Agenda and minutes

Audit and Assurance Committee
Monday, 21st March, 2016 10.30 am

Venue: Committee Room 2, The Courts, Carlisle, CA3 8NA. View directions

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 T Knowles and Mr S Collins.

 

Mr N Marriner took the Chair for this meeting only

2.

MEMBERSHIP

To note any changes to the membership of the Committee.

Minutes:

There were no changes in membership.

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:

Mr L Fisher declared a personal interest in Agenda Item 10, as he owned a Blue Badge.

4.

Minutes pdf icon PDF 67 KB

To confirm as a correct record, the Minutes of the meetings of the Committee held on 10 and 23 September 2015 (copies enclosed).

Additional documents:

Minutes:

RESOLVED that, the Minutes of the meetings held on 10 September 2015 and 23 September 2015 be confirmed as a correct record.

5.

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:

There were no items for which it would be necessary to exclude the press and public.

6.

2015/16 QUARTER 3 CORPORATE RISK REGISTER pdf icon PDF 138 KB

To receive a report from the Chief Executive (copy enclosed)

Additional documents:

Minutes:

Members considered a report from the Chief Executive which provided members with a progress update on the 2015-16 corporate risk register for the quarter to 31 December 2015 and presented an overview of both risks and opportunities for each of the Council’s priorities.

 

The Chair referred to the recommendations for further improvement (evidence that elected members and members of the Audit and Assurance Committee had been provided with Risk Management training) and asked that efforts were made to ensure training sessions were well attended. Attendance at Corporate Risk training would be reported back to a future meeting of the Committee given that it was a significant area of work for members. The Committee was reminded that the Chair of the Audit and Assurance Committee regularly appraised members at full Council meetings, of the Corporate Risk issues and were therefore kept informed of risk matters.

 

The Assistant Director – Corporate Governance referred members to a horizon scanning update circulated at the meeting which related to Litigation Risk and Britain’s exit from the European Union. She stated that to date, no risks or opportunities had been identified. A summary was provided on risk changes, a new risk (Failure to meet regulatory standards of the Care Quality Commission) and two rescored risks. Discussion took place regarding the seven coasting county schools and the impact on the County Council should District Councils be unable to deliver their statutory services.

 

A member felt that the effects of the 2015 floods on the County were considered to be a risk as the outcomes were unknown. Members were advised by the Assistant Director – Finance that a report would be submitted to Cabinet regarding flood response and long term recovery. The County Council was preparing a claim to the Government’s Bellwin Scheme administered by the DCLG. What the Bellwin Scheme funding could be used for was outlined as well as the threshold that the council would have to fund from its own reserves and the date of submission of the claim. Separate to this, the Council would need to consider how it funded recovery. The recovery effort of the Council was reported to Lead Members through the Member Flood Recovery Group. The Council engaged with government through Ministerial Flood Recovery and Ministerial Infrastructure Groups. Consideration of the potential impact on the 2015/16 accounts i.e balance sheet values etc was being factored into year end plans.

 

RESOLVED that,

 

1                    The report be noted

2                    The report provides sufficient assurance that the current Risk Management arrangements are both robust and effective.

3                    Members contact the Assistant Director – Finance with any other areas of risk for further detailed examination at future Audit and Assurance Committee meetings.

4                    Risk Management training for elected members be arranged and attendance be reported back to a future meeting of the Committee.

7.

Corporate Risk - Health & Social Care Integration pdf icon PDF 200 KB

To receive a presentation from the Interim Corporate Director – Health and Care Services (slides enclosed)

 

Minutes:

Members received a presentation from Assistant Director - Health & Wellbeing on Health and Social Care Integration Corporate Risk. He provided a definition of the risk, explained what success would look like, advised on the three transformational programmes and the Council’s role in the programmes. An explanation was given on challenges, the ways forward, the management of the risk and the current/emerging operational risks.

 

The challenges relating to the funding gap within the NHS nationally and locally and how to achieve financial balance was raised. In response, an explanation was provided on the structural deficit and historical debt and how it was being addressed by new ways of working and models of care.  The level of engagement of partners and the limits of the County Council in addressing a number of challenges was considered. How the new NHS transformational changes across the County and five year plan would address most challenges was reported by the Assistant Director – Health and Wellbeing. One member raised concerns in relation to end of life care in community hospitals in West Cumbria and the monitoring of contractual arrangements. Members were informed of the differing time spans for integration in North and South Cumbria.

 

The Associate Director - Grant Thornton stated that he was pleased with the progress made on integration and commented on the current and future financial and cultural challenges. Of particular interest to him was prevention and he was pleased to note that this was at the forefront of the model. The Assistant Director - Health & Wellbeing advised on the activities to be undertaken to ensure the commitment of the County Council in terms of prevention. Comment was made on the differing cultures in the NHS, Council and Third Sector regarding prevention and how all were focussed on prevention, however, the challenge was to make it happen within the financial context and regulatory framework. Who was leading the transformation process was explained and the Council’s future role was outlined.

 

The deep dive item for the June 2016 meeting of the Committee was discussed. Members were asked to identify any issues for consideration from the Corporate Risk Register and advise the Assistant Director – Finance so the appropriate arrangements could be made.

 

RESOLVED that members advise the Assistant Director – Finance of any items from the Corporate Risk Register for consideration as a Deep Dive item for the next meeting of the Committee,

8.

Management of Attendance pdf icon PDF 124 KB

To receive a report from the Corporate Director – Environment & Community Services (to follow)

 

Additional documents:

Minutes:

A report was received from the Corporate Director – Environment and Community Services which set out an overview of the management of attendance by the Council to reassure the Audit and Assurance Committee of actions underway to manage the level of risk.

 

The Senior Manager, People Management reported that there had been a 3.3% overall decrease in absence across the Council since 2014/15. This had occurred in challenging circumstances as the council was reducing in size. Members expressed concern that in relation to Children’s Services and Highways, sickness absence figures were not showing improvement. Members requested that a follow up report be brought to the 20 March 2017 meeting.

 

Members were given an explanation of the processes involved in high frequency and/or long term absence cases after one member questioned the HR process in terms of self certification. A member who had considered a similar report at a Scrutiny meeting expressed his confidence in the improvement of the management of attendance and advised of the impact of absence on small teams in the context of a reducing workforce. The Assistant Director – Finance shared some examples of absence management practice in her department. Officers referred to the comprehensive information available and considered that the systems in use had improved.

 

Members welcomed the introduction of a new in-house Occupational Health service and were briefed on the HR process for support available to officers on long term sick leave.

 

The Senior Manager – People Management was thanked for attending the meeting.

 

RESOLVED that  an update report on Management of Attendance be brought to the 20 March 2017 meeting of the Committee.

 

 

9.

ANNUAL GOVERNANCE STATEMENT: ACTION PLAN 2015-16 PROGRESS UPDATE pdf icon PDF 114 KB

To receive a report from the Chief Executive (copy enclosed)

 

Additional documents:

Minutes:

A report was received from the Chief Executive regarding the Annual Governance Statement: Action Plan 2015-16 Progress Update. Members had previously considered the initial draft Annual Governance Statement for 2014/15 in June 2015. At the 10 September 2015 meeting, members had considered and approved a further report on the Annual Governance Statement  for 2014/15 that contained updates following review by the Council’s external auditor.

 

Members were informed that a new Assistant Director – Children and Families had recently been appointed

 

RESOLVED that  the progress made and prospects for addressing the two governance issues set out in the 2015/16 Annual Governance Statement Action plan in Appendix 1 of the report be noted.

10.

Internal Audit progress report to 31 January 2016 pdf icon PDF 240 KB

To receive a report from the Chief Executive (to follow)

 

Minutes:

A report was received from the Group Audit Manager regarding the Internal Audit progress report to January 31 2016 which provided a summary on the work of Internal Audit for the ten months up to 31 January 2016 and highlighted key points for the Committee to note.

 

The Parking Manager had been invited to the meeting to give an update on the Council’s enforcement arrangements relating to any identified misuse of the Blue Badge Scheme in the County. This related to Appendix 2 of the internal Audit progress report which detailed the controls in place over the issuing of blue badges. He informed the Committee of the number of penalty charges for Blue Badge contraventions and the fine imposed for contraventions. There had been a multi agency event in 2015 where the public could check their Blue Badge status and understand the rules and regulations applied to the scheme. There would be an engagement exercise with partners and the District Councils to ascertain the issues that Blue Badge holders encountered. To be addressed were the issues that members of the public with mobility issues encountered with scheme users (such as parking on pavements).

 

The initial assessment of limited assurance in relation to the draft audit report on the ICT Strategy was raised. It was noted that the scope of the audit was to provide assurance that the Council had an ICT Strategy that was fit for purpose rather than assurance in relation to user satisfaction of the service. The latter would be a matter for Scrutiny to consider, not the Audit and Assurance Committee.

 

RESOLVED that the progress and outcomes of Internal Audit be noted

11.

REVIEW OF AUDIT and ASSURANCE COMMITTEE EFFECTIVENESS pdf icon PDF 118 KB

To receive a report from the Chair of the Audit and Assurance Committee (copy enclosed)

 

 

Minutes:

A report was received from the Chair of the Committee regarding the Audit and Assurance Committee’s effectiveness. At the 23 March 2015 meeting, the Committee had agreed that an external trainer would be commissioned to provide training on the Committee’s effectiveness and to facilitate a self evaluation of the Committee against the 2013 CIPFA guidance. The agreed Action Plan was included for members’ consideration.

 

The Chair welcomed that the outcomes of the review were positive and that the Deep Dive issues included as Agenda items were considered to be an example of good practice. Members felt that the report provided recognition of the important role of the Committee within the County Council; however it was acknowledged that it was a challenge to make other members aware of the risks to the Council. This prompted a short discussion on the provision of Audit and Assurance Committee member training. Although it was recognised that members were not experts, the Assistant Director – Finance stated that members regularly and robustly challenged officers and that a review on the core topics would take place in order to present a training programme for members and reserve members of the Committee.

 

There had been a six months gap since the last Committee meeting due to the December 2015 flooding and recovery work, however, members were reassured that the Chair and Vice Chair of the Committee were regularly briefed on any Audit and Assurance issues.

 

RESOLVED that

 

1                    The outcomes of the Review of Effectiveness be noted

2                    The respective priorities of the actions contained within the Action Plan be confirmed

3                    The Assistant Director – Finance, Chair and Vice Chair of the Committee draft a training programme for members and reserve members of the Committee.

 

12.

Draft Internal Audit Plan 2016/17 pdf icon PDF 237 KB

To receive a report from the Chief Executive (copy enclosed)

 

Minutes:

Members received a report from the Group Audit Manager regarding the Draft Internal Audit Plan 2016/17 which had been prepared in consultation with senior management and in conformance with the Public Sector Internal Audit Standards (PSIAS).

 

It was clarified that the number of days allocated to a directorate risk based audit work related to the number of days that would be delivered by several auditors over the year rather that one Auditor undertaking the full amount of audit days.

 

RESOLVED that the draft Audit Plan and proposed approach to follow up Audits and the Audit Charter be approved.

13.

Preparation of Final Accounts 2015-16 pdf icon PDF 161 KB

To receive a report from the Chief Executive (copy enclosed)

 

Additional documents:

Minutes:

A report was received from the Assistant Director – Finance regarding the Accounts Preparation 2015/16 which summarised the progress to date on the preparations for the Council’s and Cumbria Local Government Pension Scheme Statement of Accounts 2015/16 and associated Value for Money conclusion.

 

The Senior Manager – Accountancy and Group Finance Manager - Pensions Treasury and Insurance presented the report in detail, adding that it was the statutory duty of the Assistant Director – Finance that the Accounts were prepared and reassured members that robust plans were in place for the governance of the County. Risks  in relation to the delivery of the unaudited accounts had been taken into account. Key areas of risk were explained and the work to address them. It was acknowledged that the quality of the accounts in recent years was of a high standard. The timeline for the year end position to be considered by full Council was outlined. The Group Finance Manager - Pensions Treasury and Insurance explained  the changes to accounting, key dates  and the risks that had been identified. An additional pressure in this financial year was the work being undertaken with regard to pensions pooling but officers felt able to manage their workloads.

 

Accounting for Trust Funds was discussed as members wanted to understand the impact on officer time in pursuing what was considered to be on occasion, negligible amounts of money. Members were reassured that the best was done at least cost to the Council and liaison with the Charity Commissioner was taking place.

 

The Committee noted the acceleration of the statutory deadlines for the preparation and audit of the accounts in 2017/18 and the work underway this year to prepare for this.

 

RESOLVED that

 

1                    The high level timetable for the closedown of the Council’s and the Cumbria Local Government Pensions Scheme 2015/16 accounts be noted.

2                    The general financial reporting issues facing all local authorities for 2015/16 identified by Grant Thornton be noted

3                    Potential risks for the closure of the CCC and CLGPS 2015/16 accounts be noted.

4                    The update on the Value for Money (VFM) approach to determine the VFM conclusion as part of the final accounts process be noted.

14.

Local Audit and Accountability Act 2014 pdf icon PDF 117 KB

To receive a report from the Assistant Director, Finance (S151 Officer) (to follow)

 

Minutes:

A report was received from the Assistant Director – Finance regarding the Local Audit and Accountability Act 2014 which provided a summary of the options available to the Council and provided a recommendation for the Committee that the Council opted in to sector led procurement arrangements at such time as the arrangements were implemented and approved by the Secretary of State.

 

A discussion took place and the Chair commented on the option for the joint Panel but felt this was not an option given the associated costs.

 

RESOLVED that the Audit and Assurance Committee make a recommendation to full Council at the appropriate time, to opt in to sector led procurement of the Council’s External Auditor from 31 December 2017.

15.

External Audit Update report pdf icon PDF 514 KB

To receive and note a report from Grant Thornton (copy enclosed)

Minutes:

A report was received from Grant Thornton which provided members with a progress update in delivering its responsibilities as the Council’s external auditors. It also included a summary of emerging national issues and developments that were relevant to the Committee.

 

Mrs J Bellard of Grant Thornton reported that officer roles had changed since the previous meeting of the Committee. Ms Pieri and Mr G Kelly had recently been promoted as she was retiring. The Chair of the Committee thanked Mrs Bellard for her support, guidance and constructive challenge to the Committee.

 

Mr Kelly referred to the 2016/17 Accounting Code which would include further details on a recent CIPFA announcement regarding changes in accounting for the Highways Network Asset form 2016/17. It was anticipated that this would be a big issue in 2016/17 and Grant Thornton officers were working closely with County Council officers on this.

 

Members were briefed on Devolution, the Business Location Index, Efficiency Review and the Health and Wellbeing index.

 

RESOLVED that the position be noted.

16.

Audit Plan for Cumbria County Council 2015/16 pdf icon PDF 252 KB

To receive and note a report from Grant Thornton (copy enclosed)

 

Minutes:

A report was received from Grant Thornton on the Audit Plan for Cumbria County Council which helped members understand the consequences of Grant Thornton’s’ work, discussed issues of risk and the concept of materiality and identified any areas that members could request Grant Thornton to undertake additional procedures.

 

The Engagement Manager briefed members on key risk areas, value for money and concluded the as the result of interim audit work, there were no issues for the Committee to consider. No questions were raised on this item.

 

RESOLVED that the position be noted.

17.

Audit Plan for Cumbria Local Government Pension Scheme 2015/16 pdf icon PDF 223 KB

To receive and note a report from Grant Thornton (copy enclosed)

 

Minutes:

A report was received from Grant Thornton on the Audit Plan for Cumbria Local Government Pension Scheme which gave an overview of the planned scope and timing of the audit, as required by the International Standard on Auditing. It helped members understand the consequences of Grant Thornton’s work, discussed risk and materiality and offered an opportunity to identify any areas where members could request Grant Thornton to undertake additional procedures.

 

The Engagement manager guided members through the report in detail and no questions were raised on this item.

 

RESOLVED that the position be noted.

18.

Forward Work Programme pdf icon PDF 41 KB

To consider the Forward Work Programme for the Commitee (copy enclosed).

Minutes:

Members noted the Forward Work Programme of the Committee.

19.

FORTHCOMING MEETINGS

The next meeting of the Audit and Assurance Committee will be held on Friday 24 June 2016 at 10.30am at The Courts, Carlisle

Minutes:

The next meeting of the Committee would be held on 24 June 2016 at The Courts, Carlisle