Agenda and minutes

Audit Committee - Wednesday, 20 September 2017 6.30 p.m.

Venue: Georgian Room, Kendal Town Hall. View directions

Contact: Inge Booth 

Items
No. Item

AUD/13

Minutes pdf icon PDF 192 KB

To authorise the Chairman to sign, as a correct record, the minutes of the meeting of the Committee held on 26 July 2017 (copy attached).

Minutes:

RESOLVED – That the Chairman be authorised to sign, as a correct record, the minutes of the meeting of the Committee held on 26 July 2017.

AUD/14

Declarations of Interest

To receive declarations by Members of interests in respect of items on this Agenda.

 

Members are reminded that, in accordance with the revised Code of Conduct, they are required to declare any disclosable pecuniary interests or other registrable interests which have not already been declared in the Council’s Register of Interests.  (It is a criminal offence not to declare a disclosable pecuniary interest either in the Register or at the meeting.)

 

Members may, however, also decide, in the interests of clarity and transparency, to declare at this point in the meeting, any such disclosable pecuniary interests which they have already declared in the Register, as well as any other registrable or other interests.

 

If a Member requires advice on any item involving a possible declaration of interest which could affect his/her ability to speak and/or vote, he/she is advised to contact the Monitoring Officer at least 24 hours in advance of the meeting.

Minutes:

RESOLVED – That it be noted that no declarations of interest were raised.

AUD/15

Local Government Act 1972 - Excluded Items

To consider whether the items in Part II of the Agenda should be considered in the presence of the press and public.

Minutes:

RESOLVED – That the items in Part II of the Agenda be dealt with following the exclusion of the press and public.

AUD/16

Strategic Risk No. 16 - Waste Collection Reversing Manoeuvres and Agency Inductions pdf icon PDF 87 KB

Further to AUD/6 (2017/18), to receive an update on waste collection reversing manoeuvres and agency inductions. (Briefing note attached.)

Minutes:

Further to AUD/6 (2017/18), the Assistant Director Neighbourhood Services presented Members with an update on waste collection reversing manoeuvres and agency inductions, with particular regard to Strategic Risk 16 (Waste Collection – Reversing Manoeuvres).  As an example of the work being progressed, he reported that rounds considered to be of highest risk were being prioritised in the Ulverston area.  Lone worker rounds had been assessed and the result was that out of 50 identified “red” manoeuvres, 25 had now been completely eliminated, 23 were down to “amber” and two awaited appraisal.  Work on mitigating measures continued in the Kendal area.

 

The Assistant Director Neighbourhood Services answered questions raised by Members.  The Chief Executive reminded the Committee that some of the reduction in reversing movements related to instances whereby the collection vehicle had previously been unnecessarily driving all the way up to a property and that it was the Council’s policy to collect waste from the curtilage of a property.

 

RESOLVED – That the briefing be noted.

AUD/17

Audit Committee 2017/18 Work Programme pdf icon PDF 102 KB

To consider progress against the Committee’s 2017/18 Work Programme.

Minutes:

The Financial Services Manager presented a report setting out the progress made against the 2017/18 Work Programme.

 

RESOLVED – That the progress against the 2017/18 Work Programme be noted.

AUD/18

Internal Audit Progress Report 2017/18 pdf icon PDF 157 KB

To consider the Internal Audit Progress Report 2017/18 and the outcomes of completed audit reviews.

Additional documents:

Minutes:

The Internal Audit Manager introduced the Internal Audit Progress Report 2017/18.  The report provided a summary of the progress against the Internal Audit Annual Plan to date.

 

The Internal Audit Plan had been approved by the Audit Committee in April 2017. Three reviews had been finalised, with fieldwork having commenced on a fourth.

 

The report also contained the executive summaries of the three audit reports completed in the period: Creditor Payments; Development Control; and Licensing – Premises and Clubs. These reports were presented by the Internal Audit Manager.

 

The Review of Licensing – Premises and Clubs had resulted in a limited assurance assessment. Fifteen action points had been raised and all had been prioritised as ‘important’.

 

In response to queries raised as to when the current licensing IT system was due to be replaced, the Assistant Director Neighbourhood Services explained that the plan was to move across to the Customer Connect platform in the next year.  He further explained that a detailed action plan had been developed, with many of the recommendations having already been addressed.  He confirmed that manual updates were being carried out pending implementation of the new solution and the Principal Food, Safety and Licensing Officer provided details of how the checks were being carried out through SharePoint in the meantime.

 

The Review of the Creditor Payments Arrangements had resulted in a reasonable assurance, with four action points (two important, one routine and one operational).

 

The Review of the Development Control Arrangements had also received a reasonable assurance assessment. Ten action points had arisen from the review, with eight being considered important and two routine.

 

It was noted that the main issues related to the Community Infrastructure Levy process which was relatively new.  It was, therefore, suggested by the Chairman that an update be brought before the Committee in six months’ time.

 

The Internal Auditors had also assessed the extent to which previous internal audit recommendations had been implemented. The report showed that seven recommendations were yet to be implemented but on target, and 17 had not met the target date. Thirty-nine of the recommendations had been implemented and were now considered closed.

 

Some discussion took place with regard to Recommendation No.7 on General IT Controls and the need for all system users to be requested to complete a declaration to confirm their receipt, understanding of and compliance to the IT Acceptable Use Policy.  Members were concerned at the fact that this remained outstanding and, in particular, raised the importance of ensuring that staff not only signed up to but understood the Policy.  Officers confirmed that currently, in addition to new starters, all existing staff had signed the declaration.  Members were informed that technology had moved forward significantly since the current authorisation process had been implemented and that the issue of cybercrime meant that the situation required revisiting.  The Chief Executive undertook to ensure that a report on the subject was brought to a future meeting of the Committee.

 

RESOLVED – That the following be noted:-

 

(1)  ...  view the full minutes text for item AUD/18

AUD/19

Exclusion of Press and Public

Minutes:

RESOLVED – That, under Section 100(A)(4) of the Local Government Act 1972, the press and public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in Part 1 of Schedule 12 A of the Act as amended by the Local Government (Access to Information) (Variation) Order 2006 by virtue of the Paragraphs indicated.

AUD/20

Review of Property Services Records

To consider an update on the review undertaken by Internal Audit during 2016 on property services records.

Minutes:

The Financial Services Manager presented a report which updated the Audit Committee on a review undertaken during 2016 by Internal Audit on property services records.

 

In response to a request regarding the need to ensure the security of the data held by the Council’s new Property Services Contractor, the Chief Executive undertook to make enquiries on the robustness of the systems in place.

 

RESOLVED – That the actions taken be noted.

AUD/21

Re-admission of Press and Public

Minutes:

RESOLVED – That the press and public be re-admitted to the meeting.

AUD/22

Effectiveness of Internal Audit pdf icon PDF 222 KB

To consider a review of the effectiveness of the Internal Audit Service.

Additional documents:

Minutes:

The Financial Services Manager presented a report which provided the Committee with assurance to enable a review of the effectiveness of the Council’s system of Internal Audit.

 

The Accounts and Audit Regulations 2015 included a requirement for the Council to conduct a review of the effectiveness of its system of internal control at least once a year. The internal audit function was a key element of that internal control. For the purposes of the review, the areas of assurance which had been relied upon were as follows:-

 

·        Public Sector Internal Audit Standards;

·        Audit Charter;

·        Head of Internal Audit Opinion – 2016/17; and

·        Performance Indicators.

 

RESOLVED – That the conclusion that the Council has an effective system of internal audit in place that complies with the principles of the Public Sector Internal Audit Standards and has planned improvement activities to ensure full compliance be endorsed.

AUD/23

The External Audit Findings for South Lakeland District Council 2016/17 pdf icon PDF 611 KB

To receive the External Auditor’s opinion of the 2016/17 Accounts.

Minutes:

Note – During consideration of this item of business and in relation to reference made to the Cumbria Pensions Fund, Councillor Stan Collins declared a non-pecuniary interest by virtue of the fact that he was a Member of both the Cumbria Pensions Committee and the Cumbria Pensions Forum.  He remained in the meeting during the discussion and voting on the item.

 

The External Auditor presented the External Audit Findings for South Lakeland District Council for the year ended 31 March 2017. The report highlighted the key findings arising from the audit.  External Audit proposed to issue an audit report including an unqualified opinion on the financial statements.  Mr Farrer answered questions raised by Members.  He pointed out that every co-operation had been received from the Council’s Finance Team and, on behalf of the Committee, the Chairman expressed thanks to External Audit and to the officers involved.

 

The Chief Executive reiterated thanks for the team effort by the Finance Team, the organisation as a whole, and External Audit.

 

RESOLVED – That the External Audit Findings for South Lakeland District Council 2016/17 be noted.

AUD/24

Statement of Accounts 2016/17 and the Annual Governance Statement pdf icon PDF 57 KB

To consider the audited Statement of Accounts and letter of representation, and to authorise the Chairman of the Audit Committee to sign on behalf of the Committee.

Additional documents:

Minutes:

The Chief Accountant introduced the audited Statement of Accounts and Annual Governance Statement for 2016/17. The unaudited Statement of Accounts had been approved by the Assistant Director (Resources) on 13 June 2017 and reported to Audit Committee on 26 July 2017. The accounts had been subject to public inspection from 14 June 2017 where the general public could raise objections, questions and comments with the External Auditor.

 

Legislation required that the accounts be considered and approved by Members and published no later than 30 September 2017. From 2017/18 this deadline would come forward to the 31 July immediately following the relevant financial year end.

 

In addition, the letter of representation required approval and signature by both the Section 151 Officer and Chairman of the Audit Committee and formed part of the overall assurance required by the External Auditor in providing their opinion.

 

The Chief Accountant drew attention to a typographical error at page 162 of the agenda papers, within the Narrative Report and the paragraph entitled Non-current assets.  The figure shown incorrectly as £21.96m had been altered in the final document to read £1.97m.  He also advised Members that the Annual Governance Statement had been signed by the Leader and the Chief Executive.

 

The Assistant Director Resources (Section 151 Officer) took the opportunity to thank the Chief Accountant for his work and congratulated him on his recent appointment at another local authority.

 

RESOLVED – That

 

(1)        the audited Statement of Accounts, as at Appendix 1 to the report, be approved;

 

(2)        the letter of representation, as at Appendix 2 to the report, be approved;

 

(3)        the Chairman of the Audit Committee be authorised to sign the letter of representation and the Statement of Accounts on behalf of the Committee; and

 

(4)        the Annual Governance Statement action plan, as at Appendix 3 to the report, be noted.

 

Note – The Committee adjourned for a short break during which the Chairman and the Assistant Director Resources (Section 151 Officer) signed the letter of representation and the Statement of Accounts.

AUD/25

Review of Anti-Fraud Policy and Activity pdf icon PDF 68 KB

To consider the result of the Audit Committee’s annual review of the Council’s Anti-Bribery, Fraud and Corruption Policy and to consider the draft Counter Fraud Strategy.

Additional documents:

Minutes:

The Financial Services Manager presented the results of the annual review of the Council’s Anti-Bribery, Fraud and Corruption Policy and statistical data on cases where sources of information had indicated that fraudulent activity might have been occurring.

 

The last review of the Anti-Bribery, Fraud and Corruption Policy had been conducted by the Audit Committee in December 2016, with no amendments required. In addition, a Counter-Fraud Assessment Tool had now been produced and was included at Appendix 4 to the report.  A draft Counter Fraud Strategy had also been produced for approval by the Committee.

 

Appendix 3 to the report showed proposed amendments to the Anti-Money Laundering Policy, and the Committee was being asked to recommend these amendments to full Council for approval.

 

Attention was drawn to a grammatical error in paragraph 9.1 of the Anti-Money Laundering Policy at Appendix 3 to the report.  It was suggested that the Policy should include the need to bring to the attention of the Chairman of the Audit Committee significant instances of fraud.  In response to queries raised, the Financial Services Manager confirmed that the Council was active in addressing and tackling fraud and that the correct procedures were being followed.

 

RESOLVED – That

 

(1)        the review of the Anti-Bribery, Fraud and Corruption Policy be noted;

 

(2)        the draft Counter Fraud Strategy, as shown in Appendix 2 to the report, be approved; and

 

(3)        the amendments to the Anti-Money Laundering Policy, as shown in Appendix 3 to the report, be recommended to full Council for approval.

AUD/26

Review of Whistleblowing Policy pdf icon PDF 58 KB

To consider the results of the review of the Council’s Whistleblowing Policy.

Additional documents:

Minutes:

A report on the findings of the review of the Council’s Whistleblowing Policy was presented by the Financial Services Manager. The Policy linked very closely with the Council’s Anti-Fraud and Corruption Policy, a review of which had been considered earlier in the meeting.

 

No issues had been raised under the whistleblowing procedure between the last report in December 2015 and the report being prepared in mid-August 2017.

 

The contact information included within the Policy required updating to reflect the current internal audit contractor.

 

RESOLVED – That

 

(1)        the review of the Whistleblowing Policy, as shown in Appendix 1 to the report, be noted; and

 

(2)        the changes to reflect the current internal audit contractor be approved.

AUD/27

Other Significant Financial Issues

To receive a verbal update from the Assistant Director Resources (Section 151 Officer) on any other significant financial issues.

Minutes:

No other significant financial issues were reported.

AUD/28

Update on Appointment of External Auditors pdf icon PDF 59 KB

To consider the proposal by Public Sector Audit Appointments Ltd to appoint the identified External Auditors.

 

Please also see Part II Appendix 1.

Minutes:

Note – Prior to commencement of discussion on this item of business, John Farrar and Daniel Watson, External Audit, left the room for the remainder of the meeting.

 

The Financial Services Manager presented a report which provided the Audit Committee with an update on the process to select and appoint External Auditors following the closure of the Audit Commission and the end of the transitional arrangements at the conclusion of the 2017/18 audits.

 

As reported to Audit Committee in July 2017, Public Sector Audit Appointments Ltd (PSAA) had begun the process of consulting audited bodies on proposed appointments in August 2017. The PSAA Board would consider all the 2018/19 appointments for approval at its meeting in December 2017, and confirmation letters would then be sent to opted-in bodies.

 

Note – Members voted to exclude the press and public to discuss details of the proposed external auditor.

AUD/29

Exclusion of Press and Public

Minutes:

RESOLVED – That, under Section 100(A)(4) of the Local Government Act 1972, the press and public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in Part 1 of Schedule 12 A of the Act as amended by the Local Government (Access to Information) (Variation) Order 2006 by virtue of the Paragraph indicated.

AUD/30

Update on Appointment of External Auditors - Appendix 1

To consider the proposal by Public Sector Audit Appointments Ltd to appoint the identified External Auditors.

 

Please also see Part I Report.

Minutes:

Members considered details of the proposed external auditor.

 

Note – Following this discussion, Members voted to re-admit the press and public.

AUD/31

Re-admission of Press and Public

Minutes:

RESOLVED – That the press and public be re-admitted to the meeting.

AUD/32

Update on Appointment of External Auditors

Minutes:

RESOLVED – That the proposal by Public Sector Audit Appointments Ltd to appoint the External Auditors identified in the Part II Appendix 1 to the report be endorsed.