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Agenda and minutes

Items
Note No. Item

46.

Apologies for Absence.

Minutes:

Apologies for absence were received from Councillor Mrs Julie Ozog (Substitute Cllr. Denzil Reynolds).

 

The Chairman welcomed Liz Jackson from Grant Thornton UK, the Council’s External Auditors and noted the presence of the Strategic Director (Internal Services), the Financial Services Manager and the Principal Internal Auditor.

47.

Declarations of Interest.

To receive any declarations of interest from Members, including the terms(s) of any Grant(s) of Dispensation.  

Minutes:

There were no declarations of interest.

MD

48.

Confirmation of the Minutes of the meeting held on 11 January 2017 pdf icon PDF 133 KB

Minutes:

            RESOLVED:

 

That the Minutes of the Audit Board meeting held on 11 January 2017 be confirmed as accurate.

49.

References from Other Committees (IF ANY)

There are no references from other Committees at present.

Minutes:

There were no references from other Committees for the Board to consider.

50.

Reports from the External Auditor and Assurance Letter pdf icon PDF 58 KB

To note the attached reports and Assurance Letter from the External Auditor, Grant Thornton UK.

Additional documents:

Minutes:

The covering report from the Financial Services Manager (FSM) presented two reports from the External Auditor, Grant Thornton UK for noting and one letter. Detail:

 

·         The Audit Plan for the Council for the Year ended 31 March 2017 (attached as Appendix A to the report);

·         An Audit Board Progress Report and Update for the Year ended 31 March 2017 (attached as Appendix B to the report) including the latest position on the Housing Benefits claim;

·         A letter dated 17 January 2017 addressed to the Board Chairman for the Year ended 31 March 2017 explaining how the Audit Board gained assurance over management processes and arrangements.

 

The FSM advised that he was co-ordinating a comprehensive response to the letter from Grant Thornton on behalf of the Chairman.

 

Liz Jackson, Engagement Lead, Grant Thornton advised Board Members that

the contents of the Audit Plan for the Council for the year ending 31 March 2017 had been discussed with management and would be conducted in line with the Local Audit and Accountability Act 2014 and in accordance with the Code of Practice issued by the National Audit Office (NAO). The Plan required the External Auditors to assess significant and other risk associated with the conduct of the Council’s finances and make a Value for Money (VfM) conclusion with regard to the Council making proper arrangements for securing economy, efficiency and effectiveness in its use of resources.

 

She advised that under ISA 240 two (2) significant risks were ‘presumed’ for all audits with regard to (i) misstated revenue streams and (ii) management over-ride of controls: in the case of the Council both risks had been rebutted by the External Auditor.

 

Following an initial risk assessment and detailed discussions with the Council’s Finance Officers, the External Auditor had identified no significant risks with regard to the Council’s Value for Money (VfM) arrangements. The External Auditors had also found the Council’s proposed budget for 2017/18 to be well balanced, but would re-examine this area later in the year, as revenue streams tightened, and prior to issuing its final report to the Board in September 2017.

 

At the previous Board held on 11 January 2017 [Min. No. 35 refers] Members had been advised by the External Auditor that initial findings from certification work undertaken on the Council’s Housing Benefit Subsidy Return for 2015-16 had revealed that the Council was at risk of losing Government subsidy; due to errors identified in the testing of calculations of claimant’s Self-Employed Income, by Council staff. Following additional review work undertaken by Council staff in February 2017 and submission of a revised extrapolation by the External Auditor to the Department of Work & Pensions (DWP) it was calculated that the Council would now retain around £70K of the subsidy which it had been at risk of losing. Subject to any follow-up from the Department work on the Council’s 2015-16 HB Subsidy Claim could now be closed.

 

The Chairman sought clarification on one point in the Audit Plan [agenda page 29] with regard  ...  view the full minutes text for item 50.

51.

Internal Audit Plan 2017/18 pdf icon PDF 57 KB

To review and approve the proposed Internal Audit Plan for 2017/18.

Additional documents:

Minutes:

This report set out for the Board the proposed draft Internal Audit Plan for 2017/18 (attached as Appendix A to the report).

 

Members were asked to review and approve the proposed Internal Audit Plan for 2017/18 as set out in Appendix A to the report together with the detailed Programme Reviews for 2017/18 (attached at Annex 1) and the Resource Plan for 2017/18 (attached at Annex 2).

 

The Principal Internal Auditor (PIA) summarised the salient points in her report for Board Members:

 

·         The 2017/18 Internal Audit Plan [Appendix A to the report] had been prepared in accordance with professional standards, including the new Public Sector Internal Audit Standards 2016 and the Accounts and Audit Regulations 2015;

·         The objective of the 2017/18 Plan was to ensure that Internal Audit resources were deployed in order to add value to the Council’s objectives whilst delivering reasonable assurances to the Council regarding the effectiveness of the internal control, governance and risk management processes, in the fulfilment of the Council’s statutory obligations;

·         The Audit Approach [agenda p.64] detailed the methodology used to evaluate where there was a need for individual audit reviews and took into account the resources currently available to the Internal Audit Team;

·         Annex 1 to Appendix A [agenda p. 69-73] set out details of the 25 (twenty-five) reviews planned in the 2017/18 Audit Plan cycle, including 5 reviews covering; Non-Domestic Rates, Licensing, Electoral Services, FOI/Data Protection and Parking Income which had been deferred from 2016/17 on a risk assessment basis;

·         Relevant management had been consulted prior to the selection of the proposed reviews and the finer points of each audit brief would be agreed with managers prior to commencement of the audit fieldwork;

·         Annex 2 to Appendix A set out details of the Resource Plan for 2017/18, which included extra training days for the Team. All reviews included in the 2017/18 Plan would be completed using ‘TeamMate’ audit software to bring consistency to audit report writing and further improve the Team’s efficiency;

·         The Internal Audit Team now comprised 3.8 auditors, 1 audit administrator plus the Principal Auditor fulfilling the role of Audit Manager, in the continued absence of the Audit, Risk and Anti-Fraud Manager (ARAFM);

·         The audit opinions that had been introduced in 2016 had all been well received by the relevant managers and would continue in force in 2017.

 

The Chairman sought confirmation that Officers were content with the control arrangements for the procurement of agency staff [Review No. 7 ‘Agency Staff’ - agenda p. 70].

 

The Strategic Director confirmed that all new staff (including agency staff) were now subject to a Baseline Personnel Security Standard Check (BPSSC) prior to appointment.

 

The Shadow Leader asked why Review No. 20 - ‘Homelessness Prevention Grants’ [agenda p.72] had been proposed and whether any ‘oversight’ mechanisms were in place to review the Council’s use of Grants which appeared widespread, in his view.

 

The PIA advised that a review of the Council’s ‘Homelessness Prevention Grant’ had not been undertaken for some time and was being  ...  view the full minutes text for item 51.

52.

Review of Internal Audit Recommendations - Progress Report pdf icon PDF 48 KB

This report is to update Members on progress with the follow-up of previous audit reports and to consider any outstanding recommendations due to be implemented as at 31 January 2017.

Additional documents:

Minutes:

This report updated Board Members on progress of the implementation of recommendations agreed with Management during the year and reported on outstanding recommendations that had been due for implementation by 31 January 2017.

 

The Principal Internal Auditor (PIA) confirmed the standard format for the progress report and its Appendices. Detail:

 

·         Appendix A summarised in a table format those recommendations that had been followed up with Management and those where implementation had been delayed;

·         Appendix B provided details of agreed recommendations where Management had advised Internal Audit that implementation of agreed actions had initially been delayed from the planned date together with a ‘latest position + source’ for each outstanding recommendation with more audit days allocated to undertake the outstanding checks.

 

The Chairman sought clarification on how the Council chased outstanding debt [‘Collection & Enforcement of Debt 2015/16 – Appendix B agenda p. 82].

 

The Strategic Director advised that use of the bespoke ‘Retriever’ software tool had proved particularly effective in the tracing of sundry debtors, allied to the increased use of Enforcement Agencies when debtors had been traced.

 

                        RESOLVED:

 

1.    That Board Members note the reasons for delayed implementation of audit recommendations as set out in Appendix B to the report;

 

2.    That Members endorse the revised dates provided by Management for implementation of outstanding audit recommendations as set out in Appendix B to the report.

53.

Audit Reports Issued Since Last Meeting of the Board pdf icon PDF 54 KB

This report is to inform Members of outcomes of the audits completed since the previous report to the Board in January 2017 and to provide Members with the opportunity to request clarification or further information, if considered necessary.

Additional documents:

Minutes:

The report (and attached Appendices A and B) informed the Audit Board of the outcomes of the audits completed since the previous report to the Board on 11 January 2017 and gave Board Members the opportunity to request clarification or further information as deemed necessary.

 

 

The Principal Internal Auditor advised that since publication of the report two (2) further audits had been finalised in respect of;

 

·        Members’ Allowances’ (Full Assurance); and

·        Markets Income’ (Substantial Assurance)

 

                        RESOLVED:

 

1.    That Audit Board Members note the contents of the report and Appendices A and B.

54.

Progress Report on Internal Audit Annual Plan 2016/17 pdf icon PDF 52 KB

This report summarises the audits issued during the year and provides information regarding the progress made against the Audit Plan for 2016/17.

Additional documents:

Minutes:

This report provided Members of the Board with information regarding the progress of the Internal Audit Team in delivering the Annual Internal Audit Plan 2016/17.

 

The Principal Internal Auditor (PIA) reminded Board Members that the Internal Audit (IA) Function was a key process of the Council’s overall governance arrangements. The key purpose of the IA function was to conduct independent reviews of the Council’s system of internal controls, risk management processes and governance arrangements, in order to provide assurance to both Senior Management and Members regarding the effectiveness of such systems.

 

A summary of progress made in delivering the assurance requirements for 2016/17 was attached at Appendix A to the report and included reviews conducted in March 2017. Members were advised that nineteen (19) planned reviews had commenced, with twelve (12) finalised, one (1) at draft stage and six (6) others at various stages of progress.

 

Members were informed that the Internal Audit Plan 2016/17 had been amended to take into account existing capacity and to reflect the assurance priorities for the remainder of the 2016/17 municipal year. Some productive capacities had been lost due to a vacancy and the long-term absence of the Audit Manager. With the approval of Senior Management nine (9) reviews had been re-assessed resulting in five (5) reviews being carried forward into the 2017/18 Plan and four (4) as being of low risk and withdrawn.

 

The use of Internal Audit resources for the period up to 31 January 2017 was recorded in Appendix B to the report and took account of additional staff training days.

 

The PIA advised that since publication of the agenda the number of reviews at final report stage had increased to fourteen (14) [Appendix A agenda p.95]. This figure compared very favourably to the corresponding period in 2016 when only eight (8) reviews had reached final report stage.

 

The Shadow Leader expressed the view that; whilst understandable given recent electoral activity and the forthcoming Kent County Council elections in May 2017; the proposed review of ‘Electoral Services’ [Appendix A agenda p.95 review No. 6] should be conducted as a matter of priority in 2018.

 

The Strategic Director (Internal Services) and Section 151 Officer paid tribute to the efforts of the Internal Audit Team in the period under review, an especially commendable effort she advised, given the continued absence of the Audit Manager.

 

The Audit Board fully endorsed the Strategic Director’s comments and congratulated the Internal Audit Team on their performance in the period under review.

 

 

RESOLVED:

 

1.    That Board Members note the contents of the report and the progress made against the 2016/17 Annual Audit Plan.

 

 

55.

Selective Invoice Checks pdf icon PDF 60 KB

During the January 2017 meeting of the Board, Members selected five creditor payments for checking, in order to ascertain the probity and accuracy of the transactions. This report summarises the findings of that exercise and provides Members the opportunity to select further payments for checking, if required.

Minutes:

At the last meeting of the Audit Board on 11 January 2017 Board Members selected five (5) creditor payments for checking. The report advised Members of the outcome of that exercise.

 

The results of the Internal Audit review of the selected creditor invoices confirmed that all spend decisions made were appropriate and in compliance with Council procedures.

 

Members were invited to select five (5) further creditor payments for examination by the Internal Audit Team and subsequent reporting to the Board in June 2017.

 

 

                        RESOLVED:

 

1.    That Board Members note the contents of the report;

 

2.    That five (5) further creditor payments be selected by Board Members for checking by Internal Audit and the outcome reported back to the Board in June 2017.

56.

Anti-Fraud and Corruption Strategy Update 2017 pdf icon PDF 58 KB

That Members review and approve the proposed amendments to the Strategy.

Additional documents:

Minutes:

The report set out proposed amendments to the Council’s existing Anti-Fraud and Corruption Strategy (approved by the Audit Board in January 2011) as part of the required annual review process [Strategy, Section 5 refers].

 

An amended Strategy document was attached as Appendix A to the report for review by Members who were advised that; the review was in line with ‘best practice’, was required - given the passage of time since the last review in 2011, that the proposed changes were minor in nature and had been approved by Senior Management. Detail:-

 

·         The inclusion of a translation and alternative format strapline to the back page to inform users that the Policy, if required, was available in alternative formats [Policy pages 8/9 Agenda pages 111/112];

·         All references to the former ‘Anti-Fraud Team’ had been replaced with ‘Counter Fraud Team’ terminology;

·         Re-wording of para. 2.4 of the Policy to include “A Baseline Personnel Security Standard Check (BPSSC) will be made for all new starters”.

 

 

                        RESOLVED:

 

1.    That Members approve the proposed amendments to the Anti-Fraud and Corruption Strategy as set out in Appendix A to the report.

 

57.

Joint CIPFA training with Members of Sevenoaks Council's Audit Committee

Minutes:

The Strategic Director advised Board Members that Sevenoaks Councillors had expressed a preference for the proposed joint CIPFA training to be held at their Civic Centre offices on the evening of Monday 5 June 2017 to begin at the slightly earlier time of 6.30 p.m.

 

The training was expected to last between 2.5 and 3 hours and would offer Members from both authorities the opportunity to share in existing ‘best practice’ in addition to deepening their knowledge of CIPFA procedures as a whole.