Agenda and minutes

To receive Apologies for Absence from Committee members. 

Apologies for Absence were received from Councillor Brian Milnes.

Councillor John Batchelor declared a non-pecuniary interest as an unpaid Director of Ermine Street Housing Limited.

To confirm the minutes of the meeting held on 30 July 2019 as a correct record.

The minutes of the meeting held on 30 July 2019 were agreed as a correct record subject to the amendment of the end of the paragraph under the heading “Honest reporting” in minute 4 to read:

“Councillor Heather Williams suggested that the Committee should be concentrating more on the future than making political points regarding the past. Councillors Eileen Wilson stated it was necessary to examine the past to inform the future. Both councillors expressed an interest in sitting on the Task and Finish Group.”

The Head of Shared Internal Audit presented this report, which updated the Committee on the work of Internal Audit between April and September 2019.

Audit of HRA – Voids and lettings

It was noted that this audit in progress was on a sensitive issue that generated much local interest. There were no significant issues to report.

Audit service assessed by the Public Sector Internal Audit Standards

It was noted that in 2018 CIPFA had assessed the Council to the Public Sector Internal Audit Standards (PSIAS) and ruled that we Generally Conform with these standards, which was the highest rating that could have been awarded.

Programme assurance

The Head of Shared Internal Audit explained that the actions relating to programme assurance were being addressed. The implementation of Council Anywhere would greatly assist this.

The Committee NOTED the report.

The Principal Accountant (General Fund and Projects) presented this report, which invited the Committee to conduct its annual review of the Risk Management Strategy. It was noted that the Strategy had been approved by the Executive Management Team.

Risk appetite

It was suggested that the Council’s baseline of risk before taking action was too low at £50,000 for the authority to take advantage of investment opportunities. It was explained that this baseline figure did not apply to investments and the authority evaluated risks when making decisions on possible investments. The Committee recommended that the Risk Management Strategy include a figure in paragraph 3.3 that could be universally applied.

Risk Management Process - Paragraph 6.1.3

The Committee recommended to EMT that paragraph 6.1.3 of the Risk Management Process be re-written as it did not make grammatical sense.

The Committee AGREED  the revised Risk Management Strategy, with the above amendments.

The Head of Finance presented this report, which invited the Committee to consider whether to appoint an independent person to its membership. It was noted that an appointment would have to be agreed by Council.

Members of the Committee made the following points:

·         It was unclear what additional benefit an independent members could bring to the Committee.

·         The Council would find it difficult to attract a person of suitable calibre for this position.

·         It was unlikely that the allowance that would be offered for the position would prove much of an incentive.

The Committee resolved not to recommend the appointment of an independent member at this time, but to review this issue annually.

The Chairman brought this matter forward to item 4 on the agenda.

Capacity of External Auditors

Suresh Patel from Ernst & Young acknowledged the Council’s frustration regarding the 2017/18 accounts. He assured the Committee that Ernst & Young had recently recruited a number of new staff to ensure that the company delivered the expected quality of service. It was understood that some of the new staff would require training. He noted that the Council had expressed concerns to the Public Sector Accounts Authority and he reported that these concerns had been passed to Ernst & Young.

Resolving queries

Suresh Patel reported that visits by Ernst & Young in early August had resulted in queries that had not been responded to in a timely way. This had led to further delays. The external auditors now planned to visit the Council in early November and all being well will complete the audit of the 2017/18 accounts by the end of November. It was noted that significant adjustments had been made and the group accounts needed to be prepared.

In response to questioning, Suresh Patel explained that it was impossible to know how many additional queries the external auditors would raise on the 2017/18 accounts.

The Head of Finance explained that the outstanding queries had been resolved and the group accounts would not take long to complete. He also reported that the significant adjustment was a favourable one for the Council and had been made to the 2017/18 accounts. He also acknowledged that there had been some communication issues with Ernst & Young. The Council had employed temporary staff to assist with this process.

Identifying errors

Following a brief discussion the Committee acknowledged that the External Auditors could not be expected to uncover all errors in the accounts. It was noted that the External Auditors have a minimum figure to define what is considered a material concern.

Actions

It was noted that at its previous meeting the Committee had asked Ernst & Young to provide the details of the necessary work required to sign off the 2017/18 accounts with an explanatory comment and a rating on current status of each relevant factor. Suresh Patel was reminded that he had previously agreed to provide the Committee with an effective audit toolkit and training on the investment strategy.

The Head of Finance agreed to ascertain when the next housing re-evaluation was taking place.

Update on the 2018/19 and 2019/20 Accounts

Suresh Patel explained that that aim was to complete the audit of the 2018/19 accounts by the end of January and then start work on the 2019/20 accounts to have them completed by the June deadline. It was noted that the 2018/19 accounts required a starting balance from the 2017/18 accounts and that Ernst & Young had not carried out any preparatory work on either the 2018/19 accounts or the 2019/20 accounts. The Head of Finance considered the end of February 2020 to be a more realistic target for the signing off of the 2018/19 accounts than January 2020.

Task and Finish  ...  view the full minutes text for item 7.

The Committee requested that in future the information from the Ombudsman be accompanied by some explanatory text. It was noted that the letter from the Ombudsman had been addressed to the previous Chief Executive.

Tracking Action Points made by the Committee

The Head of Shared Internal Audit presented an action list to the Committee. This was well received and it was agreed that all the Committee members should be sent an electronic copy.

Concerns were expressed regarding the Council’s current phone system, which needed to be replaced.

It was agreed that this should become a standing item at every meeting.

Liaising with the Scrutiny and Overview Committee

Councillor Heather Williams explained that the Task and Finish Group had recommended that the Committee liaise with the Scrutiny and Overview Committee to ensure that there was no duplication of effort.

Regulation of Investigatory Powers Act (RIPA)

The Deputy Head of Legal reported that the Council had not used the RIPA during the last quarter.

It was noted that the next meeting of the Committee would be held on Tuesday 26 November at 9:30am.

The next meeting of the Auditing of Accounts Task and Finish Group would be held in early October. It was agreed that a representative of the PSAA should be invited to attend. The Chairman agreed to contact the PSAA and then inform the Committee of the subsequent meeting date. The following meeting of the Task and Finish Group was scheduled for Thursday 14 November at 3pm. It was agreed that Suresh Patel from Ernst & Young should be invited to attend this meeting.