Agenda and minutes

The Chairman welcomed Members and Officers to the meeting and asked all attendees to introduce themselves. He also welcomed Paul Cuttle, Grant Thornton (via MS Teams), Mr Mo Chughtai, Independent Member, and Councillor Lloyd, Cabinet Portfolio Holder for Finance, who was attending the meeting as an Observer.

Apologies for absence were received from Councillor Ozog.

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.

Members received a presentation from the Chief Officer & Director of Corporate Services on the Role of the Audit Board. It was noted that these training sessions would be held before each Audit Board meeting and would usually be relevant to the topics discussed within the meeting.

The overall aim of the Audit Board is to provide oversight of the governance arrangements of the Council and the system of internal controls and ensure compliance with laws and regulations. An Independent Non-Voting Member is required to attend meetings to add an additional level of integrity and impartiality to proceedings. Mo Chughtai (Independent Member) detailed his experience within the sector, including working for multiple companies in his capacity as a Chartered Accountant and Risk Management specialist.

The following reports will be brought to the Board across its meetings for members to discuss and consider.

-       Annual Internal Audit Plan (Includes Key Risks / Assurance)

-       Internal Audit Update (Progress against Audit Plan and outcomes of recent Audits)

-       Internal Audit Annual Opinion

-       Annual Governance Statement

-       Annual Statement of Accounts

-       External Audit Value for Money assessment (Including financial resilience)

-       Strategic Risk Register

-       Updates on Anti-Fraud, Corruption, Whistleblowing and Corporate Complaints

Members will be provided with assurance levels for those Audits which have been conducted. The Board are also able to view these reports and/or receive feedback from the department head, should the assurance level be ‘Limited’.

Members were asked to complete a survey to return to the Internal Audit Manager detailing their knowledge of the Audit process, allowing future training sessions to be appropriately scheduled.

The Audit Board considered the minutes of its meeting which took place on 22 March 2023

RESOLVED:

That the minutes of the meeting of the Audit Board which took place on 22 March 2023 be confirmed as an accurate record.

There were no urgent decisions.

There were no references from other committees.

The Chairman noted he would be altering the position of the last two items on the agenda, as reflected in the minutes below.

The Board considered a letter presented by the Council External Auditor Grant Thornton, detailing that the start of the external audit process had been delayed until October 2023, originally July 2023. Paul Cuttle described that there was currently a national shortage of auditors and that there is a large backlog of audits within the sector.

This delay meant the audit deadline imposed by the Accounts and Audit Regulations 2015 would be missed as would likely to be the case for the majority of audits across the sector. Dartford however was in a good position compared to neighbouring authorities.

A member suggested the possibility to review the four improvement recommendations made in the report brought to the Audit Board on 25 January 2023 as part of the Value for Money Audit and to feedback at the next scheduled Audit Board meeting in September 2023. It was confirmed that elements of the progress will be picked up in the Grant Thornton’s Value for Money report which is expected before Christmas 2023, however this information would be presented to members at the next meeting.

            RESOLVED:

That the letter from the external auditor is noted.

The Audit Board considered the Counter Fraud & Compliance Team Annual Report presented by the Counter Fraud & Compliance Team Manager, which updated the works undertaken by the Team during the year ending 31 March 2023.

The update as detailed at Appendix A, summarised the following aspects:

·         A background to the Counter Fraud & Compliance Team’s remit.

·         A summary of the key campaign areas covered during 2022/23 including Cost of Living Support Payments, Business Rates & Council Tax claims.

·         A summary of the key campaign areas which are due to be covered during 2023/24

Whilst an accuracy level of 99.78% of funds were correctly allocated for the cost of living payments, a reconciliation exercise had taken place to ensure any payments made incorrectly to residents have been automatically returned to the Council or would be contacted individually to do so manually. These issues occurred due to the residents moving out of their property during the crossover period of the payments.

Members queried and received clarification on the following points; the governance of the cost of living schemes were conveyed by local authorities, including those who did not pay their Council Tax by direct debit needing individual support from officers. The Fraud team have access to a new tool allowing further identification of fraud, allowing better protection of public money.

Procurement fraud (as an internal fraud is mainly in the domain of the internal audit team) but the fraud team share investigative resources as necessary in investigations and would be willing to consider future project work on the issue.

Cyber Security is under the IT departments work plan. Members and officers have been offered cyber training, phishing exercises are being undertaken, suitable firewalls are in place and the team are in the process of recruiting a new Cyber Security Analyst role to support and continue the good work of the team.

Members thanked the officer and his team for all their hard work as detailed in the report.

            RESOLVED:

Members noted the work undertaken by the Counter Fraud & Compliance Team in 2022/23.

The Board were presented with the Annual Governance Statement which considered the governance arrangements and the system of internal control which operated during 2022/23 and the review that had taken place.

The Chairman noted it would be useful for the following acronyms to be in full for those who are not familiar. Freedom of Information (FOI), Environmental Information Regulations (EIR), Data Protection Act (DPA).

Members queried and received clarification on the following points;

·         Whilst the outcome of equalities work needs further scoping equalities engagement work has been raised at the Scrutiny Committee and an informal group will discuss and raise issues. The relevant Cabinet member would be able to give feedback on progress of the work to members. Service Plans are being reviewed by the newly appointed Community Development Manager in consultation with leadership team.

·         An updated Procurement Strategy is in progress and is at a good level, this however has not yet been published and is expected to be before September 2023.

·         The Property Services Manager has made progress with the Asset Management Strategy Action Plan and several tasks are complete. The Asset Management Strategy will be reviewed by December 2023. 

·         The overall opinion of ‘Reasonable’ is given despite some audits with a limited opinion. The overall opinion feeds into the overall review that there are no significant governance matters to be bought to the immediate attention of members.

·         The governance statement lays out the existing arrangements around overview and scrutiny but assessment of these arrangements is primarily a role for members to consider.

·         Whilst the Audit Board minutes are not routinely considered as part of the Cabinet agenda, the Cabinet does receive feedback on any salient points that have been raised by the Audit Board via the Audit Board Chairman or the Audit Board Observer who is also the Cabinet Member for Finance.

            RESOLVED:

1.    That the review of the Council’s Corporate Governance arrangements be noted.

2.    That the Annual Governance Statement 2022/23 at Appendix A to the report, be approved for inclusion in the Annual Statement of Accounts, together with the Governance Action Plan for 2022/23, at the end of Appendix B.

The Board were presented with the Internal Audit Annual Opinion on the effectiveness of the Council’s internal control, governance and risk management arrangements. The Opinion is a requirement of the Public Sector Internal Audit Standards and included a summary of the work taken into consideration when forming the Opinion. Within the report there are two ‘limited’ assurance audits. The issues associated with these areas have now been addressed and would no longer pose any concern or impact.

The Internal Audit Manager reported that the team were previously holding three vacancies & long term sickness for a large part of the year. The vacancies have recently been filled with two trainee positions, with the intention that they are kept on following successful completion of their course. An advert has gone out to replace the Lead Auditor role however this was unsuccessful, a review of this position will now take place.

Members queried how the assurance level is deemed as ‘reasonable’ considering that some Audits are yet to be conducted. It was confirmed by the Internal Audit Manager that additional evidence to support the opinion is also used, such as involvement in extended management team meetings as well as other governance groups as well as general advice and guidance provided through the year.

There was also a discussion about how audits are decided for the year ahead and the Audit Manager confirmed that all ‘High’ risk areas flagged by the SRR are looked at and at least 50% of the ‘Medium’ risk areas are also considered. Completed Audits from this year will be included in the Annual Opinion for 2023/24.

A member queried if Procurement is due to be audited soon, it was confirmed that this had been conducted fairly recently and was considered each year when setting the audit plan as part of the audit universe (of potential audits).

            RESOLVED:

That Members notethe Annual Audit Opinion 2022/23, at Appendix A to the report.

The Board considered the Audit Annual Report which demonstrated how the Audit Board had effectively discharged its duties during 2022/23, in line with its Terms of Reference.

Members queried and received clarification on the following points; Head of Services could attend Audit Board meetings if a limited assurance rating is given. This however isn’t always a good approach as it could affect the relationship between departments and Internal Audit resulting in a reluctance to accept reports with a limited assessment. Managers may be invited if it is felt that specific advice hadn’t been complied with. The Chairman explained that he does however meet with the Internal Audit Manager regularly to discuss ongoing workloads and issues.

It was noted that the training sessions offered at the start of each meeting and externally are important to allow members to fully appreciate the functions brought to the Board as well as the function of the Audit Board.

            RESOLVED:

1.    That the Audit Board Annual Report (2022/23), at Appendix A, be endorsed.

2.    That the Audit Board Annual Report (2022/23), be referred to the General Assembly of the Council, to demonstrate how the Board has discharged its functions.