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.

To agree the minutes of the last meeting of the Audit Committee held on 20 January 2022 as a true and correct record.

The Committee agreed that the minutes of the meeting held on 20 January 2022 be signed by the Chairman as a true and correct record.

To consider the actions being implemented to address the audit recommendations relating to the Blackpool Museum Project.

Mr Alan Cavill, Director of Communications and Regeneration presented a progress report on the recommendations made following the internal audit review of the Blackpool Museum Project which had been completed in November 2020. The Committee considered the action plan of agreed recommendations and Mr Cavill provided a summary of progress in relation to each of the resulting four recommendations.

With regard to the reported inclusion of performers within the museum experience, the Committee questioned whether a budget had been allocated for the payment of such performers or whether the positions would be drawn from the pool of volunteers. Mr Cavill confirmed that the performers would be paid professionals and as such an appropriate budget had been agreed to cover performance costs. In response to a question from the Committee regarding the creation of jobs for Blackpool residents, Mr Cavill advised that there were currently 10 members of staff employed on the museum project who would transfer to the museum and that a further 30 vacancies would be available, including the position of Chief Executive.

The Committee queried whether Mr Cavill was confident that delivery of the action plan would be achieved. He reported that progress against the business plan and action plan was constantly reviewed and whilst any future impact of the pandemic could not be predicted, he was confident that all possible measures for success had been considered.

The Committee thanked Mr Cavill for his attendance and for providing a comprehensive update on the museum project.

To consider the actions being implemented to address the audit recommendations relating to Advertising.  

Following a previous update to the Committee in September 2020 on the internal audit review of advertising, Mr Philip Welsh, Head of Tourism and Communications had been invited to provide a further progress update to the Committee. Mr Welsh advised that whilst the pandemic had proven to be a challenging period for securing advertising due to the closure of many leisure assets, the downtime had been utilised to undertake a detailed asset audit, as well as staff training and improvements to the website.

In relation to the advertising business plan, Mr Welsh reported that this continued to be a work in progress and was currently under review as a result of developments within the digital marketing field. Committee Members questioned whether they had been in receipt of the latest advertising policy and business plan, with Mr Welsh advising that the advertising policy could be accessed via the Council’s website, the link for which he offered to circulate to Committee Members. With regard to the business plan, he advised that the updated version would be completed and available within the next few weeks.

The Committee sought an update in relation to recommendation R6 ‘The responsibility for securing sponsorship should be clearly assigned and be part of the overall strategy,’ specifically enquiring as to what progress had been made in this area. Mr Welsh reported that the Business Development Manager had assumed responsibility for sponsorship and this included the Illuminations, events and publications, as well as looking at cross-selling opportunities to benefit both the advertiser and Council assets income. He advised that the initial focus had been on the Illuminations, with the sponsorship target having been successfully exceeded. Following this, the approach had been widened to include a number of other events and as a result sponsorship had been secured for last year’s Christmas village event.

With regard to R9 ‘A central asset register should be established by the Advertising team,’ the Committee asked whether the register included all assets or if any had been excluded. Mr Welsh confirmed that it covered all Council-controlled assets and advised that the register provided an accurate audit of such assets.

The Committee questioned whether the service was on target to achieve recommendations R10 ‘A comprehensive and supported rate card for the advertising assets should be maintained,’ and R11 ‘Charge rates should be benchmarked periodically with similar and/or nearby local authorities to ensure that a fair market rate is being achieved.’ Mr Welsh informed the Committee that whilst progress was on target, a full review of the pricing policy was underway in response to changes in market conditions as a result of the pandemic and advertisers’ reduced marketing budgets. He further reported that whilst the provision of advertising for local services was popular, the challenge remained to attract national advertisers, with work still needed to improve the ratio of local to national contracts.

In response to a Committee question asking which recommendation had been the most beneficial, Mr Welsh reported that gaining an overall view of  ...  view the full minutes text for item 4.

The Audit Committee is asked to note the Strategic Risk Register for 2022/2023 and to approve the proposed programme of deep dive reviews which will be presented at future meetings.

Mrs Tracy Greenhalgh, Head of Audit and Risk presented the Strategic Risk Register for 2022/2023, along with a proposed programme of deep dive reviews for consideration at future Committee meetings. Mrs Greenhalgh advised that for 2022/2023 the Strategic Risk Register had been updated and reformatted to ensure that it incorporated key information, highlighting the main difference as being that the categories of risk had been changed to align with the Risk Management Framework 2021-2025. She identified the main advantages of this realignment as being that the Strategic Risk Register would now follow the same format encouraged for service and project risk registers in the Risk Management Framework and that the new risk categories would allow for better grouping of sub-risks rather than services being spread over many risks, as was the case with the previous version of the Risk Register. Mrs Greenhalgh informed the Committee that a number of new risk areas had been incorporated into the Strategic Risk Register and included Health and Wellbeing; Special Educational Needs and Disability; Key Strategic Partners’ Failure and Insurance.

In relation to the proposed schedule of deep dive reviews, the Committee questioned why the risk category of Commercial had been scheduled for December 2022. Mrs Greenhalgh advised that the review areas could be re-scheduled as requested by the Committee and she had aimed to include risk areas which had recently been considered by the Audit Committee, but that review of commercial activity at the end of the year may be useful. Mr Neil Jack, Chief Executive praised the new format, noting that the revised Strategic Risk Register would allow for more focused scrutiny of specific areas by the Committee.

Resolved:

1.    To note the Strategic Risk Register for 2022/2023;

2.    To approve the proposed programme of deep dive reviews for consideration at future Audit Committee meetings.

To obtain approval from the Audit Committee for the Fraud and Error Prevention Charter 2022/2023.

Mrs Tracy Greenhalgh, Head of Audit and Risk presented the Fraud and Error Prevention Charter 2022/2023 for consideration for approval by the Committee. Mrs Greenhalgh reported that the Fraud and Error Prevention Charter set out the Council’s Anti-Fraud and Corruption Statement which outlined the Council’s zero tolerance approach when dealing with fraud, corruption and bribery. It also outlined the fraud risk assessment and associated counter fraud programme which had been based on best practice guidance from the Chartered Institute of Public Finance and Accountancy (CIPFA) to ensure that it took account of emerging threats and focused on priority fraud risks. She informed the Committee that the Charter had been updated to include a section on communication and also expanded to reflect the new responsibilities of the internal audit team with regard to internal investigations.

Within her report Mrs Greenhalgh had included the latest fraud benchmarking report which had been released by CIPFA in 2020 and as such reflected fraud risk pre-pandemic. She advised that the Council would continue to participate in the fraud benchmarking exercise and she would share any emerging results with the Audit Committee once the exercise had resumed post-pandemic. 

The Committee questioned how Blackpool’s risk profile in relation to procurement fraud compared to the national data as reported by CIPFA. Mrs Greenhalgh advised that as procurement was a key risk area, the Council had established a Corporate Procurement Team in order to decrease the risk across the Council.

Clarification was sought by the Committee over the role undertaken by Blackpool Coastal Housing in relation to housing fraud. Mrs Greenhalgh agreed that housing presented a high risk area for potential fraud and advised that Blackpool Coastal Housing led on housing fraud but that support was available from the internal audit team as required. Discussion occurred around other high risk fraud areas, including Council Tax single person discounts and applications for the blue badge scheme. Mrs Greenhalgh identified that data matches via the National Fraud Initiative and work with the Council’s enforcement officers helped to manage risk across these areas.

In response to a question from the Committee on whether there had been an increase in any risk areas as a result of home working, Mrs Greenhalgh noted that any change in working practices had the potential to increase risk but that as all the Council’s financial systems contained in-built controls wherever possible, any such risk had been kept to a minimum.

Resolved: To approve the Fraud and Error Prevention Charter for 2022/2023.

To obtain approval from the Audit Committee for the Internal Audit Plan 2022/2023. 

Mrs Tracy Greenhalgh, Head of Audit and Risk presented the Internal Audit Plan 2022/2023 for consideration for approval by the Committee. Mrs Greenhalgh reported that each risk-based review would include core areas of internal control such as business planning, performance monitoring and security of assets. Segregation of duties in key processes would remain an important focus given the current economic climate and issues identified from past work. She informed the Committee that compliance testing would account for approximately fifty percent of the allocated audit resource to complement risk-based audit work with a robust set of compliance testing and that any changes to the programme of risk-based work would only be made following discussion with the Council’s Section 151 Officer.

Mrs Greenhalgh outlined the process by which the Internal Audit Plan was formulated, explaining that an exercise was undertaken to risk assess each Council service using a weighted criteria including materiality, system stability, devolved control, internal control and sensitivity. This was undertaken by the internal audit team using its combined knowledge and experience. Mrs Greenhalgh then met with each Directorate management team to present internal audit’s priorities and establish what managers considered to be risks faced by their service areas. The resulting information was then collated into one document and a further risk assessment undertaken to identify which of the risks could be resourced within the Internal Audit Plan. Factors which informed this included whether a follow-up of priority one recommendations had already been planned, the time since the last review, whether assurance could be obtained from a different source and whether internal audit could gain assurance through an alternative method. Once approved, Mrs Greenhalgh explained, each review identified within the Internal Audit Plan would be allocated to a member of the internal audit team and findings reported back to the Audit Committee via the Risk Services quarterly reports.

The Committee asked Mrs Greenhalgh if any specific challenges had been faced by her team and whether the Audit Committee could offer any support in helping to overcome any such challenges. Mrs Greenhalgh advised that staff resource had been a significant issue over the past two years, specifically difficulties in recruiting suitably qualified audit staff. As a result, despite now having recruited to all vacancies, Mrs Greenhalgh noted that her team contained a number of junior members of staff who would require additional training to gain the relevant qualifications. The Committee expressed its thanks to Mrs Greenhalgh and her team for the ongoing hard work.

Resolved: To approve the Internal Audit Plan for 2022/2023.

To present the updated Internal Audit Charter for approval by the Audit Committee.

Mrs Tracy Greenhalgh, Head of Audit and Risk presented the Internal Audit Charter for 2022/2023 for consideration for approval by the Audit Committee. Mrs Greenhalgh reported that the Internal Audit Charter defined internal audit’s mission, purpose, authority and responsibility. The Chartered Institute of Public Finance and Accountancy (CIPFA) and the Chartered Institute of Internal Auditors (CIIA) set the internal audit standards in respect of local government across the UK and adopted a common set of Public Sector Internal Audit Standards (PSIAS) in April 2013 and the Charter followed the model document provided by the Chartered Institute of Internal Auditors.

Resolved: To approve the Internal Audit Charter 2022/2023.

To receive a verbal update from Deloitte and Mr Steve Thompson, Director of Resources on the ISA 260 and final accounts audit.

Mr Steve Thompson, Director of Resources updated the Committee on the ongoing audit of the 2020/2021 final accounts and ISA260. Mr Thompson reminded the Committee that following the last meeting of the Audit Committee in January 2022, it had been anticipated that the final accounts would be ready for consideration at this meeting. He advised that due to new guidance around the treatment of a number of accounting issues, including Covid-19 support payments, completion had been delayed but he expected all matters to be resolved over the next few weeks. As a result, Mr Thompson informed the Committee that the final accounts and ISA260 would be reported to the next meeting on 28 April 2022.

Ms Nicola Wright, Audit and Assurance Partner at Deloitte agreed that it had been preferable to ensure the work had been completely accurately rather than to rush in order to meet the Committee’s reporting deadline and that the audit was very close to completion.

Resolved: That the 2020/2021 final accounts and ISA260 be presented to the next meeting of the Audit Committee on 28 April 2022.

To consider the Committee’s updated Action Tracker.

The Committee gave consideration to the updated Action Tracker and a progress update on action 1 ‘That the impact of the newly established joint working arrangements with the Department for Work and Pensions be reported to the Committee at a future meeting,’ was requested from Mrs Tracy Greenhalgh, Head of Audit and Risk. Mrs Greenhalgh advised that a Service Level Agreement was in place with the Department for Work and Pensions (DWP) but that the service had not been functioning due to a reduction in the DWP’s available fraud resource. This situation had now been resolved and Mrs Greenhalgh anticipated that work with the DWP would commence imminently.

With regard to action 3 ‘To receive an update report on the cost analysis findings of Traffic Regulations Orders at a future meeting of the Committee,’ and action 8 ‘The Committee to receive a progress update on the development of the junction of Common Edge Road following the appointment of a consultant and designers,’ the Committee was informed that Mr John Blackledge, Director of Community and Environmental Services would provide the requested information at the next meeting on 28 April 2022. Furthermore, the data as requested within action 11 on the number of children being schooled at home had been requested from Mrs Vicky Gent, the Director of Children’s Services and would be circulated to Committee Members once received.

Resolved: To note the Audit Committee Action Tracker.

To note the date and time of the next meeting of the Committee as 28 April 2022, commencing at 6pm.

The date of the next meeting was noted as 28 April 2022, commencing at 6pm.