Agenda and minutes

Audit and Governance Committee - Tuesday 28 September 2021 10.00 am

Venue: Council Chamber - Shire Hall, Gloucester. View directions

No. Item


Declarations of Interest


No declarations of interest were made.


Public Questions pdf icon PDF 90 KB

Up to 30 minutes is allowed for this item.


To answer any written public questions about matters which are within the powers and duties of the Audit & Governance Committee.


The closing date for receipt of questions is 10am on Tuesday, 21 September 2021.  Please send questions for the attention of Andrea Griffiths (email )


The submitted questions and responses were published online. 


The Chair advised members of the public questions were submitted to the Chair of the Audit and Governance Committee and he was unable to answer any questions directed to Grant Thornton.  As the Chair he acknowledged the short time frame on this occasion, between the publication of the agenda papers and the deadline for the receipt of questions and such, he had decided to extend the deadline under the urgency rules as defined by the Constitution.  The Chair felt the deadline for questions should be clarified further by the Constitution Committee. 


The Committee were referred to public question and responses which were circulated in advance of the meeting and were available online for reference.  The Chairman welcomed public questioners, Lynn Haanen & Sue Oppenheimer to the meeting, as they had submitted public questions, they were able to ask supplementary questions. 


Mrs Haanen attended the meeting virtually and wished to ask a supplementary question, in relation her second question.  She wished to know if the Committee still had full confidence in Grant Thornton (GT) and referred to the recent news that GT had been fined £2.3m by the FRC for work on another client.  In addition, the FRC had reviewed other audits at other authorities and had concluded that they were incomplete. She wished to know if the Committee had a view.   


The Chair explained that as the Committee had not yet discussed the item, so it was not possible to give a view at this stage.  It was noted that the Public Sector Audit Appointments contract was due to be renewed in 2024 and the Financial Services Authority (FSA) would start the process, it was anticipated that the Committee’s view would be sought at the January 2022 meeting. 


Mrs Oppenheimer addressed the Committee on behalf of the four objectors stating that as objectors they were disappointed in the quality of the report and lack of answers.  It was originally asked what happened with the contract, they felt the auditor looked at lots of ‘might’s’.  The facts had been given less weight than the ‘might’s’.  It was noted that the contract increased from £450m to £613m, and the annual cost to GCC went up from £15m to £24m per year, inflation was less than 10% and GCC was paying more than the market average for the incinerator.  As objectors they felt there was an attempt to whitewash the support.  She asked, what the Committee thought of the facts and the ‘might’s’.


The second question related to the issue that the auditor said it would be difficult to investigate further at this point, given the passing of time.  Mrs Oppenheimer felt if the contract details were available in 2015, when the decision was being made it would have been considered by the Audit & Governance Committee.  As objectors they believed the auditor and the County Council colluded to hide those contract details.  Mrs Oppenheimer informed the Committee that the auditor wrote in 2018 to say the  ...  view the full minutes text for item 2.


Member Questions

Up to 30 minutes is allowed for this item.


To answer any written member questions about matters which are within the powers and duties of the Audit & Governance Committee.


The closing date for receipt of questions is 10am on Tuesday, 21 September 2021.  Please send questions for the attention of Andrea Griffiths (email )


No member questions were received. 


Minutes of the previous meeting pdf icon PDF 111 KB

To approve as a correct record the minutes of the meeting held on 30th July 2021.




That the minutes of the meeting held on the 30th July 2021 were approved as a correct record. 


Objection to accounts regarding waste contract - External auditor's report pdf icon PDF 563 KB

Additional documents:


John Gregory, External Auditor (EA) presented the report and advised the Committee the primary report was detailed at page 43 of the agenda pack. 


The Committee were informed it was an unusual auditor’s report as it hadn’t reached a specific conclusion and the report detailed the reasons why.  The objection process was enshrined in law within the auditor’s responsibility, and local electors had the opportunity each year to ask the auditor to produce a public interest report and/or to go to the High Court and seek a declaration that there was an unlawful item within the council accounts for that particular year. 


However, given the number of objections to the accounts nationally, it was not considered a widespread process and objections were usually dealt by the local auditing team.  In this case, the EA agreed to be involved due to his experience with a similar case at another authority.  


It was explained that objector had to give reasons and the process was conducted in accordance with a judicial process and both parties’ representations were made and then considered by the EA.  These objections were then either upheld or dismissed by the Auditor. 


The objection was raised in 2017 and raised a wide of range issues around the contract.  Determining it had been a long and complex  process.  A number of issues arise around commercial confidentiality of the contract and at the time, parallel proceedings were going through an information tribunal and direct legal action was being taken by the Directors of CR4C.   This process was further delayed due to Covid and therefore it had become a long process.  In addition, there were a number of complex issues which required specialist legal advice around public procurement regulations. 


The Committee were advised there were a lot of issues raised by the objectors, the one crucial issue was combined with public procurement regulations in accordance with the revised project plan in 2015, and whether those negotiations resulted in the economic balance shifting in favour of the contractor. It was a question of where the economic balance lay and the complexities involved, the EA had taken the view that it wasn’t in the public interest to commission the necessary work, particularly as this may still not resolve the matter. 


In order to do so, detailed costs and risks would have to be analysed, as the EA he took view that it wasn’t in public interest and it wouldn’t change the view of the contract that was in place.  In addition, he didn’t feel it was worth wasting hundreds of thousands pound of public money in doing so,  notwithstanding the objectors’ comments about the relatively small amount of money in relation to the contract but it wouldn’t make any practical difference to the contract.  The EA felt it was important to share the report with the Audit & Governance Committee in accordance with its role within the Council. 


Members questioned whether the report should have been issued as a public interest report.  The EA explained that  ...  view the full minutes text for item 5.


Grant Thornton - General Enquiries of Management GCC & Pension Fund pdf icon PDF 43 KB

This items was circulated to the Committee via email on the 5th August 2021 for comment.  The Committee is asked to note the reports. 

Additional documents:


Alex Walling, Grant Thornton presented the report, it was noted that the report had been circulated to members via email on the 5th August 2021 to the Committee for information. 


The Independent Person noted that item 12 on page 73 of the report was incomplete, the External Auditor agreed to look at how assurances were given and would amend the report accordingly. 




That the report be noted subject to the amendment. 


Grant Thornton Audit Findings for GCC & Pension Fund pdf icon PDF 4 MB

The Committee is asked to note the reports.

Additional documents:


Alex Walling, Director, Grant Thornton presented the report which informed the Committee of the key matters arising from the audit of Gloucestershire County Council’s financial statements for the year ended 31st March 2021.


She explained that the 2020/21 audit had continued to present a number of issues, in light of the Covid 19 pandemic and the report reflected the additional challenges for Grant Thornton and the Authority in undertaking their respective responsibilities.  The expectations of the regulators had grown year on year,  therefore it was essential that GT were doing appropriate work to address the issues raised. 


The position statement as detailed on page 92 of the report, detailed that GT had identified a period of adjustment as part of their work and an updated audit finding report would be circulated when the work had been completed.  In relation to the prior period of adjustment, it was reported there were no adjustments to the 2020/21 accounts and the finance team should be congratulated on their efforts. 


There were some disclosure agreements, it was noted this was not a major issue and no local authority had achieved 100%.  As a result of this, recommendations had been made to management and as part of the follow up work there were some issues around IT and administration access.  Some additional testing would be undertaken around those issues to test further. 


Additional areas of work were Property, Plant and Equipment (PPE) revaluation.  This was now an issue of concern for the reporting council and issues around floor planning had been identified, GT would come back with further information in due course.  The expectation was there would further challenge to the value of property and what underpins those valuations.   


It was explained that some sample testing and management reviews were to be undertaken but GT did not intend to modify the audit opinion, this was regarded as a positive for the Council at this stage. 


In terms of the Value for Money (VfM) work 2021, the process had been changed by the National Audit Office (NAO) , they had requested more about commentary on the overall arrangements.  The VfM work would now look at three key areas deemed important by the NAO:

-           Financial sustainability

-           Governance of decisions, scheme of delegation, etc.

-           Improving efficiency, economy and effectiveness. 


Due to Covid the NAO had decided to decouple the VfM work from the accounts work, therefore the accounts work opinion could be given and the VfM work would be ongoing.  The aim was to finish the VfM work by Christmas, the commentary known as the auditors annual report would be a public document and would give the Auditor’s view on the Council’s  arrangements in the three areas outlined.  


The Auditor was unable to certify the closure of the 2020/21 accounts as part of the  statutory duty, this was partly due to Government accounts work was outstanding and no confirmation had been received by the NAO as yet as to what work was required.  ...  view the full minutes text for item 7.


Annual Statement of Accounts pdf icon PDF 51 KB

The Committee is asked to approve the Statement of Accounts for the year ended 31st March 2021, including the Gloucestershire Pension Fund Accounts 2020/21.


The Executive Director of Corporate Resources and Chair of the Committee to sign the attached letter of representation, in Annex B, on behalf of the Council.


The Executive Director of Corporate Resources and Chair of the Committee to sign the attached letter of representation, in Annex C, on behalf Gloucestershire Pension Fund.

Additional documents:


Paul Blacker, Director of Finance explained there had been a change of situation as indicated in the previous item by GT.  It was noted the updated report from GT had been circulated to the Committee and was published online. 


It was reported that external audit were unable to complete the accounts by the statutory deadline.  The Director of Finance explained that the accounts still needed to be published by the statutory deadline of the 30th September 2021, therefore it was proposed that an unaudited version of accounts with a supporting statement be published in the interim period online and be replaced by the approved version at a later date. 


The Executive Director of Corporate Resources proposed that the Committee delegate the signing of the accounts and letter of representation to the Chair of the Committee and the Section 151 Officer, providing no material adjustments were required.  It was agreed when the Statement of Accounts were finalised they would be circulated to all members of committee for approval prior to signing off. 




That the Committee delegated signing of the Statement of Accounts the letter of representation on behalf of the County Council and the Pension Fund, to the Chair of the Committee and the Section 151 Officer, providing there were no material adjustments.  In addition, it was agreed when completed the accounts would be circulated to all members of committee for approval prior to signing. 


Annual Governance Statement & Local Code of Corporate Governance pdf icon PDF 75 KB

The Committee is asked to review and approve the Annual Governance Statement and the actions planned by the Council to further enhance good governance arrangements; and agree that an update on actions taken to address the governance issues identified will be provided to the January 2022 meeting of this committee.

Additional documents:


Darren Skinner, Head of Planning, Performance and Improvement presented the report in detail and explained that the AGS summarised the Council’s corporate governance arrangements in place during 2020/ 2021. 


The CIA confirmed that the Council’s AGS and associated assurance framework had been developed in accordance with the CIPFA / SOLACE publication Delivering Good Governance in Local Government 2016. This year’s annual review had identified 7 key corporate governance matters, the details of which could be found in the reports pack:


-           Ofsted inspection of Children’s Services;

-           Gloucester Fire and Rescue Service (GFRS);

-           Recruitment and retention of employees in hard to fill, critical positions; and

-           Covid-19 impact on governance.

-           ICT and Cyber Security Risks

-           Procurement Transformation Programme

-           GIS Healthcare and management of the service. 


It was noted that these matters would be kept under review and a further update on actions taken to address them would be provided to the Committee, at its January 2022 meeting.


In relation to ICT Governance, members remarked that it was not just a question of staff culture; members should also be included within that point too, as they had GCC Ipads.  The Monitoring Officer welcomed the reminder and advised members that phishing email activities had been undertaken to make members aware of good practice and the use of the Council’s IT equipment. 


The Independent Member felt there was a slight inconsistency and referred to the certification statement as this referred to 2019/20, page 357 of the report.  It was confirmed that the dates needed amending prior to approving.   


Members questioned the forthcoming Ofsted report and the increase of children going into care during Covid, members wondered how flexible the governance arrangements were. 


The Executive Director of Corporate Resources accepted the point raised and advised the Committee at this stage that once the report was received it would be possible to review the governance arrangements in place.  Officers anticipated that the report would still say requires improvement.  It was noted that it was not possible to second guess at this stage until the report had been received, it would be questioned and duly considered once received.  The Monitoring Officer explained that an outcome of ‘requires improvement’ or better would give the authority greater freedom to manage its own governance. 




The Annual Governance Statement was approved by the Committee subject to dates on the certification statement being amended.    


Treasury Management Mid-Year Report pdf icon PDF 583 KB

The Committee is asked to note the Treasury Management Update Report.


The Director of Finance presented the report and gave a midyear review of Treasury Management activity to date.  The Committee noted that no long term borrowing had matured.  He added that in terms of investment returns this period since the beginning of the financial year, had been dominated by Covid and a low interest rate environment. 


The Committee noted that there was not much activity on the borrowing front but the Authority had maintained income returns.   It was noted that all the Treasury management activity has complied with CIPFA code of practice. 


It was explained that the Council focussed on security and liquidity in terms of the Investment Policy. In response to a question, members were informed that £10m was held in responsible investments as part of the new fund.




That the report be noted.


Finance Procedure Rules pdf icon PDF 54 KB

The Committee is asked to note the changes in the report; and

approve the proposed changes. 

Additional documents:


The Director of Finance presented the report in detail and advised members he sought their approval to the proposed changes as indicated by the track changes.  If the Committee approved the changes then report would be submitted to the Constitution Committee for their consideration. 


In response to a question relating to the removal of the paragraph on virement of year end balances, the Executive Director of Corporate Resources explained that the aim was to reflect what the actual practice was. The aim was to give assurances through financial procedures and rules in which the Council works.  It reflects what is custom and practice now. 


It was explained that the budget and policy framework was policed quite vigorously by the Executive Director, the CEO and the Monitoring Officer.  Decisions  that do not comply with that framework would go back to Council for a decision. 


The Chair shared his view that the outturn should go back to Council, The Executive Director had sought clarification from CIPFA, and some authorities do and some don’t. 




That the Committee approved the amended report and agreed that it be submitted to Constitution Committee for approval.


Internal Audit Progress Report pdf icon PDF 49 KB

The Committee is asked to review and approve the recommendation.

Additional documents:


At this point the Chair referred to a question that was raised at the Council meeting on the 8th September relating to the staffing levels of the CROW team. 


The Monitoring Officer explained the Countryside Act gave a deadline of 2026, for the receipt of applications for historic Rights of Way to be added to the Definitive Map. Act. This had resulted in the Council receiving a significant increase in demand.  Members were advised that all Councils had a significant backlog as a result of this, and management were looking at the budget plan for next year to see if additional resources could be provided.  The Monitoring Officer anticipated that Government would extend the deadline to accommodate the backlog.  It was suggested that the Committee could ask Internal Audit (IA) or Environment Scrutiny Committee to look at this issue if they wished to do so. 


Some members felt this issue would be exacerbated by the 2026 deadline and felt that Internal Audit should look at this issue.   A member of the CROW Committee recognised that the CROW Team were doing a great job but also felt IA should look at this issue. 


The Executive Director of Corporate Resources added that management were aware of the issues but felt nothing would be gained by IA looking at the issue.  He felt that it should be for the Environment Scrutiny Committee to consider how to progress further and by passing to IA this would be a waste of resources. 


The Chair disagreed and felt that the governance arrangements needed looking at further, as it would not be possible to clear the backlog if the team wasn’t sufficiently sourced. 


The Executive Director of Corporate Resources advised the Committee that they were putting in a bid for additional resources, however it was not possible to do that until the allocation from Government was known.  Rather than wasting IA resources perhaps the Executive Director of Economy, Environment & Infrastructure view could be sought primarily in terms of the issues facing the team while dealing with the backlog.  After some discussion, the Committee agreed with this approach.   . 


Piyush Fatania, Head of Audit, Risk and Assurance (ARA) presented the report which informed Members of the progress of Internal Audit activity in relation to the approved 2021/22 Internal Audit Plan for activities delivered up to August 2021.


In response to a question relating to the EfW project on page 433 of the report and requested clarity, the Head of ARA agreed to check what the scope related too and would circulate a response via email. 


Members raised concerns in relation to limited assurance of the traffic signals, the Head of ARA confirmed this would be followed up by IA and reviewed accordingly. 


The Committee were advised in terms of grant certification, specific grants were for specific activities with short deadlines, which could prevent the grant being spent in accordance with the conditions and on occasion the grant had to be returned.  Officers accepted the more notice of the  ...  view the full minutes text for item 12.


Annual Report on Request Management pdf icon PDF 158 KB

The Committee is asked to note the report.


The Monitoring Officer presented the report in detail.  It was explained that the requests management team, in the Information Management Service, was responsible for ensuring the council met its statutory obligations with regard to request management, but this relied on timely engagement with service areas in order to do so.  These fell into two categories:

           Freedom of Information (FOI) and Environmental Information Regulation  (EIR) Requests

           Subject Access Requests (SARs)


It was recognised over recent years, the council had seen a steady continuation of Freedom of Information (FOI) / Environmental Information Regulation (EIR).

In addition, there had been a rise in the number of subject access requests (SARs) being made under the General Data Protection Regulation (GDPR). Many service users request this right as a tool to better understand decisions made that directly affect them and, on occasion, to hold the council to account.  The Authority receive fewer SARs than FOI requests, but the volumes of information involved can be immense and as a result, resource-intensive to deal with.  Nevertheless, they should be seen as a key part of the ongoing relationship between the council and its service users.


It was noted that the council responded to 73% of all requests with the statutory timescales in the last financial year (20/21), compared with 82% in the previous 12 months.   


The Committee were advised that numbers received dropped during the pandemic there hadn’t been a correlating improvement in performance. The process was highly dependent on service areas providing information in response to requests and during this unprecedented period they had seen unusually high and differing demands on their time.


In response to poor performance rates, a comprehensive review of the corporate team’s capacity was undertaken, with additional permanent and temporary resource allocated to the team.  The first of these additional resources was in place in September 2020, contributing to the improvement in performance and helping move the council towards the national target of 90% on time, set by the Information Commissioner’s Office (ICO).


Members were informed that in August 2020 the council participated in a consensual audit by the ICO, achieving reasonable assurance.  As a result of the ICO recommendations a comprehensive action plan in relation to FOI had been developed and the implementation was ongoing.  It was noted that the ICO would conduct a follow up audit in November 2021. 


In response to a question, the Monitoring Officer explained that it was not possible to give a figure as to how many requests had been refused as this information was not retained.  The Monitoring Officer reassured the Committee that he met with the Chief Executive and the Executive Director of Corporate Resources on regular basis to monitor this activity. 


The Executive Director of Corporate Resources stated that the availability of information on the Council’s website was due to be reviewed. It was essential to direct the public to find the information readily available online. 


Improvements were being made to ensure that those young people currently leaving care would automatically  ...  view the full minutes text for item 13.