Agenda and minutes

Audit and Assurance Committee
Friday, 9th September, 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

36.

APOLOGIES FOR ABSENCE

To receive any apologies for absence

Minutes:

No apologies of absence were received.

 

The Chair welcomed Councillor Peter Thornton to his first Audit and Assurance Committee meeting.

37.

MEMBERSHIP

To note any changes to the membership of the Committee.

Minutes:

There were no changes of membership.

38.

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 made.

39.

MINUTES pdf icon PDF 73 KB

To confirm as a correct record the minutes of the meeting of the Committee held on 24 June 2016 (copy enclosed).

Minutes:

Further to Minute 27 Annual Report 2015-16: Information Governance, Members were informed that the Scrutiny Management Board would be considering the Audit and Assurance Committee’s referral in respect of the Council doing all it could to recover the costs of dealing with requests for information under the Freedom of Information Act at its next meeting, to be held on 26 September 2016.

 

RESOLVED that; the Minutes of the meeting held on 24 June 2016 be confirmed as a correct record.

40.

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.

41.

2016/17 QUARTER 1 CORPORATE RISK REGISTER pdf icon PDF 141 KB

To receive a report from the Corporate Director – Resources and Transformation (copy enclosed)

 

Additional documents:

Minutes:

A report from the Corporate Director – Resources and Transformation was considered on the 2016/17 Quarter 1 Corporate Risk Register. It provided a progress update on the 2016/17 Corporate Risk Register for the quarter to 30th June 2016 and presented an overview of both risks and opportunities for each of the Council priorities.

 

The Senior Manager - Performance and Risk guided members through the report, highlighting two new risks which had been identified as part of the risk refresh; Transforming Care and Commissioning and the Strategy for Adult Social Care. Additionally reference was made to the Amended Risk description for Children’s Services relating to a higher number of Children Looked After than in comparator authorities.

 

It was questioned whether the Amended Risk included the estimated impact of unaccompanied refugee children and asylum seekers. The Corporate  Director – Resources and Transformation advised that the risk was based on the current understanding of Children Looked After and reassured the Committee that the unaccompanied and asylum seeking children position was being addressed at a regional level with the Corporate Director – Children and Family Services and Assistant Director – Children and Families being part of the discussions. Currently there was no firm Cumbrian position but there would be a clearer regional position later in September 2016.

 

Discussion took place on Business Rates and whether it should be included as a risk on the Register. It was clarified that Business Rates were included in the Medium Term Financial Plan (MTFP) and Government guidelines were applied to the rates. A number of Members considered business rates to be a significant risk to the Council therefore Officers were tasked to review whether it should be included on the Corporate Risk Register.

 

The Assistant Director – Finance (Section 151 Officer) gave the Committee a brief synopsis of the 100% Retention of Business Rates Consultation and Fair Funding Review - Call for Evidence Government Consultation and the potential impact on rural Councils. Any potential risks to the Council would need to be factored into the MTFP in approximately 2019/20.

 

Members were advised that the recent decision to leave the EU had been included as an emerging risk as it was expected that it would be two years before any tangible risks would be experienced. Reference was made to the 2016 Autumn Statement and its potential impact upon Cumbria LEP’s growth projects.

 

A number of Members considered the medium scoring risk, C23 – Commissioning Strategy for Adult Social Care to be a significant risk to the Council and that there was a separate, yet associated risk due to the predicted demographic change in the county to an older population. Additionally, the UK’s decision to leave the EU could impact on the ability to recruit lower paid workers into the Adult Social Care workforce. The Corporate Director – Resources and Transformation confirmed that the Commissioning Strategy set out how it would support vulnerable people but that it had been a comprehensive piece of work which had included demographic profiling  ...  view the full minutes text for item 41.

42.

INTERNAL AUDIT PROGRESS REPORT TO 31 JULY 2016 pdf icon PDF 175 KB

To receive a report from the Group Audit Manager (copy enclosed)

 

Minutes:

The Internal Audit Progress Report to 31 July 2016 from the Group Audit Manager was considered, which gave a summary of the work of Internal Audit for the four months up to 31 July 2016.

 

The Group Audit Manager drew Members’ attention to the key points highlighted in the report. She advised that two draft Audits had been finalised and would be submitted to the December 2016 meeting of the Committee.

 

Members were advised that despite being satisfied with the service, Carlisle City Council and Copeland Borough Council would no longer be part of the shared service. The Assistant Director would respond formally to the withdrawal and reiterated that both Councils had been satisfied with the service. Implications for staffing such as TUPE transfers for staff as an impact of withdrawal from the shared service were discussed.

 

Discussion ensued on the financial audit findings in schools identified in the report. The Group Audit Manager commented on the detailed audit programme which took place in schools which were identified on a risk basis. A number of recurring themes had arisen which would be shared with the Schools Forum. It was noted that some schools had deficit budgets due to accountancy processes which may not be robust. The Assistant Director – Finance (Section 152 Officer) explained the accountancy process for County Council schools, which included dealing with deficit and surplus budgets and advised that financial management was a regular item at Schools Forums meetings. Members noted that financial management processes were different in schools with Academy status.

 

RESOLVED that; the progress made and the outcomes of internal audit work be noted.

43.

ANNUAL GOVERNANCE STATEMENT 2015/16 pdf icon PDF 85 KB

To receive a report from the Corporate Director – Resources and Transformation (copy enclosed)

Additional documents:

Minutes:

A report was considered from the Chief Executive which presented the final draft of the Annual Governance Statement 2015/16, following review by the Council’s External Auditor, Grant Thornton.

 

The Corporate Director – Resources and Transformation outlined the process for finalising the Annual Governance Statement and advised that the Audit and Assurance Committee were being asked to consider the final version of the Statement following review and amendment by the external Auditor.

 

The Chair thanked Mr Kelly for the helpful input of the external Auditor.

 

RESOLVED that;

 

1                    The final Annual Governance Statement of the County Council for 2015/16 be approved.

2                    The final Annual Governance Statement 2015/16 be signed by the Leader of the Council and the Chief Executive prior to publication.

44.

ANNUAL GOVERNANCE STATEMENT: ACTION PLAN 2016-17 PROGRESS UPDATE pdf icon PDF 120 KB

To receive a report from the Corporate Director – Resources and Transformation (copy enclosed)

 

 

Additional documents:

Minutes:

A report from the Chief Executive regarding the Annual Governance Statement: Action Plan 2016-17 Progress Update was considered. It had been agreed at the 24 June 2016 Audit and Assurance Committee that a final version of the Annual Governance Statement and Action Plan would be presented to the Committee for approval at its September meeting. The report focussed on the 2016/17 actions.

 

The Senior Manager Performance and Risk guided Members through the report, in particular drawing attention to the positive progress made in Quarter 1.

 

After being invited by the Chair to comment, Mr Kelly stated that he had attended a number of meetings with the Corporate Director – Children and Families Services to review the Agreed Actions in the Action Plan. He noted the positive direction of travel outlined in the Minister’s letter following the DfE Review had been welcomed.

 

RESOLVED that; the progress made and the prospects for addressing the Children’s Services leadership and governance set out in the 2016/17 Annual Governance Statement Action Plan be noted.

45.

PROPOSED AMENDMENTS TO THE 2016/17 MINIMUM REVENUE PROVISION (MRP) POLICY pdf icon PDF 110 KB

To receive a report from the Assistant Director – Finance (S 151 Officer) (copy enclosed)

Additional documents:

Minutes:

A report was considered from the Assistant Director – Finance (S151 Officer) regarding Proposed Amendments to the 2016/17 Minimum Revenue Provision (MRP) Policy. The report summarised the proposed amendments to the 2016/17 MRP. Following the consideration of a number of options, the conclusion of the review was that the policy and processes for the MRP be recommended for amendment.

 

The Assistant Director – Finance (Section 151 Officer) explained the changes outlined in the report in detail. She advised that other Local Authorities were also updating their policies and, after working with an external Treasury Management Team and discussions with the External Auditor, a number of amendments to the policy were proposed. The benefits to changing the policy were highlighted, including providing a reduction in the charge to the Revenue Budget until 2033 and changing the profile of the charge. Members were advised that there would be a £5.5m saving which would help with future years’ finance. From the External Auditor’s point of view, Mr Kelly explained that the amendments were consistent with other Local Authorities and the policy was very reasonable.

 

Members welcomed the changes and considered that the amendment of the policy made it more realistic. They concurred with the Chair, that the performance of the Council’s treasury management had been exemplary in the previous ten years and continued to be so.

 

The Assistant Director Finance (Section 151 Officer) gave a brief financial analysis of borrowing; she explained how finance officers worked within the parameters of daily changing interest rates and how a professional judgement was made on whether to borrow money given the current low interest rate, or use funds the County Council already held. It was confirmed that the Council’s debt portfolio was regularly reviewed.

 

RESOLVED that; Members support the following proposed amendments to the Council’s MRP Policy and processes prior to their consideration by Council in November 2016:

 

a)            That the MRP policy for supported and pre 2008 borrowing be changed from 4% reducing balance to 2% straight line;

b)            That the MRP Policy Statement be reworded to reflect the above recommendation and the latest guidance from the Council’s external expert Treasury Management Advisors; and

c)             That the current process for the allocation of financing to capital expenditure (for MRP purposes) be reviewed to ensure it is optimal.   This can be done within the existing policy.

 

 

 

46.

FORWARD WORK PROGRAMME pdf icon PDF 36 KB

To receive the Forward Work Programme for the Committee (copy enclosed).

Minutes:

The Forward Work Programme for the Committee was received.

 

Following discussion earlier in the meeting where Adult Social Care was identified as the topic for the December 2016 meeting’s Deep Dive, Members asked that the wording of the Deep Dive be drafted by Officers and then confirmed with the Chair and Vice Chair of the Committee

 

RESOLVED that; Adult Social Care be the subject of the December 2016 Deep Dive.

47.

External Audit Update pdf icon PDF 422 KB

To receive a report from Grant Thornton (copy enclosed)

 

Minutes:

The Update report for Cumbria County Council from Grant Thornton was presented by Mr Kelly. The report related only to the matters which had come to the attention of the Auditor, who then felt it then prudent to report them to the Committee.

 

Mr Kelly reminded Members that the next meeting of the Committee would be to sign off the Accounts. Both the Accounts and the Pension Fund had performed well and Grant Thornton was close to giving its qualified opinion.

 

The Advancing Closure Summary was circulated to Members and Mr Kelly emphasised the importance of the accounting deadline being brought forward in 2018, to July rather than September as was the current practice.

 

The Chair thanked Mr Kelly for the document and informative update, for his role as a critical friend to the County Council and welcomed the excellent working relationships between the Grant Thornton and County Council Officers.

 

The Chair referred to the date of the signing off of the accounts being brought forward and reassured the Committee that both himself and the Vice Chair of the Committee had regular updates from officers on the Accounts.

 

RESOLVED that: the position be noted.

48.

FORTHCOMING MEETINGS

The next meeting of the Committee will be held on 21 September 2016 in the Old Court Room, 10.30am

Minutes:

The next meeting of the Committee would be held on 21 September 2016.