Agenda and minutes

Venue: Committee Room One, County Offices, Newland, Lincoln LN1 1YL

Contact: Rachel Wilson  Democratic Services Officer

Items
No. Item

32.

Apologies for Absence

Minutes:

There were no apologies for absence.

33.

Declarations of Members' Interests

Minutes:

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

34.

Minutes of the meeting held on 26 September 2016 pdf icon PDF 140 KB

Minutes:

RESOLVED

 

            That the minutes of the meeting held on 26 September 2016 be signed by the Chairman as a correct record.

35.

Audit Committee Work Plan pdf icon PDF 101 KB

(To receive a report which provides the Committee with information relevant to the core assurance activities currently scheduled for the 2016/17 work plan)

Additional documents:

Minutes:

Consideration was given to a report which provided the Committee with information relevant to the core assurance activities currently scheduled for the 2016/17 work plan.

 

Members were advised that regular agenda planning meetings were taking place with the Chairman and Vice-Chairman.

 

Concerns were raised regarding members' awareness of the Council's risk register, as it was not felt that the Committee had considered it recently.  It was reported that the risk register was brought to the Committee for consideration twice per year, and it was next due to be on the agenda for the meeting on 30 January 2017.  It was also noted that there would be some training for members around risk in March 2017.  Members were advised that the risk register was regularly reviewed by officers.

 

RESOLVED

 

1.    That the Committee was satisfied that the Work Plan contained the assurances necessary to approve the Annual Governance Statement 2017.

2.    That the outstanding actions designed to improve the effectiveness of the Committee be noted.

36.

KPMG's Review of Agresso Implementation and Management of Serco Contract pdf icon PDF 54 KB

(To receive a report by Richard Wills, Monitoring Officer, which provides the Committee with an opportunity to consider the report by KPMG on the Review into the Serco Contract which was commissioned by the Audit Committee in June 2016 as a result of a resolution of the Council on 20 May 2016)

Additional documents:

Minutes:

Consideration was given to a report by Richard Wills, Monitoring Officer, which introduced the report of the Review into the Serco Contract which was commissioned by the Audit Committee in June 2016 as a result of a resolution of the Council in May 2016.  The full report from KPMG was appended, and Paul Diamond, Head of Local Government Technology Risk Consulting (KPMG) was in attendance at the meeting to present the findings of the review and answer questions from the Committee.

 

The Committee was guided through the report, and some of the points highlighted were as follows:

·         The delivery of programmes this size was always complex and challenging, and it was considered very positive that the Council had taken the opportunity to engage KPMG to be able to learn from the process.

·         The procurement process used by the Council to appoint Serco was examined and was considered to be sound, with the exception of the inclusion of the 12 month time table for implementation.  This timescale was considered to be tight by KPMG who suggested that an 18 – 24 month timetable would have been more appropriate.

·         It was highlighted that more site visits would also have been beneficial.

·         In terms of data migration, it would be expected that it would be signed off as accurate and complete by every party.  The meeting of key milestones needed to be checked throughout.

·         There was a need for very robust and effective challenge from both sides.

·         The need to have a contingency in place in the event of not being able to go live when scheduled was also highlighted.  It was essential that a method of paying staff and contractors was in place.  It was clear Serco had not delivered this.

·         It was also commented that it was usually expected for any remaining issues to be resolved within the first 3 months.

 

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

·         It was queried what the cost of the report was and who would pay for it.  Members were advised that the report had cost £50,000, and would be paid for by the Council.  The report was requested by the County Council which therefore would pay for it.  Members asked whether Serco, as the contractor, should be responsible for this cost, and members were reminded that service credits were being applied, which had been included in the original contract.  These credits were there in the event of service failure, and was possible that the report could be paid for with these.

·         In relation to project management, it was queried what sort of assurances were given, and whether they were verbal or evidence based.  One member of the Committee suggested that the Council was ultimately responsible for the failure of the contract, as it 'felt entitled to expect that a contractor of Serco's size and experience would deliver on  ...  view the full minutes text for item 36.

37.

Internal Audit Progress Report pdf icon PDF 118 KB

(To receive a report from Fiona Thompson, Service Manager – People, which provides an update on the actions being taken to address and rectify the issues identified in both the Payroll and Pensions Audits)

Minutes:

Consideration was given to a report which provided the Committee with an update on the actions being taken to address and rectify the issues identified in both the Payroll and Pensions Audits.  It was reported that this was a follow-up report from the last meeting, and it demonstrated that progress was being made.

 

It was reported that letters were going to be sent out in December 2016 to all staff regarding the payroll issues.

 

It was reported that within the next few weeks, Finance would consider offering the option to schools to procure their own payroll provider and stay with Agresso.  It was noted that if schools chose to go with their own provider, there would be a lot of work for them to take on operationally.

 

Members were advised that it was proposed to carry out an Internal Audit of the payroll and pensions function in the New Year.  Management assurances would be brought back to the Committee.

 

It was clarified that if staff had been found to have underpaid their pension, they would be allowed an amount of time to repay it.

 

RESOLVED

 

            That the approach and progress made with the audit actions be noted.

38.

Internal Audit - External Quality Assessment pdf icon PDF 156 KB

(To receive a report from Lucy Pledge, Audit and Risk Manager, which provides the Committee with information on the result of the external quality assessment undertaken in September 2016)

Additional documents:

Minutes:

Consideration was given to a report which provided the Committee with information on the result of the external quality assessment undertaken in September 2016.

 

It was reported that Internal Audit within the Public Sector in the UK was governed by the Public Sector Internal Audit Standards (PSIAS) which had been in place since April 2013 (updated April 2016).  The Standards required an external quality assessment at least once every five years as part of Internal Audit's Quality Assurance Framework.

 

The assessment showed that the Council's Internal Audit function 'generally conformed' with the Mission Statement for Internal Audit, the Standards of practice and the Code of Ethics laid down in the PSIAS and the associated CIPFA advisory note.

 

The Committee congratulated the Audit and Risk Manager and her team on the outcome of this assessment.

 

It was reported that there were a number of recommendations to work through, and the most notable was the need to build up relationships with the IT team.  There was now an opportunity for a realignment of services to re-energise the relationship.

 

RESOLVED

 

1.    That the External Quality Assessments for Assurance Lincolnshire and the County Council and what it tells the Committee about the quality of the Internal Audit Service be noted; and

2.    That the Committee be assured over the quality and effectiveness of the Council's Internal Audit Service.

 

 

39.

Risk Management Report - Independent Evaluation of Risk Management maturity - November 2016 pdf icon PDF 56 KB

(To receive a report from Debbie Bowring, Principal Risk Officer, which provides an update on how well the Council's risk management processes are fit for purpose and in line with best practice)

Additional documents:

Minutes:

Consideration was given to a report which assisted the Committee in fulfilling its role to monitor effective development and operation of risk management and corporate governance in the Council.  The report also provided an update on how well the Council's risk management processes were fit for purpose and in line with industry best practice. 

 

Following an external audit of risk management in 2014, a further independent review was conducted.  This was to ensure that risk management practices were in line with the principles of recognised risk organisations and documentation.  Members were advised that the outcome of this report was very positive.

 

Members of the Committee 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:

·         Risk training for the Committee was scheduled for March 2017, but it was queried whether it would be better to wait until after the election.  It was noted that there would be training included in the induction programme on risk management for new members.

·         Some very positive comments were received from the assessor

·         External reviews were carried out on an ad hoc basis, as and when it was thought they were required (or when an opportunity arose)

 

RESOLVED

 

1.    That the Independent Evaluation of risk management maturity as attached to the report be noted; and

2.    That the Committee be assured over the quality and effectiveness of the Council's risk management service.

40.

Final External Audit ISA 260 Governance report on the Council's Financial Statements and the Value for Money Conclusion

(To receive a report from KPMG, the Council's External Auditors in relation the Final External Audit ISA 260 Governance report on the Council's Financial Statements and the Value for Money Conclusion)

Minutes:

The Committee received a verbal update from KPMG, the Council's External Auditors, who advised that the additional work had now been completed, and a report had been issued the previous week.  It was noted that there were no changes in relation to matters arising, and KPMG had been able to issue an unqualified opinion.

 

An element of qualification was given in relation to the value for money conclusion around the provision of accurate and timely management information for managing the business.  This flowed directly from the difficulties experienced in the Agresso implementation.

 

It was confirmed that there would be additional costs arising from requirement to carry out additional work, and these costs would be included in the annual audit letter.  Members were advised that the Council would be seeking to recover these additional costs from the appropriate party.

 

Thanks were extended to the external auditors and the Chief Finance Officer and his team for all the hard work which had been carried out.

 

RESOLVED

 

            That the update be noted.

41.

Counter Fraud Progress Report to 31 October 2016 pdf icon PDF 100 KB

(To receive an update by Lucy Pledge, Audit and Risk Manager, which provides an update on the Council's fraud investigation activities and information on progress made against the Council's Counter Fraud Work Plan 2016/17)

Additional documents:

Minutes:

Consideration was given to a report which provided an update on the Council's fraud investigation activities and information on progress made against the Counter Fraud Work Plan 2016/17.  Members were advised that good progress was being made against the work plan.

 

It was reported that 3 cases had been referred to Lincolnshire Police with a view of pursuing criminal prosecutions.  It was noted that an increase in referrals being made had been seen, and it was believed that this was a result of the pro-active work which had been carried out.

 

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:

·         It was queried whether a member of staff had been overpaid due to the problems with Agresso and not reported it, if that would be recorded as fraud.  It was noted that this would usually be a matter for a line manager to deal with, and it would be very difficult to prove fraud in these cases.  It would just be a matter or recovering the overpayment.

·         It was queried whether the problems with payroll had provided more opportunities for people to be dishonest. 

·         It was reported that there were a larger number of cases of fraud in schools

·         Concerns were raised that training for headships did not directly include finance training.  However, it was noted that training was available for staff and governors, and if head teachers would like additional training, this service could be bought in.

·         Schools valued the internal audit service, and the independent oversight it provided, and were taking up the offer.

·         It was reported that there were five staff in the Counter-Fraud team and it was queried whether this was enough.  It was noted that the Council had a dedicated team and made the best use of the resources it had.  Collaborative work was also taking place and officers were working to promote the Lincolnshire Counter Fraud Partnership.  Members were advised that if the Council thought this was a significant area of concern, more resources would be put into it.

 

RESOLVED

 

            That the outcomes of the Council's Counter Fraud Work be noted.

42.

Whistleblowing Annual Report 2015-16 pdf icon PDF 101 KB

(To receive a report by Lucy Pledge, Audit and Risk Manager, which provides an overview of the Council's whistleblowing arrangements throughout the year 2015/16)

Additional documents:

Minutes:

Consideration was given to a report which provided an overview of the Council's whistleblowing arrangements throughout the year 2015/16.

 

It was reported that there had been an increase from 19 to 30 cases, with notable increases in relation to finance, safeguarding, and bullying.  It was believed that the increase was due to the promotion of the policy, and demonstrated that there was trust in the process and policy and that staff would be dealt with professionally.  It was noted that one third of those making referrals were providing contact details, which again showed a confidence in the process.

 

Members commented that it was very positive for any employer to have a whistleblowing policy that was used.  It was also commented that it was a very good report.

 

RESOLVED

 

1.    That the whistleblowing activity for 2015/16 be noted;

2.    That the ongoing work to raise awareness and provide assurance on the effectiveness of the Council's arrangements for whistleblowing be noted; and

3.    The Committee note the reviewed and slightly updated Whistleblowing Policy as included in the report.

43.

Draft County Council Report - Appointment of External Auditors pdf icon PDF 134 KB

(To receive the draft Council report in relation to the Appointment of External Auditors for information only)

Minutes:

It was reported that this report was solely for the information of the Committee and was largely the same as the report presented to the Committee at its meeting in June 2016 in relation to the need to appoint an External Auditor.  The report would be going to Council for final approval on 16 December 2016.  There would be a slight amendment as the Chief Legal Officer needed to make some legal comments.

 

 
 
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