Agenda and minutes

There were no apologies for absence.

There were no declarations of interest at this point in the meeting.

RESOLVED

            That the minutes of the meeting held on 31 March 2014 be agreed and      signed by the Chairman as a correct record.

It was noted that the Serco contract had been publicly signed at the Linconshire Show, where Members had been provided with the opportunity to discuss any general queries in relation to the contract.

In relation to minute 60, it was noted that Members would be provided with an opportunity to discuss the assurance map in more detail at the workshop which was planned for the afternoon.

(To receive a report which provides an update on progress made against the Audit Plan 2014/15 and provides summaries of all audits completed within the period March to May 2014)

Consideration was given to a report which provided an update on progress made against the Audit Plan 2014/15 and provided summaries of all audits completed within the period March to May 2014.  A more in depth update was provided for those audits which received 'limited' or 'no' assurance, Members were informed that managers from each of these areas would be in attendance to discuss actions taken since the audits were carried out.

It was reported that the most significant piece of work this year would be input into the Agresso project, regular highlights would be provided to the Section 151 Officer and Project Board, as well as this Committee over the coming year.  Officers from internal audit would be involved in the project at key stages.

Members were informed that 24 audits had been completed since the last progress report in March 2014, of these 2 had received 'full' assurance, 17 received 'substantial' assurance, 4 received 'limited' assurance and 1 had  received 'no' assurance.  Of the 4 that received 'limited' assurance, 1 received a split assurance (substantial/limited).  It was noted that audits in 2014/15 would be based on a new set of definitions.  Seven audits were at the draft report stage, and details of these audits would be brought to the next meeting of this committee.

The Committee was provided with the opportunity to ask questions to the officers present in relation to the information contained within the reports, and some of the points raised during discussion included the following:

·         Concerns were raised regarding the change of assurance definitions, and whether they would devalue the audit.  Members were reassured that this would not happen as all four of the definitions would be changed.  Further details would be brought to the next meeting of the Committee;

·         It was clarified that payment to the contractor for the Agresso system was related to completion of key milestones.  For the payroll system, there would be 3 parallel test runs;

·         It was noted that the frequency of visits from HMRC was dependent on a risk assessment.  The County Council had been assessed as a low risk and so would expect visits to be every 5-10 years.  It was important to carry out internal audits into tax compliance to ensure that the authority remained as a low risk;

·         The Lincoln Castle revealed project had been given a 'substantial assurance' opinion following its audit, and officers had a reasonable level of confidence that the project was on track.  It was confirmed that the project was on time and on budget;

·         Members were assured that the role of internal audit would not be compromised by its involvement in the Agresso project, as once the system is implemented the auditors involved would not be able to audit the system for at least two years;

·         In relation to Agresso, there was a challenge in convincing the project team that the audit team was there to be helpful.  The audit team were clear about how they could help and where  ...  view the full minutes text for item 4.

(To receive a report which assists the Committee in fulfilling its role to ensure that the Council has effective risk management arrangements in place, by providing an update on how well the Council's biggest risks are being managed as well as reporting on the progress made in assisting the Council to adapt and change the way it considers and 'thinks' about risk)

One of the key roles of the Audit Committee was to ensure that the Council had effective risk management arrangements in place.  Members received a report which assisted the Committee in fulfilling that role, and provided an update on how well the Council's biggest risks were being managed as well as reporting on the progress made in assisting the Council to adapt and change the way it thought about risk.

The Committee was advised that over the past few months, officers had undertaken a complete refresh of the strategic risk register.  In doing so, senior management were consulted together with the Corporate Risk & Safety group for guidance as to what the strategic key risks were for the Council.

It was reported that the number of key risks had been reduced from 15 to 11.  One new one had been added, which was the Integration of Health and Social Care Services, and a number of others had been merged together.

It was noted that the first risk on the register – Resilience (Business Continuity) did not have a risk score.  The risk scores were in the process of being calculated and officers did not want to speculate.

Within the risk register there were some common themes, such as all directorates identified risks around finance.  There was also now, a high level of management assurance for each of the top 5 risks.  It was noted that none of these risks had been assessed as 'no' assurance.

Members were provided with the opportunity to ask questions to the officers present in relation to the information contained within the report and some of the points raised during discussion included the following:

·         A risk had been identified in terms of the recruitment and retention of staff, and it was queried if there was a budget allocated to this?  Members were advised that this had been identified in a number of directorates, whilst there was not a dedicated budget for training, there was a budget code for training, and the authority would provide support to enable staff to be more resilient.  It was also noted that training was carried out in ways other than running courses, such as secondments, shadowing and mentoring, which would not be coded to a particular budget;

·         The top five risks to the Council were forward looking;

·         It was planned to hold a series of fundamental budget review workshops, and risk assessments for each service area in relation to potential budget reductions would be factored in;

·         Members commented that the new format was very readable;

RESOLVED

            That the current status of the strategic risks facing the Council be    noted.

(To receive a report which provides information on the overall effectiveness of the Authority's arrangements to counter fraud and corruption and reviews the delivery of the 2013/14 counter fraud work plan)

Consideration was given to a report which provided information in relation to the overall effectiveness of the Authority's arrangements to counter fraud and corruption and reviewed the delivery of the counter fraud work plan.

It was reported that Lincolnshire County Council's commitment to reducing fraud and error had been consistently strong over the past few years and had achieved savings and recoveries which compared favourably with similar authorities.

In relation to investigations, Members were advised that 10 potential new fraud referrals had been received during 2013/14 – this was four fewer than the previous years.  The total estimated value of fraud associated with the live cases running during the year was £460,150.  The most common type of fraud was financial abuse of vulnerable adults, followed by abuse of position.  Work in relation to direct payments had resulted in 6 referrals, but there was only one where there was sufficient evidence to refer to the police, and that person had now been charged.

Members were informed that data analytics had been used in due diligence audits of procurement to identify potential fraudulent use.  This had identified unusual spending patterns, and all testing results were satisfactory.  The same approach was also used throughout the year on the Council's key financial systems, such as creditors and payroll. 

It was believed that the Council's counter fraud activities remained effective, and it was hoped to boost fraud awareness throughout 2014/15 by working with teams with the highest fraud risks e.g. procurement, contract teams and social care practitioners.  The aim would be extend the fraud awareness work to key partners, service users and carers, where appropriate.

One member commented that they had been approached by a member of staff regarding the whistleblowing policy who had expressed how confident they felt with the process which was in place.

RESOLVED

            That the overall effectiveness of the Council's arrangements to counter     fraud and corruption and the progress made to implement the policy be       noted.

(To receive a report which provides the Committee with a summary of the work performed by the County Council's external auditors, KPMG, for the 2013/14 financial year.  The report also sets out the proposed work for the next quarter as well as an update on the Audit fee)

The Committee received a report from the Council's External Auditors, KPMG which set out the work performed by KPMG for 2013/14 financial year to date, as well as the work proposed over the next quarter.  The report also provided an update on the Audit fee.

Members were advised that the draft statement of accounts had been received by KPMG on the previous Friday, as scheduled.  Officers were confident that they would be ready for September, and that they would be completed to the same standard as the previous year.

It was reported that from the work which had been carried out already, there was nothing which needed to be raised with the Audit Commission in relation to the audit of accounts.

RESOLVED

            That the progress report be noted.

(To receive a report which provides the Committee with information on the core assurance activities currently scheduled for the 2014/15 work plan)

The Committee received a report which provided information on the core assurance activities currently scheduled for the 2014/15 work plan.

Members were advised that the work plan was in draft form and was open for discussion at the workshop to be held in the afternoon following this meeting.  It was noted that this workshop was a follow up to the one held following the meeting on 31 March 2014.

It was also noted that the CIPFA Audit Committee guidelines had been circulated to members and would be of help when looking at the effectiveness of this Audit Committee.

RESOLVED

            That the Audit Committee's work plan be noted.