Agenda and draft minutes

Audit and Governance Committee - Thursday, 28th October, 2021 6.00 pm

Venue: Committee Suite, Civic Centre, Poole BH15 2RU. View directions

Media

Items
No. Item

32.

Apologies

To receive any apologies for absence from Councillors.

Minutes:

Apologies for absence were received from Councillors Filer and Trent.

33.

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:

Formal notification had been received appointing Councillor T Johnson as substitute for Councillor Filer. The Chairman welcomed Councillor T Johnson to the meeting.

The Committee was informed that Councillor Cox had initially been appointed as a substitute for Councillor Trent but was now unable to attend the meeting in person and act as substitute. Councillor Cox had, however, asked to address the meeting at the discretion of the Chairman.

34.

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:

Councillor T Johnson declared his membership of the Dorset and Wiltshire Fire and Rescue Authority.

Councillor Cox, who was invited to address the Committee at the discretion of the Chairman, declared his profession of Auditor.

35.

Confirmation of Minutes pdf icon PDF 197 KB

To confirm and sign as a correct record the minutes of the Meeting held on 9 September 2021.

Minutes:

Councillor Brooke confirmed that he was content with the further requested information about the LGA Peer Challenge as set out as an informative at the foot of the Minutes.

An update was requested on the decision relating to BH Live contractual and governance arrangements and particularly the decision that following identified redrafting, revised proposals would come back initially to the Chairman and Vice-Chairman of the Committee prior to re-circulation for comment to Members of the Committee (including to the two substitute Members) and finally re-submission to the Committee for formal adoption. The Chairman undertook to report back on progress with this to the next meeting of the Committee.

Subject to the above it was

RESOLVED that the Minutes of the meeting of the Committee on 09 September 2021 be confirmed as a correct record.

36.

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 four clear working days before the meeting.

The deadline for submission of a public statement is 12 noon on the day before the meeting.

The deadline for the submission of a petition was 10 working days before the meeting.

Minutes:

There were no public issues.

37.

Health & Safety and Fire Safety Update pdf icon PDF 432 KB

This report details progress made on the delivery of Health & Safety and Fire Safety governance arrangements for BCP Council and highlights:

·       Ongoing Covid 19 response and the recovery

·       Implementation of Governance framework

·       Reporting of Health and Safety and fire safety to the board

·       An overview of service delivery

Minutes:

The Head of Audit & Management Assurance 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 provided details of progress made on the delivery of Health and Safety and Fire Safety governance arrangements for BCP Council.

It was reported that, during the ongoing Covid 19 response and recovery period, Health and Safety and Fire Safety Board meetings had continued with good attendance levels. Service Directorate level meetings had been significantly disrupted although now had mostly re-started. In addition, the Health and Safety and Fire Safety Forum continued to provide a forum for consultation with employees and for exchange of best practice supported by a Microsoft Teams channel for dedicated discussion.

A detailed overview of service delivery was provided including a description of the staffing structure in place. Particularly, a process of remote assurance assessments had been introduced to act as a tool to assist with completion of a revised risk register during the pandemic. Full on-site Fire Risk Assessment had now re-commenced.

In response to questions, it was explained that the arrangements for Fire Assessment of properties owned but not occupied by the Council were normally set out in property leases and that usually, where the Council was landlord, the lease provided that the responsibility for Fire Assessment was with the occupier.

Although noting that it was accordingly the responsibility of the Estates Function to follow up on these leasehold provisions, there was recognition that an internal audit on the adequacy of Estates follow-up of Fire Safety obligations would be useful and was therefore something that should be included within the Internal Audit Plan. A checklist of all Council-owned properties was likely to be required and, as a priority, there should be assessments of the situation at buildings occupied by community bodies such as Community Associations.

RESOLVED that

(a)     Health and Safety and Fire Safety on-going governance arrangements are reported to the Audit and Governance Committee annually;

(b)     the Audit and Governance Committee notes the continued progress in implementing the Health and Safety and Fire Safety governance arrangements, along with the significant contributions made towards managing the risks from the COVID-19 pandemic;

(c)     the Internal Audit Plan be amended to include an internal audit of the arrangements in place within the Council Estates function for the follow-up and enforcement of Fire Safety assessment responsibilities of the occupiers of Council owned buildings.

Voting: Unanimous

38.

Emergency Planning & Business Continuity Update pdf icon PDF 319 KB

Emergency planning and business continuity activity in BCP Council over the reporting period has continued to be predominantly focused on the ongoing response to COVID-19 and concurrent risks, managing the consequences arising from these, and transitioning to living safely with COVID-19 as part of normal business.  The BCP and Local Resilience Forum (LRF) command structures have therefore flexed considerably over this period to meet the demands of an ever-changing picture with new sets of challenges. 

The other main area of activity has been implementing the BCP Resilience Governance Framework approved by Corporate Management Board (CMB) in September 2020, the overall purpose of which is to strengthen and embed the statutory duties of emergency planning and business continuity and develop a resilience culture.  The framework also provides the necessary governance to support delivery and oversight of these statutory duties.

This report also provides an update on national developments in resilience, due in part to the experiences of COVID-19.

Additional documents:

Minutes:

The Emergency Planning and Resilience 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 was advised that Emergency Planning and business continuity activity in BCP Council over the reporting period had continued to be predominantly focused on the ongoing response to COVID and concurrent risks, managing the consequences arising from these, and transitioning to living safely with COVID as part of normal business.

It was reported that the BCP Council and Local Resilience Forum command structures had flexed considerably over the period to meet the demands of an ever-changing picture and new sets of challenges. 

In response to questions, it was confirmed that, although COVID had presented a significant distraction and had had an impact on developmental work, focus on concurrent risk and business as usual risk had been maintained. Resources were considered sufficient to ensure that forward progress was being made whilst at the same time addressing high risk ongoing activity such as the Air Festival event and the enhanced seasonal pressures within the BCP Council area. There has been some instability experienced within the team due to staffing changes although vacancies had now been successfully replaced through recruitment.

It was reported that the other main area of activity had been implementation of the BCP Resilience Governance Framework as approved by Corporate Management Board in September 2020. The overall purpose of the framework was to strengthen and embed the statutory duties of emergency planning and business continuity and develop a resilience culture.  The framework also provided the necessary governance to support delivery and oversight of these statutory duties.

There were also questions raised by the Committee about the impact of the fuel demand pressures experienced during September and particularly the implications on the programme of moving towards electric vehicles within the Council fleet. A multi-agency debrief was reported to be taking place shortly and was likely to address the wider implications of what happened although it was explained that balancing the effect of electricity power failure was also part of the consideration.

The report also provides an update on national developments in resilience, due in part to the experiences of COVID.

The Committee recorded its appreciation of the successful work of the Emergency Planning Manager and her team in maintaining resilience over a very challenging period whilst, at the same time, continuing to ‘catch up’ with the established schedule of planned work.

RESOLVED that the Audit and Governance Committee notes

(a)  the continued response to COVID-19 and the transition to business as usual;

(b)  the update on the Integrated Security Review and the National Resilience Strategy;

(c)  progress in implementing the BCP Resilience Governance Framework.

Voting: Unanimous

 

39.

Treasury Management Monitoring report for the period April to September 2021 pdf icon PDF 319 KB

This report sets out the monitoring of the Council’s Treasury Management function for the period 1 April 2021 to 30 September 2021. A surplus of £626k will be achieved through lower borrowing costs due to historically low interest rates and higher cash balances held by the authority.

The report also provides a brief update to the changing regulatory environment on Treasury Management.

Minutes:

The Acting Assistant Chief Financial Officer 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 Committee was aware of the requirement under the Chartered Institute of Public Finance and Accountancy (CIPFA) Treasury Management Code of Practice that regular monitoring of the Treasury Management function was reported to elected Members.

The report set out performance within the context of current economic environment and a tabulation of interest rate projection suggesting an expectation that interest rates could start to increase from June 2022. It was also reported that the impact of inflation and particularly its effect upon gas and electricity prices remained the biggest concern.

The report set out the monitoring of the Council’s Treasury Management function for the period 1 April 2021 to 30 September 2021 and it was reported that an anticipated  surplus of £626k was expected through lower borrowing costs due to historically low interest rates and higher cash balances held by the Authority.

Council borrowings and Council investments, both as at 30 September 2021, were set out for the Committee together with the applicable interest rate in each case. It was reported that a recent audit of the Treasury Management function had provided assurance that a sound control framework was in place with key controls consistently applied. It was also confirmed that the agreed Treasury Management Strategy had been complied with during the period 1 April to 30 September 2021. In response to questions, the Committee was informed that the BCP Council was at the low end of the spectrum in terms of borrowing in comparison with other Councils and confirmation was provided that any additional borrowing would always be underpinned by a robust business case and subject to proper approval by the Council.

The report also provides a brief update to the changing regulatory landscape as it related to Treasury Management and it was explained that, whilst currently still out for consultation, the new investment framework was likely to be in place when setting the Strategy for 2022/23. Initial assessment of the framework was that it was likely to be supportive of the BCP Council approach.

RESOLVED that the Audit and Governance Committee notes

(a)  the reported activity of the Treasury Management function for April to September 2021;

(b)  the update provided for the Committee on the Treasury Management regulatory environment .

Voting: Unanimous

40.

Risk Management – Corporate Risk Register Update pdf icon PDF 641 KB

 

This report updates councillors on the position of the council’s Corporate Risk Register. The main updates are as follows:

·        No new risks have been added to the council’s Corporate Risk Register during the quarter.

·        Corporate Risk CR17 - Risk to Reputation of Place & Council if summer arrangements are not managed – has been de-escalated and is now being considered at service risk level.

·        There have no changes to risks scores during the quarter.

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

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 'D' to these Minutes in the Minute Book.

The report provided an update for the Committee on the Council’s Corporate Risk Register which also reflected the impact of the pandemic and included a summary of the changes to Corporate Risk during the second Quarter period of 2021/22. It confirmed that no new risks had been added to the Council’s Corporate Risk Register during the quarter.

There had also been no changes to risks scores during the quarter.

Each of the risks have been reviewed including the Actions Completed and the Actions Proposed and it was reported that Corporate Risk CR17 (Risk to Reputation of Place and Council if summer arrangements are not managed) had been de-escalated from the status of corporate risk and was now being considered at service risk level.   

The Committee was informed in respect of Corporate Risk 9 (Maintaining a Balanced Budget) that this was a standard item on the risk register and that an update would be provided to the Cabinet in December to reflect in particular the impact of the recent National Government budget settlement and how this would translate in fact to the BCP Council. The Committee welcomed the level of detail being provided for them under this Corporate Risk heading in terms of the mitigations in place. On the subject of Organisational Transformation and associated savings predictions, there had been separate reports to both the Overview and Scrutiny Board and to Cabinet and this subject would continue to be kept under close review and be reported on again to the Audit and Governance Committee.

Members welcomed the opportunities that had been arranged for Member briefing seminars on these budget issues and there was support for taking this model of briefing forward into other areas.

In relation to Corporate Risk 4 (Information Technology) and 11 (Efficient Delivery of Services), the Committee highlighted their concerns about the important subject of the interface between the Council and the public and the difficulties and frustrations that the public were reporting through Councillors. The Risk and Insurance Manager undertook to raise this with the Chief Executive and the appropriate lead officer as part of the report on the Quarterly risk and to include this in the next update report to the Committee. The Chairman to be involved in the discussion with the lead officer in order to represent and input the views of Members.

The Committee also raised similar concerns about how the current performance of the Planning system was potentially affecting the reputation of the Council and it was agreed that consideration should be given to including both these subjects as corporate risks going forward. Review of the way in which performance data on this subject area was collected and assessed would also be included.

The Committee was also provided with an update on good and continuing progress with service development.  ...  view the full minutes text for item 40.

41.

Internal Audit - Quarterly Audit Plan Update pdf icon PDF 280 KB

This report details progress made on delivery of the 2021/22 Audit Plan for the period July to September (inclusive) 2021. The report highlights that:

·        Eight audit assignments have been completed (one ‘Substantial’, six ‘Reasonable’ and one ‘Partial’ audit opinions);

·        Twenty audit assignments are in progress;

·        Implementation of audit recommendations is satisfactory;

An action plan is in place to address the issues raised during a recent Public Sector Internal Audit Standards external assessment.

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 'E' to these Minutes in the Minute Book.

The report described progress made on delivery of the 2021/22 Audit Plan for the period July to September (inclusive) 2021. It was reported that eight audit assignments have been completed including one ‘Substantial’, six ‘Reasonable’ and one ‘Partial’ audit opinions. In addition, twenty audit assignments were in progress and implementation of audit recommendations were reported to be satisfactory.

An action plan was in place which included four specific actions to address issues raised during a recent Public Sector Internal Audit Standards external assessment and a copy of the plan was set out for the Committee.

It was also reported that a report reviewing the governance framework for management of parks was in the course of preparation for submission to the Committee.

RESOLVED that the Audit and Governance Committee notes progress made and issues arising on the delivery of the 2021/22 Internal Audit Plan.

Voting: Unanimous

42.

Annual Report of Internal Audit Counter Fraud Work and Whistleblowing Referrals 2020/21 pdf icon PDF 357 KB

This report details counter fraud work carried out by Internal Audit to provide assurance on the Council’s response to combating fraud & corruption. 

Internal Audit have investigated all allegations of suspected fraud or financial irregularity in a proportionate manner. 

One formal whistleblowing referral for the Council was received and investigated by Internal Audit during 2020/21.  

[PLEASE NOTE: Appendix A to this report is Restricted - Should the Committee wish to discuss the detail of Appendix A the meeting will be required to move into Confidential (Exempt) Session].

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 provided the annual summary of counter fraud work undertaken by Internal Audit to provide assurance on the Council’s response to combating fraud and corruption. Internal Audit have investigated all allegations of suspected fraud or financial irregularity in a proportionate manner. A summary of outcomes and recommendations, set out by reference to category of fraud risk, was presented. A schedule of the detail of each case was also available on a confidential basis.

One formal whistleblowing referral for the Council was received and investigated by Internal Audit during 2020/21.  

In response to questions, the arrangements for making staff across the Council aware of the adopted Whistleblowing Policy were explained including a programme of training to raise awareness. An internal survey of a random selection of staff will take place to check levels of awareness and understanding.

RESOLVED that the Audit and Governance Committee notes 

(a)  the counter fraud work & investigations carried out by Internal Audit during 2020/21;

(b)  the whistleblowing referral received during 2020/21. 

Voting: Unanimous

 

 

43.

External Audit - Core Financial System IT Audit Report 2020/21 pdf icon PDF 247 KB

The attached report provides the findings from Grant Thornton’s review of IT general controls for BCP Council applications identified as relevant to the financial audit.

 

The report includes an overview of the IT audit findings which were assessed as 4 ‘Significant Deficiency’, 7 ‘Deficiency’ and 1 ‘Improvement Opportunity’ issues.

 

Management have provided a response to all issues raised.

 

Additional documents:

Minutes:

The Acting Assistant Chief Financial Officer presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'G' to these Minutes in the Minute Book. Attached to the report was the findings of External Auditors Grant Thornton’s review and audit of IT general controls for BCP Council applications identified as relevant to the financial audit.

The report included an overview of the IT audit findings, a summary and detail of each finding, a description of the work undertaken and the recommendations for control improvements. It was reported that there were four assessments of ‘Significant Deficiency’, seven of ‘Deficiency’ and one assessment of ‘Improvement Opportunity’.

The External Auditors explained the background to the audit and its timing and provided information for the Committee about the increasing level of sampling that was now being required.

The Committee was advised of the Council’s management response to all the issues raised within the audit. These comments were set within the context of the ongoing programme of financial systems improvements following the combining of three legacy Councils into the one single Council. It was confirmed that, where practical, immediate action had been taken and plans put in place for other actions and Members were satisfied that an appropriate response was in place. An update on progress with implementation would be circulated to Members or included within the next quarterly report to the Committee.

RESOLVED that the Audit and Governance Committee notes Grant Thornton’s Core Financial System IT Audit Report and the Council’s response to the issues raised.

Voting: Unanimous

 

44.

External Audit - Audit Progress Report 2020/21 & Sector Update pdf icon PDF 233 KB

Grant Thornton, as the Council’s appointed External Auditors, have produced a report which provides an update to Audit & Governance Committee on their progress to date in delivering their responsibilities.

 

The report states that the proposed target completion date for their fieldwork is 30th November 2021 and they aim to give their opinion on the financial statements by the end of December 2021. Reasons (and context) for the delay in issuing the opinion against the target date of 30 September 2021 are included in the report.

 

The report also includes a summary of the ‘What can be learned from Public Interest Reports?’ publication by Grant Thornton, along with a link to the full publication.

Additional documents:

Minutes:

Grant Thornton Update

The Chairman of the Committee read to the Committee the contents of his email to Senior Officers in the light of findings nationally of serious financial failings in respect of the audit by Grant Thornton of the Company ‘Patisserie Valerie’ and it was essential that the Audit and Governance Committee, and the wider public generally, had confidence in the retention of Grant Thornton as the Council’s auditors. A link to the terms of a judgement made against Grant Thornton had subsequently been provided for reference to members of the Committee.

Grant Thornton informed the Committee that they had fully co-operated with the 2018 investigation, and fully accepted its findings. Since then they had invested heavily in improvement of their Commercial Audit systems. Grant Thornton retained a significant involvement in auditing local Councils and had received positive responses to their revised direction of travel in the form of their new approach and supported by the additional training described. A Press Release was expected shortly and a link to this would be circulated to all Members.

A formal response in writing from Grant Thornton to the issues raised by the Chairman was expected through the Head of Audit and Management Assurance and would be made available to the Committee and to Senior Officers to evidence that Grant Thornton had properly responded to the situation and that proper and appropriate reassurances had been provided.

Audit Progress Report

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 'H' to these Minutes in the Minute Book.

The report provided an update for the Committee on progress made by Grant Thornton, as the Council’s appointed External Auditors, in delivering their responsibilities. The report stated that the proposed target completion date for their fieldwork was 30 November with the aim of providing their opinion on the financial statements by the end of December 2021. Reasons for the delay in issuing the opinion against the target date of 30 September 2021 were explained. The report also included a summary of the Grant Thornton ‘What can be learned from Public Interest Reports?’ publication together with a link to the full publication.

RESOLVED that the Audit and Governance Committee notes the External Auditor’s progress to date in delivering their responsibilities and the sector update provided.

Voting: Unanimous

The Chairman thank the representatives from Grant Thornton for their contributions to the meeting.


 

45.

Forward Plan (refresh) pdf icon PDF 215 KB

This report sets out the reports to be received by the Audit & Governance Committee for the 2021/22 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 'I' to these Minutes in the Minute Book.

The Plan set out reports to be received by the Audit and Governance Committee during the 2021/22 municipal year.

The Committee carefully considered the amount of business outstanding and particularly due for completion in time for the meeting of the full Council in January 2022.

RESOLVED that

(a)  an additional meeting of the Committee be held at 6pm on Wednesday 1st December 2021 to receive and consider reports relating to the conclusion of the review of the BCP Council Constitution;

(b)  the additional meeting be a virtual meeting with any decisions arising as a result of consideration of reports at the meeting being deferred until the scheduled meeting of the Committee on the following day;

(c)  the three substantive items on the agenda for the scheduled meeting of the Committee at 6pm on Thursday 2nd December 2021 be ‘Statement of Accounts 2020/21’; ‘Appointment of External Auditor’ and ‘Review of Parks Governance’;

(d)  subject as above, the Audit and Governance Committee approves the forward plan set out at Appendix A.

Voting: Unanimous