Agenda and minutes

Audit and Assurance Committee - Monday, 9th December, 2019 10.30 am

Venue: Conference Room A and B, Cumbria House, Carlisle, CA1 1RD

Contact: Nicola Harrison  Email:

No. Item



To receive any apologies for absence


Apologies for absence were received from Mr F Cassidy



To note any changes to the membership of the Committee


Mr F Morgan replaced Mr F Cassidy as a member of the Committee for this meeting only.



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.




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).


There were no disclosures of interest made at the meeting.



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


There were no items on the Agenda for which the press and public should be excluded.


MINUTES pdf icon PDF 102 KB

To confirm as a correct record the minutes of the meeting of the Committee held on 17 September 2019


RESOLVED that, the minutes of the meeting held on 17 September 2019 be agreed as a correct record and signed by the Chair.


DEEP DIVE RISK ANALYSIS - Learning Disability Partnership Arrangements

To receive a presentation from the Assistant Director - Strategic Commissioning.


The Deep Dive for this meeting was Learning Disability Partnership Arrangements. 


The presentation was delivered by the Senior Commissioning Manager - Learning Disability/Mental Health/Autism and covered the following:


·         The Risk – 3 Key Factors

1.    Uncertainty on financial resource transfer into the health and social care economy in Cumbria.

2.    A lack of availability of suitable and affordable service and support providers and limited capacity within existing service and support providers.

3.    Failure to meet statutory requirements leading to reputational damage to the Council and individuals not having their care and support needs met close to home.

·         Quarter 2 Risk Rating

·         Background

·         Examples

·         Quarter 3 Risk Rating


A member sought assurance regarding the best way to support someone who may need in-patient treatment. The Senior Commissioning Manager reported that the Edenwood NHS assessment and treatment service had 6 places to cover all of Cumbria. He explained that there was also an enhanced community model service now in place to address issues with admittance and by working to this new model, the team had prevented 12 hospital admissions that at one time would have been inevitable. The Senior Commissioning Manager assured members that if a person was assessed and needed hospital in–patient treatment then they would get it, but the concern was that in the past, people were being admitted to hospital only because there was not any other option.


A member asked to what extent new providers had embraced the ‘Step-up, Step down’ process and the new framework and questioned whether the team were confident with using it in the future. The Senior Commissioning Manager informed members of the work that the team had carried out with the 32 providers currently on the additional needs Framework. A recent summit had been held with all providers which had helped to create a much more open dialogue about the Council’s requirements and helped develop an understanding of provider needs. It was clarified that of the 32 providers which had now agreed to this framework, 16 of them were new to partnership arrangements with the Council.


In response to a question regarding the current risk rating the Senior Commissioning Manager assured members that one of the key objectives of the commissioning service was to build good relationships with providers based on a genuine partnership approach and ensure quality provision which in turn would further reduce the Council’s exposure to risk.


Members were informed that before putting in place the additional needs Framework, the service identified an estimated 75 people who were potentially in need of some form of support.  There were an estimated 30 people identified as living out of county. The Senior Commissioning Manager clarified that the wider objective of the additional needs framework would be to provide for those who genuinely presented a challenge to how they were supported and whose needs could not be met through general domiciliary care and may need more specialist support.


After a question which sought clarification about the role of local providers, members heard about  ...  view the full minutes text for item 42.


2019/20 Quarter 2 Corporate Risk Report pdf icon PDF 126 KB

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

Additional documents:


A report was considered from the Director of Finance (s151 Officer) regarding the 2019/20 Quarter 2 Corporate Risk Report. The report provided Members with a progress update on the Council’s 2019/20 corporate risks for the second quarter to 30 September 2019.  The report included a proposal to separate the combined Children and Adults Safeguarding risk to provide greater clarity of the improvements being made in the area of Adults Safeguarding. As a consequence, one additional Corporate Risk had been added to the register compared to the last quarter. Overall, no risk scores had changed since the last quarter.

The Senior Risk Officer updated the members in detail on the progress made since the last quarter. This included a summary of the Corporate Risks, changes to the Corporate Risks compared with the previous quarter, new and closed off risks, rescored risks and emerging risks. She advised that the Quarter 2 risks had been reviewed by the Risk Owners Group, at Cabinet Briefing and by the Corporate Management Team. It was noted that there had been no changes to the risk scores in the last quarter at the mid-point of the year. Notable Emerging Risks in 2019/20 were explained.

Members were informed that the separation of the Safeguarding of Children and Adults into two corporate risks had been approved by the People Directorate Management Team and Corporate Management Team.

Members’ attention was drawn to an administrative error in Risk 3 (Deliver a Financially Sustainable Authority) where the previous quarter risk score should have been 20 not 15. It was confirmed that there had been no change to the Risk scores in Quarter 2.

The Assistant Director - Organisational Change reported on the reasons why the risk scores relating to Information Security Arrangements and ICT Cyber Security remained higher than the end of the year target scores. Cyber risk was explained to be both a national and regional risk which was due to the potential for increased criminal and disruptive attacks. Local authorities held large volumes of sensitive personal and commercial data which if targeted, corrupt or lost, may have significant impacts on the Council’s operations and business continuity arrangements. The implications of a significant data breach or security failure was outlined for the Committee. He reported on the significant progress made on this risk (including the appointment of a dedicated officer and improved ICT Firewalls and externally accredited PSN certificate) and was pleased to also report that Internal Audit had undertaken an independent review and the outcome had been a positive ‘reasonable’ assurance.

In terms of Data Protection, the Assistant Director - Organisational Change reported on the extensive GDPR and Information Security training provided for and taken up by officers and members and the dedicated officer responsible for this work. The risk therefore related to the likelihood of a data breach. The Assistant Director - Organisational Change reported on the number of breaches per month, explaining that the reason for data breaches was mainly due to human error. He stated that this  ...  view the full minutes text for item 43.



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

Additional documents:


A report was considered from the Director of Finance (s151 Officer) regarding the draft Treasury Management Strategy Statement.  The report advised that the CIPFA Treasury Management Code and Prudential Code required the Council to determine its Treasury Strategy and Prudential Indicators on an annual basis in advance of the new financial year. The draft Strategy in Appendix 1 of the report would be presented to full Council in February 2020 for review and approval. The draft Treasury Management Strategy Statement was consistent with the 2019/20 strategy statement approved by Council in February 2019.

The Group Finance Manager - Pensions Investments and Insurance guided members through the background to the draft Treasury Management Strategy Statement. He reported on the Council’s existing borrowing which was predominately from the Public Works Loan Board and that due to the increase in PWLB borrowing rates by 1% in October 2019 the Council would be reviewing all alternative options for future borrowing arrangements. He commented on the prospect for interest rates’ changes due to the General Election and expected withdrawal from Europe. He advised that the forecast may change before it was presented to full Council in February 2020.

A member expressed his disappointment at the increase in PWLB borrowing rates and talked about the type of projects that other local authorities invested in such as cinemas and shopping centres. The Director of Finance (s151 Officer) reported that there had been suggestions from the sector that differential PWLB rates could be offered for different types of investment. This was expected to remain a topic of interest. She suggested that there may also be discounted rates for investment in particular types of projects.

RESOLVED that, the Audit and Assurance Committee approve in principle, the draft Treasury Management Strategy Statement 2020/21 as set out in the Appendix to the report, before the finalisation of the Strategy Statement for Council’s approval in February 2020



To consider a report from the Group Audit Manager


A report was considered from the Group Audit Manager regarding the Internal Audit Progress report to 31 October 2019. The report provided a summary of the work of Internal Audit in the three months to 31 October 2019.  The key points included that work was progressing on the reviews in the 2019/20 audit plan and it was anticipated that sufficient overall coverage would be achieved by 31 May 2020 to enable the Head of Internal Audit to provide the 2019/20 annual opinion.


The Group Audit Manager informed members of the outcomes from Final Audit Reports and on the progress of follow up audits to 31 October 2019. With regard to the two school, assurance levels had improved from limited assurance to reasonable assurance.


Internal Audit had also been involved in other work such as completing work on 6 grant claims bringing the total claims audited to 10 for the current year. The Group Audit Manager highlighted this as a growth area in their work as Government continued to provide some funding through specific grants and often required both audit and the Council’s Chief Executive to sign off that funding had been spent in accordance with grant conditions. Internal Audit had also provided support and advice on the implementation of the new ADAM system.


The Group Audit Manager gave a summary of the draft reports issued to 31 October 2019, focussing on the follow up work undertaken on the ICT Strategy which when undertaken a few years earlier had been given limited assurance. Following review, this now had Reasonable Assurance. The status of internal audit work was reported, with the Group Audit Manager stating that sufficient reviews should be completed in order for him to give his Audit Opinion in 2020.


A member stated that in his experience as a school Governor, audit review outcomes may be affected by work practices in schools, commenting on the large number of policies that had to be adhered to. The Group Audit Manager explained how audits were undertaken in schools and talked about the overall summary of audits which highlighted the key audit messages which were then presented and considered by the Schools Forum.


A number of members stated that effective training for Clerks to School Governors was required. The Director of Finance (s151 Officer) undertook to report this to the Governor Support Service. She highlighted that there had to be cooperation between schools and the Council for the sharing of knowledge and training. A member talked about his own practice to identify where schools lacked expertise in order that he could be confident that when he supported a new School Governor, the skills and knowledge gap was filled.


Following a query from a member, the Director of Finance (s151 Officer) explained the rules for schools who set a deficit budget. She explained how the National Schools Funding Formula was determined and that it had implications for the financial operation of small schools in the county.


The Chair welcomed that the follow up  ...  view the full minutes text for item 45.




Audit Progress Report pdf icon PDF 560 KB

To consider a report from Grant Thornton


The Committee considered the Audit Progress Report and Sector Update from Grant Thornton. The report provided a report on progress in delivering Grant Thornton’s responsibilities as Cumbria County Council’s external auditors. The paper also provided a summary of emerging national issues and developments which were relevant to the Council and included a number of challenges and questions in respect of the emerging issues which the Committee could consider.


The Engagement Lead – Grant Thornton explained that an ethical issue had arisen as a member of the local Grant Thornton audit team had applied for a post in the County Council’s Finance Team. He set out the implications and ethical issues before the Committee and stated that the local Grant Thornton team may be unable to work on the Council’s and Pension Fund Audits. He set out the challenges and implications when using an out of area team to perform an Audit. He advised that due to these issues, Grant Thornton may be unable to commit to the Committee’s Forward Plan and deliver the County Council and Local Government Pension Scheme final Audits by 31 July 2020. A member stated that having to change an audit team as a result of potential ethical issues was normal practice.


The Chair acknowledged the implications for the Committee and the impact on the close down of the Accounts. She sought assurance that there would be no negative impact from the County Council’s point of view if the accounts were produced on time but were not audited by Grant Thornton. The Engagement Lead – Grant Thornton explained that he would liaise closely with the Director of Finance (s151 Officer) on this matter.


The Engagement Lead – Grant Thornton highlighted errors in the presentation of the Council’s Teacher’s Pension Fund End of Year Certificate (EOYC). This related to testing undertaken by Grant Thornton. However, the audit process had not yet been completed. The auditors findings had been received by the Council and these were subject to review by the Council’s team.


The Engagement Lead – Grant Thornton explained how the work undertaken had impacted on the Audit Fee which had increased from £4,900 to £8,800. The Chair welcomed that this issue had been brought to the Committee’s attention.


The Director of Finance provided some background to the annual return. The return to the Teachers Pensions Agency was summarised as being £25m worth of employees and employers contributions for 2018/19. The Senior Manager - Accountancy (Deputy S151 Officer) attended the meeting to provide a detailed explanation to the Committee of the work the team had undertaken to respond to the auditors’ findings. He explained that a contract was not in place between the pension provider and the County Council (it was with schools and the provider) but he confirmed that work would take place with the provider to rectify the issue for 2020. He advised that this had been a data returns issue. He explained his testing process in detail and confirmed that the provider had been  ...  view the full minutes text for item 46a



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


The Committee’s Forward Plan was considered. Mr Kelly reiterated that Grant Thornton’s reporting timetable may need to be amended. County Council officers would be advised of any changes in due course and would work together on the submission of reports to the Committee.


The Director of Finance (s151 Officer) stated that the Chair of the Committee would be presenting the Minutes of the Committee meeting which signed off the Annual Accounts (usually the July meeting) to full Council so any changes to the timetable would need to be known in advance of the meeting.



The next meeting of the Committee will be held on 17 March 2020



The Chair thanked officers from Finance, Grant Thornton and Democratic Services for their support to the Committee.


The next meeting of the Committee will be held on 17 March 2020.