Agenda and draft minutes

There were no apologies for absence.

To note any changes to the membership of the Committee.

There were no changes in membership for this meeting.

To disclose any personal and prejudicial interests relating to any item on the agenda.

NB   The following is a summary of what constitutes a personal interest and a personal and prejudicial interest.  Please seek advice or refer to the Code of Conduct (paragraph 8) for full definitions.

Personal Interests

You have a personal interest if the issue being discussed in the meeting affects the well-being or finances of you, your family or your close associates more than most other people who live in the Electoral Division affected by the issue.

Personal interests are also things that relate to an interest you must register.

N.B. If the personal interest arises because of your membership of another public body, you only need to declare it if you intend to speak.

A personal interest should be declared as follows:

I have a personal interest in agenda item […] regarding the report on […] because I am […].

Personal and Prejudicial Interests

If you have a personal interest in a matter you will also have a prejudicial interest in that matter if the interest is one which a member of the public, with knowledge of the relevant facts, would reasonably regard as so significant that it is likely to prejudice your judgement of the public interest.  If you have a personal and prejudicial interest you must withdraw from the meeting room for that item, unless you are there to make representations and the public have the same opportunity to do so

NB You only have a prejudicial interest if the matter

·        affects your financial position or that of your family, close associate, employer etc or it

·        relates to a regulatory matter

A personal and prejudicial interest should be declared as follows:

I have a personal and prejudicial interest in agenda item […] regarding the report on […] because I am […].

Advice on this can be sought from staff in the Legal and Democratic Services.  Members are requested to seek advice, wherever possible, before the meeting starts.

There were no declarations of interest.

To confirm as a correct record the minutes of the meeting of the Committee held on 5 December 2011 (copy enclosed).

RESOLVED,  that, subject to “Mrs Ballard” in the attendance list being amended to read “Mrs Bellard”, the minutes of the meeting of the Committee held on 5 December 2011 be confirmed as a correct record and signed by the Chair.

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 for which the press and public should be excluded.

To consider a report by the Assistant Director – Policy and Performance (copy enclosed).

The Committee, at its meeting held on 19 September 2011 (see minute no. 28), had asked for a report on the role and function of the Corporate Management Team Programme Board (CMTPB) which:

• gave members some assurance that major projects were being

properly monitored and the system was working well

• described what information the Board received and how often it

met

• explained whether corporate risks were considered as part of the

process

In response to a question about the Council’s capacity to manage this number of major projects, the Committee were advised that this was a key issue for the Corporate Management Team. Resources needed to deliver each major project were considered by CMT Programme Board as part of consideration of both the Project Initiation Document and the Business Case. There was recognition of the need for prioritisation and for external expertise to be brought in where necessary.

At the end of each project a report on the lessons learned was considered by the Programme Board. This was also shared across the organisation.

In terms of the linkages with corporate risks, the Committee were advised that risks were assessed at each stage of a project. However, there was still work to do to align major project risks with corporate risks to ensure a seamless approach.

RESOLVED,  that

(1)               the governance and methodology for the management of large scale change and investment programmes, and in particular the in-built processes for identifying and managing risk be noted

(2)               a 6 monthly report (the frequency to be reviewed later) be submitted to the Committee on the lessons learned from implementing the new Programmes and Projects methodology as well as the outcome of health-checks described in paragraph 6.2 of the report.

To consider a report by the Assistant Director – Public Protection (copy enclosed).

Members considered a paper which provided an update on the management of Corporate Risks for Quarter 3, 2011/12 (as at end December 2011) and provided an outline summary of improvement actions which had taken place since the last meeting.

Members focused on two particular areas – the risks relating to waste and also Cumbria Care modernisation. Regarding the waste risks the Committee received an explanation as to why one risk on waste had now been split into three separate risks. After the change in the management of the Environment Directorate in November 2011 risks regarding waste had been re-assessed and re-categorised to give a fuller picture. Members expressed concerns about the corporate risk process as some of the risks relating to waste had existed before November 2011 and how the risk ratings for the three disaggregated waste management risks were significantly higher than that for  the original risk rating. The point was made that it might be that a re-assessment of the other corporate risks could lead to similar, fundamental changes.  The risk rating for the modernisation of Cumbria Care was felt to be excessively optimistic. As a result the Committee concluded by questioning the adequacy and rigour of the peer review process on corporate risks.

RESOLVED,  that the report be noted.

To consider a report by the Senior Manager – Audit (copy enclosed).

Members considered a report which provided a review of the work of Internal Audit for the first ten months of 2011/12.

Members noted with some concern that the proportion of reports providing limited and partial assurances continued to show an upward trend, raising significant concerns about the overall effectiveness of internal control. In previous years some 20% of reports had provided limited and partial assurances but the proportion had now increased to 40%. In addition, these partial/limited assurance reports were in significant areas of the Council’s activities, rather than being focused on individual establishments. The Senior Manger Audit commented that, further to his report in December 2011, and in the light of this information, it would be difficult to maintain the reasonable level of assurance in Internal Audit’s annual report on internal control provided in recent years.

The Corporate Director – Resources assured members that the Chief Executive and her Corporate Management Team took internal control very seriously.  As members were aware, the Council had been under significant pressures with the need for £40 million plus ongoing savings, reductions in staffing levels, implementation of single status, and major reorganisations and restructures across directorates. Given such circumstances, it was not surprising that there had been an adverse effect on internal control. Some of the issues identified in the report were already being addressed and corrected.  The Committee considered that they required further assurances that adequate controls had been put in place and concluded that the Chief Executive should be invited to attend a special meeting to address their concerns.

Members also asked for more detail on Grade 1 recommendations so that the Committee could better understand the context and significance of the recommendations and satisfy itself that appropriate actions were being taken to address these recommendations.

RESOLVED,  that

(1)       the progress achieved to date in delivering the audit plan and the

impacts arising from audit reports set out in Appendix 1 to the report be noted

(2)       The detailed audit work highlighted in the report, including contract

management, information governance, partnerships, payroll, direct

payments and payments to carers, post project evaluation work,

investigations and hot assurance be noted

(3)       In the light of the relatively high number of reports providing limited or partial assurance which raised significant concerns about the overall

effectiveness of internal control, the Corporate Management Team be advised in writing of the Committee’s concerns about this and the Chief Executive be invited to attend a special meeting of the Committee by the end of March to address members’ concerns.

(4)       the results of the National Fraud Initiative work identifying

overpayments of £71,000 set out in Appendix 2 to the report be noted.

(5)       more detail be provided on Grade 1 recommendations as discussed above.

The meeting adjourned from 12.55pm until 1.20pm with the same members present with the exception of Mr Stewart.

To consider a report by the Senior Manager – Audit (copy enclosed).

Members considered a report which set out a draft Audit Plan for 2012/13 and provided an opportunity for the Committee to review proposals before presentation of the final plan with resourcing at the next meeting.

The Corporate Director – Resources indicated that in response to the debate on the previous agenda item, the final audit plan for 2012/13 would be discussed with the Corporate Management Team before presentation to the Committee for its consideration and that the audit plan would continue to be prepared on a risk basis; focusing on key areas and emerging themes, including hot assurance.

In response to a query whether the Council was receiving all of the monies it was due as a result of  reinstatement works by utility companies,  the Chair noted that this was the subject of an annual review and would be looked at by the Committee in September.

RESOLVED,  that

(1)               the draft audit strategy for 2012/13 (Appendix 1 to the report) and terms of reference for Internal Audit (Appendix 2 to the report) be noted

(2)               the proposed approach to audit planning (Appendix 3 to the report) be noted.

To consider a report by the Corporate Director – Resources (copy enclosed).

Members considered a report which summarised the progress to date on the preparations for the Council’s and Cumbria Local Government Pension Scheme Statement of Accounts 2011/12. The report noted that the Council had significantly improved its preparation of 2010/2011 claims and returns.Good progress had been made in implementing recommendations and no further recommendations were made for improvement following this year’s certification work.

The Committee were advised that the expectation was that the draft accounts would be prepared in accordance with the statutory timetable.

RESOLVED, that

(1)       progress against the 2010/11 Annual Governance Report action plan (paragraph 4.1) be noted

(2)       the high level timetable for the closedown of the Council’s (paragraph 4.11) and the Cumbria Local Government Pension Scheme (paragraph 4.17) 2011/12 accounts be noted.

To consider a report by the Corporate Director – Resources (copy enclosed).

Members considered a report which proposed a revised componentisation policy for 2011/12.

RESOLVED,  that

(1)               the contents of the report be noted

(2)               the revised componentisation policy for 2011/12 be noted.

To consider a report by the Senior Manager – Audit (copy enclosed).

The Audit and Assurance Committee approved the Annual Governance Statement at its June 2011 meeting, together with an action plan in respect of the 2010/11 significant governance issues.

The Corporate Governance Group, chaired by the Deputy Monitoring Officer, had continued its work to prepare the Annual Governance Statement for 2011/12 and associated corporate governance assessments. It had reviewed the action plan drawn up last year and had noted progress being made against all actions.

RESOLVED,  that the good progress against the action plan in Appendix 1 to the report be noted.

To consider a report by the Senior Manager – Audit (copy enclosed).

Members considered a report which provided an update on the work to consolidate the Council’s anti fraud and corruption policies, including money laundering and whistle blowing, in light of the 2010 Bribery Act.

RESOLVED,  that

(1)               the draft Anti Bribery Policy, set out in Appendix 1 to the report, be noted

(2)               a consolidated set of anti fraud and corruption polices be submitted to the June meeting.

To consider a report from the Audit Commission (copy enclosed).

Members considered a paper from the Audit Commission which provided the

Committee with a report on progress in delivering the Commission’s responsibilities as the Council’s external auditors. It included an update on the externalisation of the Audit Practice.

Members were advised that Grant Thornton had been awarded the contract to provide outsourced audit services to local authorities and the NHS in the North West. This was part of a new national framework of outsourced audit contracts which would replace the District Audit Service. (See also minute no 75)

With regard to the key considerations set out in the paper, a response to each point would be provided to members.

RESOLVED,  that the report be noted.

To consider a report from the Audit Commission (copy enclosed).

Members considered a paper from the Audit Commission which summarised the outcomes of their certification work on the Council’s 2010/11 claims and returns in respect of grants and subsidies from central government and other grant-paying bodies.

The significant improvement in performance in 2010/11 reflected in the reduction in the Audit fee was and the absence of recommendations for action was highlighted.

RESOLVED, that the report be noted.

To consider a report from the Audit Commission (copy enclosed).

Members considered the Audit Commission’s 2011/12 Audit Plan for the Cumbria Pension Fund. This plan set out the work for the 2011/12 audit. The plan was based on the Audit Commission’s risk-based approach to audit planning.

RESOLVED,  that the report be noted.

To consider letters from the Audit Commission together with replies from the Chair of the Committee (copies enclosed).

Members considered letters from the Audit Commission regarding the Audit of the both the County Council and the Local Government Pension Scheme’s Financial Statements for the year ending 31 March 2012. Draft responses from the Chair of the Committee were also considered.

RESOLVED,  that the suggested responses to the Audit Commission’s letters be agreed.

To consider a report by the Senior Manager Audit (copy enclosed).

Members considered a paper on the future of local public audit in light of the proposed abolition of the Audit Commission.

The Committee were advised that the new local government audit contracts awarded to private audit firms from September 2012 would run for 5 years. Therefore it would not be until September 2017 before the Council appointed an external auditor. (See also minute no 71)

RESOLVED,  that

(1)       the Government’s response to the consultation and the summary of responses (Appendices 2 and 3 to the report) be noted

(2)       the proposed timetable for external audit arrangements be noted.

To consider a report from the Senior Manager – Audit (copy enclosed).

Members considered a report which provided an update of the work programme for the Audit and Assurance Committee, together with the latest position in respect of the Committee’s monitoring of previous decisions. An updated version of the latter was tabled at the meeting.

RESOLVED,  that the updated draft work programme and monitoring report be noted.

(1)   To consider changing the date of the 28 September meeting to ensure there is sufficient time following the meeting to publish the accounts by the statutory deadline (30 September).

(2)   Subject to the above to note the dates of forthcoming meetings

7 June 2012 at 10.30 am

17 September 2012 at 10.30am

28 September 2012 at 10.30am

7 December 2012 at 10.30am

8 March 2013 at 10.30am

Members agreed to change the date of the 28 September meeting to 26 September in order to ensure there was sufficient time following the meeting to publish the accounts by the statutory deadline (30 September).

As a result the dates of forthcoming meetings were noted as follows

7 June 2012 at 10.30 am

17 September 2012 at 10.30 am

26 September 2012 at 10.00 am

7 December 2012 at 10.30 am

8 March 2013 at 10.30 am