Agenda and minutes

Audit and Governance Committee
Thursday 25 April 2019 10.00 am

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

Contact: Andrea Griffiths 

Items
No. Item

12.

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:

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

 

Resolved

 

That the minutes of the meeting held on 25th January 2019 be approved as a correct record and signed by the Chairman. 

13.

Minutes pdf icon PDF 100 KB

To approve the minutes of the meeting held on the 25th January 2018. 

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 25th January 2019 be approved as a correct record and signed by the Chairman. 

14.

Grant Thornton Progress Report pdf icon PDF 515 KB

The Committee is asked to note the report. 

Additional documents:

Minutes:

Katie Whybray presented the report which informed the Committee of the audit work to be undertaken for the 2018/19 financial year for Gloucestershire County Council, Gloucestershire Pension Fund and the fee involved.

 

The Committee were informed that Internal Audit, Finance and Grant Thornton had regular meetings and dialogue throughout the financial year to discuss key issues. 

 

Pete Barber informed the committee that legal action was being taken against the Council in respect to procurement law.  In light of this development the decision had been taken to put the objection on hold for now.  As a result of the action, Grant Thornton had issued an interim invoice for the work undertaken on the objection to date.  As at the 31st January 2019 a total of £32,861 had been incurred of which £13,891 related to Grant Thornton costs with the remaining £18,970 representing Grant Thornton’s legal costs.   Members expressed frustration at the escalating costs.  Officers explained that given the complexity of the objection it had been dealt with exclusively. 

 

In response to a question, members were advised that the legal fees incurred by Grant Thornton included a raft of legal expertise.  The Chairperson advised the Committee that it was appropriate to comment on the objection at this stage pending the legal challenge. 

 

Mr Barber explained that Grant Thornton continued to liaise with the council regarding the Fire Service Audit Investigation.  It was noted that the value for money conclusion would have regard to findings, essentially there was a proportionate approach. 

 

Peter Barber proceeded to present the International Auditing Standards in relation to the Audit and Governance Committee and management responses, as stated within the report.  The Committee considered the responses within the report. 

 

One member suggested that in terms of the fraud risk assessment paper the report should specifically refer to the Fire & Rescue Service, he felt that the report should be more open and transparent and clearly state there was a problem.   The Chief Internal Auditor (CIA) referred members to page 31 of the report, which stated the Authority was aware of the issues and that this report was a high level strategic report providing an overview of the fraud reporting process The specific fraud/irregularity cases are reported to the Committee via the Internal Audit progress reports or in respect of the GFRS issues, as a separate agenda item.  Mr Barber added that the purpose of the report was to be fully sighted on the issues facing the Council. 

 

Another member took issue with the previous comment and recognised that the whistleblowing policy had worked and the Authority had reacted quickly to the allegation.  A member disputed this point, he felt that the policy and procedure hadn’t worked, as it had resulted in a whistleblowing incident. 

 

In response to a question relating to the accounting estimates, members wished to know if the situation was any better this year for estimates compared to actuals.  The Head of Finance explained that the accounting instructions had been trialled in advance in order to overcome  ...  view the full minutes text for item 14.

15.

Grant Thornton Fee Letter pdf icon PDF 191 KB

The Committee is asked to note the report. 

Minutes:

Peter Barber, Grant Thornton presented the report, which informed the Committee of the audit work to be undertaken for the 2019/20 financial year for Gloucestershire County Council and the fee involved. It was noted that the Council’s scale fee for 2019/20 had been set by the Public Sector Audit Appointments (PSAA) at £75,468 and the pension fund audit would be £18,325.  

 

Resolved

 

That the report be noted.

16.

Internal Audit Plan 2019/20 pdf icon PDF 55 KB

The Committee is asked to approve the Internal Audit Plan. 

Additional documents:

Minutes:

Theresa Mortimer, Chief Internal Auditor (CIA) presented the Internal Audit Plan for 2019/2020 for the Committee’s consideration and approval. The CIA advised that Internal Audit apply the principles of Risk Based Internal Auditing which meant that Internal Audit focused their resources on providing independent assurance on the Council’s key risks and priorities.  

 

It was noted that to enable the plan’s development, a wide-ranging consultation process had taken place which included meetings with the Chairman of the Audit and Governance Committee, Senior Management across the Council and parallel meetings with External Audit and Finance Managers, which helped Internal Audit to establish their audit assurance activity priorities.

 

The CIA explained that Internal Audit had ongoing liaisons with key stakeholders throughout the year to ensure Internal Audit was kept informed of key changes to enable them to adapt their work priorities accordingly. 

 

The Committee were informed that audits had been re-prioritised and Priority 1 reflected statutory requirements for example Limited Assurance follow up reviews, grant certification and Priority 2 activities were the remaining identified activities. The aim being that all priority 1 activities would be delivered within the year with the priority 2 audits being reassessed in the eventuality of any new emerging risk areas or where additional fraud / irregularities materialise.

 

The plan was stated in terms of estimated days input to the Council of 1825 which was an increase of 200 from last year due to increased focus on school audits. 

 

During the discussion, members questioned purchase cards and the potential for fraudulent activity.  It was suggested that in respect of the future county wide audit of procurement cards, it might be worth checking the previous two years activity for clarity.  The CIA agreed to this request.

 

Members were advised that the proposed plan had been presented to the Chair of the Audit and Governance Committee, Interim Director of Strategic Finance and CoMT and following robust challenge, had been fully endorsed. 

 

In response to a question, it was explained that the more ICT technical audits were undertaken by The Internal Audit Association (TIIA) externally commissioned ICT auditors. The ICT audit needs assessment was currently being developed and TIIA in conjunction with the Director responsible for ICT and Head of ICT Service.  Once these audits have been agreed these will be detailed within future Internal Audit monitoring reports.

 

The CIA provided the Committee with a summary overview of the plan highlighting the allocation of audit resource per functional service area (i.e. children’s, adults, etc.) and per category of review (i.e. Fraud, ICT, etc.). 

 

During the discussion, the key points highlighted within the proposals were:

           There was a proportional split, based on risk, between each of the functional service areas to enable the provision of the Chief Internal Auditor’s annual audit opinion, however, due to the current control environment, more focus had been directed to Children and Families operating practices, Gloucestershire Fire and Rescue Service systems and processes, governance and county wide compliance with key corporate policies and strategies;

           There was  ...  view the full minutes text for item 16.

17.

GFRS Action Plan pdf icon PDF 51 KB

The Committee is asked to review and consider the actions taken to address the recommendations made and progress to date.

Additional documents:

Minutes:

Theresa Mortimer, Chief Internal Auditor (CIA) informed Members that the purpose of the report was to provide assurance to the Audit and Governance Committee that the Internal Audit recommendations made in relation to the independent investigation of GFRS were being addressed. 

 

The CIA advised the committee that the new Chief Fire Officer (CFO) and his team had been very supportive of Internal Audit’s activities.   It was noted that the CIA would continue to undertake audits. 

 

In response to a question, it was noted that fuel cards were contained within the action plan, however the audit had yet to be completed.  The Committee would receive the audit report in due course.  The CIA informed the Committee she was satisfied with the progress to date and management had actively responded to the recommendations made. 

 

The CFO informed the Committee that GFRS staff would be receiving training on gifts and hospitality, and on procurement cards in order to be compliant with the appropriate rules and procedures.   

 

One member referred to the purchase of tyres off site rather than through the fleet maintenance system.  Members sought reassurance that goods were ordered through the correct system.  The CIA explained that a procurement audit was underway, which would look at goods, equipment and services.  The CFO confirmed that the tyres purchased in question were fitted on a GFRS vehicle.    The issue highlighted in the report had occurred due to the tyres being fitted off site and not correctly recorded on the Tranman (Fleet Management) System. 

 

The CIA explained that the audit of fuel cards would be undertaken in due course and confirmed that the audit would check for trends, etc.  The Committee were advised by the CFO that fuel cards were allocated to each vehicle and not to individuals, therefore the amount of fuel purchased could be reconciled against the vehicle mileage through the Tranman software.  In addition the Fleet Manager monitored fuel consumption, miles per gallon, etc. 

 

Members appreciated the need for proportionality in relation to fuel cards for personal and business mileage, but questioned that if previous senior management were themselves involved in the use of these cards, how would this be audited appropriately.   

 

The CIA explained that in respect of procurement card expenditure that higher approval levels were now required and an Officer from a different service area would approve the procurement card transaction via a portal.  It was noted that there were only a small number of procurement cards issued within GFRS to senior management. 

 

The CIA informed the Committee that there numerous audits still to be undertaken, some of these included the Disposal of Vehicles, New Vehicles, fuel scheme cards, absence reporting procedures, etc.     The full list of audits to be completed can be found within the GFRS action plan (Agenda Item 7).   

 

Members questioned the error rating in relation to sample testing.  The CIA explained that a walk through test was undertaken on the sample selected.  The findings from the testing would then identify  if the systems/processes used were incorrect  ...  view the full minutes text for item 17.

18.

Internal Audit Activity Progress Report 18/19 pdf icon PDF 50 KB

The Committee is asked to note the report.

 

Additional documents:

Minutes:

Theresa Mortimer, Chief Internal Auditor (CIA) presented the report which informed members on the progress of the internal audit activity in relation to the 2018/2019 Internal Audit Plan and provided a progress report on those audits undertaken during the period January to March 2019, including the opinions provided on risk and control.

 

The CIA highlighted there were six limited assurance opinions on risk or control during the January to March 2018 period (including the GFRS audits reported separately).  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 during this period, which showed an overall satisfactory and above rating of 75% on control and 87% on risk.

 

The CIA informed the Committee that all 54 recommendations made by Internal Audit to improve the control environment during this period, had been accepted by management. 

 

During the discussion the Committee requested that the Youth Service - Care Leavers internal audit outcomes due to a limited assurance opinion was shared with the Children and Families Overview and Scrutiny Committee for review and oversight.

 

Members requested that management attend the next meeting of the Committee to provide an update on progress taken to address the recommendations made in relation to the Youth Service – Care Leavers Audit.   The Committee asked for a limited assurance overview report, detailing the actions and status to date.   The CIA agreed that this will be included in the Annual Report on Internal Audit Activity presented to the Committee in July 2019.

 

Resolved

 

That the report be noted. 

19.

Money Laundering Regulations and Guidance pdf icon PDF 58 KB

The Committee is asked to review and approve the updated Anti Money Laundering Policy; and agree that the policy is reviewed by the Audit and Governance Committee on an annual basis.

 

Additional documents:

Minutes:

Paul Blacker, Head of Financial Management presented the report to the Committee in detail.    Members were advised that money laundering only referred to cash. 

 

Resolved

 

That the report be approved.   

20.

Alternative Provision Schools Management Update pdf icon PDF 46 KB

The Committee is asked to note the report. 

Additional documents:

Minutes:

Philip Haslett, Head of Education Strategy and Development gave a detailed presentation on exclusions and the impact on alternative provision. 

 

It was noted that exclusions remained very high in Gloucestershire and above the level in comparator authority areas.  In addition Government policy announcements were awaited.  Members were advised that the cost of alternative provision for excluded pupils was funded from the Dedicated Schools Grant was £5.7m. 

 

The Committee were informed that was a slight decrease in the secondary sector from 72 to 70 pupils, with an encouraging picture in the primary sector with a considerable decrease from 24 to 9 pupils.  In response to a question, it was noted that the primary school children were each excluded from different schools and all had an identified SEN. 

 

Members were advised that if a pupil was excluded then the funding remained with the school.  It was explained that divulged funding gives a school more control and allows for more support.  In response to a question, it was noted that there was an increase in the number of children being home educated. 

 

During the discussion, the Committee noted that detailed research was currently being undertaken into Gloucestershire Schools who were off rolling pupils and would identify areas of concern.  The Head of Education Strategy and Development explained that this detailed work would be pursued by the Children & Families Scrutiny Committee (CFSC).

 

The Committee were advised the Deputy Regional Schools Commissioner would be attending the CFSC May meeting, and if members had any questions for the Commissioner they should send them to Democratic Services.

 

Resolved

 

That the report be noted.  

21.

Freedom of Information Annual Report pdf icon PDF 117 KB

The Committee is asked to note the report. 

Additional documents:

Minutes:

Jenny Grodzicka, Head of Information Management and Teresa Wilmshurst, Information Requests Team Manager presented the report.  It was noted that

performance rates fluctuated throughout the year.  However, this was largely dependent on service areas providing information and engaging with the process.

It was explained where there were significant changes going on in the business and this often had an effect on the performance rate. Members were advised that staff had been recruited to the central team and it took time to get new staff up to speed.

 

Members were referred to Table 1 (page 294 of the report) which showed there was an increase in the numbers of requests received, bringing the council back up to similar levels to those seen in 2016.   It was noted that the schools traded services was now a successful improved offer to schools and any related queries were managed by a small, dedicated team within IMS.   It was noted that IMS had worked closely with the School Admissions Team to ensure a great deal of information was readily available on the website. 

 

The bar chart (page 295 of the report) showed the trajectory over time of requests received. There were still fluctuations, but the numbers were showing some stability over the last few years, consistently above 2000 requests per year. However, the complexity and sensitivity of requests continues to increase. Requestors have become more sophisticated in their enquiries and were often more au fait with the legislation.

 

Members’ attention was drawn to the table on page 296 of the report, which showed the origin of requests.  It was evident that the number of requests remained fairly consistent when compared to the previous year.

 

Officers explained that requests from members of the public remained the highest at 62%.

 

The Head of Information Management referred to Table 3 of the report, which demonstrated that Children’s and Communities Clusters remained the most popular request areas. Particular interest had been shown this year, in the Fire Service and there was ongoing interest in waste management.

 

The Committee were informed that exemptions could be applied in full or in part. Reflecting the complexity of requests received, the fees exemption was the most highly used reason for not providing information. This was where locating, extracting and collating the information would take more than 18 hours or cost more than £450.  Use of the exemptions for personal data, commercial interest and future publication also reflected the position for the previous year.  In addition, a number of requestors were referred to information that was already available. 

 

Members were advised that a very small percentage of requests result in the requestor asking for a review (1%) and only 2 FOI requests were escalated to the Information Commissioners Office (ICO).  As such one request was resolved by releasing further information and the other remained open.

 

Officers explained that the new General Data Protection Regulations came in to force in May 2018, which meant all policies and procedures needed to be updated. Furthermore, it significantly  ...  view the full minutes text for item 21.