Agenda and minutes

Audit and Governance Committee - Friday 15 April 2016 10.00 am

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

Contact: Andrea Griffiths 01452 324206 

No. Item




Apologies were received from Councillor Barry Kirby and Jo Walker. 


Declarations of Interest


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


Minutes pdf icon PDF 118 KB

To approve the minutes of the meeting held on the 22/1/16.

Additional documents:


The committee discussed in detail Governance in relation to devolution.  Members were informed that a combined authority would be required to have a Audit Committee.  However, as discussions were still ongoing in relation to devolution, no further work on the Audit and Governance Committee’s remit had been undertaken at this stage.  Councillor Parsons informed the committee that Overview Scrutiny Management Committee would be discussing the scrutiny and Audit & Governance roles in more detail, in relation to devolution.  It was suggested that OSMC should look at joint working committees and their concepts in greater detail.  The committee felt that Audit & Governance would have a critical role in the new arrangements if devolution bid is approved. 


The Chairman informed members that the process would be discussed at a future committee meeting. 


The Monitoring Officer reassured members that any new arrangements would be discussed primarily at the Constitution Committee and submitted to full council. 


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 22nd January 2016 be signed as a correct record by the Chairman. 



Grant Thornton Audit Plan for GCC & Pension Fund pdf icon PDF 578 KB

Additional documents:


Elizabeth Cave presented the report which informed the Committee of the audit work to be undertaken for the 2015/16 financial year for Gloucestershire County Council, Gloucestershire Pension Fund and the fee involved.


It was noted that the report submitted to the committee included a few typographical errors, the correct version would be uploaded on the website and included in the minute book for information. 


It was explained that devolution, integration with the health sector and the earlier closedown of accounts had now been included as a challenge and opportunity.  The committee also noted that Fair Value Accounting and Corporate Governance had been incorporated into the development requirement.  In response to a question it was noted that pooled budgets were growing, this represented a significant risk.  It was explained that the Better Care Fund had in effect doubled the budget.  It was noted this was a difficult area in terms of accounting, risk share and accountability.  Officers explained that GCC had detailed discussions with the CCG to define the control mechanisms which were in place. 


The external auditor explained that it was essential to be clear on service delivery and the required outcomes.  They recognised the technical risk and the need for good governance.  Some members felt that the report contained  a lot of subjectivity and the different boundaries involved with pooled budgets could cause problems. 


It was noted that joint working arrangements in terms of the better care fund, would aim to provide the best service to meet a persons specific needs.  The External Auditor suggested that value for money needed to be looked at in more detail, as inevitably the situation was less than clear cut.  Members expressed concern over joint working arrangements.  The committee wanted reassurance concerning the audit and governance arrangements in relation to the Health and Wellbeing Board.  It was agreed that this issue would be referred to OSMC. 


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. 


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.


In response to a question, Paul Blacker explained that there was a two year cycle for valuation of property.  It was noted that PWC completed the technical evaluation and did consider the actuaries report. 

Members recognised the context of proposed recommendations, however there were no timescales.  Elizabeth Cave explained there were statutory responsibilities which had to be adhered too, however  ...  view the full minutes text for item 16.


Grant Thornton Annual Progress Report pdf icon PDF 11 MB


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 were flagged up as part of the regular report.  It was noted that Grant Thornton had regular discussions with officers. 


Members felt that consultation exercises with the public were often expensive and that due to cut backs it was necessary to decide where to spend to achieve the great.  Some members felt good community interaction via councillors who could voice those opinions was the best form of consultation, as they could help to set the tone for the organisation. 


The committee discussed the Auditor Appointment in detail.  It was noted that the committee would debate and discuss the alternatives prior to the County elections in 2017.  Officers explained that the Chief Financial Officer was discussing the option’s with the County Treasurers Group and would report back to the committee accordingly. 




 That the report be noted.


Grant Thornton Auditing Standards pdf icon PDF 203 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 robust responses, which were circulated prior to the meeting and confirmed that it was satisfied with the arrangements in place. 


The committee congratulated officers on their efforts and welcomed the report which provided detailed responses. 




That the report be noted.




Freedom of Information Annual Report pdf icon PDF 115 KB


Jenny Grodzicka, Information Management Service Manager presented the report, drawing attention to the significant increase in requests and the complexity the response rate had dropped slighlty below 85% of the statutory timescales. It was noted there had been a continued increase in the volume and complexity of requests the Council received, with 2195 requests received in 2015 compared with 1892 in 2014.   The committee discussed the report in detail. 


It was noted that impacts on the rates were as a result of the number FOI requests received, complexity, volume of information, and the need to consult with third parties and staff availability. Officers explained that they were currently managing requests on a risk basis, whilst prioritising high profile and topical requests. Members were informed that Information Management Service worked directly with all service areas and complicated requests could also be referred to legal for support, in order to provide the appropriate response.


The committee was surprised to find that one vexatious FOI request comprised of 240 parts.  In response to a question, members learnt that service resources hadn’t been increased, however officers were working more closely with service areas and maintained a FOI database. Members asked in future could chart 3 (page 98) include the previous years figures for a  comparison.  


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.  Officers actively looked at ways of communicating what information was easily available and uploaded all the responses on to the website. 


Officers recognised that the existing Council processes needed reviewing to ensure requests were well managed and have commissioned a piece of work to look at the future of request management across the Council.


Members were informed that requests falling under the Data Protection Act continued to see the biggest percentage increase, from 399 to 596 requests, which was a 49% increase. 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 noted that these were often ex-service users accessing their files to help them understand their past, but also included requests from solicitors acting on the individual’s behalf.  Officers explained that 35 requests for review were received compared with 22 in 2014.  Therefore, time spent on reviews had increased from 279 hours in 2014 to 492 in 2015.


The committee was informed that there had been a small reduction in the number of Data Protection complaints received.  These related to complex service user cases that required considerable investigation to understand the issues in question.  Officers explained that further improvements were as a result of the complaints, such as providing information on password protected disk rather than by post, to help prevent concerns in the event of loss or misdirection.


The Chief Internal Auditor gave assurances that effective processes were in place.  The committee welcomed the report and congratulated officers  ...  view the full minutes text for item 19.


Internal Audit Plan 2016/17 pdf icon PDF 2 MB


Theresa Mortimer, Chief Internal Auditor (CIA) presented the Internal Audit Plan for 2016/2017 for the committee’s consideration and approval.  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 Senior Management across the Council and parallel meetings with the Chairman of the Audit and Governance Committee, External Audit and Finance Managers, which, helped Internal Audit to establish their audit 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 proposed activity from all sources, which included internal audit’s own risk 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 service area, change of management, policy, new contractual arrangements, financial value/overspends, etc.  These activities were then matched against internal audit’s capacity and staff resource plan, with priority 1 activities being allocated in the first instance and subsequently priority 2 activities.


The plan is stated in terms of estimated days input to the Council of 1625 which is an increase of 202 days in comparison to last years plan. This increase is due to the Internal Audit and Risk Management Shared Service restructure, which in addition to increased productivity, also achieved budgetary savings.  The Chief Internal Auditor explained she had the ability to commission additional internal audit resources via the current audit framework agreements to meet in year demand.


In response to a question, it was explained that the ICT technical audits were undertaken by The Internal Audit Association (TIIA) the Council’s appointed  external ICT auditors. This plan was developed by Internal Audit and TIIA in conjunction with the Director responsible for ICT and Head of ICT Service. 


The proposed plan had been presented to the Chair of the Audit and Governance Committee, Director of Finance, the Head of Financial Management and COMT and following robust challenge, had been endorsed.


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, continued focus had been directed to Adult Services and procurement/contracts 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  ...  view the full minutes text for item 20.


Internal Audit Activity Progress Report 2015/16 pdf icon PDF 380 KB

Additional documents:


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 2015/2016 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 2016.  Officers were pleased to report that all 106 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 2015 to March 2016. This showed an overall satisfactory and above rating of 70% on control and 97% on risk. The CIA informed the committee that 30% of the opinions on control were limited. It was noted that this was possibly related to transformational change, the continued focusing of activity on the key risks of the Council and specific requests from Directors, who were asking for areas to be reviewed where issues had arisen or where independent assurance was required.  This proactive action was seen by members as positive as this further enhances good governance within the Council. 


The Chief Internal Auditor drew member’s attention to the three limited assurance opinions provided on both risk and control relating to the Adult Services Financial Assessment and Benefits Team, Adults/Public Health/Finance – Active Together Grant and Strategic Finance – Capital Virements.   The committee noted that recommendations were made to improve the control environment, all of which were accepted by management. 


In response to a question, members were informed that in relation to the Financial Assessment Benefits (FAB) Team, issues related mainly to staff sickness and performance, therefore creating backlog which had an acculumative impact on the team.  It was also noted that there had been a problem with collection and recording of data on an excel spreadsheet. 


Tina Reid, Operations Lead: Adult Social Care and Business Development explained that consequently information had been lost in translation, however this issue had now been overcome and the service was moving forward.  The committee noted that the FAB team would be moving to a new system for financial transactions in due course.


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 each of the three limited assurance reports.




That the relevant senior management attend the next meeting of the Committee to provide an update on the actions taken in relation to the three limited assurance reports.


That the committee noted the report.




Reports from Internal Audit on Limited Assurance Reports pdf icon PDF 106 KB

To receive limited assurance reports on:

-       Adult Services (Deaths & Discharges)

-       BSC/Payroll - Local Government Pension Scheme

Additional documents:


Death and Discharges Audit - Tina Reid, Operations Lead for Adult Social Care presented the report in detail. 


It was explained that the focus of this review was limited to the systems and processes currently operated within the Commissioning Personalisation Adults and Children’s (CPAC) and Disability Commissioning (DC) teams. The objective was to review the effectiveness of the current systems and processes in place for the receipt of notification of a service user’s death or discharge from permanent care and that there is a sound control environment for promptly updating the Council’s Electronic Social Care Record (ERIC). 


Members were informed that the demand for external care services for adults within Gloucestershire over recent years had placed significant pressure upon the Council’s Adult Services external care budget. The largest pressure resided with the budget for older people and people with physical disabilities. This budget has been reported as an overspend for a number of years and continued to be under significant pressure this financial year. The cost of reported deaths and discharges for older people and people with disabilities represents on average more than 20% of the actual annual spend on external care.


Officers explained that notifications of a service user’s death could be received into the Council through various pathways, such as: the Customer Services Contact Centre; the Registrars Service, “Tell Us Once” system; notification from a family member/representative into a service area and provider notification either direct to, the Commissioning Personalisation Adults and Children’s (CPAC) team or the Disability Commissioning (DC) team.


Members welcomed the change of culture and praised officers on their efforts.  It was explained that the registration service was unable to pass details over to the service without the families consent, as data protection laws applied. It was suggested that registrars should be reminded to promote the “Tell Us Once” service as this would help families with the difficult process and prevent upsetting letters being sent to recover over payments.   Officers explained that this was done as sensitively as possible. 


The Operations Lead welcomed the robust challenge by auditors and felt the opportunity to have a open and honest discussion was beneficial for all. 




That the report be noted











Business Service Centre (BSC) – Payroll


Cheryl Chambers, Head of Business Service Centre presented the report in detail. 


It was noted that in April 2015, Internal Audit (IA) was advised by the Director of Finance of an incident where the contributions, for a senior member of staff deducted from their March 2015 pay, were twice the amount that they should have been. Officers explained that IA was asked to investigate this matter, to give assurance that it had not impacted on other employees and that corrective action had been taken. As a result of this request this investigation was included within the scope of this audit.


In response to a question, the CIA reassured the committee that actions had been addressed during the course of the audit.  The Head of Business Service Centre welcomed Internal Audit  ...  view the full minutes text for item 22.


Internal Audit Charter 2016- 18 pdf icon PDF 2 MB


Theresa Mortimer, Chief Internal Auditor presented the report in detail.


The Internal Audit Charter sets out the role, responsibility, status and authority of Internal Auditing within Gloucestershire County Council, and outlined the scope of internal audit activity in line with the Account’s and Audit Regulations 2015 and the Public Sector Internal Audit Standards 2013 (PSIAS).  The committee discussed and approved the Internal Audit Charter.




That the committee approved the Internal Audit Charter. 


Internal Audit Code of Ethics 2016 - 18 pdf icon PDF 1 MB


Theresa Mortimer, Chief Internal Auditor presented the report.  The report  set out the Internal Audit Code of Ethics which was a statement of principles and expectations governing the behaviour of individuals in the conduct of internal auditing as mandated by the Public Sector Internal Auditing Standards 2013.  The committee discussed and welcomed the report. 




That the committee approved the Internal Audit Code of Ethics. 


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




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 26 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.


Exempt Internal Audit Limited Assurance Reports


The committee received and discussed the reports in detail.




 That the reports be noted.