Agenda and minutes

Audit and Governance Committee - Friday 17 April 2015 10.00 am

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

No. Item


Declarations of Interest


Councillor Awford declared that he was a County Council representative on the Lower Severn Internal Drainage Board who was a member of the GCC Pension Fund. 


Councillor Brown declared he was a member of the Pensions Committee.


Minutes pdf icon PDF 135 KB

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It was noted that the accounts and supporting narrative would be produced earlier in the process to allow members to have sufficient time to comment, officers explained that a training session on the narrative would be arranged prior to the September Committee meeting.   


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




That the minutes of the Audit & Governance Committee meeting held on the 23rd January 2015 be signed as a correct record by the Chairman. 


Grant Thornton Audit Plan for GCC & Pension Fund pdf icon PDF 499 KB

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Terry Tobin presented thereport which informed the Committee of the audit work to be undertaken for the 2014/15 financial year for Gloucestershire County Council, Gloucestershire Pension Fund and the fee involved.


It was noted that the auditors did not provide a separate value for money conclusion on the pension fund.  The committee noted that the pension fund was within the remit of the Pensions Committee who reviewed the Auditors annual report. 


            It was explained that the plan clearly set out the process and had a greater emphasis on the elements of risk.  In response to a question, members were informed that audits were based on materiality, therefore the audit was designed to consider material error.  The committee were informed that Internal Audit and Grant Thornton had regular meetings and dialogue throughout the financial year to discuss key issues on a regular basis.  The committee were very pleased with the good joint working methods, which aided the planning process. 


            A discussion took place regarding journals, members were informed that only certain members of staff had the authority to make a journal entry. It was noted that strict control processes were in place, as journals were a recognised practice that would continue for many years.  It was noted that each journal entry had a reference number attached to it. 


During the discussion, members vigorously debated the report content and questioned Grant Thornton.  During the discussion, members referred to revenue recognition and seeked assurance from Grant Thornton that the issues were deeply considered.  Members were informed that the report highlighted the most important aspects of risks, officers duly explained that there were varying levels of risks.


            It was requested that the terminology of “bed-blocking” (on page 18, item 3) be amended to “delayed discharges”


            The total indicative fee for the audit for 2014/15 was £130,680.  


In response to a question concerning the Pension Fund, the committee was advised that the biggest employer in the fund was GCC, however the number of employers in fund were increasing, therefore, the fund would increase.  It was noted that Grant Thornton worked closely with the Head of the Pension Fund and the Pension team.  It was noted that the transition of the fire fighters pension fund would be audited in the 2015/16 plan, as this was a major transfer into the fund.  Members were reassured that Internal Audit would also be carrying out work on the regulations, pensions and payroll testing to ensure compliance.   




            That the terminology of “bed-blocking” be amended to “delayed discharges”


THAT the report be noted.









Grant Thornton Progress Report pdf icon PDF 371 KB


Terry Tobin presented the report. It was noted that Grant Thornton had devised the plan in association with the Authority.  Accounting, audit issues and emerging issues would be flagged up as part of the regular report.  It was noted that Grant Thornton had regular discussions with officers. 


It was agreed that the link for Grant Thornton’s publications would be circulated to members via email. 




That the Grant Thornton’s publication link be circulated to members via email. 


That the report be noted. 





Grant Thornton Auditing Standards Communication pdf icon PDF 340 KB


Terry Tobin presented the report, which summarised 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, which were circulated prior to the meeting and confirmed that it was satisfied with the arrangements in place. 


Members discussed the issues surrounding the fidelity guarantee (computer and employee fraud policy) and the cost of the policy.  It was explained that the policy covered staff for up to £2 million pounds and named high risk employees up to £12 million. The committee was informed that the council had its own appointed insurance advisors.  Officers explained that the authority had recently undergone a tender process.   




That the report be noted.



Freedom of Information Annual Report pdf icon PDF 115 KB


Jenny Grodzicka, Corporate Information & Compliance Manager presented the report, drawing attention to the significant increase in requests and the maintenance of an overall response rate that is above the ICO criteria of 85% within statutory timescales.  The committee discussed the report in detail. 


Members were informed that information was published on the County Council website, in a bid to improve openness and transparency and to reduce Freedom of Information requests.  Of the 2 FOI complaints received by the Commissioner, there had been no findings against GCC.  Members were pleased to note this was a positive aspect. 


It was reported that the number of requests being managed by the team continued to increase, however, the main challenge was the complexity and size of the requests.   Members were referred to the chart (on page 92 of the report), which demonstrated the estimated time spent on requests.  It was reported that the number of medium and difficult enquiries had significantly increased.


In response to a question, members were informed that one request received had 235 parts and on average an FOI request had 9 questions within each request.  It was noted that despite this the number of times we could refuse requests as the time limit would be exceeded had dropped, from 106 requests in 2013, to 68 requests in 2014. 


Members were advised that requests falling under the Data Protection Act had seen the biggest percentage increase from 293 to 399 requests, which equated to a 36% increase.  Many of these dealt with co-ordinating large volumes of both paper and electronic files, many of which required the full content to be assessed prior to release, so were very time consuming.  It was explained that these were often ex-service users accessing their files to help them understand their past, but also include requests from solicitors acting on the individual’s behalf.


Percentage of internal reviews had reduced to under 2% overall, compared with 3.7% in 2013.  It was noted that the team analysed the requests for review received and addressed common themes.  As a result the team had produced a FAQs sheet which were included in all responses to subject access requests. 


In response to a question, members were informed that the FOI team tried to identify trends and where possible, the appropriate information was uploaded to the GCC website, in a bid to reduce requests.  Officers were actively looking at ways of communicating what information was easily available and uploaded all the responses on to the website. 


It was noted that the FOI team were very busy and given the service constraints, the team were achieving the appropriate targets.  It was noted that the team worked directly with officers throughout GCC to obtain the necessary responses. 


The committee welcomed the report and congratulated officers on their efforts. 



That the report be noted.








Internal Audit Plan 2015/2016 pdf icon PDF 558 KB


Theresa Mortimer, Chief Internal Auditor (CIA) presented the Internal Audit Plan for 2015/2016 for the committee’s consideration and approval in detail.  It was noted that the principles of Risk Based Internal Auditing, were encompassed within the plan, which meant that officers could focus resources on providing 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 (from Commissioning, Support Services and Delivery), External Audit and Finance Managers, which helped Internal Audit to establish their audit activity priorities.

Officers explained that they 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.  In response to a question, it was explained that detailed terms of reference including the scope of the review were agreed with the client prior to the commencement of each review. 

The proposed activity from all sources, which included internal audit’s own assessments, were collated and prioritised based on risk between 1 and 4.  It was noted that 1 was the highest priority based on previous fraud/irregularity within the area, change of management, policy, new contractual arrangements, financial value/overspends, etc.  These activities were then matched against internal audits capacity and staff resource plan, with priority 1 activities being allocated in the first instance.

The chief internal auditor explained that whilst she had a slight reduction in available audit resources due to holding a vacant post, she had the ability to commission additional internal audit resources via the current audit framework agreements to meet in year demand.

Member’s attention was drawn to the summary overview of the plan, which highlighted the allocation of audit resource per category of review and functional service areas.   It was noted that this year’s plan had been based on the Council’s current risk profile and change agendas.

There was a proportional split based on risk, between each of the service areas to enable the provision of an annual audit opinion, after taking into consideration other assurance providers to avoid duplication. However, more focus had been directed to Adult Services than in previous years due to the risk profile, and fraud and irregularity work, due to an increase in referrals.

Members felt that it was a very ambitious plan, the CIA explained that due to the ongoing organisational changes, Internal Audit would continue to review the planned activity particularly following our stakeholder meetings to ensure the audit resources continue to be directed accordingly throughout the year. It was therefore very important that the plan was dynamic and flexible to meet any required changes. All changes to the plan would be reported to the Audit and Governance Committee. 

In response to a question, members were informed that the CIA had principal auditors who specialised in certain service areas and were actively involved in the development of the plan.  It was  ...  view the full minutes text for item 19.


Internal Audit Activity Progress Report 2014/2015 pdf icon PDF 324 KB

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Theresa Mortimer, Chief Internal Auditor presented the report.  The purpose of the report was to inform members of the progress of the internal audit activity in relation to the 2014/2015 Internal Audit Plan, including the opinions provided on risk and control. 

Members were informed of the progress made in relation to those audits undertaken during the period January – March 2015.  Officers were pleased to report that all 30 recommendations made by internal audit to improve the control environment during this period, had been accepted by management.

Members were referred to the graphical summary of the opinions on risk and control provided during April 2014 to March 2015. This showed an overall satisfactory and above rating of 81% on control and 93% on risk.

The Chief Internal Auditor drew member’s attention to the limited assurance opinion provided on both risk and control relating to the Adult Services Financial Assessment and Benefits Team.   It was noted that recommendations were made relating to the management, monitoring and delivery of the financial assessments, all of which were accepted by management. 

The committee noted that Internal Audit would monitor their implementation, however, it was agreed that the relevant senior management attends the June meeting of the Committee to provide an update on the action taken in relation to each recommendation made within the audit review.


That senior management attend the next meeting of the Committee to provide an update on the action taken in relation to the limited assurance report.


That the committee noted the report.



Internal Audit Quality Assurance and Improvement Programme pdf icon PDF 215 KB


Theresa Mortimer, Chief Internal Auditor  (CIA) presented the report in detail.  Members were informed that Chief Internal Auditors required assurance that their internal audit department and each member of the staff conformed to all mandatory elements of the Public Sector Internal Audit Standards 2013, and needed to demonstrate this conformance to their stakeholders. 


It was noted that the only way to meet these needs was with a comprehensive Quality Assurance and Improvement Programme (QAIP) which included ongoing and periodic internal assessments and an external assessment at least once every five years, by qualified independent parties.


It was explained that the Internal Audit annual reports provided the Committee with updates on the performance of the internal audit function.   The CIA explained that the committee would also receive feedback from the external assessors on the effectiveness of the Internal Audit function following their review week commencing 18th May 2015.


The Committee discussed the Internal Audit QAIP in detail and formally approved its adoption.




That the Internal Audit Quality Assurance and Improvement Programme be approved. 


Value for Money Policy pdf icon PDF 132 KB


Mark Spilsbury, Head of Financial Management presented the report.  The policy set out ways in which the Authority ensured value for money would be achieved and was supported by an action plan which set out the areas for improvement and change. 


The purpose of the Value for Money (VfM) policy was to establish a framework for the systematic approach and management of VfM, as a key enabler to delivering the Council Strategy.  It was noted that the responsibility for the delivery of VfM remained with all Elected Members and all employees of GCC.   


Members were reminded that there was a risk if the policy and action plan were not implemented in full, as value for money within the Council may not be maximised.  After some discussion, the committee formally approved the policy. 




That the committee formally approved the policy. 


Reports back on action requested following on from Internal Audit limited assurance reports pdf icon PDF 92 KB

Gloucestershire Care Partnership


Louise Brill, Commissioning Manager for Adult Social Care presented the report. 


Members were informed that for platinum contracts actions had been taken in order to support Adult Care contract management arrangements.  Two outcome managers had been allocated the responsibility of Contract manager for five care homes platinum contracts.  In response to a question, it was noted that platinum contracts were high value contracts.  These two officers also jointly managed the responsibility for all five contracts reporting to and escalating to the Lead Commissioner when necessary. 


It was noted that the Gloucestershire Care Partnership had at times proved to be a complicated arrangement, in relation to the transfer of assets.  Some members felt that they couldn’t see any evidence of a conclusion to the plan to change the framework.  Officers explained that operationally there was a shift in the service provision and there were over 400 vacancies.  Consequently the shift in domicilliary care provision and the outcomes were starting to affect the market place. 


The committee was informed that there were numerous issues in relation to the OSJ contract and consequently the service had moved from 60 different categories of pricing to just 6, this was a significant service change.  In response to a question, it was noted that deaths were now being recorded. 


The Head of Financial Management explained that the recommendations had been implemented with effect from 1st April 2015.  However, it was still early days and given the critical nature of these contracts it was very important that IA examined this area again as a follow up audit in 2015/16 to ensure that the new actions were working effectively.  


It was confirmed that a follow up audit as included in the 2015/16 Internal Audit Plan to ensure that all the recommendations made were properly in place and would be reported accordingly as part of the Internal Activity Progress Report in January 2016. 


Members were disappointed that the lead officer was unable to attend the committee meeting to answer their questions in detail and provide reassurances.  The CIA confirmed that Internal Audit would review the prposed actions detailed by management and report back to the committee in due course. 


After a heated discussion, the committee requested that the Lead Officer attend the June committee meeting to provide a more detailed report on the new management framework, including the detailed contract and performance monitoring arrangements and to answer any questions members may have. 


Officers explained that any contract should contain detailed monitoring information.  It was suggested and agreed that it would be beneficial if the Health Care Overview Scrutiny Committee received a full performance report by the appropriate manager at its September committee meeting.  Councillor Wilson agreed to discuss this issue with the Chairman of HOSC. 




That the Lead Officer attend the June committee meeting to provide a detailed report on the new management framework.


That  Health Care Overview Scrutiny Committee receive a full performance report by the appropriate manager at its September committee meeting. 


That the report  ...  view the full minutes text for item 23.