To consider the management assurance statements provided by each service area and the conclusion that, overall, for 2020/21 the management of the Council’s internal control environment was satisfactory.

23.1          Attention was drawn to the report of the Head of Corporate Services, circulated at Pages No. 120-148, which provided management assurance statements for each service area.  Members were asked to consider the statements and the conclusion that, overall, for 2020/21, the management of the Council’s internal control environment was satisfactory.

23.2          The Head of Corporate Services reminded Members that, as part of the Council’s response to COVID-19, the Internal Audit team had been redeployed to the business cell for the whole of 2020/21 to support the administration of business grants.  As reported at the last Committee meeting, due to all internal audit work being suspended for the year, no independent assurance could be given on the adequacy of the Council’s internal control environment.  In order to mitigate this, management assurance statements had been produced by each service area which also provided assurance that, despite resources generally being directed to the Council’s COVID-19 response, this had not detrimentally affected the internal control environment.  Each Head of Service had been required to fill out a statement which captured the key elements of the Council’s governance and internal control framework.  The statements did not offer full assurance that everything was effective all of the time but that, generally, management arrangements had been satisfactory over the year.  The Corporate Governance Group had reviewed the statements and concluded that they were a fair reflection of the position.  Whilst some of the questions had been given a partial response, that was not unexpected as the Council had a complex array of systems, processes and procedures so it would be unrealistic to expect them to operate 100% effectively all of the time.  The statements were attached as appendices to the report and the overall conclusion was that a satisfactory system of internal control had been maintained.  The areas of exception – the review of the licensing service and recovery of the internal audit function - had been identified as Significant Governance Issues within the Annual Governance Statement.

23.3          A Member queried whether the licensing service was now sufficiently staffed and the Head of Community Services explained that a member of staff had been seconded from Cheltenham Borough Council for two days per week until the end of December at which time an experienced Licensing Officer from another authority would take up a full-time role.

23.4           A Member noted that the external auditor’s findings report made reference to the annual audit report not being ready until December and she asked if there was any indication as to the opinion that would be issued at that time.  In response, the representative from Grant Thornton explained that this was the first year of the revised approach to the audit of value for money as introduced by the National Audit Office.  In recognition of the challenges COVID-19 had brought to local authorities as a whole, and given the importance of getting the baseline assessment year right, additional flexibility had been given to postpone the completion of work on arrangements to secure value for money so as not to compromise the opinion on the financial statements.   The value for money work needed to conclude within three months of issuing the opinion on the accounts and Grant Thornton would not be in a position to do that until Christmas.  It was intended to bring the annual report, which would include the commentary on arrangements to secure value for money, to the Audit and Governance Committee meeting on 15 December 2021.  It was not possible to say at this stage whether sufficient value for money arrangements were being delivered as it would be necessary to go through the management assurance statements in detail and a moderation exercise would be carried out to ensure scoring was not unduly generous or excessively harsh - Grant Thornton needed time to do that moderation exercise and come back with its final judgements in December.

23.5           The representative from Grant Thornton recognised that self-assessment came down to management assurances provided by individual services so it would be useful, as part of the value for money assessment, to understand whether there had been a good response from Officers when audits had been followed-up in previous years as that may give an indication as to the level of confidence that could be placed in the management assurance statements.  The Head of Corporate Services advised that no follow-up audits had been undertaken for at least 12 months but, pre-COVID, the management response had generally been positive with many recommendations being implemented, even during the pandemic.  A Member indicated that, as a Member of the Audit and Governance and Overview and Scrutiny Committees, he was satisfied with the level of scrutiny and challenge and endorsed what the Head of Corporate Services had said.  The Chair of the Audit and Governance Committee echoed these sentiments.

23.6          It was

RESOLVED          That the management assurance statements provided by each service area and the conclusion that, overall, for 2020/21, the management of the Council’s internal control environment was satisfactory be NOTED.