Agenda item

(To receive a report which provides an update on audits completed in the period 31 May to 10 July 2015 and outstanding recommendations at 30 June 2015)

Consideration was given to a report which provided an update on the audits completed in the period 31 May to 10 July 2015 and outstanding recommendations at 30 June 2015.

It was reported that two audits had been completed which had been given the audit opinion of 'Major Improvement Required' which were in relation to the Joint Commissioning Board and Incendi Fire and Rescue Trading Company.  The Joint Commissioning Board had been given this opinion as significant governance, accountability and decision making issues had been observed in February 2015.  It was reported that the creation of a joint action plan by LCC and the four CCG's was scheduled on the agenda for the meeting on 28 July 2015.  All the actions would be owned by the CCG's and progress would be tracked by PWC and reported back to the County Council.

In relation to Incendi, the Fire and Rescue Trading Company, it was found that that there was a need for governance and business planning arrangements to be strengthened.

It was also noted that the report provided an update on the Audit Team's involvement with the Agresso Project.

Members were 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:

·         It was commented that there were a number of issues with Agresso, and it was queried what costs would be passed on to Serco for the additional work which has had to be undertaken.  Members were advised, that as an audit team, officers were recording the time which was being spent on the project so that it could be quantified.  It was noted that all costs would be passed back to Serco, but it was not yet known what the final costs would be.  At the moment, the focus was on trying to get the system working correctly;

·         Some audit assurance work had been carried out on the transfer of Pensions;

·         In relation to the outstanding recommendations listed in Appendix 4 of the report, it was noted that some progress had been made on these actions, and a follow up process was in place.  Progress was checked every quarter, and if it was felt that more assurance was needed then managers could be asked to report back to this Committee;

·         It was queried whether there was confidence that all outstanding actions in relation to information governance would be implemented.  Members were advised that the majority of the actions related to the new case management system which was not yet in place, and therefore an extension had been agreed;

·         From an audit perspective, there were no concerns that management were not implementing actions;

·         It was felt that there was a need for some assurance that the problems with Agresso were being dealt with, as schools and small businesses were suffering.  The Committee was advised that it was planned to have a joint meeting with the Value for Money Scrutiny Committee on 21 September 2015 in order to raise these concerns and receive a substantive written report on Agresso;

·         It was reported that progress was being made on the issues related to Agresso, and the Finance and Audit Teams were working closely together.  This work was also being monitored by the Head of Finance on a weekly basis.  There was recognition that additional resources;

·         The job of audit was to ensure that the system was resilient and could be relied upon and that appropriate controls were in place, and that the authority had a system which was robust and fit for purpose.  If this could not be done, then there would be a need to flag up that an adequate financial control system was not in place;

·         Members were advised that there was no 'fall back' position with Agresso, that was the system which had been selected, and the authority was working with Serco  to implement it;

·         It was crucial that the problems with the system were fixed as soon as possible;

·         It was requested that the concerns that the Committee had in relation to Agresso be raised with the Executive;

·         There were not just the practical issues of the problems with Agresso top consider, but also the reputational ones, as the Council was, in some cases, not being able to pay suppliers on time;

·         Concerns were raised regarding school staff not receiving payments, and also the effect this would have on small businesses.  Members wre advised that there a process for critical payments and this had been circulated to all budget holders;

·         It was queried whether the costs for making these emergency payments would be passed on to Serco, as there was a £10-£15 charge for each of these payments.  Members were advised that the authority was keeping a log of these payments and would be seeking to recover these costs from Serco;

·         In relation to the Audit for the Joint Commissioning Board, it was noted that the opinion given was due to the transition the Board had undergone from an informal meeting to a formal meeting in order to deal with the Better Care Fund (BCF);

·         It was thought that the Better Care Fund was approximately £20million, but the exact figure would be confirmed and circulated to the Committee after the meeting.  It was noted that the Committee would receive reports on this in the future;

·         In relation to the Incendi Fire and Rescue Audit, it was noted that this again was an issue of having the correct governance arrangements in place.  However, this was being fully supported by Finance officers, and the audit had been requested at this early stage due to the nature of the business;

·         Any charges were recharged back to Fire and Rescue.  There was a financial plan, and officers were in the process of producing a business plan for the coming years.  Incendi had been trading for a year, so it would be possible to be more realistic about growth;

·         It was noted that the company was registered for corporation tax, but it was not expected that the turnover would reach the minimum requirements;

·         Members were reassured that there were sufficient resources to examine the critical areas.  It was noted that the internal audit plan had been reduced by 39%, and the focus would now be on a risk based approach.

RESOLVED

            That the outcomes of the Internal Audit work be noted.