Agenda and minutes

Audit and Governance Committee
Thursday, 21st January, 2021 6.00 pm

Venue: Virtual Meeting

Contact: Bob Hanton  Email: democratic.services@bcpcouncil.gov.uk

Media

Items
No. Item

53.

Apologies

To receive any apologies for absence from Councillors.

Minutes:

There were no apologies for absence.

54.

Substitute Members

To receive information on any changes in the membership of the Committee.

 

Note – When a member of a Committee is unable to attend a meeting of a Committee or Sub-Committee, the relevant Political Group Leader (or their nominated representative) may, by notice to the Monitoring Officer (or their nominated representative) prior to the meeting, appoint a substitute member from within the same Political Group. The contact details on the front of this agenda should be used for notifications.

 

Minutes:

There were no substitute members appointed.

55.

Declarations of Interests

Councillors are requested to declare any interests on items included in this agenda. Please refer to the workflow on the preceding page for guidance.

Declarations received will be reported at the meeting.

Minutes:

There were no declarations of Interest.

56.

Confirmation of Minutes pdf icon PDF 307 KB

To confirm and sign as a correct record the minutes of the Meeting held on 26 November 2020.

Minutes:

The Minutes of the meeting on 26 November 2020 were confirmed as a correct record.

The Committee sent its best wishes to the Strategic Director - Corporate Services wishing a speedy recovery from his current ill-health.

57.

Public Issues

To receive any public questions, statements or petitions submitted in accordance with the Constitution. Further information on the requirements for submitting these is available to view at the following link:-

https://democracy.bcpcouncil.gov.uk/documents/s2305/Public%20Items%20-%20Meeting%20Procedure%20Rules.pdf 

The deadline for the submission of public questions is Thursday 14 January 2021.

The deadline for the submission of a statement is 12.00 noon, Wednesday 20 January 2021.

The deadline for the submission of a petition was 12.00 noon, Wednesday 6 January 2021.

Minutes:

There were no public issues.

58.

Treasury Management Monitoring report for the period April to December 2020 and Treasury Management Strategy 2021/22 pdf icon PDF 335 KB

This report sets out the monitoring of the Council’s Treasury Management function for the period 1 April 2020 to 31 December 2020. A surplus of £159k will be achieved through lower borrowing costs due to historically low interest rates.

The Treasury Management Strategy 2021/22 is included as an appendix to this report. Key changes to the strategy have been set out in paragraphs 29-33 as well as inclusion of analysis of the approach to finance more of the capital programme through borrowing.

Additional documents:

Minutes:

The Finance Manager (Corporate) presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'A' to these Minutes in the Minute Book.

The report set out the monitoring of the Council’s Treasury Management function for the period 1 April 2020 to 31 December 2020 set against a summary of the prevailing economic background and an assessment of the impact of changing interest rates. Details of actual performance were set out including a schedule of the Council’s borrowing and investments.  It was reported that the current prediction was for a net surplus of £159k and iIt was explained that this would be achieved through lower borrowing costs as a result of historically low interest rates.

It was confirmed that regular internal and external audit of treasury management activities had confirmed compliance with the Council’s Financial Regulations and that a sound control framework was in place with key control systems being consistently applied.

The Treasury Management Strategy for 2021/22 had also been included with the agenda and circulated as an appendix to the report. The key changes proposed to the Strategy were set out including an analysis of the proposed approach to financing more of the capital programme through borrowing. The different sources of short-term and long-term borrowing were explained.

In response to questions, it was confirmed that all Councils were being encouraged to adopt a similar financing approach to the proposal set out in the Strategy. In terms of investments, it was also confirmed that treasury investments, where undertaken, took place through national Banking Institutions

RESOLVED that the Audit and Governance Committee

(a)  Note the reported activity of the Treasury Management function for the period ending 31 December 2020;

(b)  Approve the Treasury Management Strategy 2021/22 included in Appendix 1 of the report to the Audit and Governance Committee.

Voting: Unanimous

59.

Risk management - Corporate Risk Register update pdf icon PDF 514 KB

This report updates councillors on the position of the council’s Corporate Risk Register. The main updates are as follows are outlined in paragraph 8 of this report.

 

 

Minutes:

The Risk and Insurance Manager presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'B' to these Minutes in the Minute Book.

The Committee received a report on the current position relating to the BCP Council Corporate Risk Register with the objective of providing assurance about effective risk management.  It was confirmed that all risks had been reviewed during the third Quarter of the year and the outcome of that review was set out in the report.

In terms of service development, the report provided information for the Committee about work being undertaken to refresh service level risk registers and, in parallel, ‘horizon scanning’ continued to take place with a view to identifying new potential risks and to consider necessary action.

The report highlighted specific changes in risk and the factors having an influence on risk were set out. Where appropriate Action Plans were in place to address specific risks.

Members were reminded that in October 2020 an updated Risk Register had been established to include within one single register those risks previously identified within a separate COVID-19 register. There was reference to the Committee’s Risk Workshop session in April 2020 which had been aimed at identifying COVID-19 related risk in the light of the information that was known and available at that time. There was agreement that after Easter in 2021 would be a good opportunity to revisit these issues through another Member workshop session when detailed assessment of the risks could be undertaken in the light of information available one year on.

RESOLVED that the Audit and Governance Committee note the update provided relating to corporate risks in Quarter 3 of 2020/21.

Voting: Unanimous

60.

Assurance Framework & Internal Audit Planning Consultation pdf icon PDF 310 KB

This report sets out the BCP Assurance Framework which identifies the different sources of assurance received across the Council.

The report also provides details of the proposed 2021/22 Internal Audit Plan approach.

Minutes:

The Head of Audit and Management Assurance presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'C' to these Minutes in the Minute Book.

The report set out the BCP Council Assurance Framework which identified the different sources of assurance received across the Council with the objective of identifying the key components that enable identification of risk and provide assurance that appropriate controls are in place, are adequately designed and operationally effective.

The report also provided details of the proposed 2021/22 Internal Audit Plan approach together with the proposed high level allocation of resources towards identified audit activity. In addressing particular elements of the Plan, Members emphasised the importance of maintaining the allocation of resources within the ‘BCP Transformation and Efficiency’ heading and assurance was provided that the 20 additional days this would require could be found within the flexibility of the Plan. The need for flexibility around COVID-19 related audit activity was also highlighted and the opportunity existed to maintain a dynamic approach with the ability to re-prioritise that element of the plan as required.

RESOLVED that the Audit and Governance Committee agree the BCP Council Assurance Framework and note that the adjustments identified within the draft 2021/22 Internal Audit Plan would be incorporated into the final Audit Plan presented to the Committee for approval in April.

Voting: Unanimous

61.

Internal Audit - Quarterly Audit Plan Update pdf icon PDF 781 KB

This report details progress made on delivery of the 2020/21 Audit Plan for the period October to December (inclusive) 2020.  The report highlights that:

·       Thirteen audit assignments have been completed (with the following summary opinions - one ‘Substantial’, eleven ‘Reasonable’ and one Consultancy Review);

·       Thirty-seven audit assignments are in progress;

Implementation of audit recommendations is satisfactory.

Minutes:

The Head of Audit and Management Assurance presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'D' to these Minutes in the Minute Book.

This report detailed progress made on delivery of the 2020/21 Audit Plan for the period October to December (inclusive) 2020.  The Committee was informed that thirteen audit assignments had been completed with one summary opinion of ‘Substantial’, eleven of ‘Reasonable’ and one of Consultancy Review issued. A further thirty-seven audit assignments were reported to be in progress.

Implementation of audit recommendations was considered to be satisfactory with good progress on delivery of the plan being reported. In response to questions, it was confirmed that emerging risks would be factored in response to corporate priorities. The issue of speed of processing of planning applications was suggested as a possible area for enquiry. In the meantime, and although the situation was being regularly monitored, the Head of Audit and Management Assurance expressed confidence that that the level of resources available for audit was adequate at the current time.

RESOLVED that the Audit and Governance Committee notes progress made and issues arising on the delivery of the 2020/21 Internal Audit Plan.

Voting: Unanimous

62.

Updated Audit Findings Report (AFR) - including Letter of Representation pdf icon PDF 261 KB

The attached report sets out the findings of the council’s external auditor following their audit of the council’s statement of accounts 2019/2020. The key points to note are:

·       Grant Thornton anticipate providing an unqualified opinion on the financial statements for the council; and that

Grant Thornton anticipate issuing a qualified “except for” value for money conclusion due to the findings of the Ofsted targeted review of children’s services.

Additional documents:

Minutes:

The Head of Audit and Management Assurance and the Assistant Chief Finance Officer presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'E' to these Minutes in the Minute Book.

The report set out the findings of the Council’s external auditor, Grant Thornton, following their audit of the council’s statement of accounts 2019/2020. The key points to note from their report were that Grant Thornton anticipated providing an unqualified opinion on the financial statements for the Council and that they anticipated issuing a qualified “except for” value for money conclusion due to the findings of the Ofsted targeted review of children’s services.

In commenting on their report Grant Thornton provided the context of national delay in signing off accounts which they explained was largely as a result of the challenges presented by COVID-19 and remote working although, in the case of BCP Council, the establishment of the partnership and the necessary production of a new single set of accounts added a further dimension. The external auditors outlined the specific areas on which they were still working but acknowledged that the set of controls set out by the BCP Council Finance Team were very good and that no material adjustments were anticipated.

In response to questions from the Committee on the subject of the value for money judgement the Chief Executive and the Chief Finance Officer both confirmed that they were fully aware of the results and findings of the Children’s Services Ofsted report and that there was full commitment to the Action Planning and Improvement Board processes that had been put in place to ensure that the significant improvements required were achieved.

There was also reference to the increasing audit fee set out within the Grant Thornton report and the Committee was informed that this subject would be addressed within the Quarter 3 budget monitoring report.

Included as an appendix to the report was a draft of the formal ‘Statement of Responsibilities’ and the ‘Letter of Representation’ and the Assistant Chief Finance Officer set out for the Committee the significance and effect of agreeing to signing the documents subject to completion of the audit and subject to there being no material alterations to the accounts that had been presented in draft to the Committee.

RESOLVED that Audit and Governance Committee

(a)  Notes the anticipated audit opinions and findings of the council’s external auditor included as Appendix A of the report to the Audit and Governance Committee following the audit of the council’s statement of accounts 2019/20;

(b)  Approves the Letter of Representation included as Appendix B of the report to the Audit and Governance Committee;

(c)  Approves the treatment of the unadjusted misstatement referred to in Appendix C of the report to the Audit and Governance Committee;

(d)  Approves the signing of the Statement of Responsibilities included as Appendix D of the report to the Audit and Governance Committee, and the Letter of Representation by the Chair of  ...  view the full minutes text for item 62.

63.

Forward Plan pdf icon PDF 215 KB

This report sets out the reports to be received by the Audit & Governance Committee for the 2020/21 municipal year.

Additional documents:

Minutes:

The Head of Audit and Management Assurance presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'F' to these Minutes in the Minute Book.

The report set out the reports to be received by the Audit & Governance Committee for the remainder of the 2020/21 municipal year.

The Committee noted that the report entitled ‘Information Governance Update’ was now scheduled to be presented to the meeting of the Committee on 22 April 2021.

The Chairman reminded members again of his recent email inviting suggestions for additional subjects for consideration in more depth at the more informal ‘extra’ meetings of the Committee. This was now an important and useful method of working for the Committee and members were welcome to contribute suggestions on a continuing basis.

The Chairman also referred to the work of the Committee’s Constitution Review Working Group. There was potential for an increasing workload for the Committee in the short term in delivering its role in the ongoing review of the Council’s Constitution and it was agreed that some ‘reserve’ dates for additional meetings of the Committee, before the end of the current Municipal year, should be identified in order that members could reserve the dates should they be required.

The Committee was also informed that the Monitoring Officer had completed in draft her Action Plan for wider review of the Constitution and that this would be considered by the Working Group at its next meeting.

RESOLVED that, subject to the above comments, the Audit and Governance Committee approves the forward plan set out.

Voting: Unanimous