officer explained that the governance review of the companies, detailed by the flowchart at page 153 of the agenda, implemented processes to provide transparency on the risks. Stone Circle were revising their business plans in response to the recommendations by Cabinet and everything would be kept under review and stress tested. The officer stated that he was happy with the level of risk at present and the organisation as a whole was cognisant of the risk. If at any point things changed and he was no longer happy with the level of risk, a follow up report would come to Committee. 

In response to a question from Members the officer highlighted the different  ...  view the full minutes text for item 11.

The Chairman highlighted the FWP at pages 213 – 215 of the agenda. It was noted that the FWP was a dynamic document that Members could request items be added to, and the timings of some items coming to the Committee may be subject to change.

In response to a question regarding the timings of accounts after the 2019/20 accounts coming to Committee and whether those accounts would also be affected by current issues, Lizzie Watkin, Assistant Director Finance & Deputy s151 stated that the scale of works being undertaken on the 2019/20 accounts meant that the opening position of later accounts should be more stable. Whilst it was unusual, you could have two sets of accounts being audited at the same time. Officers were working with Deloitte on a timetable for all three sets of accounts. There was currently no draft statement of account 2020/21 due to the scale of 2019/200 issues so there would be a knock-on effect on timings. It was hoped that at the November meeting officers could update on how the two sets of accounts would work.

The Chairman requested that the Third Party Spend Purchase to Pay limited assurance item be added to the FWP as well as progress reports on the Annual Governance Statement actions (using the new process).

Resolved:

To note the FWP and add the above items. 

To note that the next regular meeting of the Committee will be held on 24 November 2021.

The next meeting of the Committee would be held on 24 November 2021.

Urgent item to appoint a Member of the Audit and Governance Committee to the Constitution Focus Group.

The Constitution Focus Group is a working group of the Council which reports to the Standards Committee (which has responsibility for oversight of the Council’s Constitution, and makes recommendations to Full Council). The Focus Group periodically reviews the Constitution and makes recommendations to the Standards Committee. Membership of the Constitution Focus Group includes a representative of the Audit and Governance Committee.

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

An urgent item was considered by the Committee. The item was to appoint a Member of the Audit and Governance Committee to the Constitution Focus Group.

Resolved:

To appoint Cllr Pip Ridout as the Audit and Governance Committee representative on the Constitution Focus Group.

There were no other urgent items, so the Chairman thanked everyone for attending and closed the meeting.