Agenda and minutes

Audit and Assurance Committee
Friday, 27th July, 2018 10.30 am

Venue: Conference Room A, Cumbria House, Botchergate, Carlisle

Contact: Jackie Currie  Email: jackie.currie@cumbria.gov.uk

Items
No. Item

16.

APOLOGIES FOR ABSENCE

To receive any apologies for absence

Minutes:

An apology for absence was received from Dr D Roberts, Executive Director – Corporate, Customer and Community Services.

 

17.

MEMBERSHIP

To note any changes to the membership of the Committee

 

 

Minutes:

There were no changes to membership for this meeting.

 

18.

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:

There were no disclosures of interest made on this occasion.

 

19.

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 be excluded from the meeting during consideration of Item 12 – Independence and Ethics, ) by virtue of Paragraph 1 of Part 1 of Schedule 12A of the Local Government Act 1972, as it contained exempt information relating to any individual.

 

20.

MINUTES pdf icon PDF 126 KB

To confirm as a correct record the minutes of the meeting of the Committee held on 29 June 2018 (copy enclosed)

 

Minutes:

RESOLVED that,     the minutes of the previous meeting held on Friday 29 June 2018 be agreed as a true and accurate record and signed by the Chair.

 

21.

ANNUAL GOVERNANCE STATEMENT 2017/18 pdf icon PDF 129 KB

To consider a report from the Executive Director – Corporate, Customer and Community Services (copy to follow)

 

 

 

Additional documents:

Minutes:

The Audit and Assurance Committee considered a report from the Chief Legal Officer (Monitoring Officer) which presented the final draft of the Annual Governance Statement 2017-18, following a review by the Council’s external auditors, Grant Thornton.

 

Members noted that the Annual Governance Statement must be published with the Statement of Accounts by no later than 31 July 2018.

 

The Council’s governance arrangements include oversight of the effectiveness of its arrangements by the officer led Corporate Governance Group, Corporate Management Team and the Audit and Assurance Committee.  Annually a detailed review was carried out of the Council’s arrangements drawing on a range of information.

 

The effectiveness of the governance framework has been evaluated as follows:

·      A review of corporate arrangements and their effectiveness carried out by relevant managers in early 2018.

·      A review of internal control comprising an assessment by each Assistant Director of their service areas against the required standards, carried out in  early 2018.

·      A review of the overall opinion of the Group Audit Manager as set out in the annual internal audit report. 

·      An assessment of the Audit and Assurance Committee arrangements against the core functions of Audit Committees set out within the 2013 CIPFA Guidance for Audit Committees in Local Authorities and the Police. 

·      A review of the Council’s arrangements against the CIPFA Statements on  the Role of the Chief Financial Officer and the Role of the Head of Internal  Audit.

·      A review of the 2017/18 Annual Governance Statement Action Plan to assess progress.

·      Consideration of reports from external inspections, including Ofsted, the Care Quality Commission and Zurich Municipal

·      Review by the Pensions Committee of the Cumbria Local Government Pension Scheme Fund Policy Statements, which are kept under review and updated when required throughout the year (e.g. following changes in regulations) and reviewed annually.

·      The Council’s arrangements with its controlled company, Cumbria County Holdings Limited, and its subsidiaries. 

 

The Monitoring Officer took members through all of the evaluations, and these were noted by members.

 

The Monitoring Officer advised members that the Council recognised that some issues were of more corporate significance than others and, in the main, issues would properly be addressed by the relevant Assistant Directors through the management of their service areas. However, significant corporate governance issues required appropriate action plans and were therefore reported within the Corporate Governance Action Plan at a corporate level (i.e. through the Corporate Management Team and Elected Members).

 

The review of corporate governance 2017/18 had not identified any significant governance issues.

 

The Monitoring Officer advised that careful consideration had been given as to whether either of the two significant governance issues noted in the Annual Governance Statement 2016/17 should continue to be defined as such for this year. 

 

In November 2017, Children’s Services was re-inspected by Ofsted and the Judgment revised from ‘Inadequate’ to ‘Requires Improvement’.  Therefore, whilst there was still work to do to deliver the improvements required, this was no longer considered to be a significant governance issue.

In September 2017, Audit & Assurance Committee received a detailed  ...  view the full minutes text for item 21.

22.

ACCOUNTS OVERVIEW 2017/18 pdf icon PDF 138 KB

To consider a report from the Director of Finance (copy enclosed)

 

 

Minutes:

The Director of Finance (Section 151 Officer) presented the report and explained to members that the Unaudited Accounts for the Council and the separate Cumbria Local Government Pension Scheme (Cumbria LGPS) 2017/18 were published on 31 May 2018 in line with the Accounts and Audit Regulations 2015.

 

A robust training session had been held on 20 July 2018 where members received a presentation from the Finance Team which set out:-

·      the process by which the accounts had been prepared and audited, assurance the Committee had in relation to completeness and thoroughness of the accounts

·      the approach the auditor had taken in relation value for money assessment

·      the audit findings thus far to that point 

·      the headlines of the Accounts – which included presenting the key financial statements, key figures, facts and answered lots of explanatory questions.

Grant Thornton had now completed their audit work and their findings would be presented at agenda item numbers 8 and 9 to this meeting.

The key messages of the Audit Findings Reports were that Grant Thornton intended to issue an unqualified audit opinion on both the County Council and the Cumbria LGPS sets of 2017/18 Accounts. There were no recommendations in the Audit Findings Reports in relation to the financial statements.

Grant Thornton also intended to issue an “except for” Value for Money conclusion for Cumbria County Council in respect of securing economy, efficiency and effectiveness in the use of resources. The “except for” conclusion was in relation to the embedding of contract management procedures. With the exception of the matters reported above the Auditors were satisfied that in all significant respect the Council put in proper arrangements to secure economy, efficiency and effectiveness in its use of resources.

The Audit Findings Report for the Council’s Accounts concluded that again the Council had achieved a very high quality of financial reporting, with working papers being to a good standard. Grant Thornton positively commented on the effective response time to their audit queries. Overall, the very small number and the nature of the adjustments reflected the continuing improvement and substantial progress the Council had made in strengthening the accounts production process over recent years.

The Audit Findings Report for Cumbria LGPS confirmed that the accounts contained no material errors to the primary statements and no unadjusted or adjusted misstatements.  Again the Audit Findings Report for Cumbria Local Government Pension Scheme highlighted the high standards that were being achieved in respect of working papers and responses to audit queries.

The Audit and Assurance Committee was required to approve the audited set of accounts for the Council (Agenda Item 7(c) and Port of Workington (Agenda Item 7(d) at this meeting in accordance with the Accounts and Audit Regulations 2015, and the Council’s Constitution.

The Committee was also asked to consider the Letters of Representation (Agenda Item 7(a) and Agenda Item 7(b)), which provided Grant Thornton with assurance on the financial statements and governance arrangements upon which they would base their audit opinion. The Regulations required the letters  ...  view the full minutes text for item 22.

22a

Letter of representation - Cumbria County Council pdf icon PDF 121 KB

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

 

Minutes:

Members received the representation letter to the Director of Grant Thornton regarding the Group Financial Statements of Cumbria County Council and its subsidiary undertakings for the year ended 31 March 2018, for the purpose of Grant Thornton expressing an opinion as to whether the group and parent financial statements gave a true and fair view in accordance with International Financial Reporting Standards and the CIPFA/LASAAC Code of Practice on local Authority Accounting

 

Discussion in this item took place at Agenda Item No 7(a) – (Minute No 22 refers)

 

22b

Letter of representation - Cumbria Local Government Pension Scheme pdf icon PDF 107 KB

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

 

 

Minutes:

The Audit and Assurance Committee also received the letter of representation in respect of the financial statements of Cumbria Local Government Pension Scheme (Cumbria LGPS) for the year ended 31 March 2018.

 

Discussion on this item took place at Agenda Item No 7(b) – (Minute No 22 refers).

 

22c

AUDITED STATEMENT OF ACCOUNTS 2017/18 pdf icon PDF 1 MB

To receive the County Council’s Audited Statement of Accounts 2017/18 (copy to follow)

 

Minutes:

Discussion on this item took place at Agenda Item No 7(d) – (Minute No 22 refers)

 

 

22d

PORT OF WORKINGTON STATEMENT OF ACCOUNTS 2017/18 pdf icon PDF 113 KB

To receive the Port of Workington Statement of Accounts 2017/18 (copy enclosed)

 

Additional documents:

Minutes:

Discussion on this item took place at Agenda Item No 7(d) – (Minute No 22 refers)

 

 

23.

EXTERNAL AUDIT FINDINGS - CUMBRIA COUNTY COUNCIL 2017/18 pdf icon PDF 693 KB

To consider a report from Grant Thornton (copy to follow)

 

Minutes:

Members considered a report from Grant Thornton which highlighted the key findings from their audit that were significant to the responsibility of those charged with governance, which for Cumbria County Council was the Audit and Assurance Committee.

 

The Associate Director from Grant Thornton and the Assistant  Audit Manager guided members through the report in detail, and informed members that the audit work had been completed on site during June and July 2018, and that Grant Thornton had not identified any adjustments to the financial statements that had resulted in a change to the draft reported Statement of Comprehensive Income and Expenditure position. 

 

Grant Thornton had raised recommendations for management as a result of their audit work and had also included a follow up of recommendations for the prior year’s audit.  Subject to the outstanding queries being resolved and following today’s meeting Grant Thornton was anticipating issuing an unqualified audit opinion. 

 

In relation to the Value for Money aspect, based on the work performed to address the significant risks Grant Thornton concluded that except for the matter identified in respect of embedding the contract management arrangements, the Council had proper arrangements in all significant respects, and therefore proposed to give a qualified ‘except for’ conclusion on arrangements for securing economy, efficiency and effectiveness in the council’s use of resources.

 

Grant Thornton took the opportunity to record their appreciation for the assistance provided by the Finance Team during the audit.     

 

The Chair thanked the Associate Director, the Assistant Audit Manager and officers of the Council who had contributed to the work of the audit findings.

 

24.

EXTERNAL AUDIT FINDINGS - CUMBRIA LOCAL GOVERNMENT PENSIONS SCHEME 2017/18 pdf icon PDF 556 KB

To consider a report from Grant Thornton (copy enclosed)

 

 

 

Minutes:

Grant Thornton presented a report which highlighted their key findings in respect of Cumbria Local Government Pension Scheme and the preparation of the Scheme’s financial statements for the year ended 31 March 2018.

 

The Audit Manager outlined the key audit and financial reporting issues to members, and advised that the audit work had been completed on site during June and July 2018, and that Grant Thornton had not identified any adjustments to the financial statements that had resulted in an adjustment to the Scheme’s reported financial positon.

 

Subject to outstanding queries being resolved Grant Thornton anticipated issuing an unqualified audit opinion.

 

The Chair thanked the Associate Director, the Audit Manager and officers of the Council who had contributed to the work of the audit findings.

25.

FORWARD PLAN - AUDIT AND ASSURANCE COMMITTEE pdf icon PDF 35 KB

To note the Forward Plan for the Audit and Assurance Committee and agree any additional items (copy enclosed).

Minutes:

The updated Forward Plan was noted.

 

26.

DATE & TIME OF NEXT MEETING

The next meeting will be held on 17 September 2018 at 10.30am in Cumbria House, Carlisle.

 

 

Minutes:

The next meeting will be held on Monday 17 September 2018 at 10.30am in Cumbria House, Carlisle

 

 

27.

INDEPENDENCE AND ETHICS

To consider a report from Grant Thornton (to be tabled)

 

Not for publication by virtue of Paragraph(s) 1 of Part I of Schedule 12A of the Local Government Act 1972, as this report contains exempt information relating to any individual.

 

Minutes:

The Committee considered a report from the Director of Finance which updated members on the process from Grant Thornton to report their internal process for possible conflicts of interest to the Audit and Assurance  Committee.

 

There was one significant matter that Grant Thornton felt could appear to have an impact on their independence, objectivity and integrity as the County Council’s Auditors. 

 

Members noted the action taken to mitigate this, and thanked the Associate Director for his report.

 

RESOLVED that the report be received and noted.