Agenda and minutes

Members are asked to declare any interests in the items under consideration and in doing so state:

(1) the type of interest concerned either a

(a)    personal interest

(b)   prejudicial interest

(c)    disclosable pecuniary interest (DPI)

and

(2) the nature of the interest concerned

If any Member requires advice on declarations of interests, they are advised to contact the Head of Democratic Governance in advance of the meeting.

There were no declarations of interest on this occasion.

To agree the minutes of the last meeting of the Audit Committee held on 12 March 2020 as a true and correct record.

The Committee agreed that the minutes of the meeting held on 12 March 2020 be signed by the Chairman as a true and correct record.

To consider the controls being implemented to manage the strategic risk relating to pandemic infection.  

[Dr Arif Rajpura, Director of Public Health joined the meeting prior to consideration of this item].

The Committee considered a progress report outlining the individual risks identified within the Strategic Risk – Pandemic Infection, from the Council’s Strategic Risk Register.

Dr Arif Rajpura, Director of Public Health provided an overview of the sub-risk ‘Impacts on the Council's ability to deliver critical services and wider impacts on the Town’ in respect of the Covid-19 pandemic. Dr Rajpura outlined that the national message had been amplified locally, with the key role of the Council being to protect the vulnerable. He provided an overview of the provisions put in place in response to the pandemic, referencing the swift implementation of twelve Corona Kindness Community Hubs and the provision of accommodation for all homeless people within the town. The Corona Kindness Community Hubs had provided valuable support to vulnerable people in the community by delivering essential support such as food and medicines, whilst Adult Social Care had created a dedicated Provider Support and Resilience Hub to provide practical support to any social care provider requiring assistance including supply of Personal Protective Equipment (PPE), infection control advice and urgent staffing support.

Dr Rajpura reminded the Committee that on 1 June 2020 the government had implemented phase two of the pandemic response which would include limited opening of primary schools along with some non-essential retail also opening.As the cases had declined and Blackpool moved into phase two of its response, there had been a move to the Test, Track and Isolate phase, which would be important in the Council’s efforts to contain localised outbreaks.

The Committee was informed that phase three would commence on 4 July 2020 with further restrictions being lifted on the hospitality industry. Members were assured that all changes would be kept under strict review and that if cases started to increase again then stricter measures may be re-implemented. Dr Rajpura advised that Covid-19 would likely remain for the foreseeable future and further waves of infection in the months to come were a strong possibility.

Dr Rajpura stressed that current measures had been suppressing the number of cases and deaths and Blackpool had passed the peak, with reported cases and deaths in decline.Death Data from the Office of National Statistics (ONS) up to 17 April 2020 showed that Blackpool had a low death rate from Covid-19 when compared to other areas.He further reported that despite the tragic loss of life experienced across the town, its hospital care had never been overwhelmed by the number of cases and according to the reported figures up to the end of May 2020 the rates within Blackpool were close to the average for England and well below North West rates. Moving forward, Dr Rajpura explained, the Council’s role would be to regulate establishments to ensure they were adequately ‘Covid Secure’ and adhering to government guidance.

A question was raised regarding the risk scores assigned to the pandemic, with a query around whether a net  ...  view the full minutes text for item 3.

To receive a verbal update from Deloitte on the ongoing Audit.

Ms Nicola Wright, Partner and Mr Nick Rayner, Senior Manager, both Deloitte attended the meeting to provide a verbal update on the external audit interim report. Ms Wright advised that a revised timetable for the audit would be required as a result of the impact of the Covid-19 pandemic, with an amended start date for the audit having been agreed as 6 July 2020.

Mr Rayner informed the Committee that the work would be undertaken remotely due to restrictions preventing the external audit team from working on site and he anticipated the impact of Covid-19 to affect a number of accounting areas. He provided assurance to Committee Members that initial preparatory work had been commenced by the Council’s finance team in anticipation of the audit. Ms Wright acknowledged that there would be a substantial amount of work to cover but that the team at Deloitte was experienced at managing complex projects.

To consider the annual audit report for the year ended 31 March 2020.

Ms Tracy Greenhalgh, Head of Audit and Risk presented a report setting out the individual and collective outcomes of the audit reviews undertaken over the financial year ending 31 March 2020. It addition the report provided an audit opinion on the control environment based on the audit work undertaken. Within her report, Ms Greenhalgh set out the proposed programme for Heads of Service to report progress against audit recommendations to the Audit Committee based on a random sample of audits.

Ms Greenhalgh reminded the Committee that as the Head of Audit and Risk she was responsible for the delivery of an annual audit opinion and report that could be used by the Council to inform its Annual Governance Statement. The annual opinion concluded on the overall adequacy and effectiveness of the organisation’s framework of governance, risk management and control. In giving this opinion, assurance could never be absolute and therefore only reasonable assurance that there were no major weaknesses in the processes reviewed could be provided but she assured Committee Members that where high risk areas had been identified as part of audit reviews these would be subject to a follow-up process to ensure that effective controls were implemented. 

Ms Greenhalgh reported that she was satisfied that sufficient assurance work had been carried out to allow the provision of a reasonable conclusion on the adequacy and effectiveness of the Council’s internal control environment and that the overall control environment of the Council was adequate, however she recognised that there were significant issues faced by Children’s Services as identified in the Ofsted report and ongoing overspends which needed to be addressed. The Covid-19 pandemic had also impacted on the control environment in March 2020 and this would continue to be monitored during 2020/2021 and steps taken to manage risk as effectively as possible given the challenging circumstances. Where weaknesses had been identified through internal audit work the team had worked with management to agree appropriate remedial actions and a timescale for improvement. This was particularly relevant in high risk areas where innovative solutions were being implemented to support future sustainability.

Within the report Ms Greenhalgh had identified four areas where planned internal audit work for 2019/2020 had not been undertaken and which included Homelessness; the Conference Centre; Children’s Legal Services and Fostering. Councillor Mitchell, as Chair of the ongoing scrutiny review of Housing and Homelessness queried the lack of liaison between internal audit and the scrutiny working group and suggested that internal audit’s input would be appreciated. Ms Greenhalgh confirmed that internal audit’s support could be offered to the working group if any areas of risk were identified during its review.

The Committee queried the decision to defer the audit of the Conference Centre, stating that as a one-off occurrence if the construction process was not audited there would be no future opportunity to undertake this review. Ms Greenhalgh clarified that a full audit of the Conference Centre would be undertaken at a future date and that she had been involved  ...  view the full minutes text for item 5.

To consider and note a summary report of the work completed by Risk Services in quarter four of the 2019/2020 financial year.

The Committee considered the Risk Services Quarter Four report which provided a summary of the work completed by Risk Services in quarter four of the 2019/2020 financial year.

Ms Tracy Greenhalgh, Head of Audit and Risk reported that only fifteen per cent of risk registers had been updated by the end of the quarter but that due to the on-going Covid-19 situation services had not been actively chased for their submissions. Ms Greenhalgh advised that each service would have received an email reminder in late February/early March 2020 and the indicator would be revisited in quarter one of the new financial year to ensure a higher rate of compliance.

In relation to applications for Coronavirus business grants, the Committee questioned whether any potential risk of fraud had been identified and addressed. Ms Greenhalgh confirmed that internal audit had been heavily involved in the issuing of the grants along with the implementation of a post-payment support network to help ensure adequate due diligence had been maintained and therefore reduce the risk of fraudulent applications.

Ms Greenhalgh provided a summary of the audits undertaken over the period and highlighted to the Committee those areas which had been identified as ‘Inadequate’, these being ‘Non-Contracted ICT Software’ and ‘Water Self Supply’. The Committee was informed that work was ongoing to address the identified weaknesses.

Ms Greenhalgh reported that the review of priority one audit recommendations would usually be undertaken at the end of each quarter, however due to the Council’s ongoing response to the Covid-19 emergency the review had been delayed until the first quarter of 2020/2021.

To consider and approve the Quality Assurance and Improvement Programme for the internal audit service for 2020/2021.

Ms Tracy Greenhalgh, Head of Audit and Risk presented and sought approval of the Quality Assurance and Improvement Programme (QAIP) for the internal audit service for 2020/2021.   

The Committee was informed that internal audit’s QAIP was designed to provide reasonable assurance to stakeholders of internal audit that the service performed its work in accordance with its Charter whilst conforming to the requirements of the Public Sector Internal Audit Standards (PSIAS); operating in an effective and efficient manner and was perceived by stakeholders as adding value and improving operations. Internal audit’s QAIP covered all aspects of the Internal Audit Service in accordance with the PSIAS Standard 1300 (Quality Assurance and Improvement Programme).

As the Head of Audit and Risk, Ms Greenhalgh advised that she would be responsible for the QAIP, which covered all types of internal audit activity, including advice and consulting. She highlighted that external review was recommended at least every five years and this period was now approaching.

The Committee questioned what succession planning or support was in place with regards to her role as Head of Audit and Risk. Ms Greenhalgh assured the Committee that the newly introduced structure had increased capacity at Senior Auditor level and she was working closely with her team to develop the necessary support skills yet further.

The Committee agreed: To approve Internal Audit’s Quality Assurance and Improvement Programme 2020/2021.

To consider the outcome of the self-evaluation exercise and to approve the training programme as well as to consider the other actions as identified in the report.

Ms Tracy Greenhalgh, Head of Internal Audit and Risk introduced the results of the Audit Committee Self Evaluation and the resulting training programme for approval.

The Committee was reminded that the self-evaluation responses were used to inform the Committee’s proposed training programme and as such it was important that all Committee Members completed and returned the information. Ms Greenhalgh acknowledged that on this occasion some Members of the Committee had experienced IT issues and due to the Covid-19 restrictions paper copies could not be made available but would be provided in future if necessary.

The Chair of the Committee highlighted that the Audit Committee was on a journey over a three year period, whereby Members’ skills and knowledge continued to develop. He asserted that the Committee would be enhanced yet further by the recruitment of an independent member and extended his thanks to the Committee Members for their hard work and dedication.

The Committee agreed: To approve the Audit Committee training programme for 2020/2021.

To note the date and time of the next meeting of the Committee as Thursday 24 September 2020, commencing at 6pm.

The date and time of the next meeting of the Committee was noted as 24 September 2020, commencing at 6pm.