Agenda and minutes

Audit and Governance Committee - Friday 26 January 2018 10.00 am

Venue: Cabinet Suite - Shire Hall, Gloucester. View directions

Contact: Andrea Griffiths 01452 324206 

Items
No. Item

1.

Declarations of Interest

Members of the Committee are invited to declare any pecuniary or personal interests relating to specific matters on the agenda. 

 

Please see note (b) at the end of the agenda.

Minutes:

Councillor Parsons declared he was a member of Cotswold District Council, and a member of the Pensions Committee. 

2.

Minutes pdf icon PDF 104 KB

To approve as a correct record the Minutes of the Meeting held on 6th October 2017. 

Additional documents:

Minutes:

All matters arising had been dealt with and communicated to members of the committee.

 

Resolved

 

That the minutes of the meeting held on 6th October 2017 be approved as a correct record and signed by the Chairman. 

3.

Grant Thornton Annual Audit Letter pdf icon PDF 506 KB

The Committee is asked to note the report. 

Minutes:

The Committee were informed that David Bray would be moving areas as an Audit Manager and this was his last meeting at Gloucestershire County Council.  The Chairman extended thanks on behalf of the Committee to David for all his hard work and effort in supporting the Committee and wished him every future success. 

 

David Bray, Grant Thornton presented the report in detail.  The report summarised the findings from the 2016/17 audit, which was undertaken by Grant Thornton.  It included key messages arising from the audit of the Council’s financial statements and the results of the work that had been undertaken to assess the Council’s arrangements to secure value for money in its use of resources. 

 

Members were informed that Grant Thornton were unable to issue a Value for Money conclusion as they were considering an objection received from a group of electors relating to the Council’s energy from waste scheme.  It was noted that this work had not been concluded and Grant Thornton would take the findings into consideration before issuing a Value for Money conclusion.  It was noted that a Director from Grant Thornton was thoroughly investigating the objection raised and would report back to the Committee in due course.  In response to a question, it was noted that the Grant Thornton Director had full access to all information available. 

 

In terms of the cost of the objection, David explained that it was difficult to know the exact cost at this stage, however, based on similar objections elsewhere it was estimated the cost of the objection would be approximately £10-£12K.  Members noted that the final fee would depend greatly on the extent of any external advice sought as it was a complex piece of investigatory work. 

 

David Bray explained that the national audit office approach ensured that due process was followed in relation to objections, therefore auditors were obliged to accept objections unless they were deemed to be vexatious, were based on something ‘trivial’ that would be disproportionate to review or had been looked at previously with no new information coming to light. 

 

It was noted that the fee charged for the audit was £98,010. 

 

Resolved

 

That the report be noted.

4.

Grant Thornton Progress Report pdf icon PDF 725 KB

The Committee is asked to note the report. 

Minutes:

David Bray presented the report, which detailed the progress Grant Thornton had made in delivering their responsibilities as the external auditors.  It was noted that Grant Thornton would produce the External Audit plan for 2017/18 in association with the Authority.  Members were informed that accounting, audit and emerging issues would be flagged up as part of the regular report.  Members were informed that internal and external auditors met on a regular basis to discuss any issues that may arise

 

Members were advised that Pete Barber (Engagement Lead) and Katie Whybray (Engagement Manager) had been appointed to work with Gloucestershire County Council. 

 

Resolved

 

That the report be noted.

5.

Treasury Management Update pdf icon PDF 363 KB

The Committee is asked to consider the report. 

Minutes:

Paul Blacker, Head of Financial Management presented the proposed Treasury Management Strategy Statement and Investment Strategy for 2018/19, which met the CIPFA Code of Practice, and governed how the Authority undertook Treasury Management activities.  It was noted that the Committee was required to consider, comment and recommend the new Treasury Management Strategy to Council for approval. 

 

It was noted that the strategy will be approved by full Council as part of the Medium Term Financial Strategy (MTFS) and was being submitted to the Audit and Governance Committee in accordance with its terms of reference to regularly monitor the Council’s Treasury Management policy and practices.

 

It was noted that the Audit and Governance Committee undertook a detailed Treasury Management training session earlier in January 2018, which was well attended. 

 

In response to a question relating to the reduction in the Minimum Revenue Provision to £6.2 million, officers explained that it was a saving of £2 million as GCC was over providing.  Changing the policy would only slightly  increase the payment profile of debt outstanding and therefore it is deemed a positive move. 

 

In addition, one of the key changes as agreed with Arlingclose the Treasury Management Advisors were the lowest risk category approved for use had been raised from BBB+ to A-. 

 

Members referred to the Department for Communities and Local Government (DCLG) which had been revised in 2010, as this required the Council to approve an investment strategy before the start of each financial year.  Kathy Oakey, Finance Manager, explained that CIPFA had also updated their Code and GCC had used this opportunity to amend its MRP Policy to reflect the changes in the Code.  The Director of Strategic Finance clarified that investment decisions were delegated to lead officers.

 

In relation to Treasury Management property investment, it was noted that Arlingclose, provide the council with advice.  It was noted that investments in property were usually deemed to be long term.  Some members felt that it could be potentially beneficial to invest in county, in order to benefit local people. 

 

The Committee was advised that unsecured overnight investments of up to £50k was left in the bank, however if the bank defaulted this would be covered by the Financial Services Compensation Scheme.   A member questioned if the amounts should be a secured limit.  The Director of Strategic Finance agreed to discuss this point further with Arlingclose and would report back to the Committee in due course. 

 

In response to a question, members noted that the longest loan term was over a 70 year period.  Members were informed that ‘Bail-In’ legislation had changed in order to protect councils deposits, moving away from unsecured investments.  The Committee attention was drawn to table 2 (page 51 of the report), which detailed the investment limits.  It was reported that the limits had been set in accordance with Arlingclose advice.  Some members questioned the advice given by Arlingclose, however the Director of Strategic Finance explained that they had a healthy working relationship and challenged  ...  view the full minutes text for item 5.

6.

Annual Governance Statement Improvement Plan 2016/17 Update pdf icon PDF 50 KB

 

The Committee is asked to review and consider the actions taken to address the governance improvement areas identified.

Additional documents:

Minutes:

Stephanie Payne, Group Manager presented the report.  The report provided assurance to the Audit and Governance Committee that the improvement actions identified as part of the annual review of the governance arrangements operating within GCC had been/were being addressed.  It was recommended that the Committee reviewed and considered the actions taken to address the governance improvement areas identified.

 

The Committee was advised that four key improvement areas were identified to further enhance the governance arrangements and documented within the AGS action plan.  These were:

1.     Future Financial Sustainability;

2.     Ofsted Inspection of Children’s Services;

3.     Implications of the Policing and Crime Act; and

4.     Contracting / Commissioning Care Services.

 

Members were referred to the appendix, which confirmed lead officer responses to each AGS action – reflecting a positive direction of travel against them.  It was noted that that the Audit, Risk and Assurance’s role was to act as a facilitator for the update report (i.e. that action delivery was the responsibility of each confirmed lead officer).

 

It was noted that a further update to Audit and Governance Committee as part of the AGS 2017/18 report would take place in July 2018.

 

Resolved

 

That the report be noted. 

7.

Risk Management Policy Statement & Strategy 2018 - 2021 pdf icon PDF 51 KB

The Committee is asked to consider the report. 

Additional documents:

Minutes:

Stephanie Payne, Group Manager presented the report in detail.  The proposed Risk Management Policy Statement and Strategy, reflected national good practice/standards and aligned with the Council’s operating model.  It was explained that the Strategy was now a three year document due to the key principles of good risk management practice not changing. 

 

However, officers would continue to review it annually, and from this point the Committee would only expect to see the document prior to the end of the three year term or as a result of required change.  Therefore, the Committee was asked to review and agree the Strategy.

 

It was explained that it has always been important for GCC to identify and manage its risks as risk management was one of the key principles of effective Corporate Governance.   Identifying risks enabled the Council to effectively manage strategic decision making, service planning and delivery to safeguard the wellbeing of our stakeholders and increased the likelihood of us achieving our outcomes.

 

The Committee’s role was to monitor the effectiveness of the Council governance arrangements, including risk management.   Members noted that the annual review and update of the Council’s Risk Management Policy Statement and Strategy was led by the Head of ARA.  The Policy was last reviewed and approved by Committee in January 2017. 

 

The Group Manager advised members that there were only very minor changes to the strategy.  These were highlighted as the Corporate Risk Management Group was to change from virtual to physical, in order to support risk management communications, escalation and effective oversight; and the three year term of the document. 

 

Members were referred to the Accounts and Audit Regulations 2015 (part 2 paragraph 3) which stated that ‘a relevant local authority must ensure that it has a sound system of internal control which…includes effective arrangements for the management of risk’.? It was noted that the general principles of how risk was managed within the Council had not changed.

 

It was noted that Internal Audit provided an opinion of the effectiveness of risk management arrangements when undertaking individual audit assignments which provided the Committee with reasonable assurance that risk was being managed effectively across the Council.

 

A discussion took place relating to risk monitoring and reporting arrangements, it was reiterated that risk monitoring and reporting were integral to the corporate performance management and monitoring arrangements and was within the Overview Scrutiny Management Committee (OSMC) remit.  The Council’s strategic risks were reported on a quarterly basis to OSMC.  

 

It was suggested that people had to be proactive and not reactive to risk.  The Group Manager referred Members to pack page 85 onwards which confirms minimum requirements, their regularity and key roles and responsibilities. 

In addition, the Committee agreed that a link to the Corporate Risk Register be included on Members Matter.

 

During the discussion, some members questioned data protection and the ability to log who had copied documents.  The Director of Strategic Finance explained that officer’s had access to lots of data both paper based and electronically.  As such  ...  view the full minutes text for item 7.

8.

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

The Committee is asked to note the report. 

Additional documents:

Minutes:

Stephanie Payne, Group Manager presented the report which informed members on the progress of the internal audit activity in relation to the 2017/2018 Internal Audit Plan and provided a progress report on the internal audit outcomes from the period October to December 2017.ncluding the opinions provided on risk and control.

 

The Committee welcomed the report which provided the relevant risk and control assurance opinions in relation to the audit activity during the above period.  The report included a graphical summary that highlighted the opinions provided for the 2017/18 year to December 2017.  This period showed an overall satisfactory and above rating of 78% on control and 89% on risk.

 

In addition, the Group Manager was pleased to report that during the October to December 2017 period that no limited assurance opinions on control or risk had been provided on completed audits from the 2017/18 Internal Audit Plan.    

 

In relation to fraud, it was reported that there were 12 new cases in 2017/18, alongside 9 cases that were work in progress from prior year.  Consequently the ARA team were ensuring the appropriate resources were in place to investigate these cases.

 

The Committee discussed the progress report in detail, and were informed that Internal Audit also carries out consultancy work as well as assurance activity. Members were reassured by the processes in place and felt there was positive delivery against the Plan to date.

 

Resolved

 

That the report be noted. 

9.

Limited Assurance Reports pdf icon PDF 70 KB

An update on actions taken in relation to key recommendations:

-       Approval of Payments for Agency Staff.

-       Electronic Call Monitoring (ECM) – All Ages All Disabilities.

-       Section 20 – Children’s Act.

 

Additional documents:

Minutes:

Stephanie Payne, Group Manager informed the Committee that internal audit would do follow up audits on the three areas, this was proposed within the County Internal Audit Plan 2018/19

 

Due to staff illness, the Chairman agreed to defer the limited assurance report on Electronic Call Monitoring – All Ages All Disabilities to the April 2018 Committee meeting.

 

Approval of Payments for Agency Staff – Mandy Quayle, Head of HR presented the report in detail.  The Committee noted that the contractor’s timesheet and vacancy management system (e-tips) requires GCC managers to approve agency workers timesheets on a weekly basis, however should they fail to do this e-tip would automatically approve the timesheets to enable the individual agencies to pay their staff.  It was noted that an update to the system was due on the 1st February 2018 and would auto-generate an email to managers to approve the timesheets.  This would then enable GCC to monitor which managers were approving timesheets and those who weren’t doing so. 

 

Members felt that the auto-approval rate should be considerably lower.  The Committee agreed that all approved spend to agency staff should be authorised by a manager.  The Head of HR was requested to look at this option in more detail. 

 

Resolved

 

That the report be noted. 

 

Section 20 – Gill Horrobin, Interim Strategic Lead for Children in Care presented the report in detail.  It was explained that Section 20 was an integral part of the Improvement Plan as picked up by Ofsted. 

 

Members were informed that Section 20 agreements were voluntary arrangements between the LA and the parents, where the parent could not provide suitable accommodation or care on a temporary or permanent basis.  However, parental responsibility remained with the parent until the child returned home and /or permanence plans were progressed through the courts.

 

It was reported that Section 20 agreements were a major issue in Gloucestershire and were reported to be at 37%, while the national average was 23%.  The Committee agreed it was crucial to streamline and speed up the process, in order to significantly reduce the figure. 

 

Members were advised that the Children and Families Scrutiny Committee (CFSC) were well aware of the situation and had recently had a meeting with Judge Wildblood.  The CFSC were actively monitoring the situation. 

 

The Committee did request that in future the report detailed which officer was responsible for each area, given the staff changes in the service.   The Interim Strategic Lead for Children in Care agreed to brief management of the continuity of the response. 

 

Resolved

 

That the report be noted. 

10.

Whistleblowing Policy pdf icon PDF 128 KB

The Committee is asked to note the new policy. 

Minutes:

Jane Burns, Director of Strategy and Challenge and Monitoring Officer presented the report in detail.  The Committee were thanked for previously submitting their comments, which had now been included in the policy. 

 

Members were informed that the Chief Executive and the Monitoring Officer under delegated powers had formally approved the Whistleblowing Policy, which had now been disseminated throughout the organisation. 

 

Resolved

 

That the report be noted.

 

11.

General Data Protection Regulations Presentation pdf icon PDF 109 KB

Additional documents:

Minutes:

Nick Holland, Information Governance Specialist presented the report in considerable detail.  The Committee were advised that GDPR was one part of a major change in data protection legislation that would replace the Data Protection Act 1998 on 25th May 2018.  

 

Officers explained that under the current legislation GCC had been able to prove compliance and had not been fined. GDPR was an EU regulation, and updated data protection legislation to reflect the way organisations were now collecting and using personal data.  It had been confirmed by the government that the content of the GDPR will be reflected in domestic data legislation after Brexit.  It was explained that there were a number of changes that the council needs to consider when using personal data. 

 

During the discussion, it was suggested that it would be advisable to host a GDPR briefing session for all members, and possibly extend an invitation to the districts on the new legislation, in order to make members aware of the risk.  The Monitoring Officer agreed to make the necessary arrangements. 

 

The topic of erasure of information was discussed. The Information Governance Specialist was requested to discuss the issue with Legal and report back accordingly. 

 

Resolved

 

That the report be noted.

12.

Exclusion of the press and public

THAT in accordance with Section 100 A (4) of the Local Government Act 1972 the public be excluded from the meeting for the business specified in agenda item 14 because it is likely that if members of the public were present there would be disclosure to them of exempt information as defined in paragraph 3 and 7 of Part 1 of Schedule 12 A to the Act and the public interest in withholding the information outweighs the public interest in disclosing the information to the public.

Minutes:

THAT in accordance with Section 100 A (4) of the Local Government Act 1972 the public be excluded from the meeting for the business specified in minute 12 because it is likely that if members of the public were present there would be disclosure to them of exempt information as defined in paragraph 3 of Part 1 of Schedule 12 A to the Act and the public interest in withholding the information outweighs the public interest in disclosing the information to the public.

13.

Exempt Limited Assurance Report

Minutes:

The Committee received and discussed the report in detail.

 

Resolved

 

That the report be noted.