Agenda and draft minutes

Audit Committee - Tuesday, 28th September, 2021 6.00 pm

Venue: the Preston Room, Woodgate Chambers, Woodgate, Loughborough. View directions

Items
No. Item

19.

MINUTES FROM THE PREVIOUS MEETING pdf icon PDF 293 KB

The Committee is asked to confirm as a correct record the minutes of the meeting of the Committee held on 8th June 2021.

 

Minutes:

The minutes of the meeting of the Committee held on 8th June 2021 were confirmed as a correct record and signed.

 

The Vice-chair raised the following concerns regarding the previous minutes and requested they be recorded in the minutes:

 

·         the document detailing slippage figures attached to the minutes was missing relevant information; there were no headings in the table or breakdown of the figures as requested and was therefore difficult to understand.

·         a resolution agreed at the last meeting for the exempt item to include purchase prices in future reports had not be actioned for this meeting’s report.

·         this was not considered up to usual standards and it was hoped this could be resolved.

 

20.

DISCLOSURES OF PERCUNIARY AND PERSONAL INTEREST

Minutes:

During the consideration of item 6, Risk Management (Risk Register) update, Cllr Hunt declared a personal interest as the Member of Parliament for Loughborough.

 

21.

QUESTIONS UNDER OTHER COMMITTEE PROCEDURES 12.8

No questions were submitted.

Minutes:

No questions had been submitted.

22.

INTERNAL AUDIT PROGRESS REPORT 2021/22 TO 10TH SEPTEMBER 2021 pdf icon PDF 955 KB

A report of the Head of Strategic Support.

Minutes:

A report of the Head of Strategic Support was submitted summarising the progress against the 2021/22 Audit Plan, outlining key findings from final reports and any outstanding recommendations. (Item 5 on the agenda filed with these minutes).

 

The Audit Manager and Senior Auditor attended the meeting to assist the Committee with the consideration of this item and noted that the progress report covered up to 10th September.  She provided a verbal update as follows:

 

·         Six reports had been issued since the last Committee meeting, three had related to the 2020-21 Audit Plan and had concluded the Plan.  Three related to this year and there were no concerns in relation to working through the Audit Plan at this point.

·         Overdue recommendations were set out in Appendix C  and that as the majority of the reports were issued post January the data was slightly skewed.  However any issues raised were anticipated to be resolved by the next Committee meeting.

·         Reference was made to changes within the Team.  Temporary resources would be recruited for any identified long-term gaps and no disruption was expected to the delivery of the Audit plan.

 

The Committee were advised in response to questions that:

·         Regulations for money laundering no longer covered Local Authorities and it was considered of small risk for Councils.  Although it was not a legislative requirement, it was good practice to have a money laundering policy and one was being drafted for the Council to be completed by end October.

·         with reference to the cleansing exercise and leavers having access to systems revoked, a process was in place but was not always tightly followed.  This did refer to the Housing System and was not related to accessing other Council systems.  It had been recommended that the Service continued to review system users on a quarterly basis.

·         Complaints regarding Tenancy Management and Housing were reviewed by the Audit Team if there were issues but not routinely considered as it was anticipated that any issues would be identified primarily through performance management processes and the current Finance and Performance Scrutiny Committee.  It was noted that previous scrutiny committees had received monitoring reports concerning complaints in this area but these reports had been discontinued when the Committee was superseded.

·         issues raised in the Audit on asset management would be considered by the Asset management team as these related mostly to strategy and guidelines.

·         the outstanding gas servicing contract monitoring recommendation was currently prioritised as medium and the resignation of the Compliance Gas Inspection Surveyor was not considered significant to change the priority of this action.  The recommendation related to a reconciliation between different systems, processes were in place and it was this short-term unexpected event that had delayed the completion of the agreed action.

·         with respect to points raised in audits that had been issued with limited assurance opinions, Services were responsible for having the appropriate processes in place and were given advance notice of the dates of the internal audits.  Senior managers were consulted in detail when  ...  view the full minutes text for item 22.

23.

RISK MANAGEMENT (RISK REGISTER) UPDATE pdf icon PDF 111 KB

A Report of the Strategic Director for Environment and Corporate Services.

Additional documents:

Minutes:

A report of the Strategic Director, Environmental and Corporate Services, was submitted providing the Committee with details of the Strategic Risk Register produced for the period to 2020/21, and also providing information on the risk register that had been compiled to reflect the ongoing COVID-19 situation. (Item 6 on the agenda filed with these minutes).

 

The Strategic Director, Environmental and Corporate Services attended the meeting to assist the Committee with the consideration of this item and drew the Committee’s attention to the risks that the proposed Environmental Services Bill could cause the Council, particularly in respect of the potential requirement to collect food waste and collecting recyclate in a number of streams.  Further clarity would be obtained when the Bill was passed into law next year.

 

The Committee were advised in response to questions that:

·         the risk register would be updated in accordance with progress of the  recommendations from the Internal Audit.

·         although the Strategic Risk register did not include risks relating to underspending or reputational damage, the underspend risks were recognised in terms of the delivery of the Capital Programme at a Strategic Director level.  The funds were still in the budget if projects were not fully delivered within timescales and there had been challenges concerning contractors and the HRA general fund underspends.  The Audit Committee had sight of the risk if the Council did not achieve its objectives and other committees such as the Budget Scrutiny Panel would consider these matters in further detail.

·         regarding the risks rated as red indicating financial gaps, this would not be resolved through an increase in Council tax, as the Government’s Council Tax capping rules would restrict any increase.  If there was a severe civic contingency the Government would enable the Council to access emergency funds through the Bellwin Scheme.

·         in general funding could be obtained to convert the inherent risks identified to amber, but in some cases the issues could not be resolved fully by money.

 

RESOLVED that the report be noted.

 

Reason

 

To ensure the Committee is kept informed of progress against the strategic risks that should they crystallise would cause the Council to be unable to operate and/or provide key services leading to a significant adverse effect on public wellbeing, and also about the COVID-19 risk register.

24.

COUNCIL'S USE OF REGULATORY OF INVESTIGATORY POWERS ACT (RIPA) pdf icon PDF 100 KB

A report of the Head of Strategic Support.

Minutes:

A report of the Head of Strategic Support was submitted providing the Committee with a summary of the Council’s use of RIPA powers (item 7 on the agenda included with these minutes).

 

The Head of Strategic Support noted that the inspection by the officer of the Surveillance Commissioner in relation to its RIPA processes and arrangements had been completed and had identified that policies required minor updating.  In addition it had recommended that officers undergo refresher RIPA training but noted that the powers had not been used for 10 years so training would be light touch.

 

RESOLVED that the Committee noted that there had been no use of RIPA powers by the Council for the period from 1st June 2021 to 31st August 2021.

 

Reason

 

To enable the Committee to comply with the request from Cabinet that the Audit Committee assumes responsibility for receiving a quarterly report on the use of RIPA, and to report to Cabinet any concerns arising from those reports that may indicate that the use of RIPA is not consistent with the Policy or that the Policy may not be fit for purpose.

25.

EXTERNAL AUDIT PROGRESS REPORT AND TECHNICAL UPDATE pdf icon PDF 307 KB

A report of the External Auditors.

Minutes:

A report of the External Auditors providing a progress report and technical update was submitted to the Committee for consideration. (Item 8 on the agenda filed with these minutes).

 

Mark Surridge from Mazars attended the meeting via video-link and assisted with the item.  The Chair had confirmed that Mark could see and hear the proceedings when he joined the meeting.

 

He noted that there were no new risks to bring to the Committee’s attention.  There were some challenges regarding substantial pension movements and an updated valuation had been obtained for the Council’s account, but it would not impact the General Fund. The timelines were affected as the auditors had not yet received instructions to certify the audit from the National Audit Office.  The Annual Auditors report was new and it was still anticipated officially it should be completed by 30th September.  However the guidance had been issued pre-COVID and it was unlikely to until November but was consistent with other clients.

 

The Committee were advised in response to questions that:

·         it was unlikely that the Committee would go back to its usual audit cycle in 2022 as the cumulative effect of the COVID pandemic were still being felt.

·         the Statutory deadline for publishing accounts would continue to be 30th September 2022 but it was doubtful that many authorities would be in a position to do so as the ability to regain lost time during 2021 was unlikely.

·         there was a shortage of auditors being recruited which also caused delays.

 

The Committee was advised to keep to its current Audit timetable and to progress thorough 2021 until further clarity could be obtained regarding timelines for 2022.

 

RESOLVED That the Committee noted the report.

 

Reason

 

To acknowledge the Committee’s consideration of this item.

26.

WORK PROGRAMME pdf icon PDF 118 KB

Report of the Head of Strategic Support.

Minutes:

A report of the Head of Strategic Support was submitted to enable the Committee to consider its work programme (item 9 on the agenda filed with these minutes).

 

The Head of the Strategic Support noted the following:

 

·         that the Annual IT Health Check had slipped due to COVID and was scheduled to be submitted to the Committee’s meeting in February 2022.

·         that the ‘Future of Local Public Audit’ item be renamed as ‘Appointment of External Auditors’ and that a report be considered by the Committee at its meeting scheduled in November 2021 in order to meet the timescales for appointing external auditors.  The Committee would be requested to approve the Council joined the National Pool arrangement for recommendation to full Council in early 2022.

·         that the Policy for Engagement of External Auditors for non-audit work had been agreed in March 2013 and that it would be timely for the Committee to consider this at its November 2021 meeting.

 

There were no issues that the Committee wished to forward to the Scrutiny Commission from this meeting.

 

RESOLVED that the Committee proceeds on the basis of its work programme with the following amendments:

 

·         that the ‘Future of Local Public Audit’ item be renamed as ‘Appointment of External Auditors’ and that a report be scheduled to the Committee’s meeting in November 2021;

·         that the Policy for Engagement of External Auditors for non-audit work be scheduled to the Committee’s meeting in November 2021.

 

Reason

 

To enable the Committee to identify future items of business and enable planning for future meetings to be undertaken, for example preparing reports and arranging for the attendance of officers and /or others at meetings.

27.

EXEMPT INFORMATION

It is recommended that members of the public be excluded from the meeting during the consideration of the following item on the grounds that it will involve the likely disclosure of exempt information as defined in Paragraph 3 of Part 1 of Schedule 12A to the Local Government Act 1972 and it is considered that the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

Minutes:

It was resolved that members of the public be excluded from the meeting during the consideration of the following item on the grounds that it involved the likely disclosure of exempt information as defined in Paragraph 3 of Part 1 of Schedule 12A to the Local Government Act 1972, and the public interest in maintaining the exemption outweighed the public interest in disclosing the information.

 

At this point in the meeting the recording was stopped.

28.

INVESTMENT PERFORMANCE REPORT - Q1 2021/22

An exempt report of the Strategic Director for Commercial Development, Assets and Leisure, circulated to members of Committee. To Follow.

Minutes:

An exempt report of the Strategic Director for Commercial Development, Assets and Leisure (Exempt item 11 on the agenda filed with these minutes).

 

A summary of the Committee’s discussion on this matter is provided in the exempt minute (Audit Committee 28E. 2020/21)

 

RESOLVED

1.    that decisions be made as detailed in the exempt minute (Audit Committee Minute 18E 2020/21);

 

2.    that a briefing regarding the Asset Management Strategy be arranged for all councillors prior to it being submitted to Cabinet;

 

3.    that the exempt report of the Audit Committee be noted.

 

Reasons

 

1.    As set out in the exempt minute (Audit Committee Minute 28E 2021/22).

 

2.    Members considered that information held within the Asset Management Strategy was of an important nature and wished to be briefed on the matter before considering it in its entirety at a meeting of the Audit Committee.  Members also considered it would be relevant for all councillors to be briefed in this matter.

 

3.    Such that the activity be known and transparent as well as illustrating the impact of the activity on the Council.