Agenda and minutes

Audit Committee - Wednesday, 25 July 2018 6.30 p.m.

Venue: District Council Chamber, South Lakeland House, Kendal. View directions

Contact: Inge Booth 

Items
No. Item

AUD/1

Minutes pdf icon PDF 101 KB

To authorise the Chairman to sign, as a correct record, the minutes of the meeting of the Committee held on 19 April 2018 (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 19 April 2018.

AUD/2

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 Councillor Kevin Lancaster declared an interest, on behalf of himself and Councillor Sheila Capstick, in Minute No. AUD/5.

AUD/3

Local Government Act 1972 - Excluded Items

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

Minutes:

RESOLVED – That it be noted that there are no excluded items on the Agenda.

AUD/4

Terms of Reference pdf icon PDF 59 KB

To note the Terms of Reference for the Audit Committee, as attached.

Minutes:

RESOLVED – That the Terms of Reference for the Audit Committee be noted.

AUD/5

Internal Audit Progress Report 2018/19 pdf icon PDF 70 KB

To consider the Internal Audit Progress Report 2018/19 and three Internal Audit Reports.

Additional documents:

Minutes:

Note – Councillor Kevin Lancaster, on behalf of himself and Councillor Sheila Capstick, declared a non-pecuniary interest in this item by virtue of the fact that the Bereavement Services Officer was known to them. Both councillors remained in the meeting during discussion and voting on the item.

 

At the last meeting of the Committee held on 19 April 2018, officers had been requested to attend the Committee to address concerns raised with regard to outstanding recommendations identified by Internal Audit in relation to Bereavement Services (AUD/52 2017/18 refers). A report on the subject had been circulated to Members prior to the meeting. The Principal Community Spaces Officer, Community and Leisure, presented a report and explained that the delay in completing the Parks and Open Spaces Strategy had not affected the bereavement service or the opportunity to seek improvements in service delivery.

 

The Assistant Director Neighbourhood Services informed Members that plans were in place to recruit a consultant to assist with the production of the Parks and Open Spaces Strategy, which would consider a number of options and would include the views of Members and communities and following consultation with Overview and Scrutiny, a report would be produced in spring 2019.

 

Discussion took place with regard to the equality of the provision of cemeteries throughout the district and it was highlighted that a number of Parish Councils carried out activities including burial provision and maintenance of cemeteries and others were keen to carry out the provision of services under appropriate arrangements with South Lakeland District Council. Members requested that the equality of provision of services be considered as part of the Parks and Open Spaces Strategy.

 

The Internal Audit Manager introduced the Internal Audit Progress Report 2018/19.  The report provided a summary of the progress against the Internal Audit Annual Plan to date.

 

The report detailed that, following the Internal Audit Plan’s approval by the Committee in April 2018, three reviews had been finalised.  The reviews for Debtors, Treasury Management and Budgetary Control were due to commence in July 2018, and Procurement in August 2018.  At the meeting, the Internal Audit Manager provided an update, informing Members that the Treasury review had been completed and the report would be produced this week. Members were advised that the Annual Plan was on track and the review of Use of Agency, Interim and Casual Workers and Customer Connect would be completed by the end of March 2019.

 

The report also contained the executive summaries of the three audit reports completed in the period: Council Tax, Lake Services – Moorings and Encroachments, and Awarding of Grants. These reports were also presented by the Internal Audit Manager.

 

She informed Members that the Assurance Review of Council Tax had received Substantial Assurance and testing indicated that Council Tax arrangements were accurate, timely and in compliance with legislation.

 

The Assurance Review of Lake Services – Moorings and Encroachments, had received Reasonable Assurance, with three important action points having been identified. Recommendations had been made to develop proper  ...  view the full minutes text for item AUD/5

AUD/6

Audit Committee 2018/19 Work Programme pdf icon PDF 56 KB

To consider progress against the Committee’s 2018/19 Work Programme.

Minutes:

RESOLVED – That the progress against the 2018/19 Work Programme be noted.

AUD/7

Risk Management Update pdf icon PDF 57 KB

To consider the Strategic Risk Register.

Additional documents:

Minutes:

The Performance and Risk Officer presented the latest Strategic Risk Register. The Register contained all those risks above and below the line of risk tolerance.  He explained that risks above tolerance were reviewed quarterly and those below tolerance were reviewed annually. The number of strategic risks above risk tolerance had reduced from six to four over the last twelve months, which meant that over 70% of the Strategic Risks were now positioned below risk tolerance, demonstrating the effective mitigation and regular review of the risks. He highlighted that an example of effective risk management was the Business Continuity risk which had previously been positioned above tolerance. This risk had been reduced and archived through the implementation of several strategic level business continuity arrangements.

 

Members suggested that the Medium Term Financial Plan may have a higher impact than indicated on the risk matrix and Officers undertook to review the risk in terms of likelihood and impact regarding future uncertainty over Government spending reviews. In response to a query, Members were advised that the Customer Connect Programme existed on the Strategic Risk Register as Risk No. 15.

 

RESOLVED – That the Strategic Risk Register, as at Appendix 1 to the report, be noted.

AUD/8

Statement of Accounts and Annual Governance Statement 2017/18 pdf icon PDF 76 KB

To consider the Statement of Accounts for 2017/18.

 

(Appendices to follow).

Additional documents:

Minutes:

The Financial Services Manager introduced the audited Statement of Accounts and Annual Governance Statement for 2017/18 and Appendices 1, 2 and 3, which had been circulated to Members prior to the meeting. The unaudited Statement of Accounts had been approved by the Assistant Director (Resources) on 28 May 2018. The accounts had been subject to public inspection from 1 June 2018 allowing the opportunity for the general public to raise objections, questions and comments with the External Auditor. Legislation required that accounts be considered and approved by Members and published no later than 31 July 2018.

 

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.

 

Members expressed their appreciation to Officers for their hard work in producing the Statement of Accounts and requested that their thanks be placed on record.

 

RESOLVED – That

 

(1)        the audited Statement of Accounts for 2017/18 including the up-dated Accounting Policies, 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.

AUD/9

External Auditor's Findings Report pdf icon PDF 751 KB

To consider a summary of the External Auditor’s findings to date and emerging issues and developments that may be relevant to the Council.

 

(Report to follow).

Minutes:

John Farrer, External Auditor Engagement Lead, presented the Audit Findings report, which had been circulated to Members prior to the meeting. The report set out the Audit Findings for the year ending 31 March 2018 and provided Members with observations made by Grant Thornton in delivering their responsibilities as the Council’s external auditors. The report also set out emerging issues and developments that were relevant to the Council.

 

The Auditors anticipated issuing an unqualified audit opinion following resolution of outstanding queries and that they were satisfied that the Council had put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2018.

 

Members welcomed the report.

 

RESOLVED – That the Audit Findings made by the External Auditors for the year ending 31 March 2018 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/10

Planned Audit Fee for 2018/19 pdf icon PDF 214 KB

To consider a letter from External Audit on the planned audit fee for 2018/19.

Minutes:

Jillian Burrows, the External Audit Senior Manager, presented a letter from Grant Thornton on the planned audit fee for 2018/19. Public Sector Audit Appointments Limited had set the 2018/19 scale audit fees and following a consultation process individual scale fees had been reduced by 23 percent from 2017/18. The Council’s scale fee for 2018/19 had been set by PSAA at £43,005. The audit planning process for 2018/19, including the risk assessment, would continue as the year progressed.

 

RESOLVED – That the Annual Audit Fee for 2018/19 be noted.

AUD/11

Internal Audit Annual Report 2017/18 pdf icon PDF 60 KB

To consider the Internal Audit Annual Report 2017/18, the progress achieved in delivering the 2018/19 Audit Plan and the outcomes of completed audit reviews.

Additional documents:

Minutes:

Jane Butterfield, Internal Audit Manager, introduced the 2017/18 Internal Audit Annual Report. The report provided a summary of the outcomes of the work of the Internal Audit and included the Head of Internal Audit’s opinion on the effectiveness of the Council’s arrangements for risk management, governance and internal control in accordance with requirements of the Public Sector Internal Audit Standards (PSIAS).

 

An interim Head of Internal Audit opinion which informed the Annual Governance Statement had been presented to the Audit Committee on 19 April 2018:- (Minute AUD/52 (2017/18) refers).

 

RESOLVED – That the following be noted:-

 

(1)        the Head of Internal Audit’s opinion of reasonable assurance on the Council’s overall systems of governance, risk management and internal control for the year ended 31 March 2018, as at Appendix 1 to the report;

(2)        the progress achieved in 2017/18 in delivering the Audit Plan and the outcomes of completed audit reviews, as at Appendix 1 to the report;

(3)        the Head of Internal Audit’s declaration of Internal Audit independence, as required by the mandatory PSIAS; and

(4)        the Head of Internal Audit’s declaration of conformance with the mandatory PSIAS.

AUD/12

Audit Committee Risk Register pdf icon PDF 57 KB

To consider the updated Audit Committee Risk Register.

Additional documents:

Minutes:

The updated Audit Committee Risk Register was presented by the Financial Services Manager. The Risk Register had last been reviewed by the Committee on 6 December 2017 and the recommendations from that meeting had been included within the update.

 

The Financial Services Manager highlighted the three current risks and made particular reference to Risk AC 1 (The challenge from the committee is ineffective due to inexperience). It was proposed, due to Audit Committee having four new inexperienced Members, that the likelihood be increased from very low to low. Risk AC 3 (The Council fail to meet the tighter timescales for the preparation of final accounts from 2017/18 onwards). The completion of the 2017/18 final accounts had been achieved within the tighter statutory timescales. However, it was proposed that there be no change to the assessment as it was anticipated that there would be technical issues next year.

 

RESOLVED – That the updated Audit Committee Risk Register be noted.

AUD/13

Customer Connect Programme pdf icon PDF 55 KB

To consider the Customer Connect Programme.

Additional documents:

Minutes:

Council, at its meeting on 24 July 2018, had approved the Customer Connect Programme Business Case, including the new operating model for the Council (Minute C/26 (2018/19) refers).  The report was now being brought to Audit Committee to allow Members an opportunity to further discuss the Business Case and the governance and assurance arrangements in place to support the Programme.

 

The Director People and Places and the Partnerships and Organisational Development Manager informed Members that they were the Customer Connect Project Sponsor and the Customer Connect Programme Manager respectively. Together, they delivered a PowerPoint presentation which focused on the Programme management, governance, controls and the costs and benefits of the Customer Connect Programme.

 

They concluded their presentation by informing Members that the Customer Connect Programme was compliant with the General Data Protection Regulations and supported the Government Local Digital Declaration announced at the Local Government Association Annual Conference in July.

 

Discussion took place and Officers answered questions. It was agreed that Officers would attend quarterly meetings to update Members on the programme risks and spend against budget. The first meeting would review all 39 risks and thereafter those risks above the line of appetite.

 

RESOLVED – That the Customer Connect Programme Business Case and the governance and assurance arrangements in place to support the Programme be noted.

AUD/14

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.