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 made on this occasion.

To agree the minutes of the last meeting of the Audit Committee held on 15 September 2022 as a true and correct record.

The Committee considered the minutes of the last meeting held on 15 September 2022 and requested that Councillor Ms Maxine Callow, Scruitny Lead-Member, be added to the list of attendees.

Resolved: That the minutes of the meeting held on 15 September 2022, subject to the amendement outlined above, be signed by the Chair as a true and correct record.

To receive a verbal update from the External Auditor, on progress to sign-off the Annual Statement of Accounts.

Mr Stuart Kenny, External Auditor, Deloitte, provided a verbal update on progress to sign-off the Annual Statement of Accounts 2021/2022. He informed members that work on the 2021/2022 accounts was underway and it was expected that this would be ready for March 2023.

In respect of the 2020/2021 accounts Mr Kenny reported that Chartered Institute of Public Finance and Accountancy (CIPFA) and the Department for Levelling Up, Housing and Communities, had developed a solution for the recording of Infrastructure Assets. This would be enacted via Statutory Instrument on 30 November 2022 and have effect from 21 December 2022. Once this had taken place the work could begin in finalising the 2020/2021 accounts with sign off expected in January 2023. The Committee noted that this timescale would mean that the end of December 2022 and early January 2023 would be busy periods for the external auditor and Council Officers involved.

It was queried if the work required to sign off the outstanding accounts would mean that additional costs were incurred from the external auditor. Mr Kenny explained that this was likely to occur, but that all costs would be agreed with the Council’s Corporate Leadership Team and reported to the Committee.

Mr Steve Thompson, Director of Resources, also informed the Committee that from 2023, KPMG had been allocated as the Council’s new external auditor.

Resolved: That the update be noted.

To consider a summary of the work completed by Audit and Risk Services in quarter two of the 2022/23 financial year.

Ms Tracy Greenhalgh, Head of Audit and Risk, presented the Audit and Risk Services Quarter Two report. She reported that during quarter two the Audit team had been reduced by three officers to eight auditors which would affect the ability of the team to deliver against the Audit Plan and that any major changes would be reported back to the Committee as part of the quarter three reporting.

Details of work to update to the Council’s departmental risk registers were reported with 59% having been completed. In respect of Children’s Services it was highlighted that this figure was at 66% completed. Ms Greenhalgh explained that each directorate had a number of risk registers and that the audit team would be chasing up the outstanding registers during quarter three.

The Committee noted that the report stated that the Audit Team had reduced in professional qualifications by 25% in quarter two with Ms Greenhalgh explaining that this figure represented the number of staff with professional qualifications and had been impacted by the reduction in members of the team. She added that the team had recruited a number of trainee auditors to support ongoing audit work, and that although it would take time, this new employees would be supported in gaining the necessary professional qualifications.

Mandatory fraud awareness training in Children’s Services was shown at 62% having been completed and the Committee expressed concern that this was lower than other directorates. Ms Greenhalgh replied that the Director of Children’s Services (DCS) had been informed of which members of staff not yet undertaken the training and would ensure that they did so in a timely manner. The Committee asked that progress to improve the number who had undertaken the fraud awareness training be highlighted in future reporting to allow ongoing monitoring.

Ms Greenhalgh also reported on the outcome of internal audit reports issued during quarter two and reported that in most adequate assurance had been found. In respect of the Children’s Service’s Financial Systems Development Audit, however inadequate assurance had been found. In response to this the DCS and set up a working group under the responsible Assistant Director to work toward improvement against the audit recommendations made. Mr Steve Thompson, Director of Resources, added that the working group’s establishment would provide assurance that the necessary work was taking place and have input from the audit and finance teams. Members therefore asked that a report on the progress of the working group’s work be provided to the Committee in six months time.

The Civil Claims Financial Data audit was also discussed with Ms Greenhalgh highlighting that split assurance had been given in this case. This was due to inadequate assurance being found in the handling of potential claims, with changes being made without consultation with the Risk and Resilience and Self Insurance Panel. The Committee was informed that there would therefore be discussions with the panel to determine a suitable approach to be taken to resolve this issue.

It was also queried the what  ...  view the full minutes text for item 4.

To consider a progress report on individual risks identified in the Council’s Strategic Risk Register and to consider the controls being implemented to manage the strategic risk relating to legal.

The Committee considered a deep dive into the Strategic Risk ‘Legal’ which included the sub-risks (a) ‘Hardening insurance market’, (b) ‘Inadequate safety management of the public realm/communities’ and (c) ‘Unsafe workplace’.

a)     Hardening Insurance Market

Mr Steve Thompson, Director of Resources, provided an update in respect of sub-risk (a). He reported that controls in place to mitigate the risk of a hardening insurance market included a robust Risk Management Framework and dedicated risk register for Council projects, which could be used to demonstrate to insurers how the Council managed risk. The reports Appendix demonstrated how the Council’s approach to risk had resulted in a reduction in Council insurance claims since 2011 and a reduction in the Strategic risk score for this sub-risk from 20 to 16.

Further to this the Risk and Resilience Team was undertaking a procurement exercise for a new claims handling system, which would improve efficiency and the management of information to assist with lessons learned. The team had received a number of demonstrations of potential systems and it was foreseen that the procurement would be complete for the 2023-2024 financial year.

Mr Thompson also reported that a new Risk and Resilience Officer would be appointed to assist with work to undertake a procurement exercise for the Council’s insurance portfolio. This work would ensure that the Council had value for money and that comprehensive insurance was in place. It was expected that this procurement would take place in April 2023 with insurers appointed by April 2024.

The Committee queried if the Risk and Resilience Team undertaking the procurement of an insurer created a conflict of interest. In response Mr Thompson explained that the procurement would be undertaken by the Procurement Team, with advice from Risk and Resilience, and that therefore no conflict existed.

The overall cost of insurance, including self-insurance, for the Council annually was approximately £3m. This presented an ongoing challenge for the team and issues outside of the Council’s control, such as the cost of living crisis and the war in the Ukraine, had meant that costs were expected to increase and insurers becoming more risk averse. These could be partially mitigated through demonstrating the Council’s risk management processes. Mr Thompson added that where an insurer could not be found then the Council would seek to self-insure to ensure coverage was in place.

Mr John Blackledge, Director of Community and Environmental Services, provided an update in respect of Highways insurance claims. He reported that due to the risk management approach taken that claims that had previously cost around £1m had reduced to approximately £100k. This approach had included the establishment of a joint risk management group in the Highways team and a dedicated highways Health and Safety Officer in Audit and Risk.

Members asked if all Council owned vehicles had trackers installed to monitor usage, noting that this would assist in managing risk. Mr Blackledge explained in response that the majority of vehicles had trackers, but some older vehicles did not.

Oversight of the risks  ...  view the full minutes text for item 5.

To consider a progress report on the recommendations made in the internal audit report of the Management of Leisure Centers issued on the 24 February 2022.

Ms Lisa Arnold, Strategic Head of Service Community and Wellbeing,

CES Management and Admin Support, presented a report on progress made against recommendations identified as part of the Internal Audit of the Management of Leisure Facilities. The audit had sought to review the financial losses incurred due to Covid, the recovery plans in place and the impact on staffing and recruitment.

The audit had found that adequate assurance was in place and had made 7 recommendations for improvement. In response to this the leisure services team had agreed actions to address the recommendations made.

In respect of the income of leisure centres, the Committee was informed that this had been affected by individual decisions following Covid and the closure of centres during the pandemic. Following the lifting of Covid restrictions and the reopening of leisure facilities the Council had sought to demonstrate the safety of its centres to encourage individuals to return and address concerns that they could have.

In respect of recommendation 3 the Committee was informed that the term “significant” relating to financial benefits or risks, applied to projects valued at over £10k. This had been agreed with the Auditor and Ms Arnold confirmed that no current projects had met this threshold. Ms Tracy Greenhalgh, Head of Audit and Risk, added that as service manager Ms Arnold was best placed to determine what constituted a significant project and Audit had been guided by her advice.

The rotation of Facility Managers made by recommendation 7 was discussed by the Committee with it being noted that this action had not been undertaken. Ms Arnold explained that this had been the case due to it being recommended that only consideration be undertaken, which had taken place. However it was decided that due to the Covid recovery journey being underway and the relevant managers’ embracing their roles within it that now was not the appropriate time to introduce such a change. She added however that it would be kept under consideration going forward recognising the benefit in developing the services’ managers.

Going forward Ms Arnold outlined that Leisure Facilities recovery from the Covid pandemic was based on encouraging people to return to becoming physically active. Before the pandemic the service had sought to compete with the private sector, however it was recognised that this was no longer feasible. This new approach involved closer working with Public Health and NHS partners, and had created a number of opportunities for improving community health.

The program of exercise classes offered was discussed with Ms Arnold explaining that these had been historically popular. The number of attendees had reduced since Covid and consideration was needed to determine how best to proceed with the Council’s offer.

Resolved: That the update be noted.

To consider the Committee’s updated Action Tracker.

The Committee gave consideration to the updated Action Tracker.

Resolved: To note the Action Tracker.

To note the date and time of the next meeting of the Committee as 24 November 2022, commencing at 6.00pm.

The date and time of the next meeting was confirmed as Thursday, 24 November 2022 at 6pm.