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 28 April 2022 as a true and correct record.

The Committee agreed that the minutes of the meeting held on 28 April 2022 be signed by the Chairman as a true and correct record.

To consider a progress report on individual risks identified in the Council’s Strategic Risk Register.

Mr Steve Thompson, Director of Resources, presented a deep dive into the strategic risk ‘reputation’.

The Committee considered the sub-risk “Inability to deliver services”. It was noted that the list of updated business continuity plans for Children’s Services had not been completed. Mr Thompson explained that this had not been undertaken due to an oversight during a period when the service was subject to an Ofsted inspection and had therefore been given until quarter two to complete the plans, with Internal Audit assisting to make sure that this was achieved. It was also noted that Children’s Services had performed well during the unforeseen circumstances of the Covid-19 pandemic. Mr Neil Jack, Chief Executive, added that consideration was being given to how to prevent a reoccurrence of such an oversight, such as the development of a tracker that would highlight to services what risk management work was required in upcoming quarters.

Mr Thompson added that the updated plans across the Council had been placed on a standard format to ensure consistency. Business Continuity plans had also been embedded into directorate business plans, linking them to the risks in the strategic risk register.

External factors affecting risk, such as the ongoing war in the Ukraine, were also discussed. These factors had created pressures on supply chains and increased the cost of resources such as fuel. Mr Thompson explained that ongoing monitoring of these factors was needed to mitigate risks to the Council. Mr Jack added that the Council had some measures in place to reduce the impact of external shocks and panics, such as maintained stocks of fuel at the Layton Depot which would protect against a sudden increase in fuel costs in the short term. He also highlighted that such measures had allowed the Council to operate during Covid-19, as stocks of resources had allowed services to continue to operate when sourcing additional material had become difficult.

Ms Tracy Greenhalgh, Head of Audit and Risk, informed the Committee that the remaining outstanding Business Continuity plans in the report had been noted by the Risk and Resilience Team and that the work would be undertaken in the upcoming quarter to ensure they were completed.

The Committee further considered the sub-risk “Inability to respond to a major incident”. The impact of Council owned companies delivering an increasing number services on the Council’s volunteer arrangements was discussed. Mr Jack explained that the delivery of services by Council owned services had not impacted on services being able to attract volunteers or draw in further support from the companies. He noted for example that Blackpool Coastal Housing Limited’s Community Centres had been utilised as Rest Centres by Adult Services, and that volunteers for events like Elections had been successfully sought from a wide range of sources, including across the Council.

To provide the Audit Committee with a summary of the work completed by Risk Services in quarter four of the 2021/22 financial year.

Ms Tracy Greenhalgh, Head of Audit and Risk, presented the Risk Services Quarter Four Report. She highlighted that many of the areas covered in the report had met or exceeded their targets, although it was recognised that a small number of audit reports had been issued late. This had been due to a training issue which would be addressed going forward. The service was also shown to be working to ensure that the Council’s directorates risk registers were up to date, and a meeting had been arranged with the Director of Children’s Services to ensure that they were aware of all the audit work required.

The Committee discussed the pro-active communications work being undertaken, with Ms Greenhalgh explaining that this work had been launched in quarter one, highlighting the Council approach to fraud. This work had included an article in the local press and online. She also emphasised the importance of considering how to engage with the public, stating that it had been recognised that people were often reluctant to report instances of fraud involving their neighbours. Therefore, communications had sought to show the impact of fraud and its cost to Council services. The Committee noted that it was too early to consider the outcome of this work but further consideration could be given in future Risk Services updates.

Issues in obtaining a satisfactory insurance quote for Council property were also highlighted. The cost of insurance had increased significantly and the terms offered were worse than in previous years. Members of the Committee were informed that consideration was being given to using the Council’s Self-Insurance Fund to ensure that premises were covered. Mr Steve Thompson, Director of Resources, and Chair of the Self Insurance Panel would therefore be looking at claims, the cost of insurance premiums and how Council reserves could be used to manage risk going forward.

With regards the National Fraud Initiative (NFI), Ms Greenhalgh advised the Committee that this was a Cabinet Office initiative that the Council had requested to take part in. The NFI would allow co-operation on issues such as Council Tax fraud. The Council had not taken part during 2021-2022 due to issues with a Covid-19 loan, but that there would be participation in the NFI during 2022-2023. A breakdown of the work could then be provided in future reports.

Ms Greenhalgh also informed the Committee of the service’s failure to meet its target for 2021-2022 in respect of professional and technical qualifications which had been missed due to recruitment issues. This had meant that the service’s strategy had been changed and a number of trainees had been brought in. Although the new staff lacked qualifications they were working towards them at the Council. Support was being provided financially and professionally by risk services and it was planned that the target for qualifications would be met in the medium term.

Assurance Statements for internal audit work completed in the quarter had also been provided as part of the report. The statement showed that most  ...  view the full minutes text for item 4.

To consider a report setting out the individual and collective outcomes of the audit reviews undertaken in the year ended 31 March 2022.

Ms Tracy Greenhalgh, Head of Audit and Risk, presented the Annual Audit Opinion to the Committee. She informed Members that the overall opinion was adequate. However a number of challenges existed including finance, Children’s Services, Regeneration and the Council Owned Company finance.

The report showed that a number of audits had yet to be completed. Ms Greenhalgh informed the Committee that these audits had been undertaken and draft reports would be available. The Committee also noted the ‘Timetable for Audit Follow-Up’ that had been included in the report.

Levels of external work and their impact on risk services resources which consisted of 18% of its work were considered, with Ms Greenhalgh explaining that the majority of work was for Council owned companies. Service Level Agreements were in place for this work and additional recruitment had been undertaken to ensure resources were sufficient.

The outcome of the Taxi advice work was discussed with members being informed that it was advice work that would not normally be considered by the Committee. The audit had engaged taxi operators on the licensing process to feed back to the Council. The response to this work was reported as being good.

Members of the Committee also discussed how unplanned audit work was paid for by Council Services. Ms Greenhalgh advised that any unplanned work was recharged back from central funds. This was based on the number of days used and was undertaken to ensure that all priority areas were covered. Mr Neil Jack, Chief Executive, added that the Council’s corporate leadership recognised the value of independent audit for assurance work. Although it was noted that as a scare resource, consideration was needed to ensure it focussed on risk and control.

The Committee agreed: That the Timetable for Audit Follow-Up be noted.

To consider a verbal update on the Annual Statement of Accounts 2020/2021.

Mr Steve Thompson, Director of Resources, provided a verbal update on the progress to receive the Annual Statement of Accounts 2020/2021. He informed the Committee that there had been no change in progress since April 2022 and that the asset depreciation issue remained unresolved. The Chartered Institute for Public Finance and Accountancy (CIPFA) had provided guidance for councils to assist in resolving this issue and work to progress the accounts could begin in July 2022 to prepare them for September 2022. The Committee also noted that the delay in preparing the accounts was being experienced by other councils.

To consider the implementation of a requirement of the Public Sector Internal Audit Standards that a Quality Assurance and Improvement Programme is implemented for the internal audit team and approved by senior management and the Audit Committee.

Ms Tracy Greenhalgh, Head of Audit and Risk, presented the Internal Audit Quality Assurance and Improvement Programme 2022/2023. She informed the Committee that the findings in the programme had been based on external assessment and an action plan had been included setting out how the service would be improved and structured.

The Committee noted that some of the target dates for actions in the programme were up to two-years away. Ms Greenhalgh explained that due to the appointment of trainees and other junior staff it would take time to achieve some of the targets, due to the time needed for training and obtaining relevant qualifications.

To consider the Committee’s updated Action Tracker.

The Committee gave consideration to the updated Action Tracker, noting that a number of actions had been completed and removed following the previous meeting.

The Committee identified that two outstanding updates were required from Mr John Blackledge, Director of Community and Environmental Services. Ms Greenhalgh advised that these would be provided by Mr Blackledge at the July meeting.

The Committee agreed: That the Audit Committee Action Tracker be noted.

To note the date and time of the next meeting of the Committee as 27 July 2022, commencing at 6.00pm.

The date of the next meeting was noted as 27 July 2022 commencing at 6pm.