Agenda and minutes

Members were advised that it was proposed to hold the annual training session on the Statement of Accounts separately to the meeting, on 17 July 2017.  It was agreed that the meeting of the Audit Committee would still take place on Monday, 24 July 2017 as scheduled.

It was also agreed that this training should be opened up to all councillors.

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 27 March 2017 be received and signed by the Chairman.

(To receive a report from Lucy Pledge, Audit and Risk Manager, which provides details of the audit work undertaken during the period 12 March to 12 June 2017)

Consideration was given to a report which provided the Committee with details of the audit work undertaken during the period 12 March to 12 June 2017 and also advised on the completion of the 2016/17 Audit Plan and progress with the 2017/18 plan.

It was reported that during this period, 18 County audits had been completed, 7 to final report (including a consultancy assignment) and 10 to draft report stage as well as finalising 1 school audit.  It was also noted that there were a further 6 audits in progress.

Members were advised that 3 final reports had been issued with limited assurance – HR Recruitment Processes in Schools; Adult Care Assessments and Heritage Site Financial Controls – and that senior managers would be in attendance for this item to answer any queries from the Committee and provide an update on progress since the audit was carried out.

It was acknowledged that the performance against timescales was quite disappointing, but some causal analysis had been carried out which had identified a number of factors both within and outside of the control of the Internal Audit Team.  The Committee was advised that an action plan had been developed to address some of the identified issues.  It was hoped that an improvement would be seen as the Team worked through the 2017/18 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:

·         Concerns were expressed regarding some of the language used in the executive summaries of completed audits which had received substantial assurance such use of the word 'adequate' as it was suggested that this did not reflect a high enough standard.  Members were advised that words such as this were used differently in audit terminology, 'adequate' would reflect that required needs were being fulfilled.  Officers agreed to take this point into consideration and would look at more consistent use of language.

·         In relation to those audits given limited assurance, members were advised that senior officers would be in attendance at this meeting to provide an update on work carried out since the audits took place.

·         It was queried whether officers were satisfied that the action plan put in place would lead to improvements in performance.  Members were advised that officers were confident that there would be improvements, but were not certain that 100% would be achieved as there would always be factors which were outside the control of the team.  It was noted that officers were working on some key areas of business, for example, on how meetings were scheduled, as there were often a lot of delays associated with the starting and finishing of the audit through not being able to get into senior officers diaries.

·         It was noted that the indicator in relation to a draft report issued within 2 months of fieldwork commencing was an indicator which was added in by the Audit  ...  view the full minutes text for item 4.

(To receive a report from Mike Norman from KPMG, which provides the Committee with an overview on progress of the delivery of their responsibilities as the Council's external auditors)

Consideration was given to a report from KPMG which provided the Audit Committee with an overview on progress on delivery of their responsibilities as the Council's external auditors.

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

·         It was queried how confident KPMG were that the accounts would be completed on time, and it was reported that at this time the previous year the external auditors had been flagging up issues around the Council's ability to produce a set of accounts.  The external auditors were not flagging up any concerns at this stage for this year.

·         It was commented that it was important that the right opinion was given rather than getting it completed on time.

·         It was noted that there were improvements in the accounts payable, but there were still issues with payroll.

·         It was recognised that there were still some issues around systems controls, but these more on a systems basis than the scale of errors.

·         It was reported that the Council was still going through management discussions in relation to the opinion, and the control regime transactions were being tested.

RESOLVED

            That the progress report presented be received.

(To receive a report from Dianne Downs, Team Leader – Audit, which provides the Committee with information on the proposed Counter Fraud activities for 2017/18 and draft Counter Fraud work plan)

Consideration was given to a report which provided the Committee with information on the proposed Counter Fraud activities for 2017/18 and the draft Counter Fraud work plan.

On consideration of the draft Counter Fraud Work Plan for 2017/18, members commented that they were assured that the authority was following good procedures.

It was also noted that there had been a successful prosecution of a case which had been to court the previous Friday.

RESOLVED

            That the Counter Fraud Work plan for 2017/18 be approved as presented.

(To receive a report from Lucy Pledge, Audit and Risk Manager, which provides the Committee with the opportunity to review the contents of the draft Annual Governance Statement)

Consideration was given to a report which provided the Committee with an opportunity to consider and approve the Annual Governance Statement (AGS) 2017.  It was reported that the Council was required to reflect on how well the Council's governance framework had operated during the year and identify any governance issues that needed to be drawn to the attention of Lincolnshire's residents.

Members were advised that good governance underpinned everything that the Council did and how services were delivered often came under close scrutiny.  A 'good' Annual Governance Statement was an open and honest self-assessment of how well the Council had run its business across all activities with a clear statement of the actions being taken or required to address any areas of concern.

The Committee was 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:

·         Work had been carried out to make the AGS more readable in plain English.

·         Several issues had been identified as needing a watching brief, but they were not significant issues.

·         In relation to the overall assurance status for 2015/16 and 2016/17 (as listed on p.105 of the report) it was queried whether a lower level of assurance would be offered for 2016/17, and members were advised that this was correct.

·         The effective implementation of Agresso was given very low assurance last year, but improvements were being seen in some areas but not others.

·         Each risk was very different in its nature and control regime.  For example, safeguarding would always be an amber risk, but there was substantial assurance that risks were being managed and controls were in place.  It was suggested whether including a link to the risk register in the Statement would be helpful, and members agreed that it would be.

·         It was queried whether the Effective implementation of Agresso system – finance and HR systems risk could be separated out as the problems in the HR systems were being hidden by the improvements on the finance side.

·         It was noted that the resilience and business continuity was an emerging risk and so had a watching brief.  It was commented whether, in light of events which had happened in London in recent months, there was a need for some assurance that any lessons learned were being taken account of.  Members were advised that checks were being made on all buildings and schools, and so far no safety issues had been identified.  It was also reported that the Emergency Planning Team had been instructed to look at the lessons learned following the Grenfell Tower fire, and Lincolnshire's emergency planning approach was far ahead of what had been seen in some other areas.  it was queried whether, as this was now a national issue whether it needed to be include in the Statement, however, members were advised that officers would prefer to review this in due course as there would be some very significant  ...  view the full minutes text for item 7.

(To receive a report from Lucy Pledge, Audit and Risk Manager, which provides the Committee with information on the core assurance activities currently scheduled for the 2017/18 work plan)

The Committee received a report which provided information on the core assurance activities currently scheduled for the 2017/18 work plan.

It was clarified that the External Audit Plan due to be submitted to the Committee at its meeting on 26 March 2018 would be the 2017/18 plan rather than the 2018/19 plan as stated in the report.

It was also noted that Glen Garrod, Executive Director for Adult Care and Community Wellbeing would be requested to attend the meeting in July 2017, and the Audit and Risk Manager would contact him regarding getting assurance in relation to the audit carried out on Adult Care – Initial and Annual Care Assessments.

The Chairman advised that the draft Annual Report on the work of the Audit Committee would cover the last six months' work of the Committee.  The report would come to this Committee for comments and approval and would then be submitted to Full Council in September 2017.

RESOLVED

1.    That the actions identified in the Action plan be agreed.

2.    That the Executive Director Adult Care and Community Wellbeing be asked to attend the meeting of the Committee scheduled to take place on 24 July 2017 in relation to the Audit on Adult Care – Initial and Annual Assessments.