Agenda and minutes

3.1             The evacuation procedure, as noted on the Agenda, was advised to those present.

3.2             The Chair welcomed David Johnson, Grant Thornton’s Audit Manager for Tewkesbury Borough Council, to the meeting. 

4.1             Apologies for absence were received from Councillors A J Evans and B C J Hesketh.  There were no substitutions for the meeting. 

5.1             The Committee’s attention was drawn to the Tewkesbury Borough Council Code of Conduct which was adopted by the Council on 26 June 2012 and took effect from 1 July 2012.

5.2             There were no declarations made on this occasion.

To approve the Minutes of the meetings held on 22 March and 16 May 2017.

6.1             The Minutes of the meetings held on 22 March and 16 May 2017, copies of which had been circulated, were approved as correct records and signed by the Chair. 

To consider the Audit Committee Work Programme.  

7.1            Attention was drawn to the Audit Committee Work Programme, circulated at Pages No. 12-18, which Members were asked to consider.

7.2            The Head of Corporate Services indicated that work on the review of the Council’s overall risk management arrangements would commence shortly and would include training for Members and Managers.  It would ultimately lead to the development of a new Risk Management Strategy and Corporate Risk Register which would be monitored by the Audit Committee on a quarterly basis.  It was not feasible to bring this to the next meeting of the Committee but it was hoped it would be ready by the end of the year and the work programme would be updated to move this item from 21 September to 13 December accordingly. 

7.3            A Member noted that a number of items relating to the Statement of Accounts 2016/17 had been deleted from the Agenda for today’s meeting.  She understood that these items had originally been brought forward from September in preparation for the early closure of accounts the following year and she raised concern that this had not been achieved.  The Head of Finance and Asset Management confirmed that these items had been brought forward to test preparedness for the forthcoming year.  From the Council’s point of view, the accounts had been closed on time at the end of May; however, the external auditors had not been able to audit the accounts in time for them to come to today’s meeting.  Clearly next year it would be crucial to meet the deadlines and Officers would need to work with Grant Thornton to achieve this.  The Audit Manager from Grant Thornton reiterated that it had originally been agreed that the accounts would be submitted to the present meeting in order to ensure they were signed-off by 31 July, in line with the new regulations for 2017/18.  Unfortunately, due to resourcing issues and people leaving the organisation, Grant Thornton had approached certain Councils to establish whether there was any flexibility to extend these deadlines.  On the basis that a meeting date had already been set for the Tewkesbury Borough Council Audit Committee in September which would ensure that the national deadline for 2016/17 was still achieved, the Head of Finance and Asset Management had agreed to an extension.  The early closure of the accounts was two-fold; partly to test the Council’s ability to meet the new deadlines - which Tewkesbury Borough Council had achieved - and to check for any major issues.  The accounts were currently in the process of being analysed and early indications were that the quality was of the same high standard as in previous years.  He provided assurance that, had the statutory deadline for this year been 31 July, alternative arrangements would have been made to ensure this was attained and procedures were currently being put in place to make certain that adequate resources would be available to meet this deadline going forward.

7.4            It was

RESOLVED          That the Audit Committee Work Programme be  ...  view the full minutes text for item 7.

8.1             Attention was drawn to Grant Thornton’s progress report, circulated at Pages No. 19-32, which set out the progress that had been made in relation to the Audit Plan, together with any emerging national issues and developments that might be relevant to the Borough Council.  Members were asked to consider the report. 

8.2             Pages No. 22-23 of the report set out the work being undertaken by Grant Thornton for 2016/17.  It was noted that the Audit Plan had been considered at the last Audit Committee meeting in March and the interim accounts audit had also been completed in accordance with the planned timetable.  As discussed under the previous Agenda Item, the final accounts audit would now go to the September Audit Committee meeting; it was intended to complete the work by early August, as close to the 31 July deadline as possible.  Work on the value for money conclusion was still underway.  The initial risk assessment had been completed in respect of the value for money conclusion and the significant risk identified in relation to Ubico contract monitoring had been reported in March.  A follow-up meeting was taking place later that week to discuss the ongoing position with the management of the contract and an update would be provided at the Audit Committee meeting in September.  It was noted that work on the housing benefit grant claim would be finished by the end of September at the latest. 

8.3             A Member sought assurance that any issues identified during the work carried out by Grant Thornton would be highlighted to Members.  The Audit Manager from Grant Thornton explained that it was not appropriate for such issues to be included in the progress report; any findings from the interim work would be reported in the Audit Plan.  The findings tended to be finance-focused and more for attention rather than action.  If issues were identified in the accounts audit or the value for money work, normal practice would be to discuss them with the Head of Finance and Asset Management or responsible officer.  Any recommendations would then have a management response for presentation to the Audit Committee so Members could be assured that appropriate measures were being put in place and this should be monitored by the Committee going forward.

8.4             It was

RESOLVED          That the Grant Thornton progress report be NOTED.

To consider the external auditors’ fee letter in relation to the audit work to be undertaken during 2017/18. 

9.1             Attention was drawn to Grant Thornton’s fee letter, circulated at Pages No. 33-36, which set out the proposed fee for 2017/18, together with the scope and timing, for the work.  Members were asked to consider the fee letter.

9.2             The Audit Manager from Grant Thornton explained that the scale fee for 2017/18 was £44,921 - the same as the previous year and a reduction on the 2015/16 fee.  The fee covered audit of the Council’s financial statements; the value for money conclusion; and work on the whole government accounts return.  The timetable had changed, with reporting dates being brought forward, and this was outlined at Page No. 35.  It was noted that the key members of the audit team for 2017/18 were due to stay the same at this stage.  Particular attention was drawn to the fact that the housing benefit certification fee was to be confirmed pending formal notification of the Public Sector Audit Appointments (PSAA) established grant fee for 2017/18 and an update would be provided at the September Audit Committee meeting.

9.3             A Member raised concern that there should be some consistency in terms of the audit team and he questioned whether it was possible to ensure that at least one team member remained the same.  The Audit Manager from Grant Thornton provided assurance that every effort was made to keep the same team together as this helped with continuity and, as far as he was aware, there were no plans to change the team for the forthcoming year.  In response to a query as to whether there was any scope to reduce the external audit fee, the Head of Finance and Asset Management indicated that a report had previously been brought to the Committee regarding the appointment of external auditors for the forthcoming financial year.  At that time, the Audit Committee had considered three broad options and had recommended to Council that it opt-in to PSAA - the Sector Led Body for the independent appointment of auditors for principal authorities in England - from 2018/19.  This option had been approved by the Council in January and the tender process had now been completed with auditors appointed via lots.  Grant Thornton had won the biggest lot and had been awarded 40% of the work, followed by Ernst and Young with 30%.  Tewkesbury Borough Council would find out who had been appointed as its external auditor in the autumn.  It was noted that the fee would be reduced by around 18% under the new contract.  A Member sought more information as to how the external auditors were appointed and the Head of Finance and Asset Management clarified that the Council could have opted to make its own appointment; however, Officers believed that the most cost effective and efficient route was to opt-in to the Sector Led Body arrangement which 97% of local authorities had done.  PSAA took into account any feedback from local authorities or particular circumstances, e.g. where there were shared arrangements with other local authorities,  ...  view the full minutes text for item 9.

To consider the progress made in respect of the recommendations arising from the bulky waste audit.  

10.1           The report of the Head of Community Services, circulated at Pages No. 37-43, provided an update in relation to the recommendations arising from the trade waste audit.  Members were asked to consider the progress that had been made.

10.2           The Head of Community Services explained that, in addition to collecting furniture and bulky items from domestic properties, the bulky waste collection service also operated as a bin and caddy delivery service.  The audit of the bulky waste collection service had been carried out in 2016/17 and highlighted a number of areas of improvement, the main two being in relation to the cost of the service and waiting times.  A review of the charges had subsequently taken place and all standard charges had been increased from £20 to £22.  Residents in receipt of housing or council tax benefit were entitled to a 50% reduction so the charge for this had increased from £10 to £11.  Moving forward, the fees would be reviewed annually in accordance with the Fees and Charges Strategy approved by the Executive Committee in April 2017.  In terms of service delivery and lead times for collection and delivery, Members were informed that the service had been unable to meet the level of demand in June 2016 with the average waiting time rising to 40 days.  Additional collections had been provided to deal with the back log and changes had been made to the way the service operated which had reduced average bin delivery time to between one and two weeks, and bulky waste collections from seven weeks to less than four weeks; in some areas it was as little as two weeks.  Importantly, service lead times was a standing item on the Agenda for the Ubico and Customer Services team meeting to ensure that they were regularly monitored and, where a trend appeared to be leading to a backlog, the team could make changes to address this.  A new policy was currently being prepared with Ubico to work in advance to deliver bins when new developments came on line.  The Head of Community Services acknowledged that there was still work to do but significant progress had been made since the audit.

10.3           A Member was pleased to see the reduction in waiting times, particularly as there was often a correlation between bulky waste collection and fly-tipping and he indicated that he would welcome a piece of work on the relationship between the two.  The Head of Community Services confirmed that there was a known connection between bulky waste collection and fly-tipping but investigating that further would require significant resources and he felt that it would be beneficial to wait until the changes were fully embedded whilst giving an assurance that fly-tipping would be closely monitored.  The Member queried whether the Customer Services team asked people where they were storing their bulky items whilst awaiting collection as fly-tipping may be encouraged if customers left items outside their house on a public footpath.  The Head of Community Services explained  ...  view the full minutes text for item 10.

To consider the Internal Audit work undertaken and the assurance given on the adequacy of internal controls operating in the systems audited.

11.1           The report of the Head of Corporate Services, circulated at Pages No. 44-65, was the final monitoring report of the financial year and detailed the findings of Internal Audit for the remaining audits within the Audit Plan 2016/17.  Members were asked to consider the audit work completed and the assurance given on the adequacy of internal controls operating in the systems audited.

11.2           Members were advised that full details of the work undertaken were attached at Appendix 1 to the report and a list of audits within the 2016/17 Audit Plan, and their progress to date, could be found at Appendix 2 to the report.  With regard to the debtors audit, the Head of Corporate Services advised that this was a key financial system and income stream for the Council.  As it was an established system there was an expectation that it would be well-managed and this had been confirmed by the audit and the ‘good’ level of assurance identified.  In respect of the safeguarding audit, the Council had an up-to-date policy which had been approved by the Executive Committee in November 2016.  The policy was available to staff and Members through the intranet; however, there were some recommendations around making sure that the information was embedded in the heart of the organisation.  In terms of awareness, whilst staff were required to undertake compulsory online training, it was suggested that it should be relevant to job role, for example, auditors may not need the same level of training as someone working in housing, and this was being considered by the management team.  It was noted that the importance of safeguarding was recognised through its inclusion within the Community Portfolio and a designated safeguarding officer reported to the Lead Member on a regular basis.  Further consideration needed to be given to the level of training volunteers should receive, for instance, volunteer litter pickers who were frequently out and about in the community.  A decision had been taken in October 2016 to make safeguarding training mandatory for all licenced taxi drivers and some recommendations had been made around updating the website and application form to reflect this. 

11.3           A ‘limited’ opinion had been given in relation to the audit on information governance as it was considered that the overarching Information Governance Policy should be supported by a number of more detailed policies and codes of practice that related to particular risk areas.  At the time of the audit, 11 policies were due for review and a number required updating; this would need to be done to ensure compliance with the General Data Protection Regulations (GDPR) coming into force in May 2018 and it was noted that a dedicated officer had been appointed, and an action plan drawn up, to support that.  Furthermore, recommendations had been made around the documentation and handling of Environmental Information Regulations (EIR).  The Head of Corporate Services explained that there had been no corporate plan of action for the GDPR at the time the recommendations for the  ...  view the full minutes text for item 11.

To consider the Internal Audit Annual Report 2016/17 and the assurance from the work undertaken during the year on the level of internal control within the systems audited.

12.1           Attention was drawn to the report of the Head of Corporate Services, circulated at Pages No. 66-72, which provided Members with a summary of the internal audit work undertaken in 2016/17, together with an opinion on the overall adequacy and effectiveness of the organisation’s control environment.  Members were asked to consider the report and the assurance that, overall, there was a satisfactory level of assurance in relation to the effectiveness of the Council’s framework of governance, risk management and control.

12.2           Members were advised that the Public Sector Internal Audit Standards (PSIAS) required the Council to produce an annual internal audit opinion and report which could be used by the organisation to inform its Annual Governance Statement.  Page No. 68, Paragraph 2.2 of the report, gave an overview of the audits undertaken during the year.  One audit was outstanding from the 2016/17 Audit Plan in relation to an allocation of days for a further ICT audit and days had been allocated within the 2017/18 Plan to undertake that work.  As well as internal work, the team had provided an internal audit service to Tewkesbury Town Council during the course of the year; however, as reported to the last meeting of the Committee, notification had been received from the Town Council of the decision to terminate the contract and, as such, there were 20 days within the Audit Plan which could now be allocated to Tewkesbury Borough Council work.  Paragraph 2.3 of the report set out the corporate improvement work which had been carried out and it was noted that the team was also represented on key corporate groups such as the Corporate Governance Group and the ‘Keep Safe, Stay Healthy’ Group.

12.3           Members were advised that 59 audit opinions had been issued during the year, as set out at Paragraph 3.2 of the report.  There were eight ‘limited’ or ‘unsatisfactory’ opinions which had been brought to the Committee during the year e.g. tree inspections, bulky waste, Ubico client monitoring.  The Head of Corporate Services stressed that it was not unexpected to find areas of limited or unsatisfactory assurance given the variety and complexity of systems, procedures and services operated by the Council; the important thing was that the audit recommendations were accepted and acted upon by management.

12.4           Management of internal audit was overseen by the Head of Corporate Services and delivery of the annual Audit Plan was carried out by two full-time employees. During the course of the year, one employee was on maternity leave and this position had been covered by a secondment from another service area.  The team comprised one full-time, and two part-time, employees with one taking a senior role.  As defined in the Internal Audit Charter, the team had remained organisationally dependent during the year and the Head of Corporate Services had regular briefings with the Chair and Vice-Chair of the Audit Committee which would continue going forward.  A ‘Meet the Internal Audit Team’ session had been held for Members of the Audit Committee  ...  view the full minutes text for item 12.

To consider the Work Plan 2017/18 and to consider the Council Tax, Housing Benefit and Council Tax Support Penalty and Prosecution Policy to comment thereon to the Executive Committee. 

13.1           Attention was drawn to the report of the Head of Finance and Asset Management, circulated at Pages No. 73-85, which provided assurance on the counter-fraud activities of the Council.  Members were asked to consider the Counter Fraud Unit Work Plan 2017/18, and the Council Tax, Housing Benefit and Council Tax Support Penalty and Prosecution Policy, and put forward any comments to the Executive Committee to aid its deliberations.

13.2           The Chair welcomed Kate Seeley, Senior Fraud Investigator from the Counter Fraud Unit to the meeting.  Members were reminded that the Council had approved the authority’s participation in the establishment of a permanent Counter Fraud Unit on 24 January 2017 and, from 1 April 2017, this was a permanent support service serving Tewkesbury Borough Council and four other partner authorities within the county.  The Work Plan 2017/18, attached at Appendix 1 to the report, had been agreed by the senior management team as the key areas to focus on during the year.  The work was largely proactive, with a drive and focus on gaining revenue.  A lot of work was done in the revenues section e.g. council tax, business rates, but also in housing and enforcement.  Reactive pieces of work were also undertaken e.g. referrals for investigation. 

13.3           The Counter Fraud Unit had been undertaking a review of a number of policies and procedures in support of each service area to enable criminal investigations to be legally undertaken and appropriate sanctions to be applied.  The Council Tax, Housing Benefit, Council Tax Support Penalty and Prosecution Policy had been drafted for use within the Revenues and Benefits team.  There had been a number of service changes within housing benefit which had meant that the previous policy around the enforcement of housing benefit and council tax was no longer relevant.  The proposed policy focused on council tax support, and the criminal and civil penalties which the Council could enforce, and the civil penalties available in relation to housing benefit and council tax.  This did not generate a huge amount of money but it was another way the Council could enforce the regulations surrounding council tax and impose penalties for those who did not follow the rules.

13.4           The Head of Finance and Asset Management explained that the Work Plan 2017/18 was focused on ensuring that policies were up to date and consistent for all Counter Fraud Unit partners and raising awareness among Officers and Members.  A Member raised concern that the Whistleblowing Policy was not working effectively as he understood that some Officers did not know who they should report to, or were reluctant to do so.  Assurance was provided that there were a number of contacts within the policy, including the Counter Fraud Unit which was independent and not linked to management in any way. 

13.5           A Member sought confirmation that the Counter Fraud Unit was geared up for the changes associated with Universal Credit.  The representative from the Counter Fraud Unit advised that housing benefit fraud would no longer be  ...  view the full minutes text for item 13.

To consider the outcomes of the data matching exercise. 

14.1           The report of the Head of Revenues and Benefits, circulated at Pages No. 86-88, informed Members of the outcomes of the National Fraud Initiative data matching exercise.  Members were asked to consider the report.

14.2           The Head of Revenues and Benefits advised that the National Fraud Initiative (NFI) matched electronic data within and between public and private sector bodies to prevent and detect fraud.  The NFI had helped to trace almost £198M in fraud, error and overpayment in England during the period 1 April 2014 to 31 March 2016.  The 2016/17 data matching exercise showed a considerable fall in the number of data matches compared to the 2014/15 review – in 2014/15 there had been 531 data matches, 17 incidents of fraud and 44 errors whereas in 2016/17 there had been 321 data matches, one incident of fraud and 69 errors.  The level of overpayments had dropped dramatically from £59,878.67 to £8,835.28.  This was good news for customers as there were fewer errors and less need for enforcement.  The single case of fraud detected had been forwarded to the Single Fraud Investigation Service to consider further action.  Overall, the Council had paid over £19M in housing benefit to 3,970 housing benefit recipients.  It was to be borne in mind that, in terms of the numbers and values of overpayments, the impact was very small.  The benefits staff were doing more preventative work with customers to encourage them to report any changes and systems were being automated so that claims were updated with benefit changes which had reduced delays. 

14.3           The Chair congratulated the Revenues and Benefits team on the savings on behalf of the Committee and it was

RESOLVED          That the outcomes of the data matching exercise be NOTED.

To approve the Annual Governance Statement 2016/17. 

15.1           The report of the Corporate Governance Group, circulated at Pages No. 89-101, set out the Council’s Annual Governance Statement 2016/17 which Members were asked to approve.

15.2           The Head of Corporate Services explained that the Annual Governance Statement provided assurance that the Council was following the code of corporate governance that it had approved and adopted, which was consistent with the principles of the CIPFA/SOLACE Framework ‘Delivering Good Governance in Local Government’.  The Annual Governance Statement for 2015/16 was attached at Appendix 1 to the report and included eight areas of governance that required improvement.  These significant governance issues would be monitored throughout the year and the progress would be reported to the Audit Committee.  The significant governance issues identified were: review and update of the Constitution; risk management; business continuity; Audit Committee effectiveness; development and approval of a Workforce Development Strategy; Ubico client monitoring; compliance with the General Data Protection Regulations; and the review and update of the local Code of Corporate Governance.

15.3           It was

RESOLVED          That the Annual Governance Statement 2016/17 be APPROVED.