Agenda and minutes

No declarations of interest were made. 

To answer any written public questions about matters which are within the powers and duties of the Audit & Governance Committee.  Up to 30 minutes is allowed for this item.

The closing date for receipt of questions is 10am on Wednesday 23rd November 2022

No public questions were received.

The closing date for receipt of questions is 10am on Wednesday 23rd November 2022

No member questions received. 

The Committee is asked to approve the minutes of the previous meeting held on the 30th September 2022. 

Resolved

That the minutes of the meeting held on the 30th September 2022 be approved as a correct record. 

The Committee is asked to note the reports.

Sophie Morgan-Bower, Senior Manager, Grant Thornton (GT) 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 2022.

The 2021/22 audit had continued to present a number of issues, in light of the Covid 19 pandemic and the report reflected the additional challenges for GT 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 External Audit had not identified any significant matter during the audit.  GT were awaiting further instruction from the National Audit Office (NAO) and explained that working remotely had created issues and the hybrid working arrangements would help to overcome these issues.  GT wished to thank the Finance Team for all their efforts that had enabled the audit to progress well. 

Members were advised that GT had not completed all of its VFM work and were not in a position to issue their Annual Auditor's Report 2021/22.  A letter detailing the VFM position was also presented to the Committee.  The aim was to issue the Auditor's annual report by 31st January 2023.  This was in line with the National Audit Office's revised deadline, which required the Annual Auditors Report to be issued no more than three months after the date of the opinion on the financial statements. 

It was reported that GT had substantially completed the audit of the financial statements and subject to outstanding queries being resolved they hoped to issue an unqualified opinion on the accounts by the end of January.  There were no significant areas of weakness reported, although one valid objection, which was under review regarding the Council's definitive map. 

As the audits had been conducted remotely, this resulted in an increase in the fees and these figures would be confirmed in January.  During the discussion, it was agreed that the previous year audit fees should be included for transparency.  (Action - GT) 

In terms of the valuation of land and buildings, it was explained the council revalued these assets on a rolling basis and represented a significant estimate by management in the financial statements due to the size of the numbers involved and he sensitivity of the estimate to changes in the key assumptions.  Officers explained the problem occurred in that asset lives were short, as such management needed to revisit the fixed asset register to ensure they were not materially different to the current value.    

It was reported there was a national issue affecting the valuations of infrastructure assets within the accounts, members were advised this was a national issue as most councils did not have sufficient data available.  Which had resulted in councils inadvertently replacing assets, which had a positive on accounting.  CIPFA were considering a solution in the form of a statutory override, if approved it would take infrastructure outside the scope of the audit.  This requirement  ...  view the full minutes text for item 5.

The  Committee is asked to note the VfM extension letter.

Resolved

The Committee noted the value for money extension letter. 

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 agrees that an update on actions taken to address the governance issues identified will be provided to the January 2023 meeting of this committee. 

Simon Hawkins, Planning & Co-ordination Manager presented the report in detail and explained that the Council was required, as part of its annual review of the effectiveness of its governance arrangements, to produce an Annual Governance Statement (AGS) for 2021/22.   It was noted the Annual Governance Statement was signed by the Leader, Chief Executive and the S151 Officer and must accompany the Annual Statement of Accounts.

The Committee were advised 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 9 key corporate governance matters, the details of which could be found in the reports pack:

-         Ofsted Improvement Plan

-         Gloucester Fire and Rescue Service (GFRS) Improvement Plan

-         Recruitment and retention of employees in 'hard to fill', critical posts

-         The impact of Covid-19 on governance.

-           ICT transformation roadmap

-         Procurement Transformation 

-           Adult Social Care transformation and procurement

-           Equalities, Diversity and Inclusion (EDI) development

-          Implementation of the Communities Infrastructure Levy (CIL)

The Committee discussed the governance key matters in detail, during the discussion it was noted that under the 'ICT Transformation Roadmap', cyber security was not clearly defined, members felt it needed to be clear and concise and requested the wording be amended accordingly. In terms of the CIL,  it was also agreed that the wording be amended to include 'we will work constructively with partners'.   (Action - SH)

In response to a question, members were advised that the Children's Services  Budget was a limited resource, officers explained that general reserves were used as a contingency.  Members were advised that contract management oversight would form part of contract procurement arrangements and this area was being looked at closely given the outsourcing issues within children services, which had contributed to the overspend. 

The Committee questioned the relationship between the GFRS Improvement Board and the Fire Scrutiny Committee.  It was explained that this was an issue for the Constitution Committee, as the Fire Scrutiny Committee was still in its infancy stage and the Committee had been established in response to the white paper.  The Committee were informed that the Fire Scrutiny Committee would monitor these issues, as it was within its remit and they would keep the issues relating to GFRS front and centre.  

Members also raised concerns regarding GFRS culture, the Monitoring Officer explained that a lot of work was being undertaken with an independent organisation to advise, challenge and work on the cultural improvement journey.   

In terms of concerns raised regarding the CIL, the Committee were informed that the Environment Scrutiny Committee were of a similar view and wanted to work with the Districts to find a solution.  Members were advised the CIL had been introduced as an alternative to Section 106 funding and the CIL Team were actively working to understand the issues raised by the Districts and GCC.  It was suggested that an LGA corporate peer review would include CIL  ...  view the full minutes text for item 7.

The Committee is asked to note the amended draft Statement of Accountsfor theyear ended 31st March 2022, including Gloucestershire Pension Fund Accounts 2021/22. (N.B. This Remains subject to change pending the completion of the external audit process)

Paul Blacker, Director of Finance presented  a progress report on the StatementofAccountsfor 2021/22, it provideddetail onthekeyfindings set outin the interim audit findingsreports for theCouncil and the Gloucestershire PensionFund.  The Director also explained the agreed timescale to allow the Committee toformallyapprove the2021/22 auditedaccounts.

It was noted although considerable work has been undertaken throughout the 2021/22 audit process, it was not possible to be able to receive a formal external audit opinion. Committee members were assured that no material errors had been identified to date, and that an unqualified opinion was anticipated for both the Council and the Pension Fund.

Officers would continue to work with Grant Thornton to complete the outstanding items, for the next Committee meeting scheduled for 20th January 2023, incorporating any additional reporting requirements for Infrastructure Assets, following changes in accounting standards and/or the legal framework. 

During the discussion, members referred to the narrative on page 147 of the report, in relation to Equality Diversity and Inclusion (EDI) and it was agreed that the colours on the sexual orientation chart need amending, as it was unclear.  The Committee felt that the narrative needed to include the gender pay gap, disability and ethnicity. Members also questioned how staff identified or was it just male/female in terms of EDI.  Officers agreed to liaise with Human Resources to improve the narrative, but advised the Committee that in terms of data quality, it was only possible to report on what data had been collected. (ACTION -PB)

Members also referred to page 160 of the report and requested that a link to the senior pay chart be included for transparency, officers agreed to take this point away and look at it in more detail.

Resolved

That the Committee noted the amended draft Statementof Accountsfor theyear ended 31st March2022, including Gloucestershire Pension Fund Accounts 2021/22 and remained subject to change pending the completion of the external audit process. 

That the Committee noted the progress report and audit findings report from Grant Thornton on the current audit of the Council’s and Gloucestershire Pension Fund Statements of Accounts.