Agenda and minutes

Apologies for absence were received from Councillor P Skinner.

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

RESOLVED

            That the minutes of the meeting held on 26 March 2018 be signed by the Chairman as a correct record.

(To receive an update on actions and recommendations identified in two recent internal audit reports from Adult Social Care)

The Committee received an update on actions and recommendations identified in two recent internal audit reports which were on Assessment of Needs in Adult Care and the Quality of Workforce Learning and Development.

Representatives from Adult Social Care were in attendance to provide verbal updates to the Committee on progress since the findings of the audit were reported to the meeting of the Audit Committee in March 2018.

It was reported that the outcomes of the Carers Workforce Development Audit was reported to the meeting of the Audit Committee held in March 2018.  It was noted that there was no officer present to address the Committee at that meeting as the lead officer had recently left the authority, therefore it was agreed that an officer would instead attend a meeting in 6 months' time to update on progress since the audit had taken place.

Members were advised that this was an interim update on actions undertaken by the two providers of the Lincolnshire Carers' Service, following the audit of workforce learning and development in January 2018.  It was reported that the Lincolnshire Carers' Service was commissioned to carry out the delegated statutory function of the Carer's Assessment (Care Act 2014) of adult carers for Lincolnshire County Council.  In 2017/18 the service assessment the needs of 2,367 carers.  CSC Serco provided the 'front door' into the service and offered a telephone based service.  Carer's FIRST provided all aspects of face to face support in the community.

The audit focused on the internal quality assurance framework of Carers FIRST and Serco, particularly in relation to carers' assessment.  It looked for evidence of quality assurance in practice, in terms of one to one staff supervision and workforce development.

It was reported that Carers FIRST and Serco Customer Service Centre had both taken immediate steps to comply with recommendations.  Revised contracts had been signed off with both providers to employ additional staff, which would lead to the implementation of the required quality assurance checks.  Members were advised that this was an interim update and the expected resolution date for actions was early autumn 2018.

In terms of the actions being taken to fulfil the Audit recommendations, it was noted that both providers now had a comprehensive workforce development planned for staff, including mandatory elements commissioned/provided in part by the Council (i.e. safeguarding training).  Each provider was either uploading or aimed to upload course certificates onto its database to evidence full resolution.  Members were also advised that Carers FIRST had drafted an internal Quality Assurance Framework Action Plan which included evidence based monitoring across supervision, quality assurance of assessment and observation of practice.  It was also noted that toolkits to quality assure assessments, supervisions and practice observation were currently being trialled by staff.  Finally, members were informed that Serco had a Quality Management System in place and the contact centre carried out monthly call evaluations for each service area, which informed monthly 'one to ones' between staff and team leader.

In conclusion, it was reported  ...  view the full minutes text for item 4.

(To receive a report from Lucy Pledge, Audit and Risk Manager, which provides details of the audit work during the period 11 March to 12 June 2018, and advises on the progress with the 2018/19 plan)

Consideration was given to a report which provided the Committee with details of the audit work during the period 11 March – 12 June 2018 and advised on the progress with the 2018/19 plan.  It was reported that during this period 13 audits were completed, with four of them given limited assurance.  It was noted that the full executive summaries were attached as appendix 2 to the report, with the exception of payroll which was included as a separate agenda item.

Members were also advised that the two IMT reports had been issued without the actions agreed. However, it was reported that representation from IMT would be in attendance at the July meeting of the Audit Committee.

It was noted that actions had been agreed for completion in September, and it was proposed to ask those representatives to come to the meeting in September so they could update the Committee on actions which had been done rather than what was hoped to be done.

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 how things moved forward when there was a disagreement on the outcomes of an audit, and also what the role of the audit committee would be in this situation.  It was clarified that there was not a disagreement in relation to the findings, but it had not been possible to agree the actions.

·         It was commented that the management response to an audit provided the Committee with assurance that any issues were being managed.

·         In relation to the fuel cards, it was noted that an action plan had been agreed, and were being transferred from procurement to commissioning but without a contract in place.  It was noted that the risks were low, but there were still risks.

·         In relation to the two ICT audits, it was queried how the Committee could have any assurance that the audit was effective.  It was acknowledged that there had been some challenges in getting the response, but officers would keep chasing or bring it to the Audit Committee to make it more transparent.

·         It was noted that the manager responsible for the ICT audits had not been invited to attend this meeting as it was already scheduled for them to attend the next meeting in July.

·         Members expressed disappointment that a management response had not been received for the two ICT audits and felt that this suggested a disregard for the audit process and was preventing the audit committee doing its job.  The Audit and Risk Manager advised that the comments would be passed back to the appropriate officer.

·         It was commented that the role of the Audit Committee was to support the audit process and not being able to get a management response did not send the message that there were good interdepartmental relations.  It was acknowledged that a management response was needed  ...  view the full minutes text for item 5.

(To receive a report by Lucy Pledge, Audit and Risk Manager, which provides the opportunity for the Committee to approve the Council's Annual Governance Statement for 2017/18)

The Committee was advised that each year the Council was required to reflect on how well the Council's governance framework had operates during the year and identify any governance issues that needed to be drawn to the attention of Lincolnshire's residents.

It was noted that good governance underpinned everything the Council did and how services were delivered often came under close scrutiny.

A 'good' Annual Governance Statement is an open and honest self-assessment of how well the Council's business had been run across all activities – with a clear statement of any areas of significant concern. 

The Audit Committee oversaw the development of the Annual Governance Statement and recommended its adoption by the Council.  It was noted that the Committee considered the Draft Annual Governance Statement at its meeting on 26 March 2018.  Members were advised that work had been undertaken with the Corporate Digital Team to make the Statement easier to read and understand.  This year's Statement also included information on value for money and commercialisation.

Members commented that the new layout was much better and did make it easier to read. However, it was felt that in terms of the improvement actions identified as part of the 2016/17 Statement, the area of market supply being on track could be seen as mis-leading.   In terms of payroll, this was behind plan in terms of the updating of financial procedures.

RESOLVED

1.    That the Annual Governance Statement 2017/18 accurately reflected how the Council was run.

2.    That the Statement included the significant governance issues/key risks it would have expected to be published.

3.    That the Audit Committee approve the Statement and recommend it for adoption by the Council.

(To receive a report by Lucy Pledge, Audit and Risk Manager, which gives the Head of Internal Audit opinion on the adequacy of the Council's Governance, Risk and Control environment and delivery of the Internal Audit Plan for 2017/18)

Consideration was given to a report which gave the Head of Internal Audit opinion on the adequ7acy of the Council's Governance, Risk and Control environment and delivery of the Internal Audit plan for 2017/18.  Members were advised that overall the Council was performing adequately.

Members commented that it was good to see that the internal control had increased and there was one area performing well and three performing adequately.  It was also commented that it would be positive if next year there could be another one or two areas which were upgraded to performing well.

In relation to the financial control assurance remaining the same and being assessed as performing adequately, it was noted that this generally related to outstanding payroll actions and recommendations.  It was suggested that this section maybe needed to be reworded as it read as though the assessment was due to the finance system.

It was noted that the recent upgrade to Agresso had been successful.  It was noted that at one point the authority had been unable to take payment by credit card, but this issue had now been resolved.

RESOLVED

            That the content of the Audit and Risk Manager's Head of Internal Audit Annual Report be noted.

(To receive a report by Lucy Pledge, Audit and Risk Manager, which provides information on the overall effectiveness of the Authority's arrangements to counter fraud and corruption and reviews the delivery of the 2017/18 counter fraud work plan)

Consideration was given to a report which provided the Committee was information on the overall effectiveness of the Authority's arrangements to counter fraud and corruption and reviewed the delivery of the 2017/18 Counter Fraud work plan.

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 noted that 84% of the work plan for 2017/18 had been delivered.

·         It was also noted that 9 new referrals of suspected fraud had been received.  Whilst this was fewer than the previous year, the cases investigated had tended to be of a more complex nature.

·         National intelligence showed that fraud continued to be on the increase and cyber fraud in particular was an increasing risk area.

·         In relation to recruitment fraud, members were advised that this was something which was not a new issue and related to those situations where someone would apply for a post and make declarations about their qualifications or experience which were not true.  It was noted that this had occurred within some of the schools.  However, officers were unsure of the number of cases but would find out this information and circulate to the Committee.

·         It was confirmed that further work would be taking place to go through the overpayments.

RESOLVED

            That the Council's arrangements to counter fraud and corruption and the progress made to implement policy be assessed by the Audit Committee as effective.

(To receive an update from Fiona Thompson, Service Manager – People, which updates the Committee on the latest situation with the payroll function)

Consideration was given to a report which provided the Audit Committee with an up-to-date briefing on the payroll position and the steps being taken to address any risk of an inaccurate payroll. 

Members were guided through the report and it was highlighted that since March 2018, improvements in monthly payroll administration had continued as expected.  However, it was disappointing that there were still a number of improvement actions which required progression.  It was reported that these improvements remained the single highest priority for the People Management Service.

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 noted that it had gone from low to limited assurance and so there had been an improvement, but it was still far from where members would like the assurance level to be.

·         It was noted that there had been close working taking place between LCC People Management, audit colleagues and Serco and there was confidence that an appropriate plan was in place.  However, there were a significant number of actions which could be closed down once the historic pay validation (Pay Statements Project) work was completed.

·         It was expected that an improvement would be seen when the audit team returned to carry out a follow up audit, however whether this would be enough to get to a substantial level of assurance was not known.

·         It was commented that the fact that there had been improvements gave some assurance that things were moving in the right direction but the progress had been slow, and goal posts kept moving which was a worry from an assurance perspective.

·         In relation to the Pay Statements Project, there had been 2020 overpayments identified and they would all be investigated.  It was noted that just over £1million had been recovered and around £0.5million still outstanding.  However, it was expected that more would be added to the list as the validation continued.

·         The development of itemised payslips to ensure employees were better able to confirm their payments and deductions (particularly for multiple employments) was a key control, and it was a high priority to get these resolved.  Members were advised that work on this would be starting next month.

·         It was queried when error or oversight developed into fraud.  Members were advised that all issues of overpayments were the responsibility of the manager.  Monthly payroll budget reports were provided to schools prior to the payroll being run which they were required to monitor.  Schools had the responsibility to notify payroll when a member of staff left.  Where there were overpayments, there was an established process which had to be followed.  It was also noted that another set of communications was planned to go out in the coming weeks as there continued to be late notifications of leavers to the payroll service.

·         Members also queried whether the Council was at risk of sending incorrect reports to  ...  view the full minutes text for item 9.

(To receive a report by Lucy Pledge, Audit and Risk Manager, which provides the Committee with information on the core assurance activities currently scheduled for the 2018/18 work plan)

Consideration was given to a report which provided the Committee with information on the core assurance activities currently scheduled for the 2018/19 work plan.

It was noted that there was a new CIPFA practical guide on effective Audit Committees, and that the skills matrix would be sent out to the Committee within the next few weeks.

It was noted that the Annual Report was now in draft form and would be submitted to the July meeting together with the output from the workshop held in March.

Members were also advised that approval had been given for a second independent member of the Committee to be appointed.  The necessary changes to the Constitution would be submitted to the meeting of Council in September.  It was also noted that Mr Finch would be retiring from the Audit Committee in December 2018.

RESOLVED

            That the work plan and points listed above be noted..

(To receive a report by Dave Simpson, Technical and Development Finance Manager, which presents the draft Statement of Accounts for the financial year 2017/18 for scrutiny and comment by the Audit Committee)

Consideration was given to a report which provided members with an opportunity to scrutinise and comment on the draft Statement of Accounts.  The final Statement of Accounts would be presented to the Audit Committee on 23 July 2018 for approval.

Members received a presentation which provided detailed information in relation to the following areas:

·         Introduction and Background

·         Further Background

·         Role of the Audit Committee

·         Role of the External Auditor

·         Narrative Report (pages 147-156 of the agenda pack)

·         The Main Financial Statements

·         Expenditure and Funding Analysis (p. 157 of the agenda pack)

·         Comprehensive Income and Expenditure Analysis (p.158 of the agenda pack)

·         Movement in Reserves Statement (p.159 of the agenda pack)

·         Balance Sheet (p.160 of the agenda pack)

·         Cashflow Statement (p.161 of the agenda pack)

·         Potential Notes of Particular Interest

·         Pension Fund Accounts (p.250 of the agenda pack)

·         Lincolnshire's LGPS Pension Fund Account (p.250 of the agenda pack)

·         Potential Question Topics

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

·         In relation to the outturn report and the under spend of £44m, it was clarified that of that amount £27.3m was the Council's underspend, the remainder belonged to schools.  It would be recommended to Council that £17m be put into the reserves.

·         The outturn report would be considered by the Overview and Scrutiny Management Board, then Executive and finally, it would be approved by Council at its meeting in September.

·         It was noted that the biggest item in relation to the income and expenditure statement was the schools budget.  The main expenditure outside of schools, was adult social care.  There would be a need to look at the use of resources for future years, as that would be where the pressures would be.

·         It was noted that Adult Care funding had been stabilised for the time being by the Better Care Fund (BCF) but there was a lot more uncertainty in relation to children's social care.

·         Members were advised that the revenue support grant from government was reducing to the point where it would be non-existent and would be replaced by a new system.

·         It could be estimated what the Council's pressures would be, but it was not known that the government contribution towards these pressures would be.

·         It was noted that Lincolnshire was in the same position as every other local authority, police force, fire and rescue and NHS in terms of uncertainty around finance.  However, members were informed that Lincolnshire was equipped to deal with this uncertainty.

·         It was noted that the Lincolnshire Pension fund was funded, however, the scheme relied on new people enrolling in it.

·         In relation to Note 39 – Related Parties – it was queried whether the part relating to councillors could be re-worded to make it simpler to understand.

·         The final set of accounts would be brought back to the Committee in 4 weeks' time for approval.

RESOLVED  ...  view the full minutes text for item 11.

A copy of the CIPFA Better Governance Forum – Developing an Effective Governance Statement was circulated with the agenda pack for information.

A copy of the CIPFA Audit Committee – Practical Guidance for Local Authorities and Police (2018 edition) was circulated with the agenda pack for information.