Agenda and minutes

Audit and Assurance Committee
Wednesday, 26th June, 2019 10.30 am

Venue: Conference Room A and B, Cumbria House, Carlisle

Contact: Nicola Harrison  Email: nicola.harrison@cumbria.gov.uk

Items
No. Item

1.

APOLOGIES FOR ABSENCE

To receive any apologies for absence

Minutes:

Apologies for absence were received from Mr F Cassidy and Mr G Cook.

2.

MEMBERSHIP

To note any changes to the membership of the Committee

 

At the meeting of full Council on 11 April 2019, the following changes to the Committee were made:

 

Mrs C McCarron Holmes was appointed Vice Chair of the Committee.

 

Mr F Cassidy was appointed as a permanent member of the Committee.

Minutes:

Mr Morgan replaced Mr F Cassidy and Mr P McSweeney replaced Mr G Cook as members of the Committee for this meeting only.

 

It was noted that at the meeting of full Council on 11 April 2019, the following changes to the Committee were made:

 

Mrs C McCarron Holmes was appointed Vice Chair of the Committee.

 

Mr F Cassidy was appointed as a permanent member of the Committee.

 

The Chair congratulated Mrs McCarron Holmes on her appointment as Vice Chair of the Committee and thanked Mr McGuckin, the outgoing Vice Chair for his valuable contribution to the work of the Committee.

3.

DISCLOSURES OF INTEREST

Members are invited to disclose any disclosable pecuniary interest they have in any item on the agenda which comprises

 

1          Details of any employment, office, trade, profession or vocation carried on for            profit or gain.

 

2          Details of any payment or provision of any other financial benefit (other than from the authority) made or provided within the relevant period in respect of any expenses incurred by you in carrying out duties as a member, or towards your election expenses.  (This includes any payment or financial benefit from a trade union within the meaning of the Trade Union and Labour Relations (Consolidation) Act 1992.

 

3          Details of any contract which is made between you (or a body in which you have a beneficial interest) and the authority

 

(a)       Under which goods or services are to be provided or works are to be executed; and

 

            (b)       Which has not been fully discharged.

 

4          Details of any beneficial interest in land which is within the area of the authority. 

 

5          Details of any licence (alone or jointly with others) to occupy land in the area of the authority for a month or longer. 

 

6          Details of any tenancy where (to your knowledge)

 

            (a)       The landlord is the authority; and

 

            (b)       The tenant is a body in which you have a beneficial                                                         interest.

 

7          Details of any beneficial interest in securities of a body where

 

(a)       That body (to your knowledge) has a place of business or land in the    area of the authority; and

 

 

(b)       Either –

 

(i)      The total nominal value of the securities exceeds £25,000 or one            hundredth of the total issued share capital of that body; or

 

(ii)     If that share capital of that body is of more than one class, the total nominal value of the shares of any one class in which the relevant person has a beneficial interest exceeds one hundredth of the total issued share capital of that class.

In addition, you must also disclose other non-pecuniary interests set out in the Code of Conduct where these have not already been registered.

 

Note

 

A “disclosable pecuniary interest” is an interest of a councillor or their partner (which means spouse or civil partner, a person with whom they are living as husband or wife, or a person with whom they are living as if they are civil partners).

Minutes:

No disclosures of Interest were declared.

4.

EXCLUSION OF PRESS AND PUBLIC

To consider whether the press and public should be excluded from the meeting during consideration of any item on the agenda.

Minutes:

RESOLVED that, the press and public not be excluded from the meeting during consideration of any items of business on the Agenda.

5.

MINUTES pdf icon PDF 236 KB

To confirm as a correct record the minutes of the meeting of the Committee held on 14 March 2019

Minutes:

RESOLVED that, the minutes of the meeting held on 14 March 2019 be agreed and signed by the Chair.

6.

DEEP DIVE RISK ANALYSIS - Prevention of and Placement Sufficiency for Children Looked After.

To receive a presentation from the Executive Director – People (Deputy Chief Executive)

Minutes:

A short discussion took place on the merits of receiving presentation slides before meetings in order for members to prepare questions in advance.

 

The Deep Dive for this meeting was the Prevention of and Placement Sufficiency for Children Looked After (CLA). The presentation was delivered by the Assistant Director - Children and Young People and covered the following:

 

·         The risk description

·         Causal factors

·         Setting the context – National and Cumbria

·         Mitigating actions to address causal factors

·         CLA Recovery Plan: Management Oversight/Governance and its impact

·         CLA recovery – additional prevention services

·         Impact of prevention services

·         Unavailability of appropriate placements to match young people’s assessed needs

·         Ineffective recruitment and retention of Cumbria foster carers and impacts

·         Signs of Safety (SOS) Implementation and impact

·         2019/20 and what’s next

 

The Assistant Director - Children and Young People undertook to circulate the name of the company involved in the Safe Families Project.

 

In highlighting the negative national press relating to the circumstances of some CLA, a member asked that the positive story to fund the internal provision of two, four bedded residential homes for CLA be publicised. A member queried why the risk rating had not reduced in light of the improvement in CLA services over recent years and whether Scrutiny could have a role in determining the value for money element of placements. A short discussion took place on the respective roles of Scrutiny and the Audit and Assurance Committee.

 

The Director of Finance (s151 Officer) informed the Committee about who would be best placed to ascertain placement value for money and advised on the value for money of CLA placements in terms of supply, demand and cost of care needs placements in the county. She stressed the appropriateness of placements to reflect CLA needs was part of the assessment of the value for money of placements, not just cost in isolation and that the contractual framework of providers for CLA external placements provided rigour for value for money.

 

In response to a query about the underlying causes why children were brought into care, the Assistant Director - Children and Young People commented on national research on why the numbers of CLA were increasing. In describing the complex landscape of reasons, she identified that increased public awareness, legacy issues from the Ofsted inspection of CLA services, areas of high deprivation in the county and staff recruitment and retention issues all had an impact on the number of CLA. Additionally, reference was made to new areas of concern for CLA such as child sexual and criminal exploitation. The Chief Executive concurred, listing additional issues which contributed to the complex picture which was demanding to manage.

 

A short discussion took place on how many children were placed in care due to parental behaviour rather than the child’s behaviour. The Assistant Director - Children and Young People reported that a whole family approach aided with this challenge.

 

The challenge of recruitment and retention of Social Workers in Allerdale and Copeland was raised by a member. The Assistant  ...  view the full minutes text for item 6.

7.

2018/19 QUARTER 4 CORPORATE RISK REPORT pdf icon PDF 382 KB

To consider a report from the Director of Finance (Section 151 Officer)

Additional documents:

Minutes:

A report was considered from the Director of Finance (s151 Officer) regarding the 2018/19 Quarter 4 Corporate Risk Report. The report provided members with a progress update on the Council’s 2018/19 corporate risks for the fourth quarter to 31 March 2019.

 

The Director of Finance (s151 Officer) reported that no new risks had been identified and that the Management of Significant Contracts risk RAG rating had reduced due to the significant progress made and therefore had been moved back into ‘business as usual’. A summary of risk management changes at Quarter 4 was provided.

 

In discussing the Waste Management Contract risk, a member asked if  subcontractors subscribed to the same ethics as the County Council. The  Assistant Director - Economy and Environment advised that in general terms, they did.

 

A member queried whether the information contained within the Risk Register should be more detailed in order to identify officer accountability and provide members with confidence that the mitigation of risks were being monitored. The Director of Finance (s151 Officer) and Chief Executive assured the Committee that risk owners had the responsibility to follow detailed action plans which sat underneath the Risk Register.

 

Discussion took place on sickness absence with a member referring to the deep dive on the matter at a previous meeting. He highlighted that sickness absence numbers were still increasing and that this was a matter for management to resolve as the County Council’s People Management monitoring system was effective and efficient. The Executive Director - Corporate Customer and Community Services reported on the significant work being undertaken on sickness absence management throughout the Council, the work being undertaken by the Scrutiny Management Board on the issue and the long term plans to focus on and improve sickness absence.

 

The Chair reflected on the sickness absence deep dive and asked that sickness absence figures were further broken down into component parts with an increased level of detail presented. Differentiation was required to identify between single day and long term absences. It was important for members to understand if there were a small number of long term instance of sickness or a high number of short term absences in any future presentations.

 

A member highlighted the negative impact of inspections on County Council service provision and on officer time. He considered that preparation for inspections adversely affected the ability to deliver services and incurred financial costs. The Chair concurred, adding that there should be an appropriate level of regulation.

 

RESOLVED that,

 

1             Members note the content of the Quarter 4 report, and agree that it provides sufficient assurance that the current Risk Management arrangements are both robust and effective.

2             Members receive and note the presentation on the corporate risk; Prevention of and Placement Sufficiency for Children Looked After, given earlier in the meeting.

3             Members note that a report outlining the refreshed 2019/20 Corporate Risk Register is the next item on the agenda, and note that the deep dive review of a Strategic Risk for the September 2019  ...  view the full minutes text for item 7.

8.

2019/20 CORPORATE RISK REGISTER REFRESH pdf icon PDF 345 KB

To consider a report from the Director of Finance (Section 151 Officer)

 

Additional documents:

Minutes:

A report was considered from the Director of Finance (s151 Officer) regarding the 2019/20 Corporate Risk Register Refresh. The report presented a refreshed Corporate Risk Register for 2019/20, together with the supporting rationale for changes to the 2018/19 register, new and emerging risks. Once approved, the refreshed Corporate Risk Register would be updated on a quarterly basis and presented to the Committee in order to provide assurance that current risk management arrangements were both robust and effective.

 

In presenting her report, the Director of Finance (s151 Officer) reported that of the twelve corporate risks, ten would be rolled forward into the 2019/20 Corporate Risk Register following discussion by the Corporate Management Team (CMT). She reported on the Action Plans in place advising that all had milestones and tasks included. She confirmed that escalation of a risk would be recommended if CMT considered that a risk was not placed at the appropriate level. Reference was made to the uncertainty relating to core funding for the next financial year due to the absence of Government announcements on Fair Funding and 75% Business Rate Retention and that all risks were being addressed in the context of this uncertainty.

 

The Chair acknowledged the uncertainty in the ten year financial planning model in the context of the absence of government announcements on funding. She expressed her wish to have a five year financial planning model in addition to highlighting that financial planning was based on some assumptions. She reported that the Better Care Fund and Improved Better Care Fund would remain and would not be included in the £50m gap in the Medium Term Financial Plan. A short discussion took place on the merits of Unitary Authorities and their impacts on finance.

 

Following a member question, the Assistant Director Economy and Environment provided members with the rationale as to why the risk ‘strategic waste management contract does not deliver the services to the level required’

was not included in the proposed Corporate Risk Register. The management of this risk would be at Directorate level. The waste contract, however was a significant contract and reporting of this contract would be part of risk 9 ’There is a risk that the Council has a failure in significant contracts’. He undertook to advise members outside of the meeting about the name of the waste management contractor which may have recently changed. The Chair expressed her concern around the lack of Committee visibility and timeliness of escalation should the risk increase.

 

It was noted that following member discussion in the Deep Dive earlier in the meeting, the causal factors in the risk ‘Prevention of and Placements Sufficiency for Children Looked After’ would be reworded.

 

The Chair advised that the strategic Risk for the September 2019 Audit and Assurance Committee would be agreed at the 26 July 2019 meeting.

 

RESOLVED that,

 

1             Members note the summary of refreshed risks and agree that they adequately cover all areas of Strategic Risk. 

2             Causal factors in the risk ‘Prevention of and Placements  ...  view the full minutes text for item 8.

9.

ANNUAL REVIEW OF AUDIT COMMITTEE EFFECTIVENESS 2018/19 pdf icon PDF 339 KB

To consider a report from the Director of Finance (Section 151 Officer)

 

Minutes:

A report was considered from the Director of Finance (s151 Officer) regarding the Annual Review of the Audit and Assurance Committee’s Effectiveness 2018/19. The report provided a review of the work of the Committee against the core functions of an audit committee as defined within the CIPFA Position Statement on Audit Committees in Local Authorities and Police 2018. The analysis of how the Committee matched the core functions was included in Appendix 1 of the report.

 

The Director of Finance (s151 Officer) reported on the business conducted at the meetings of the Committee held over the previous twelve months. She was pleased to report that against the CIPFA core purpose statements for audit committees, the Audit and Assurance Committee compared well.

 

RESOLVED that, Members note the report and confirm the assessment of   conformance with the core functions of an audit committee per the 2018 CIPFA Guidance as set out at Appendix 1 of the report

10.

INTERNAL AUDIT ANNUAL REPORT 2018/19 pdf icon PDF 571 KB

To consider a report from the Group Audit Manager.

 

Minutes:

A report was considered from the Group Audit Manager regarding the Internal Audit Annual Report 2018/19. The report provided a summary of the outcomes of the work of Internal Audit for 2018/19 and included the Head of Internal Audit’s opinion on the effectiveness of the Council’s arrangements for governance, risk management and internal control in accordance with the requirements of the Public Sector Internal Audit Standards (PSIAS).

 

The Group Audit Manager reported that he could provide reasonable assurance over the reported effectiveness of the Council’s arrangements for governance, risk management and internal control. He reported that 65% of Risk Based Audits had resulted in Reasonable or Substantial assurance which was a slight improvement on 2017/18.  He commented on the Audit Opinion statements available to him using the agreed Internal Audit reporting methodology and advised that 44 reviews had been completed or were at draft report stage. He highlighted that all audit work had been conducted in accordance with the Public Sector Internal Audit Standards and advised on a threat to Internal Audit’s independence and the mitigating safeguards put in place to resolve this.

 

Members were informed about the follow up work on the Highways Supply Chain (Operated Plant) Audit Review and members were provided with the definition of a ‘chequebook school’. Discussion ensued on what the Committee could do to help the Group Audit Manager raise the profile of Audit reviews to ensure that recommendations were followed up by directorates. Committee oversight of the audit review process was considered to be a positive contribution to the work of Internal Audit, by the Group Audit Manager.

 

The Chair was concerned that the Waste Management Contract risk which had transferred to the responsibility of the Directorate Management Team, would result in a lack of visibility for the Committee. She queried how assurance could be given to members that recommendations were being actioned. The Chief Executive provided assurance that Executive Directors had responsibility for addressing the recommendations of the Audit. Using the Highways Supply Chain (Operated Plant) Audit Review as an example, the Chair queried how the Committee would know if directorates were not implementing recommendations.

 

In acknowledging the Chair’s concerns, the Engagement Manager – Grant Thornton considered that an effective governance framework which allowed the escalation of issues should provide assurance for the Committee. The Group Audit Manager confirmed Executive Director oversight of the progression of Audit recommendations and reassured members that if he had any concerns, the issue would be brought before the Committee for consideration.

 

RESOLVED that, members note:

a)    The progress in delivering the 2018/19 audit plan and the outcomes of completed audits set out at Appendix 1 of the report.

b)    The Head of Internal Audit’s opinion of reasonable assurance over the adequacy and effectiveness of the Council’s arrangements for governance, risk management and internal control for the year ended 31 March 2019.

c)    The Head of Internal Audit’s declaration of conformance with the mandatory PSIAS.

d)    The Head of Internal Audit’s declaration of safeguards put in place  ...  view the full minutes text for item 10.

11.

SENIOR INFORMATION RISK OWNER (SIRO) & INFORMATION GOVERNANCE ANNUAL REPORT 2018-19 pdf icon PDF 146 KB

To consider a report from the Executive Director - Corporate Customer and Community Services

Additional documents:

Minutes:

A report was considered from the Executive Director – Corporate, Customer and Community Services regarding the Senior Information Risk Owner (SIRO) and Information Governance Annual Report 2018-19. The report provided an update relating to the responsibilities of the Cumbria County Council SIRO and outlined activity and performance related to information governance. It provided an update on information risks, how risks were managed, the governance process in place, what was going well and where improvements were required.

 

The Executive Director – Corporate, Customer and Community Services reported on the end of year target Risk Score, the increased number of reported data breaches and increased no of requests for information and Freedom of Information requests. She explained the work being undertaken on breaches of data and the number of referrals made to the Information Commissioner, all of

Which had since been closed to his satisfaction. Members’ attention was drawn to the Action Plan 2019/20 which would further strengthen the Council’s Governance arrangements.

 

Following a query on the use of the blind copy email facility, the Information Governance Manager commented on its importance for the business of the Council. Reasons for the small number of data breaches were provided for members and the new ways of working that had been introduced to ensure further breaches did not occur were reported.

 

RESOLVED that,

 

1             The content of the 2018-19 SIRO Annual Report attached as Appendix 1 to the report be noted.

2             The council’s approach to risk management which enables consideration of the nature of information governance risks and the adequacy of controls and mitigations be noted.

12.

GRANT THORNTON ITEMS

12a

External Audit - Fees letter 2019/20 pdf icon PDF 198 KB

Minutes:

The Engagement Lead from Grant Thornton presented their letter detailing the  Planned Audit Fee for 2019/20. The letter included the scale fee, scope of the audit fee, the value for money conclusion, Pensions Fund audit, the online audit timetable, identified the key members of the audit team, information about additional work and the commitment of Grant Thornton to providing a high quality service.

 

The Engagement Lead from Grant Thornton emphasised that the scale of the audit had not changed since the previous year and that the timescale was that which was to be expected. He commented on the focus on regulation rather than outcomes for Local Authorities. The Code of Audit Practice was currently being consulted on and the County Council was encouraged to contribute. He advised on the recommendations that Grant Thornton would be making in terms of remit, a change to value for money and to undertake audits at a different time of year,

 

The Chair, in noting that fees had not increased over a number of years and the implications of this, highlighted that members were aware of the challenges within the audit system.

 

RESOLVED that, the fees be noted.

13.

FORWARD PLAN - AUDIT AND ASSURANCE COMMITTEE pdf icon PDF 157 KB

To note the Forward Plan for the Audit and Assurance Committee and agree any additional items

Minutes:

The Forward Plan for the Committee was noted.

 

The Deep Dive for the September meeting would be confirmed at the 26 July meeting of the Committee.

14.

DATE & TIME OF NEXT MEETING

The next meeting will be held on 26 July 2019 at 10.30am at Cumbria House, Botchergate, Carlisle.

 

Minutes:

The next meeting of the Committee would be held on 26 July 2019 at 10.30am at Cumbria House, Carlisle.