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Agenda and minutes

Items
Note No. Item

40.

Apologies for Absence

Minutes:

Apologies for absence were received from Councillor D Swinerd.

 

The Chairman welcomed his guests Darren Wells (Engagement Lead) and Laurelin Griffiths (Engagement Manager) from the Council’s external auditors Grant Thornton UK to the meeting and noted the presence of the Strategic Director (Internal Services), the Financial Services Manager and the Acting Internal Audit Manager.

 

 

41.

Declarations of Interest.

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

Minutes:

There were no declarations of interest.

MD

42.

Confirmation of the Minutes of the meeting held on 24 January 2018 pdf icon PDF 121 KB

            RESOLVED:

 

That the minutes of the Audit Board held on 24 January 2018 be confirmed

Minutes:

The Strategic Director (Internal Services) advised Members that the Council’s draft Information Security Policy was with the Managing Director for approval [Min. No. 31 agenda p.2 penultimate para refers].

 

                        RESOLVED;

 

1.    That the Minutes of the Board meeting held on 24 January 2018 be confirmed as accurate.

43.

Urgent Items

The Chairman will announce his decision as to whether there are any urgent items and their position on the agenda.

Minutes:

The Chairman confirmed that there were no items of urgency for the Board to consider.

44.

References from Other Committees (IF ANY)

There are presently no references from other Committees.

Minutes:

There were no reference reports from other Committees for the Board’s consideration.

45.

Reports from the External Auditor and Assurance Letter pdf icon PDF 53 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 to Board Members for consideration the following listed documents from the Council’s External Auditors Grant Thornton UK:

 

·         The Audit Plan for 2017/18 which explained the process and timescales envisaged for the audit of the Council’s Statement of Accounts [attached as Appendix A to the  report];

·         An Audit Progress and Sector Update Report submitted to each meeting of the Board [attached as Appendix B];

·         An Assurance Letter (dated 8 February 2018) addressed to Councillor Hammock as Audit Board Chairman [attached as Appendix C].

 

Darren Wells (Engagement Lead, Grant Thornton) referred Members to the summary page of the 2017/18 Audit Plan document [Appendix A agenda p.15] and advised that:

 

·         The ‘Significant risks’ listed for specific audit consideration were standard to all local authorities;

 

·         The concept of ‘Materiality’ adopted under the National Audit Office (NAO) Code of Audit Practice (“the Code”) was that not all individual Council transactions would be tested, only a sample equating to 2% of the Authority’s gross expenditure for 2016/17 with any omissions or misstatements below £64k deemed to be ‘trivial’ and not reported;

 

·         The ‘Value for Money’ assessment had identified no key risks at present but would be kept under review until the date of Grant Thornton’s opinion;

 

·         Grant Thornton as external auditors were completely independent of the Council as the local authority body for Dartford.

 

In response to the Chairman’s specific request, the Engagement Lead explained that in the context of the Council’s gross annual expenditure [£64 m in 2017/18] £64k was deemed ‘trivial’ in accounting terms, if not to the average man and woman in the street.

 

Members were advised that GT’s interim audit of the Council’s 2017/18 financial statements had commenced in March 2018 [summarised in pages 32, 34 and 35 of the agenda] and that matters were progressing well with the full co-operation of the Council’s Finance team.

 

The Sector Update for local government finances, details of updated CIPFA publications and an Overview of the General Data Protection Regulation (effective from May 2018) was set out for Members information at agenda pages 36-43.

 

The FSM advised that he was in the process of co-ordinating a comprehensive response for signature by the Board Chairman, to the External Auditor’s Assurance Letter of 8 February 2018 [Appendix C to his report - agenda p.45].

                        RESOLVED:

 

1.    That Members note the External Auditor’s plan for the audit of the Council’s 2017/18 accounts;

2.    That Members note the contents of the Audit Committee Update for Dartford Borough Council presented by the External Auditor;

3.    That Members note the letter (dated 8 February 2018) from the External Auditor and the proposed action to be taken by the Council in response.

 

46.

Internal Audit Plan 2018/19 pdf icon PDF 57 KB

This report sets out the proposed Internal Audit Plan for 2018/19.

Additional documents:

Minutes:

The report from the Acting Audit Manager set out the proposed Internal Audit Plan for 2018/19 [attached as Appendix A to the report].

 

The Acting Audit Manager advised Members that the methodology used to formulate the 2017/18 Plan had been applied to the 2018/19 Plan including; input from Service Managers and the calculation of ‘Risk’ across all the Council’s functions and service provision. Annex 1 to the Plan (agenda pages 61-64) gave specific details of the Internal Audit programme of work for 2018/19 to be undertaken by a staff compliment of 2.8 auditors plus the Acting Audit Manager. The Internal Audit Resource Plan 2018/19 (attached as Annex 2 to the Plan - agenda p.65) gave details of the total audit days available, together with a breakdown of audit days allocated to specific areas of Council activity.

 

The Chairman expressed his surprise that 5 (five) days had been allocated to the audit of Members’ Expenses [Annex 1, Review 3 - agenda p. 61]. His experience was that very few expenses were claimed by Members.

 

The Acting Audit Manager explained that the proposed 5 day Review of Members’ Expenses would be a broad-brush exercise, concentrating on the structure and rationale of Members Allowances and Special Responsibility Allowances, rather than individual expenses claims from Members. 

 

The Shadow Chairman of the Board expressed his approval of the proposed Review of Members’ Expenses, as outlined by the Acting Audit Manager, which would provide valuable assurance through the audit process, irrespective of the level of expenses claims made by Members.

 

In separate reference to the process for Review 17 – Fleet Vehicle Management (Annex 1 agenda p.64) the Acting Audit Manager advised the Shadow Chairman that the Review had not yet commenced.

 

                        RESOLVED:

 

1.    That Members approve the proposed Internal Audit Plan for 2018/19 as enclosed at Annex A to the report.

47.

Review of Internal Audit Recommendations - Progress Report pdf icon PDF 49 KB

This report is to update Board Members on progress with the follow-up of previous audit reports and to consider any outstanding recommendations due but not implemented as at 31 January 2018.

Additional documents:

Minutes:

The Standard report from the Acting Audit Manager updated Members on the progress that had been made in the implementation of recommendations agreed with Management during 2017/18, and to report on outstanding recommendations due to have been implemented by 31 January 2018.

 

Details of the audit action taken were set out in Appendix A to the report (agenda pages 69-73) 5 (five) recommendations remained ‘Outstanding’.

 

The Vice-Chairman expressed his concern, in reference to Recommendation 1 [agenda p. 69 – Audit: Safeguarding 2015/16] that only 80% of relevant Officers that require an up-to-date DBS (Disclosure and Barring Service) check had produced documentation of their current status or completed the on-line application. He asked if the 20% of relevant Officers who had not produced the required documentation were spread across all Council services.

 

The Strategic Director (Internal Services) advised that the Council followed strict criteria in their management of Officers who required DBS authorisation to undertake their duties. She recalled that the outstanding 20% figure for Officers referred to only 1 or 2 staff members in the same Department, but would confirm this figure for the Board.

 

The Shadow Board Chairman asked what ‘chasing’ mechanisms were being pursued by the Council to ensure that all relevant Officers requiring extant DBS status attained that requirement.

 

The Strategic Director advised that the relevant staff had extant DBS status when hired, but lacked up-to-date documentation. The HR Manager/Business Advisor was chasing up their manager(s) to produce the required documentation, but in the interim, given their long-standing status with the Council the Officers concerned continued to carry-out the full range of their designated duties.

 

Members agreed the Vice-Chairman’s suggestion that if the relevant Managers did not ensure that their staff either produced evidence of extant DBS status or undertook the Council’s on-line application process for DBS status, the Managers should be sanctioned and asked to appear before the Board to explain their ‘failings’.

 

Members also agreed the Chairman’s suggestion that the Audit of ‘Valuation & Property Services 2015/16’ [Appendix B agenda p.73] be removed from the Audit Plan for 2017/18 given Management’s view recorded in the ‘Latest position’ comment (p.73) that the ‘Estates module’ being audited was of limited benefit to the Council and no longer in use.

 

                        RESOLVED:

 

1.    That Board Members note the reasons for delayed implementation of the actions outstanding and endorse the revised dates for implementation provided by Management as set out in Appendix A to the report;

2.    That Members note and endorse the decision taken by Management where no further action is intended, as detailed in Appendix B to the report.

  

48.

Audit Reports Issued Since Last Meeting of the Board pdf icon PDF 55 KB

This report is to inform the Board of the outcomes of audits completed since the previous report to the Board in January 2018 and to provide Members with the opportunity to request clarification or further information, if considered necessary.

Additional documents:

Minutes:

This report and Appendices informed Audit Board Members of the outcomes of the audits that had been completed since the previous report to the Board on 24 January 2018 and provided Members with the opportunity to request clarification or further information, if considered necessary.

 

The Acting Audit Manager referred Members to Appendix A to the report which set out in standard format details of the audits undertaken in the period under review. Three (3) audits had received a ‘Full Assurance’ Opinion, two (2) a ‘Substantial Assurance’ Opinion with one (1) audit review [Environmental Health Customer] submitted for ‘Information’ purposes only.

 

The Shadow Board Chairman thanked the Acting Audit Manager for her report and requested to see the full report for Audit No. 4 – Electoral Registration 2017/18. He expressed a particular interest in the internal processes of the ER Section and proposed that Members examine the full audit report at a future meeting of the Board.

 

The Chairman suggested, and the Board agreed that all Members should be provided with a summary for Audit No. 4 for their information. The Acting Audit Manager noted the request.

 

RESOLVED:

 

1.    That Members note the contents of the report and Appendix A as submitted, and the ‘Definition of Audit Opinion’ set out in Appendix B to the report.

 

49.

Progress Report on Internal Audit Plan 2017/18 pdf icon PDF 49 KB

This report summarises the audits issued during the year and provides information regarding the progress of the Audit Plan for 2017/18.

Additional documents:

Minutes:

The report provided Members of the Board with information regarding the progress of the Internal Audit Team in delivering the Annual Internal Audit Plan 2017/18.

 

The Acting Audit Manager advised Members that her Team had performed exceptionally well as detailed in Appendix A to the report [agenda p.87] which recorded progress as at 28 March 2018. Since publication of the report, as of 25 April 2018, all 24 scheduled audits had been completed by the Team. She believed that this was a first time the Internal Audit Team had achieved this significant target.

 

The Cabinet Portfolio Holder for Strategic Council Finances & Major Capital Projects (present as a Board Member) congratulated the Acting Audit Manager and her Team on an excellent performance and asked that his comments be recorded in the Minutes.

 

The Chairman and fellow Board Members endorsed the comments of the Cabinet Portfolio on the excellent performance and significant achievement of the Internal Audit Team in the period under review.

 

                        RESOLVED:

 

1.    That Members note the contents of the report.

50.

Selective Invoice Checks pdf icon PDF 63 KB

During the January 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 the opportunity for Members to select further payments for audit checking.

Minutes:

At the last meeting of the Board on 24 January 2018 Board Members selected 5 (five) creditor payments for checking. The report advised Members of the outcome of that exercise.

 

The report advised that the results of the Internal Audit review confirmed that all the spend decisions made in respect of the creditor payments selected by Members were appropriate and in compliance with Council procedures, as set out in detail, in the full report findings.

 

Members selected a further 5 (five) creditor payments for examination by Internal Audit with a subsequent report on the exercise being reported back to the Board at their meeting on 30 July 2018.

 

                        RESOLVED:

 

1.    That Members note the contents of the report and Appendix A as submitted;

2.    That Members select a further 5 (five) creditor payments for checking by Internal Audit.

 

51.

Annual Governance Statement pdf icon PDF 51 KB

This report considers the governance arrangements and the system of internal control which operated during 2017/18 and the review that has taken place of those arrangements and controls.

Additional documents:

Minutes:

The report from the Financial Services Manager (FSM) considered the governance arrangements and system of internal controls which had operated during 2017/18 and the review of those controls that had taken place.

 

The report required the Board to note the review of the Council’s Corporate Governance arrangements as set out in the report, and approve the Annual Governance Statement 2017/18 attached as Appendix A to the report, together with the Governance Action Plan for 2018/19 attached as Annex 1 to Appendix C to the report [agenda pages 179/80] - which included those actions not completed in 2017/18.

 

The Chairman asked the Strategic Director (Internal Services) to remind Board Members of the background to the ‘Significant Governance Issue’ recorded at para 1.5.1 of Appendix A (agenda p.107) concerning the independence and objectivity of the role of Chief Audit Executive. 

 

The Strategic Director reminded Board Members of the findings of the original PricewaterhouseCoopers (PWC) report on the Council’s Internal Audit function undertaken in 2015. PWC had recommended a need for the Council to identify whom should hold the Chief Audit Executive (CAE) role. PWC had expressed their satisfaction with the Council’s temporary arrangement of the Strategic Director (Internal Services) taking the CAE role. However, the Council’s external auditors Grant Thornton UK, had subsequently advised that the CAE role should be independent of the Section 151 Officer role held by the Strategic Director (IS). The role of CAE was therefore passed to the Audit, Risk and Anti-Fraud Manager (ARAFM). However, following the subsequent departure of the ARAFM, the CAE role had reverted back to the Strategic Director, given that the Principal Auditor was also Acting Audit Manager, pending the appointment of a replacement ARAFM. The Strategic Director noted, that the Acting Audit Manager still had independent access to the Managing Director, and the Audit Board in her present role.

 

The Strategic Director advised that a joint recruitment process would be undertaken with Sevenoaks District Council, to appoint a replacement ARAFM to head the joint Internal Audit Service for both authorities, with an appointment expected to be confirmed in June 2018.

 

The Shadow Board Chairman referred Members to Appendix C Annex 1 Action 5 of the report [agenda p. 179] concerning proposed Member training following the next local election in 2019. He enquired about the nature of the proposed training and raised concerns regarding the efficacy of the training he had received prior to being appointed Chairman of the Council’s Scrutiny Committee.

 

It was confirmed that the training arranged by the Democratic [formerly Member] Services Manager is mainly aimed at new Members, plus any prescriptive training for individual Members who sat on the Audit Board, Deeds, Trust & Obligations Committee (DTOC) or the Licensing Committee.

 

In subsequent discussion; Members’ agreed that the training given to new Members by the Head of Legal Services and her team, including for Members serving on Committees governed by statutory and quasi-judicial requirements; was satisfactory. Training was also provided inter-alia through the performance in Committee, of longer-standing Members, seasoned in  ...  view the full minutes text for item 51.

52.

PricewaterhouseCoopers Follow Up Review of the Internal Audit Service pdf icon PDF 47 KB

This report presents the PricewaterhouseCoopers follow up review report to Members, together with associated action plan.

Additional documents:

Minutes:

The report presented to Board Members the full PricewaterhouseCoopers follow up review to their original 2015 report, together with the associated action plan.

 

The Strategic Director referred Members to the Summary of Progress against EQA Recommendations [table agenda page 185]. The table summarised the very positive direction of travel the Council was taking to improve its Internal Audit service in response to the PWC recommendations. The bottom 3 (three) categories listed in the table showed a particularly positive direction of travel, the top 2 (two) categories needed to be addressed further, following the appointment of the new Audit Manager [June 2018]. The Action Plan [agenda p. 203] addressed areas of common concern and would be updated for presentation to future meetings of the Board.

 

                        RESOLVED:

 

1.     That Members note the findings from the PricewaterhouseCoopers follow up review of the Council’s Internal Audit service and approve the associated action plan attached at Appendix A to the report.

 

53.

A.O.B. (Any Other Business)

Minutes:

The Chairman advised Members that the Acting Audit Manager was probably attending her last Board meeting before taking up a new appointment in London. He asked that his appreciation and that of all Board Members, for her efforts in exceptional circumstances, be recorded in the Minutes and he wished Lisa Nyon all the very best in her future appointment.