Agenda and draft minutes

An apology for absence had been received from Councillor S N Gosine with Cllr. Oakley-Dow in attendance as his Substitute.

The Chairman welcomed Members to the meeting, which was being held virtually via the Zoom platform, and confirmed that the proceedings were being streamed live to the public via YouTube, as per the link published on the Council’s website.

He welcomed the remote participation of Mr Ian Murray and Mr Keith Mungadzi from Grant Thornton UK (Council’s External Auditors), and noted the remote presence of the Council’s Strategic Director (Internal Services), Head of Finance (Section 151 Officer), Internal Audit Manager (Chief Audit Executive) and the Board Clerk.

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

There were no declarations of interest.

                    RESOLVED:

1.     That the Minutes of the Board meeting held on 21 October 2020 be confirmed as accurate record of those proceedings.

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

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

There were no references from other Committees.

To receive an update report from the Council’s External Auditor, Grant Thornton UK.

The covering report from the Head of Finance presented two documents from the Council’s external auditors Grant Thornton for Members’ consideration:

(i)              An Addendum to the Audit Findings Report (attached as Appendix A); and

(ii)             The Annual Audit Letter for the Financial Year ended 31 March 2020 (Appendix B).

Mr Murray (Grant Thornton UK, External Auditors) informed Members that the Audit Adjustments Amendment [Appendix A to the report], was required to be notified to the Board, but was not considered by Management to have had a material impact on the Accounts, for the period under review. The Annual Audit Letter [report Appendix B], was a statutory requirement and did not contain any additional material from his last report to the Board in October 2020 [Min. No. 57 refers], apart from a variation in Fees being negotiated with Management, to reflect the additional work being undertaken by the External Auditors due to the Coronavirus pandemic and the subsequent and ongoing Government lockdown measures.

The Chairman expressed his appreciation of the External Auditor’s efforts and those of the Council’s Finance Department during the ongoing pandemic and necessary Government lockdown measures.

The Cabinet Portfolio Holder for Finance (in attendance as a Board Member), sought further clarification regarding the Addendum to the Audit Findings Report [Appendix A]. In particular how/why an incorrect house pricing index had been used in the calculation of the Council’s Discounted [Housing] Sales Scheme [agenda p.14 refers], and sought assurances that the error would not be repeated in the future.

The Head of Finance advised that it appeared to be the case that a new member of his Team had used an outdated Average Housing Value Index, and that measures had been put in place to ensure a similar error would not be repeated in the future. He supported the External Auditor’s assertion, that the error had resulted in only a minor misstatement, but had not had a material impact on the Accounts as previously published.

The Cabinet Member expressed his satisfaction with the explanation and the decision taken by the Council’s Management.

                    RESOLVED:

1.     That Members note the Addendum to the Audit Findings Report 2019/20 as set out in Appendix A to the report;

2.     That Members note the Annual Audit Letter for 2019/20 as set out in Appendix B to the report.

To receive a report from the Internal Audit Manager (Chief Audit Executive).

The report from the Internal Audit Manager (IAM) provided Audit Board Members with an update [attached at Appendix A], on Internal Audit outcomes and activity since the last report to the Board in October 2020 [Min. No. 59 refers], and presented information to facilitate Members’ oversight of the Internal Audit function.

The IAM highlighted the following principal points in her January 2021 Update report for Board Members;

·       All DBC employees within the IA team plus the Audit Manager had been re-deployed to part-time audit duties until the end of March to assist in the Council’s COVID-19 Hub operation;

·       Despite the Dartford team’s re-deployment, it was still expected that the End of Year Annual Opinion would be presented to the Board in July, with an update report to the Board in March;

·       Progress had been made towards the implementation of recommendations in the Cyber Security Audit [Annex A agenda p.39] with the purchase of a Disaster Recovery Solution;

·       An advisory report on the counter fraud arrangements in place across the Council had revealed the absence of a comprehensive fraud risk assessment to identify and manage risk. To rectify this, it was proposed that the IAM and the Counter-Fraud Manager would undertake a joint risk assessment in the 2021/22 financial year and a Counter-Fraud Response Plan developed;

·       The proposed IA audit of the Council’s response to the Coronavirus pandemic would now have to be undertaken by an independent body, following the participation of the IA team in the work of the Council’s COVID-19 Hub;

·       The proposed audit of the IT Service Desk had been substituted for an audit of IT Change Control [Appendix A para 9) agenda p.35 refers];

·       The External Quality Assessment (EQA) by the Institute of Internal Auditors (IIA) had yet to be finalised, however, an internal assessment by the IAM had confirmed the need to improve the efficiency and timeliness of audits undertaken by the IA team [Appendix A paras 25) and 26) agenda pages 37/38 refer].

The Chairman thanked the IAM for her comprehensive update report and for the continued contribution of her team in the operation of the Council’s COVID-19 Hub operation, and advised Board Members that he been interviewed by the IIA team as part of the EQA of the Council’s IA operation.

In response to subsequent questions from the Chairman and Board Members, the IAM confirmed the following points:

·       A further cultural review of the Council’s Home Working policy arrangements would be undertaken once the two new Director appointments had been made, and the Council had decided where the emphasis on home working should lie going forward [post COVID-19], given the cultural change that would involve for the organisation;

·       All Audits were prioritised within the Internal Audit 2020/21 Plan into Plan A and Plan B [Appendix A, Annex A agenda p.39 refers]. Currently, 8 out of 23 audits from Plan A had been completed, and the Board had been asked to remove Audit 21 ‘Covid-19: Lessons Learned’ from Plan A for independent audit. Audit  ...  view the full minutes text for item 68.

The report from the Strategic Director (Internal Services) presented the Council’s updated Strategic Risk Register (SRR) for the Board’s approval [attached as Appendix A to the report]. 

The Strategic Director (Internal Services) commended the updated SRR to the Board as a timely and comprehensive document, which took account of the emerging risks associated with COVID-19 and the new UK-EU partnership post Brexit, and the implications which both factors could potentially hold for the Council in achieving its corporate objectives. The Council’s overall risk strategy was also in the process of being reviewed, and would be presented to the Board later in the year. Members were invited to pose any specific questions they had on the contents of the updated SRR.

The Chairman noted that the Council shared an Internal Audit Service with Sevenoaks Council, but assessed Risk differently. Dartford used a 9 (nine) square model based on the green/amber/red traffic-light system to indicate the current risk level for each objective [report Appendix A agenda pages 51-88 refer]. In contrast, Sevenoaks used a more comprehensive 16 (sixteen) square model to assess and indicate risk, which he proposed the Council consider adopting.

The Strategic Director (Internal Services) advised Board Members that the Council linked its SRR with the objectives set out in its Corporate Plan and used a 9 (nine) square risk model, as this was considered easier to comprehend than the 16 square version. The Council were entitled to use a different risk model to Sevenoaks under the Shared IA Service, with the agreement of the IA Manager. However, she undertook to consider adopting the 16 square risk model used by Sevenoaks and report back to the Board with her findings. It was also agreed that a curser arrow be added to the existing 9 square risk model for each objective, to indicate whether risk had increased or decreased for each objective, since the previous update to the Board.

The Cabinet Portfolio Holder for Finance asked how the senior Management Team reviewed the SRR in particular; once a risk target had been set for an objective who decided that any residual level of risk was acceptable, how was improvement of a risk target agreed, and if that process was documented.

The Strategic Director (Internal Services) advised the Board that all service managers had been asked to comment on the impact of Brexit and COVID-19 on their individual service areas, as part of the overall process of updating the Council’s SSR. That process included setting risk targets/ratings, consideration of residual risk and presentation of the updated SRR to the senior Management Team for consideration, and to decide whether identified residual risk could be accepted, or further investigation was required. The risk process was documented by individual service managers and their findings feed into the final updated SRR document. Individual service managers acted as their own risk officers, with the SD (IS) acting as a central point of reference, the Council did not have a designated Risk Officer.

The Member for Newtown (attending  ...  view the full minutes text for item 69.

Following the last virtual meeting of the Audit Board in October 2020, the Chairman had again selected a further five creditor payments for checking by Internal Audit.

The standard report from the Internal Audit Manager (IAM) summarised the outcome of that exercise for Board Members, and recoded that three (3) of the spending decisions had been made appropriately and in compliance with Council procedures, but that two of the procurements whilst justified, had not been fully in compliance with Contract Standing Orders [report para 5.1 and 5.3 refer] and that the relevant service managers had been advised of the appropriate action to take for future procurements.

The IAM also advised Members that the proposed guidance to all Council managers and account holders, to raise awareness of the selective invoice check process, and to publicise emergent themes and findings [report para 4.2 refers], would now issue in February 2021 once the relevant Officer, currently on COVID-19 Hub duties, resumed her full IA portfolio.

The Chairman advised that, for the same staffing reasons, he had also agreed with the IAM (prior to the meeting), that the Board would not receive a Selective Invoice Checks report at the March Board, but hoped to resume the process in time for the July 2021 Board.

                    RESOLVED:

1.     That Members note the contents of the report.