Agenda and minutes

To receive any apologies for absence from Councillors.

There were no apologies for absence.

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.

There were no substitutions.

Councillors are required to comply with the requirements of the Localism Act 2011 regarding disclosable pecuniary interests. Declarations received will be reported at the meeting.

Cllr D Brown, Portfolio Holder for Finance, declared an interest in Agenda Item 6 arising from his Chairmanship (including at the time when the deputation was initially submitted) of the Kinson Community Association.

Cllr M Cox declared his employment as a Chartered Accountant and Auditor.

There were no declarations of disclosable pecuniary interest.

Cllr M Andrews presided for the following item.

Councillors are asked to elect the Chairman of the Audit and Governance Committee for the 2019/20 Municipal Year.

RESOLVED that Cllr J Beesley be elected Chairman of the Audit and Governance Committee for the period until the first meeting of the Committee in the Municipal Year 2020/21.

Cllr J Beesley in the Chair.

Councillors are asked to elect the Vice Chairman of the Audit and Governance Committee for the 2019/20 Municipal Year.

RESOLVED that Cllr L Williams be elected Vice-Chairman of the Audit and Governance Committee for the period until the first meeting of the Committee in the Municipal Year 2020/21.

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 18 July 2019.

The deadline for the submission of a statement is 12.00 noon on Wednesday 24 July 2019.

The deadline for the submission of a petition is 12.00 noon on Wednesday 24 July 2019.

The following statement from a member of the public, Vicky Moss, was read out to the Committee:

‘On behalf of the Branksome Park and Canford Cliffs Residents Association, I would like to express concern that the E-Petition facility offered by the former Borough of Poole Council has been disabled for nearly 5 months. 

An E-Petition submitted in early March 2019, to request a Traffic Survey in the Branksome Park and Canford Cliffs Area following concerns over lack of pedestrian accessibility and safety and along the footpaths that transverse thoroughfares such as Western Rd/The Avenue, was rejected on the grounds that Poole Council would cease to exist in one month.

The E-Petition facility is an essential tool in allowing a Community’s voice to be heard. We have grave concerns over pedestrian safety in this area and the requests of individuals for a Traffic Survey to the Transportation Department have so far been ignored.

Please advise when the BCP E-Petition facility will be up and running.’

The Committee noted that the statement would be passed on to the appropriate department within the Council and any report back necessary be made to the Committee.

Response to KCA Question 1 –When, if ever, has the Community Regeneration and Community Centre function of the Council (BBC) been audited?

The function has not been audited in the last six years.  Instead other forms of assurance have been used to measure the effectiveness of the Council’s Community Regeneration and Community Centre support service, principally the positive and negative feedback from all Centres in Bournemouth.    

Internal Audit provided assurance on the effectiveness and adequacy of several related corporate functions relevant to the Landlord status BBC had for Community Centres including Kinson Community Centre (KCC).  These included, but were not limited to:

·       Health & Safety;

·       Fire Safety; and

·       Building Maintenance.

Response to KCA Question 2 – Why the Anti-Fraud and Corruption Policy which states that: “The policy will be communicated to all staff, councillors, contractors and other relevant bodies”, clearly is not?

Whilst it was a clear aspiration for every employee to be aware of the Anti-Fraud and Corruption Policy (the Policy), this was extremely difficult to achieve across such a large and diverse workforce.  The BBC induction program made all new starters aware the Policy existed and where to find it.

Response to KCA Question 3 – Why, in the experience of KCA, have officers at all levels failed to follow the Anti-Fraud and Corruption Policy?

The then Head of Community Regeneration took the view that BBC’s Anti-Fraud and Corruption Policy did not apply in this case.

A subsequent ‘Independent Reviewer’ produced a series of findings which stated that BBC employees acted (quote) ‘appropriately, reasonably and professionally’ during their respective interactions with KCA.

The Service Director for Communities (BCP Council) is implementing two recommendations made by the independent reviewer to foster and improved landlord (BCP) / tenant (KCA) relationship

A comprehensive report of responses to a deputation in three parts made in January 2019 to the predecessor Bournemouth Borough Council was presented for consideration by the Committee. The arrangements in place for audit and oversight of the function, including changes made since receipt of the deputation, were set out and explained.

Members questioned the background and context around the issues raised and it was explained that the Community Centre was operated by a Board of Trustees forming the KCA and that Bournemouth Borough Council had no day to day management or control but was the landlord. The Council did provide payroll services to the Association, the employee involved was managed by the Trustees and no payments could be made without direct and explicit approval of a Trustee.

In response to questions from the Committee there was acceptance that, in transferring undertakings of this kind in the future, the nature of roles and responsibilities being transferred should be more specifically set out.

There was also particular discussion around allegations of fraudulent activity and the circumstances within which the service manager in 2014 took the view that the Council’s Anti-Fraud and Corruption Policy did not apply were explained. It was the Bournemouth Borough Council view, and this was communicated to the KCA, that if KCA believed fraudulent activity had taken place, they should inform the Police.

In an attempt to bring the various range of matters to a satisfactory conclusion during the 2018/19 financial year, it was reported that the Managing Director of Bournemouth Borough Council, in consultation with the Chairman of the Community Association, commissioned an independent and specialist report. The outcome was a set of findings that found allegations of fraud unsubstantiated but made two recommendations relating to the rebuilding of effective working relationships going forward.

RESOLVED:-

(a) That in respect of ‘Questions 1 and 2’ as submitted by the Kinson Community Association and reported to the Committee, the responses be noted and no further action be taken;

(b) That in respect of ‘Question 3’ as submitted, the Head of Audit and Management Assurance be instructed to request a copy of the Independent Investigation Report and to also seek a formal response in writing from the Community Association and that another report be brought back to the next meeting of the Audit and Governance Committee to determine any further action;

(c) That, in the meantime, the Committee note the actions proposed to foster improved landlord (Bournemouth, Christchurch and Poole Council) and tenant (Kinson Community Association) relations and to improve working relationships going forward.

The legacy Councils have not made use of RIPA powers during the 2018/19 financial year.

It was reported that the three BCP legacy Councils had not made use of RIPA powers during the 2018/19 financial year.

RESOLVED that the Committee note that the three Bournemouth, Christchurch and Poole legacy Councils had not made use of powers under the Regulation of Powers Act during the financial year 2018/19.

This report sets out the breaches, waivers and exemptions of Financial Regulations which have occurred during the 2018/19 financial year for the three legacy Councils and highlights the following:

The relatively low number (and £ value) of breaches and the broadly similar number of waivers to previous years indicate that there was generally a good level of understanding of the Regulations.

Whilst full compliance can never be guaranteed and ‘under-reporting’ is an inherent possibility, arrangements were in place to detect instances of non-compliance. 

An effective and transparent breaches / waivers / exemptions governance process maximises the chances of the Council(s) achieving value for money and complying with UK law (Public Contract Regulations 2015) when procuring goods, services or works.

The Committee received the schedule of breaches, waivers and exemptions which had occurred in respect of the three BCP legacy Councils during the 2018/19 financial year and the levels reported were generally indicative of a good level of understanding of the Regulations by managers and Officers. It was explained that only the Chief Finance Officer was authorised to approve exemptions under these Regulations.

Members were provided with detailed explanations relating to significant waivers and invited to raise in writing any specific questions directly with the Head of Audit and Management Assurance.

RESOLVED that the Committee note the breeches, waivers and exemptions of Financial Regulations that occurred during the financial year 2018/19 as reported in respect of the three Bournemouth, Christchurch and Poole legacy Councils.

It is the opinion of the Chief Internal Auditor that for the three legacy councils:

·       arrangements were in place to ensure an adequate and effective internal control environment and where weaknesses were identified there was an appropriate action plan in place to address them;

·       the systems and internal control arrangements were effective and agreed policies and regulations were complied with;

·       adequate arrangements were in place to deter and detect fraud;

·       there was an appropriate and effective risk management framework;

·       managers were aware of the importance of maintaining internal controls and accepted recommendations made by Internal Audit to improve controls;

·       the respective Councils’ internal audit service was effective and compliant with all regulations and standards as required of a professional internal audit service; and that

the arrangements, at the respective Councils, in respect of the Chief Internal Auditor were consistent with all of the five principles set out in the CIPFA publication “The Role of the Head of Internal Audit in Public Sector Organisations”.

The Committee received the Chief Internal Auditor’s Annual Reports and opinions in respect of the three BCP legacy Councils during the 2018/19 financial year and it was explained that the report was produced in compliance with the Public Sector Internal Audit Standards. The reports had also been considered and discussed by the respective legacy Council Audit Committees throughout the year. In summary, the Internal Auditor was satisfied that there was an adequate and effective internal control environment in place and that the Audit service was effective and compliant.

Members raised questions on some specific aspects of the legacy Council reports and assurances were provided in response.

RESOLVED that the Committee note the Chief Internal Auditor’s Annual Report and opinion on the overall adequacy of the internal control environment for each of the three BCP legacy Councils.

The Accounts and Audit Regulations 2015 require councils to produce an Annual Governance Statement (AGS) to accompany its Statement of Accounts.

This report seeks approval for the Annual Governance Statements for the three legacy Bournemouth, Christchurch and Poole councils.

For all three legacy Councils ‘the governance arrangements were fit for purpose and in accordance with the respective governance framework in place at each council’.

After considering all the sources of assurance (of governance arrangements) in the legacy councils, BCP Corporate Management Board identified that the following significant governance issues existed.

·       Bournemouth – Information Governance and  governance related issues raised in the Ofsted inspection of Children’s Social Services;

·       Christchurch – none; and

·       Poole – Information Governance.

Action plans to address these significant governance issues, which continue to be relevant for BCP Council, has been produced and is being implemented.

The approval of the Committee was sought to the Annual Governance Statements for 2018/19 in respect of the three BCP legacy Councils and it was explained that the Statements were required by Audit Regulations to accompany the Statement of Accounts. The various elements required to be addressed were set out and described and it was reported that, after examination of sources of assurance, a small number of significant governance issues had been identified. An Action Plan to address these issues was presented to the Committee and it was confirmed that the issues continued to have relevance to the new BCP Council.

RESOLVED:-

(a) That the Committee approve the Annual Governance Statements for 2018/19 for each of the three BCP legacy Councils and the Leader and the Chief Executive be requested formally to sign off the Statements;

(b) That the Committee approve the BCP Council Action Plan to address the significant governance issues identified and a progress report be presented to the January 2020 meeting of the Audit and Governance Committee.

The attached reports set out the work that the Councils’ External Auditors, Grant Thornton, planned to undertake for the audit of the three legacy Councils’ Statement of Accounts in respect of 2018/19 (as previously agreed by legacy Council Audit Committees).

The External Auditors planned to give an opinion on whether the accounts give a true and fair view and whether the Councils have made proper arrangements for securing economy, efficiency and effectiveness in their use of resources.

At the specific request of External Auditors, Grant Thornton, the BCP Council Audit and Governance Committee received copies of the External Audit Plans as previously agreed by the respective three legacy Councils. This was considered necessary prior to the External Auditors presenting their opinion on the accounts at the next item on the Agenda.

The opportunity was taken to explain the context of the role of External Audit for the benefit of Councillors new to the Committee. The External Auditor replied to questions about specific parts of the Plans.

RESOLVED that the Committee note the Grant Thornton External Audit Plans 2018/19 for each of the three BCP legacy Councils.

The attached reports set out the findings of the Councils’ external auditor following their audit of the three legacy Councils’ Statement of Accounts 2018/2019. The key points to note are:

·       Grant Thornton anticipate providing an unqualified opinion on the financial statements for each of the three legacy Councils; and that

Grant Thornton were satisfied that, in all significant respects, the three legacy Councils had proper arrangements in place to secure economy, efficiency and effectiveness in its use of resources (unqualified VFM conclusion). 

The Committee had received the 31^st March 2019 Grant Thornton Audit Findings Reports for each of the three BCP Council legacy Councils and it was explained that the External Auditor was required to report whether, in their opinion, the financial statements presented a true and fair view of the Councils’ financial positions.

Councillors were advised of the scheduled dates for publishing the audited accounts and for publishing the Auditor’s statement of opinion.

It was reported that whilst it was expected to conclude the audits for Christchurch Borough Council and for Borough of Poole Council by 31^st July, the audit for Bournemouth Borough Council was likely to be delayed whilst some complex valuation audits were being undertaken. It was explained that this was not uncommon and especially in view of the complexity of the issues involved and in the context of the Structural Review of the legacy Councils. It was also confirmed that the outstanding issues did not involve anything that gave rise to concerns about governance or were such that would have an impact upon Council Tax.

RESOLVED

That the Committee note the position regarding the audit opinion and findings of the Councils’ External Auditor following their audit of the three legacy Councils’ statements of accounts for 2018/19.

This report presents the 2018/19 Statement of Accounts for each of the three predecessor councils, Bournemouth, Christchurch and Poole.

Each of the Statement of Accounts has been prepared in accordance with the CIPFA Local Authority Accounting Code of Practice, and presents a True and Fair view of the relevant authority’s financial performance for 2018/19 and financial position as at 31 March 2019.

This report explains any key changes, highlights any significant issues, and provides an opportunity for robust Member scrutiny prior to their formal approval.

The Chief Finance Officer presented to the Committee the Statements of Accounts for the 2018/19 financial year in respect of the three BCP legacy Councils. As set out in the previous agenda item, it was further explained that, although now substantially complete, the final stages of audit work around asset valuations in the Bournemouth Borough Council legacy accounts had not been completed. The two additional tasks remaining outstanding were described and an undertaking provided that, once resolved, a notice would be published on the BCP Council website setting out the technical details involved.

The Committee was also reminded of the assurance provided by the External Audit as described in the previous agenda item and an explanation had also been provided at the informal Members’ session on 15^th July. A list of the questions asked at that session and of the responses provided would be circulated as an Appendix to the minutes. It was accepted that there were lessons to be learnt for the future and the importance of adopting a consistent approach across the new Council was underlined.

A list of updates in respect of each of the legacy Councils was set out.

The Committee recorded their gratitude for the work of External Auditors Grant Thornton and acknowledged their contribution to the process.

Members also paid tribute to the role of the Chief Finance Officer and the whole of the Finance Team, who had been under huge pressure to produce accounts for the three legacy Councils, and expressed their gratitude for the quality and timeliness of the work undertaken by them. The Chief Finance Officer underlined this with his own expression of appreciation of the staff involved across the board in supporting the process.

RESOLVED:-

(a) That the Committee agree the 2018/19 Statements of Accounts for Christchurch Borough Council and Borough of Poole Council and the Chair of the Audit and Governance Committee sign the Statement of Responsibilities included within the Statement of Accounts and the letter of Representation on behalf of the Committee;

(b) That agreement on behalf of the Committee of the 2018/19 Statement of Accounts for Bournemouth Borough Council be delegated to the Chair of the Audit and Governance Committee subject to satisfactory completion of the further identified audit tasks except that any further issues identified by the External Auditor will be referred back to the Committee for consideration.

This report sets out the Internal Audit Charter and Audit Plan for 2019/20. Approval of these documents by the Audit and Governance Committee is a requirement of the Public Sector Internal Audit Standards (PSIAS).

The report also details progress made on delivery of the 2019/20 Audit Plan for the period April to June  (inclusive) 2019.  The report highlights that:

·       Three audit assignments have been completed (all ‘Reasonable’ audit opinion);

·       Twenty audit assignments are in progress;

·       Implementation of audit recommendations is satisfactory;

There are no other significant issues to report. 

The BCP Council Internal Audit Charter for 2019/20, the Audit Plan, and the Quarterly Audit Plan Update for the first Quarter of 2019/20 were presented to the Committee as required under adopted Audit Standards. It was explained that the Plan and the Charter set out for the Committee what the Council should expect from the Audit Team during 2019/20 and represented a high-level statement of how Audit resources would be deployed. The report also included an update of performance against the Plan during the first Quarter of the current financial year.

RESOLVED:-

(a) That the Committee approve the Internal Audit Charter and that the Chair signs the document to record the approval;

(b) That the Committee approve the Internal Audit Plan 2018/19;

(c) That the Committee notes the budget for the Internal Audit service as previously agreed by the Council and notes progress made and issues arising on delivery of the 2219/20 Internal Audit Plan.

This report updates Members on the position of the Council’s Corporate Risk Register following the quarterly review by the Corporate Management Board.  The main changes are as follows:

·         No new risks have been added to theCouncil’s Corporate Risk Register during thequarter;

·         The overall risk score on the following riskshave been reduced (risk score equals an assessment of the likelihood and impact of the riskoccurring)

o  CRR04 - Failure to provide adequate IT and cybersecurity

o  CRR06 - Failure to adequately respond to an incident involving the activation of the emergencyplan

o  CRR07 - Failure to provide adequateservices as a result of an incident requiring a business continuityresponse;

·         Corporate Risk CRR08 has beenremoved during this quarter;

Each of the risks have been reviewed and including the Actions Completed and the Actions Proposed.

Following quarterly review by the Corporate Management Board, the Audit and Governance Committee received an overview of the Corporate Risk Register and highlighted changes during the first Quarter of 2019/20. It was explained that changes to Risks were made where necessary on an ongoing basis by the Management Board. The Committee also noted proposals to provide this information through an internal portal which would further facilitate access by Members.

RESOLVED that the Committee note the outcome of the Corporate Management Board’s review of the Corporate Risk Register.

Although a report relating to this item had been tabled, the Committee underlined its resolve not to consider tabled items and noted that a further report on this matter would be submitted to the next meeting of the Committee.

This report sets out the core reports to be received by the Audit & Governance Committee for the 2019/20 financial year in order to enable it to fulfil its terms of reference.

The Committee considered the Forward Plan for 2019/20.

It was noted that items on the Plan were largely driven by the core business of the Committee and the requirements for reporting as set out in regulations, prescribed within adopted audit process and set out within the Committee’s Terms of Reference.

Councillors recognised that, in addition to the core items identified, there were likely to be additional issues emerging from time to time in response to events and to address particular matters raised by Members. The Chair underlined the importance of ensuring that the Committee felt able to fully and properly engage with the Audit process.

A number of issues were raised in discussion including the opportunity to consider, for example, the Medium Term Financial Plan and in accordance with the Committee’s Terms of Reference, to maintain an overview of the Constitution. The Chair invited Members to email him directly with these and other suggestions for areas on which the Committee could focus and where it could generate input going forward. The importance of informal background briefings and other events to support the Committee in its role was also underlined.

RESOLVED that, subject to the comments raised, the Committee approve the Forward Plan for 2019/20.