Agenda and draft minutes

The Chairman welcomed Members and Officers to the meeting. He also welcomed Mr Mo Chughtai, Independent Member, and Councillor Lloyd, Cabinet Portfolio Holder for Finance, who was attending the meeting as an Observer at his invitation.

Apologies for absence were received from Councillors Butler-Rhule and Canham.

To receive declarations of interest from Members including the terms(s) of the Grant of Dispensation (if any) by the Audit Board or Chief Officer and Director of Corporate Services.

There were no declarations of interest.

The Audit Board considered the minutes of its meeting which took place on 25 January 2023.

RESOLVED:

That the minutes of the meeting of the Audit Board which took place on 25 January 2023 be confirmed as an accurate record.

There were no urgent decisions.

There were no references from other committees.

The Audit Manager introduced a report which provided an update on Internal Audit outcomes and activity since the last meeting of the Board in January 2023, progress against the audit plan and implementation of audit recommendations as well as information on the performance of the internal Audit Service.

The Audit Manager reported on successful recruitment to the three vacant posts within the Audit Service which would result in a slight re-structure of the service. In addition the South West Audit Partnership had been contracted to deliver 5 audits during April and May along with securing the services of a Temporary Auditor who would assist in delivering an additional 3 audits. Together these would enable the service to complete sufficient work to support the Chief Audit Executive opinion in July. Two of the new posts were for trainee auditors who would be undertaking a level 7 apprenticeship and would take around 3 years to fully qualify.

Progress against the 2022/23 Audit Plan was reported and it was noted that the need to focus on the completion of the 2021/22 programme of audit work had slowed progress on 2022/23 work, completion of which had been re-phased. It was reported that two audits had been completed since January; Staff and Wellbeing, and Planned Maintenance, both of which had been deemed to offer ‘reasonable’ assurance. The reasons for these conclusions and areas for development were reported, along with follow-up of previous audits. Audit Performance Indicators for October – December 2022 (Quarter3) reflected the staffing issues within the service but performance was anticipated to improve once staff were in place.

The Chairman sought clarification on the training programme for the trainees and whether, having undergone their training, there was any obligation for them to continue to work for the council for a period of time. The Audit Manager confirmed that, although it was possible for them to leave during or after completion of their training, there was a training agreement in place with each trainee and an expectation that they would continue to work for the council after qualifying. The training agreement provided for the recovery of some of the costs of training if a trainee left, within defined parameters.  

A Member asked for clarification of the implications of the rephasing of some audits and the Audit Manager advised that audits were prioritised according to risk and that there were no assurance concerns arising from the rephrasing of the audits and that, irrespective of whether audits were being carried out, risk owners were continuing to actively manage risk and that the level of audit activity was sufficient for her to deliver the Chief Audit Executive opinion.

A Member sought further clarification on the development of the trainee auditors and whether there would be ongoing opportunities to recruit new trainees once the current trainees were fully qualified. The Audit Manager explained that the intake of the new trainees would take the total number within her team to three as she currently had a trainee who was  ...  view the full minutes text for item 40.

The Audit Manager presented the Internal Audit Plan for 2023/24. The report reminded the Board that in accordance with Public Sector Internal Audit Standards, the Audit service was required to establish a risk-based plan setting out the priorities and activities to be undertaken in the ensuing financial year. The Audit Plan was aligned to the Council’s key risks, corporate priorities and plans, and considered the wider risks facing the public sector. The Audit Board, through its Terms of Reference, was required to consider and approve the Audit Plan each year. The report set out the audit planning process, how it was proposed to deploy audit resources during the year and how audit work will be completed.

The Audit Manager stressed the considerable work carried out each year to develop the Plan and the need to identify and balance priorities and resources. She noted that the total number of days available for audit work in 2023/24 had been reduced slightly to take into account the support and training requirements of the new trainees and Audit Support Officer. The Audit Plan contained two lists of audits, those linked directly to the Council’s strategic risk register which were considered to be high priority, and medium priority risks, comprising those areas where there was a gap in audit knowledge or where operational risk profiles indicated assurance would be beneficial but which did not necessarily link directly to the strategic risk register. It was anticipated that all of the high priority audits would be carried out and approximately half the medium priority audits. The medium priority audits would be reviewed and prioritised each quarter based upon their risk profile at the time.The Plan also provided for some non-assurance and consultancy work.

Performance Indicators had also been reviewed and some that had become unfit for purpose had been removed. It was hoped that the proposed indicators would allow for renewed focus on the value of work carried out by the Internal Audit Partnership and the benefits of data analytics.

The Audit Manager provided clarification on the remit for budget monitoring assurance work and how operational risk management was carried out during the year and via service planning.

A Member noted the rephrasing of some work and that it would not be possible to carry out all of the audits. He asked whether, in terms of providing assurance, there was a maximum period of time within which each service should be audited. The Audit Manager said that this depended upon each area, and that there were some new or novel areas where audits may never have been carried out in the past and that were now being identified for consideration. However as a very rough guide, for audits carried out periodically, these should be undertaken at least every 5 years.

The Cabinet Portfolio Holder for Finance said that part of the role of internal audit was to identify risks, establish mitigations and to test how successful these were. However he had struggled to see how this  ...  view the full minutes text for item 41.

The Audit Manager reminded Members that, in accordance with the Public Sector Internal Audit Standards, the Internal Audit Service was required to implement, maintain, and periodically review, a Charter defining its purpose, authority and responsibility. Members were asked to consider the Council’s Internal Audit Charter, attached at Appendix A to the report, to ensure that it remained relevant to the Council’s needs. It was noted that there were minimal changes to the Charter since it was last reviewed. However, attention was drawn to a consultation on major changes to the Standards being undertaken by the institute of Internal Auditors which could impact upon the content of the Charter and that it was proposed that the next refresh of the Charter should be carried out in alignment with the introduction of any changes to the Standards. For this reason, it was proposed that the Charter should be reviewed periodically, when needed, rather than annually.

            RESOLVED:

That the Internal Audit Charter, at Appendix A to the report, be approved.

The Chief Officer & Director of Corporate Services presented the Council’s current iteration of the Strategic Risk Register and highlighted changes to risk ratings made since the last review of the Register. The report drew attention to improvements to the risks around the likelihood of further outbreak of infectious disease, emergency planning and the delivery of local elections and highlighted control measures put in place to deal with ‘high’ and ‘medium’ risks, where these were possible, and the management approach to risk where such measures were not available.  Attention was also drawn to the introduction of a new Cyber Security Strategy which would be presented to Cabinet on 23^rd March 2023 for adoption, and it was the intention to keep this under review and to bring periodic reports to future meetings of the Audit Board. Clarification was provided on the cyber security capacity of the Council’s IT team.

The Chairman noted that the Strategic Risk Register currently listed named officers as the ‘risk owner’ but felt that, in view of a number of current vacancies it would be better to assign ownership to posts instead of named postholders. This was accepted. Following on from this a Member commented upon the current difficulties being experienced in filling key posts, and felt that this should be reflected in the risk register. The Chief Officer & Director of Corporate Services said that the Council was devoting considerable focus on succession planning and that, whilst it was true that some difficulties were being experienced in recruiting to particular roles, the Council had been able to make some good interim appointments. The Chairman commented on the challenges that the Council sometimes experienced in this respect due to its proximity to London.

The Cabinet Portfolio Holder for Finance asked for the title of risk SR16 to be revisited.

Members discussed SR17 Elections 2023 in the context of the introduction of Voter Id requirements for electors to be able to vote in person at the May 2023 elections and the effectiveness of measures to make voters aware of the changes. The Chief Officer & Director of Corporate Services said that there were national and local campaigns to promote awareness of the need for photo id but that there were concerns at how effective these were. For these reasons the Council had been actively promoting awareness locally and had sent out information with Council tax bills, and would also be sending out leaflets with poll cards. Information had also been distributed for display to venues such as leisure centres, schools, local businesses and posters were on display prominently at the Civic Centre. She confirmed that the Council was also using social media and would look into the possibility of using paid-for social media. She said that she would welcome any help that Members could give to promote awareness of the voter id requirements to their constituents, providing that these were within the election publicity rules. A Member asked whether there had been an increase in applications for postal votes  ...  view the full minutes text for item 43.

The Head of Finance drew Members attention to a document he had circulated to Board members by e-mail, entitled ‘Informing the Audit Risk Assessment for Dartford Borough Council 2022-23’. He said that the External Auditor had requested that the document, which detailed the Council’s approach to key accounting estimates and related disclosures, should be drawn to the attention of Board members, and that External Audit had advised that distribution by e-mail would meet their requirements. Board members were asked to consider whether the responses referred to in the document, are consistent with its understanding and were invited to make any comments. He thanked Councillor Maddison for the comments that he had submitted, relating to business rates appeals, and said that he would welcome any further comments outside the meeting by 24^th March.

The Board was asked to consider the Council’s proposed Code of Corporate Governance for 2023, which was the latest iteration of the code which had originally been adopted in 2002, and most recently agreed by Cabinet on 26 January 2017. The Annual Governance Statement Action Plan for 2021/22 had recommended that the Code should be reviewed and this review had now been carried out.  As a result, minor amendments to the Code were proposed, mainly in terms of references to dates and posts within the Council.

          RESOLVED:

That the Code of Governance 2023, attached at Appendix A to the report, be adopted.