Agenda and minutes

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Contact: Cheryl Evans  Democratic Services Officer

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Items
No. Item

1.

Apologies for Absence

Minutes:

Apologies for absence were received from Councillors P E Coupland and A J Spencer. 

 

2.

Declaration of Members' Interests

Minutes:

There were no declarations of interest.

3.

Minutes of the meeting held on 15 June 2020 pdf icon PDF 250 KB

Minutes:

RESOLVED

 

That the minutes of the meeting held on 15 June 2020 be signed by the Chairman as a correct record. 

4.

Internal Audit Annual Report 2019/20 pdf icon PDF 735 KB

(To receive a report by Lucy Pledge (Head of Internal Audit and Risk Management), 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 2019/20)

Additional documents:

Minutes:

A report from the Head of Internal Audit and Risk Management was considered, which presented the Head of Internal Audit's opinion on the adequacy of the Council's Governance, Risk and Control environment and the delivery of the Internal Audit Plan for 2019/20. 

 

The Committee was advised that the Annual Internal Audit Report, which was set out at Appendix A to the report, presented a summary of the audit work undertaken over the last twelve months. 

 

It was highlighted that for the twelve months ended 31 March 2020, the Council's arrangements for governance, risk management and control had performed 'adequately' and had been unaffected by the coronavirus.  The Head of Internal Audit's opinion had taken into account the impact of coronavirus on the Council's governance, risk and control environment and the impact of the virus would materialise in the Head of Internal Audit's opinion in the coming year.

 

The Audit Committee had previously approved the 2019/20 original audit plan of 1,075 days in March 2019.  The plan was reduced in November 2019 to 851 days with the agreement of the Committee.  94% of the revised plan had been delivered, which amounted to 780 days.  The difference between the original and resourcing plan was a combination of a reduction in resources and the impact of the coronavirus.  The Head of Internal Audit expressed gratitude for the efforts of her team in achieving 94% of the revised plan during challenging times.

 

The delivery of the IT Audit had remained challenging and planned audits had been deferred owing to the impact of coronavirus.  These audits were now scheduled for August - September 2020.

 

During the discussion, the Committee made the following comments:

 

·    The external assessment was always undertaken by an accredited qualified assessor, as determined by the Institute of Internal Auditors. The approach for external assessments was approved by the Audit Committee.  Typically the County Council opted for a full external assessment, rather than a partial self-assessment.  The full external assessment involved meetings with the audit committee; key stakeholders; and reviewed work undertaken by Internal Audit, and was considered to be a rigorous process.  An independent report was provided following the full external assessment.  The procurement for an external audit would commence in September, to allow ample time for procurement processes.

·       The assurance framework had changed owing to the impact of coronavirus and the plan would be recast and be based on risk.  The revised plan would be presented to the Committee on 28 September 2020. 

·       In response to a question, it was agreed that the Committee would receive an informal briefing paper on recent assurances in Adult Care services, particularly those areas which had previously received high and substantial or limit and low assurances.  The report would cover information on risk and recovery.

·       The seven overdue actions, as detailed on page 35 and Appendix 3 of the agenda pack, owing to the coronavirus pandemic.  Information on the reasons behind the seven overdue actions would be circulated on email.

 

RESOLVED

 

(1)          That the content  ...  view the full minutes text for item 4.

5.

Approval of the Council's Annual Governance Statement 2019/20 pdf icon PDF 155 KB

(To receive a report by Lucy Pledge (Head of Internal Audit and Risk Management), which invites the Committee to approve the Statement and recommend it for adoption by the County Council)

Additional documents:

Minutes:

Consideration was given to a report by the Head of Internal Audit and Risk Management, which sought approval for the Annual Governance Statement for 2019/20.  The statement was set out at Appendix A to the report.

 

The Committee had considered the draft Annual Governance Statement 2019/20 at its meeting on 15 June 2020 and the comments of the Committee had been included in the latest version.  The key amendments to the revised statement were detailed on page 59 of the agenda pack.

 

It was highlighted that the significant governance issue for the Council, as detailed on page 55 of the report, was to:  Review lessons learned from the Council's response to Covid-19 – implementing a re-set plan over the short, medium and longer term.

 

RESOLVED

 

(1)      That it be recorded that the Annual Governance Statement 2019/20 accurately reflected how the Council was managed.

 

(2)      That it be recorded that the Annual Governance Statement 2019/20 included the significant governance issues and key risks.

 

(3)      That the Annual Governance Statement 2019/20 be approved and recommended for adoption by the Council.

6.

Monitoring Officer's Annual Report pdf icon PDF 164 KB

(To receive a report from David Coleman (Monitoring Officer), which introduces the Annual Report of the Monitoring Officer for 2019/20)

Minutes:

Consideration was given to the Annual Report of the Monitoring Officer for 2019/20.

 

In presenting the report, the Monitoring Officer highlighted the following areas:

 

·       All decision-making reports that were considered by the County Council; the Executive or an Executive Councillor were reviewed by legal services and included a legal comment.  Therefore the County Council had a robust process for identifying any legal issues raised by any proposed decision.

·       In 2019/20 there had been 55 referrals to the Local Government Ombudsman, down from 77 in 2018/19.  Of the 55 referrals, in 40 instances no fault had been found; nine referrals were ongoing; and six cases of fault had been found.  Details of the six referrals where fault had been found were summarised on page 81 of the agenda pack.

·       Under the Regulation of Investigatory Powers Act 2000, the Council was able to authorise the use of covert surveillance of two types: directed surveillance; and the use of covert human intelligence sources.  Trading Standards had been the only department to use covert surveillance during 2019/20, which had included five operations (one directed surveillance; and four covert human intelligence source operations).

 

The following points were made by the Committee:

 

·       Reference was made to the six Local Government Ombudsman referrals where fault had been found.  Of the six referrals, three had related to Education, Health and Care Plans.  Assurance was sought that there were appropriate policies and system controls in place and it was also queried whether financial remedy adequately compensated for a child's loss of education.  In response, the Committee was advised that the Local Government Ombudsman considered maladministration as part of their investigations and whether appropriate policies were in place, and any concerns would be highlighted in their report.  Financial remedy had been recommended by the Local Government Ombudsman, as financial recompense was one of the remedial powers available to them.

·       As there had been three referrals relating to Education, Health and Care Plans, it was suggested that this could be an area of interest for Internal Audit.  The Head of Internal Audit and Risk Management agreed to include this in the Council's risk based assessment for consideration.

·       The Monitoring Officer agreed to share details of the nine ongoing cases, in particular the service areas, to ascertain whether there were any areas of concerns for the Committee to consider.

·       The Monitoring Officer confirmed that where fault had been found, the complainant received an apology alongside the finding.  However, as two of the six cases where fault had been found did not refer to an apology, the Monitoring Officer agreed to ascertain whether this had been the case.

 

RESOLVED

 

That the Monitoring Officer's Annual Report 2019/20 be received.

7.

Local Government Association Model Code of Conduct pdf icon PDF 140 KB

(To receive a report from David Coleman (Monitoring Officer), which informs the Committee of the publication by the Local Government Association (LGA) of a consultation draft of a model Code of Conduct for Council members and invites the Committee to consider how to respond to the consultation draft issued by the LGA)

Additional documents:

Minutes:

Consideration was given to a report which informed the Committee of the publication by the Local Government Association (LGA) of a consultation draft of a model Code of Conduct for Council members and invited the Committee to consider how to respond to the consultation.  A copy of the Model Code was detailed at Appendix A to the report.

 

Following an initial comparison of the LGA's Model Code with the County Council's recently revised Code, the Monitoring Officer advised that there were differences between the two and in particular the inclusion in the LGA's Model Code of:-

 

·       A requirement not to bring the Council into disrepute including by acting dishonestly.

·       A requirement to act with civility.

·       A requirement not to compromise the impartiality of anyone who works for or on behalf of the Council.

·       A requirement not to misuse Council resources and facilities.

·       A wider range of declarable interest going beyond the Disclosable Pecuniary Interests defined in law.

 

The LGA had initiated a period of consultation ending on 17 August 2020 and had identified a number of questions set out in Appendix B to the report.

 

It was advised that the Audit Committee was being consulted as the Committee with responsibility for reviewing any proposed changes to the Constitution.  The County Councillors would also receive the Monitoring Officer's response to the LGA.

 

RESOLVED

 

(1)       That the draft Model Code of Conduct issued for consultation by the Local Government Association be noted.

 

(2)       That the Monitoring Officer be delegated authority to determine the final form of the Council's response to the Local Government Association, in consultation with the members of the Audit Committee, and such other members as he considered appropriate.

8.

Information Assurance Annual Report 2019/20 pdf icon PDF 134 KB

(To receive a report by David Ingham (Head of Information Assurance), which presents the Information Assurance Annual Report 2019/20)

Additional documents:

Minutes:

The Head of Information Assurance presented the Information Assurance Annual Report 2019/20, which summarised some of the key activity undertaken by the Information Assurance team during 2019/20.  It focused on three core domains: data protection; records management; and information security (including elements of cyber security).  Its purpose was to provide assurance to the Audit Committee, that the information assurance function was effective and responsive to challenges affecting the Council.

 

Three themes were highlighted:

 

  • the focus on risk management;
  • the need for continual improvement, both within the team and corporately; and
  • the importance of positive engagement, for example with partners, suppliers and members of the public.

 

The Head of Information Assurance also highlighted that there were 259 security incidents during 2019/20. Of these, 89% had been due to human error, and were largely related to the unauthorised disclosure of information.  For context, each year six million emails were sent outside the organisation. 

 

The annual report also referred to engagement with the Information Commissioner's Office in two areas.  Firstly, there had been twelve complaints of data protection infringement, of which seven had been upheld and three partially upheld, but all had now been resolved to the satisfaction of the Information Commissioner's Office.  Secondly, twelve data breaches were also reported to the Information Commissioner's Office, all of which had been resolved.

 

The following issues were raised by members of the Committee:

 

  • The 25 instances of lost data / hardware often related to the laptops being stolen from vehicles.   These losses were mitigated by the encryption of hardware, with all devices removed from the network. Processes were in place to check the loss of data from hard copy documents.   The number of instances had fallen compared to the previous year.
  • There was a potential reputational risk from security incidents and unauthorised disclosure. Only data breaches reaching a threshold, namely, where it was likely to pose a risk to the individual concerned, were reported to the Information Commissioner's Office.  No concerns had been raised by the Information Commissioner's Office. Assurance was given that the Information Assurance Team was continually looking at ways of reducing the number of incidents and breaches.
  • There was a request for the annual report to contain more information on the future focus of the Information Assurance Team, for example, hard copy legacy records.  There was also a risk that the impact of Covid-19 had led to the creation of records outside the document management processes, which would be addressed in the recovery phase.  In the meantime, guidance has been issued, for example to reducing paper copy formats outside the Council's offices.
  • Council hardware items cannot be traced, as encryption was considered more appropriate to protect data, and the items could no longer connect to the network.
  • Social workers were more likely to create manual records outside the organisation.  However, they tended to be used to these ways of working and were provided guidance on how to manage the information they held appropriately.
  • The percentage of staff trained on information governance e-learning  ...  view the full minutes text for item 8.

9.

Draft Statement of Accounts 2019/20 pdf icon PDF 127 KB

(To receive a report by Michelle Grady (Assistant Director – Strategic Finance), which invites the Committee to scrutinise and comment on the draft Statement of Accounts 2019/20)

Additional documents:

Minutes:

Consideration was given to a report by the Assistant Director – Strategic Finance, which presented the draft Statement of Accounts for Lincolnshire County Council; Local Government Pension Scheme and the Fire and Rescue Pension Fund for the financial year 2019/20.  The draft Statement of Accounts was set out at Appendix A to the report.

 

The Committee was invited to scrutinise and comment on the draft Statement of Accounts for 2019/20.  The final Statement of Accounts for 2019/20 would be presented to the Committee on 28 September 2020. Although the Government had deferred the deadline for publishing accounts to the end of August 2020, owing to the coronavirus pandemic, the County Council had made a decision to work to the earlier deadline and had published its accounts for public inspection on 1 July 2020.  It was highlighted that auditors were already carrying out its annual audit on the draft statement of accounts.

 

The Committee had attended informal training on statement of accounts prior to the Committee's meeting on 13 July 2020.  A note of the questions, answers and issues raised had been circulated in advance of the meeting and published to the Council's website.

 

It was highlighted that the coronavirus pandemic had resulted in increased uncertainty with some of the asset valuations in the Pension Fund accounts, which were detailed in the Statement of Accounts (page 160 of the agenda pack onwards). The fair value of unquoted assets (including alternatives and private equity holdings) was unavoidably subjective in normal circumstances and Covid-19 disruptions could increase this. 

 

The Fund expected to start receiving the 31 March valuations in July 2020. When the valuations had been received, Fund Officers would consider their materially, both individually and collectively, and revise the accounts to reflect the valuations if necessary.  If these actual valuations were materially different from the original estimated valuations provided then this could indicate that a revised actuarial valuation of the pension fund net liability within the main accounts was required, as this could also have changed materially.  If this was the case then revisions would be made to the main accounts and the amendments would be presented for auditing.

 

The following points were highlighted to the Committee:

 

·         It was highlighted that the narrative report, which started on page 143 of the agenda pack, had also included the Revenue Budget Outturn Position 2019/20; Capital Gross Programme Outturn Position 2019/20; and the Council's Assets and Liabilities. 

·         Long term liabilities had included pension fund liabilities. The reduction in long term liabilities was largely as a result of the triennial valuation at April 2019.  The pension fund's investment strategy had delivered a return of 32% over the previous triennial review period, versus the assumed growth of 4% per annum.

·         Note 3 of the accounts sets out the Council's assumptions made about the future and other major sources of estimation uncertainty. Owing to the current uncertainties resulting from the coronavirus pandemic, the Council's assumptions would continue to be reviewed on a regular basis throughout the auditing of  ...  view the full minutes text for item 9.

10.

Work Plan pdf icon PDF 119 KB

(To receive a report by Lucy Pledge (Head of Internal Audit and Risk Management), which invites the Committee to consider its work plan for the coming months)

Additional documents:

Minutes:

Consideration was given to a report which provided the Committee with information on the core assurance activities scheduled for the 2020/21 work plan.

 

The Committee was advised that members would receive a survey in August 2020 on the annual report.  The Audit Committee Annual Report would be presented to the Committee for approval at its meeting on 28 September 2020.

 

The item on Annual Audit Letters for Lincolnshire County Council & Lincolnshire Pension Fund for the year ending 31 March 2020 had been deferred from 28 September 2020 to 16 November 2020.

 

RESOLVED

 

(1)  That the Work Plan be amended accordingly.

 

(2)  That the actions identified in the Action Plan be noted.

 

 
 
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