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Agenda and minutes

Venue: Committee Room 1

Contact: Democratic Services Tel: 01684 272021  Email:  Democraticservices@tewkesbury.gov.uk

Items
No. Item

3.

Announcements

When the continuous alarm sounds you must evacuate the building by the nearest available fire exit. Members and visitors should proceed to the visitors’ car park at the front of the building and await further instructions (staff should proceed to their usual assembly point). Please do not re-enter the building unless instructed to do so.

 

In the event of a fire any person with a disability should be assisted in leaving the building.

Minutes:

3.1             The evacuation procedure, as noted on the Agenda, was taken as read.

3.2             The Chair welcomed the Engagement Manager and Engagement Lead from Grant Thornton to the meeting.  She indicated that the Counter Fraud Manager from the Counter Fraud Unit was in attendance for Agenda Item 6 – Counter Fraud Unit Report.  It was noted that the Lead and Support Members for Corporate Governance were also present to observe the meeting as audit was included in their Portfolio.

4.

Apologies for Absence and Substitutions

To receive apologies for absence and advise of any substitutions. 

Minutes:

4.1             Apologies for absence were received from Councillor G F Blackwell.  There were no substitutions for the meeting. 

5.

Declarations of Interest

Pursuant to the adoption by the Council on 26 June 2012 of the Tewkesbury Borough Council Code of Conduct, effective from 1 July 2012, as set out in Minute No. CL.34, Members are invited to declare any interest they may have in the business set out on the Agenda to which the approved Code applies.

Minutes:

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.

6.

Minutes pdf icon PDF 154 KB

To approve the Minutes of the meeting held on 28 March and 15 May 2018.

Additional documents:

Minutes:

6.1             The Minutes of the meetings held on 28 March and 15 May 2018, copies of which had been circulated, were approved as correct records and signed by the Chair. 

7.

Audit Committee Work Programme pdf icon PDF 246 KB

To consider the Audit Committee Work Programme.  

Minutes:

7.1             Attention was drawn to the Audit Committee Work Programme, circulated at Pages No. 11-17, which Members were asked to consider.

7.2             It was

RESOLVED          That the Audit Committee Work Programme be NOTED

8.

Counter-Fraud Unit Report pdf icon PDF 145 KB

To consider the annual update on the work of the Counter Fraud Team. 

Additional documents:

Minutes:

8.1             Attention was drawn to the report of the Head of Finance and Asset Management, circulated at Pages No. 18-22, which provided assurance over the counter fraud activities of the Council.  Members were asked to consider the annual update on the work of the Counter Fraud Team.

8.2             The Counter Fraud Manager advised that the Team had supported the Council in a number of areas over the last six months.  This included the introduction of a new Corporate Enforcement Policy, an overarching policy for the Council with the specific approaches for each department sitting beneath; a new procedural document in relation to internal investigation processes which had been issued to HR to start the consultation process; and a high level review of staff expenses.  Confirmation was also provided that fraud awareness training had now been delivered to all Council staff.  It was noted that work had commenced on the review of businesses within the borough and it was intended to bring these results to Members in the next update report; work on serious organised crime and how this affected the authority was also planned.  The work plan for 2018/19 was attached at Appendix 1 to the report and had been developed with a focus on the priorities set out in the Home Office UK Anti-Corruption Strategy 2018-22.  The Counter Fraud Unit would continue to review the Council’s policies and look for opportunities to add value and align them for continuity as well as working with the Department for Work and Pensions on future joint investigations such as the Housing Benefit and Council Tax Reduction Scheme.

8.3             A Member noted that Appendix 1 stated that 217 days were to be provided in 2018/19 and sought clarification as to whether this was an estimate of the amount of time that would be dedicated to Tewkesbury Borough Council.  The Counter Fraud Manager clarified that this was based on a full-time equivalent post but the work was split across all members of the team.  At the end of the year, the Counter Fraud Unit reported back to the Head of Finance and Asset Management on the number of days that had actually been taken up and a refund was issued if that was less than anticipated.  Another Member recognised that a significant amount of the work undertaken by the Counter Fraud Unit related to the drafting of policies and procedures and she questioned what happened if changes were required.  The Counter Fraud Manager advised that a new policy, such as the Corporate Enforcement Policy, would be drafted by the Counter Fraud Unit and sent to One Legal in the first instance.  The policy would then be taken to the Corporate Management Team and relevant Heads of Service for review and any comments would be taken on board and the policy updated accordingly.  The final draft would then be taken to the appropriate Council or Committee meeting for approval. 

8.4             In response to a query as to whether there were any specific target dates for  ...  view the full minutes text for item 8.

9.

External Auditor's Audit Findings pdf icon PDF 583 KB

To consider the external auditors’ Audit Findings 2017/18. 

Minutes:

9.1             Attention was drawn to Grant Thornton’s report, circulated at Pages No. 23-47, which set out the audit findings for the Council for 2017/18.  Members were asked to consider the report.

9.2             The Engagement Lead from Grant Thornton explained that the report highlighted the key findings from its audit of the Council’s financial statements for the year ended 31 March 2018 and its review of the Council’s value for money arrangements.  Under the National Audit Office Code of Practice, Grant Thornton was required to report whether, in its opinion, the Council’s financial statements represented a true and fair view of its financial position and income and expenditure for the year, and whether they had been prepared in accordance with the Chartered Institute of Public Finance and Accountancy (CIPFA) code of practice on local authority accounting and the Local Audit and Accountability Act 2014.  It was noted that the timetable for the preparation of the accounts had been brought forward considerably compared to previous years – in the past the accounts were provided at the end of June following which they were audited and brought to the Committee in September whereas this year they had been reviewed at the end of May. She was pleased to report that the audit was substantially complete.  At the time of writing the report, there were a few areas where work was ongoing; one area, in relation to the work on the Council’s valuation of its Property, Plant and Equipment (PPE), was not fully concluded but it was hoped this would not give rise to any significant issues.  She explained that Grant Thornton was making enquiries about the underlying assumptions made by the valuer to ensure it was comfortable with the approach taken – the assumptions had changed compared to the previous year and a number of local authorities used the same valuer so this was being considered across the board. This matter was expected to conclude within the next few days with a view to issuing the opinion by the statutory deadline later in the month.  Therefore, the final sign-off on the opinion was subject to the resolution of the remaining queries with the valuation.  The Engagement Lead from Grant Thornton wished to record her appreciation to the Finance Manager and her team for the preparation of the accounts and, subject to the outstanding queries being satisfactorily resolved, she anticipated issuing an unqualified audit opinion on the financial statements.  There were no material issues in the accounts which needed to be brought to Members’ attention.

9.3             In terms of the value for money conclusion, one main area of risk had been identified from the audit plan in relation to the Council’s arrangements in respect of the preparation of its Medium Term Financial Strategy (MTFS).  This was set out in detail at Pages No. 36-38 of the report.  The latest version of the Council’s MTFS had been reported to Members on 5 December 2017 identifying a £2.99M funding gap over the five year period of  ...  view the full minutes text for item 9.

10.

Letter of Representation 2017/18 pdf icon PDF 122 KB

To approve the Letter of Representation 2017/18.

Additional documents:

Minutes:

10.1          Attention was drawn to the Section 151 Officer’s Letter of Representation on the financial statements for the year ended 31 March 2018, which had been circulated at Pages No. 48-54.  Members were asked to approve the letter.

10.2          The Head of Finance and Asset Management advised that, as the Section 151 Officer, he was required to write a Letter of Representation to the external auditors which outlined the principles on which the accounts were based and confirmed compliance with the law and the level of information provided to Grant Thornton to complete the audit, as well as disclosing any fraudulent activity that may have taken place.  The contents of the letter had been agreed with Grant Thornton and formal approval was sought from the Committee.

10.3          Accordingly, it was

RESOLVED          That the Letter of Representation be APPROVED and signed by the Section 151 Officer.

11.

Statement of Accounts 2017/18 pdf icon PDF 286 KB

To approve the Statement of Accounts 2017/18. 

Additional documents:

Minutes:

11.1           The report of the Head of Finance and Asset Management, circulated at Pages No. 55-142, attached the Statement of Accounts for 2017/18 which Members were asked to approve.

11.2          The Finance Manager explained that the Statement of Accounts for 2017/18 showed the financial position of the Council as at 31 March 2018 as well as performance during the year.  This year had seen working balances increase to £550,000 and a net worth increase from £9.9M to £14.4M.  This was a surplus of £1.7M in accounting terms; the actual amount of surplus affecting the general fund was £2.6M and the Council achieved a budget surplus of £1.5M.  The comprehensive income and expenditure statement was set out at Page No. 65 of the report.  It was noted that the deadlines for the production and audit of the accounts had been brought forward by one and two months respectively which had been challenging due to the loss of a key member of the accountancy team and it was a credit to the Finance Team that the accounts had been produced by the new deadline.  There had been a surplus of £894,000 in income for the year and the large variance was as a result of substantial grant income being received.  The Council had received a number of new burdens grants from the government and had also attracted significant service specific grants, particularly in relation to the delivery for the requirements for infrastructure and the Joint Core Strategy.  Treasury had also performed strongly and the Council had been able to borrow cheaply in the short-term and invest at higher rates using different products. 

11.3           The balance sheet, set out at Page No. 68 of the report, showed that investment properties had increased from £13M to £19.5M due to the purchase of three new properties. Current liabilities had increased by £9M, £6M of which was due to borrowing money to fund the investment property purchase.  Other adjustments included a reduction of £1.5M in the capital receipts reserve as the Council paid the final amounts for the new refuse and recycling vehicles and funded the refurbishment of the Public Services Centre.  The balance on the Collection Fund for Council Tax at year-end was a surplus of £1.9M and £1.6M of that had already been allocated into the budget for future needs.  The balance on the Collection Fund for Business Rates at year-end was a deficit of £1.79M which was a £2M improvement on the previous year.  The capital resources balance was £1.979M including capital grants; however, after allowing for commitments, the unallocated budget available for new capital projects was £680,000.

11.4           A Member felt it should be recorded that the Audit Committee had attended a training session on the Statement of Accounts immediately prior to the Committee meeting at which Members had engaged in a significant amount of debate and discussion.  It was therefore

RESOLVED          That the Statement of Accounts 2017/18 be APPROVED.

12.

External Auditor's Fee Letter 2018/19 pdf icon PDF 227 KB

To consider the external auditors’ fee letter in relation to the audit work to be undertaken during 2018/19. 

Minutes:

12.1          Attention was drawn to Grant Thornton’s fee letter, circulated at Pages No. 143-146, which set out the proposed fee for 2018/19, together with the scope and timing for the work.  Members were asked to consider the fee letter.

12.2          The Engagement Lead from Grant Thornton explained that Public Sector Audit Appointments (PSAA) set the fee for opted-in local government bodies.  For 2018/19, the indicative scale fee had reduced by 23% from the fees applicable for 2017/18 to £34,589.  The letter summarised the responsibilities for Grant Thornton for the coming years, the timetable and key members of the team.

12.3          The Lead Member for Corporate Governance questioned how the external auditors were appointed and was advised that a significant exercise had been undertaken as part of the PSAA arrangements for 2018/19 and beyond.  Individual local authorities had a choice as to whether they went into the exercise or decided to set-up their own independent panel to appoint its own auditors.  There were examples of larger authorities, or collective groups of authorities, making their own appointments but over 95%, including Tewkesbury Borough Council, had decided to go into the PSAA arrangement.  PSAA appointed auditors on behalf of the authorities that had opted-in based on an exercise that took into account quality and price and Grant Thornton had been appointed on that basis.  At the end of the five year contract, the Council could decide whether it wanted to opt-in again or make its own arrangements.  The Head of Finance and Asset Management confirmed that a report had been brought to the Audit Committee in September 2017 explaining the options and Officers had recommended the PSAA model due to the efficiencies within the arrangement.

12.4          It was

RESOLVED          That the Grant Thornton fee letter 2018/19 be NOTED.

13.

Internal Audit Plan Monitoring Report pdf icon PDF 125 KB

To consider the internal audit work completed and the assurance given on the adequacy of internal controls operating in the systems audited.

Additional documents:

Minutes:

13.1          The report of the Head of Corporate Services, circulated at Pages No. 147-168, was the final monitoring report of the financial year and detailed the findings of Internal Audit for the remaining audits within the Audit Plan 2017/18.  Members were asked to consider the audit work completed and the assurance given on the adequacy of the internal controls operating within the systems audited.

13.2          Members were advised that full details of the work undertaken were attached at Appendix 1 to the report and Appendix 2 included a list of all recommendations reviewed in the period and their status.  It was noted that a number of recommendations had been identified as a result of a previous audit of the leisure centre, particularly in respect of the importance of client monitoring, and a follow-up audit had provided good assurance that those recommendations had been implemented.  An audit of the Council’s Occupational Road Risk Policy had found that the policy had been appropriately approved and communicated to staff, and Managers/Heads of Service had received training and were carrying out checks.  This was something which would be incorporated into the new HR ‘Breathe’ system and would be subject to a further audit review when the system was live.  As such, a ‘good’ audit opinion had been issued.  It was noted that volunteers were incorporated in the policy; however, it was considered unlikely that they would be classed as driving whilst at work and therefore the risk was minimal.  Given the difficulty enforcing this policy it was considered reasonable not to complete these checks, although volunteers should be made aware of the policy.  The audit on housing benefit and the current controls in place in respect of Universal Credit had resulted in a good level of assurance and the arrangements in place between the Council and the Department for Work and Pensions were adequate.  Training had been provided for staff on the introduction of Universal Credit, the Council’s website had been updated with relevant information and a leaflet had been produced for residents.  The Public Services Centre refurbishment had also been audited and there was a satisfactory level of control in relation to the project management arrangements. In terms of risk management, a detailed risk register was in place for the project which identified key risks and was frequently updated.  The risks were reported at monthly progress meetings and discussed at the Transform Working Group.  Health and safety issues formed part of the risk management process and were also discussed at meetings.  With regard to the budgetary element of the project, it was noted that there had been an increase from £1.8M to £2.2M due to a change in the design brief which had been reported to Transform Working Group.  Overall there was a good level of budgetary control and audit testing on expenditure had confirmed it was valid and within the remit of the project.

13.3           In terms of corporate improvement work, the Internal Audit team had worked with Housing to address an  ...  view the full minutes text for item 13.

14.

Internal Audit Annual Report 2017/18 pdf icon PDF 266 KB

To consider the Internal Audit Annual Report 2017/18 and the assurance from the work undertaken during the year that, overall, the Council’s governance, risk management and control environment is generally effective and, where areas of concern have been identified, there has been a positive management response.

Minutes:

14.1          Attention was drawn to the report of the Head of Corporate Services, circulated at Pages No. 169-176, which provided Members with a summary of the internal audit work undertaken in 2017/18, 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, the Council’s framework of governance, risk management and control was generally effective and, where concerns had been identified there has been a positive management response.

14.2          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. 170, Paragraph 2.2 of the report, gave an overview of the audits undertaken during the year and Paragraph 2.3 set out the corporate improvement work that had been carried out.  It was noted that the team was also represented on key corporate groups such as the ‘Keep Safe, Stay Healthy’ Group.

14.3          A summary of the audit opinions reported throughout the year was set out at Page No. 172, Paragraph 3.2 of the report, and it was pleasing to note there had been no ‘unsatisfactory’ opinions.  Two ‘limited’ opinions had been issued, both in relation to the licensing function, and the key areas for improvement were outlined within the report.  There had been a positive response to these findings and the Head of Community Services had attended the Audit Committee meeting in December 2017 where he had explained that he had discussed the audit with the Chair of the Licensing Committee and they had worked together on an action plan which was being monitored by that Committee.  These recommendations would be followed-up via the internal audit process and the outcomes would be presented as part of the quarterly monitoring report.  It was noted that 27 recommendations had been made overall and 10 of the audits had resulted in no recommendations.

14.4           The structure of the Internal Audit team was outlined at Page No. 173, Paragraph 4.0 of the report, and Members were informed that one member of staff’s absence had been covered by a secondment from another service area during the course of the year.  With regard to the independence of the Head of Corporate Services, it was not uncommon for the internal audit strategic lead to also have operational responsibility for service areas.  The Head of Corporate Services explained that he had a wide managerial remit including ICT, Customer Services, Human Resources and Policy and Communications.  In cases where an audit was undertaken in any of those areas, he could give assurance that all audit opinions were exercised objectively and with integrity so that the opinions issued were open, transparent and accurate.  Moving forward to 2018/19, and in response to a recommendation made in the peer review, additional safeguards had been put in place to maintain his independence in this role.  Members were reminded that an  ...  view the full minutes text for item 14.

15.

Internal Audit Charter pdf icon PDF 140 KB

To approve the Internal Audit Charter.

Additional documents:

Minutes:

15.1          The report of the Head of Corporate Services, circulated at Pages No. 177-191, attached the Internal Audit Charter which must be periodically reviewed.  Members were asked to approve the Internal Audit Charter. 

15.2          Members were advised that the Public Sector Internal Audit Standards (PSIAS) required the purpose, authority and responsibility of the internal audit activity to be formally defined in an Internal Audit Charter.  The charter must be periodically reviewed by the Chief Audit Executive and presented to senior management and ‘the board’ for approval.  For Tewkesbury Borough Council, the charter defined the board as the Audit Committee and the Chief Audit Executive as the Head of Corporate Services.  As previously reported to the Committee, it was a requirement of PSIAS that an external assessment of internal audit activity be undertaken at least every five years by a qualified, independent assessor.  This had taken place in November 2017 and had resulted in 16 recommendations, a small number of which related to the Internal Audit Charter and were set out at Page No. 179, Paragraph 3.2 of the report.  Amendments had been made to take account of these recommendations and an updated charter was attached at Appendix 1 to the report.  Particular reference was made to Page No. 184 of the report which had been included to address the recommendation that core principles for the professional practice of internal audit be included with examples, and Page No. 186 which included the safeguards to protect the independence and objectivity of the Chief Audit Executive.

15.3           A Member noted that Paragraph 13 of the Internal Audit Charter made reference to the annual review of the charter by the Chief Audit Executive and she questioned when this would be undertaken.  The Head of Corporate Services advised that this was likely to be towards the end of the financial year.  If any significant changes were needed they would be brought back to the Audit Committee for approval, otherwise the charter would be taken to the Committee for formal approval every three years.

15.4           The Chair congratulated the Head of Corporate Services on the revised charter which she felt was well set out and very easy to read.  It was subsequently

RESOLVED          That the Internal Audit Charter be APPROVED.

16.

Annual Governance Statement 2017/18 pdf icon PDF 232 KB

To approve the Annual Governance Statement 2017/18.

Additional documents:

Minutes:

16.1          The report of the Corporate Governance Group, circulated at Pages No. 192-205, attached, at Appendix 1, the Council’s Annual Governance Statement 2017/18 which Members were asked to approve. 

16.2          The Borough Solicitor explained that the Accounts and Audit Regulations 2015 required local authorities to conduct a review, at least once a year, of the effectiveness of its systems of internal control and include an Annual Governance Statement reporting on the review with any published Statement of Accounts.  The Annual Governance Statement should normally be approved at the same time, or prior to, the Statement of Accounts.  The draft Annual Governance Statement for 2017/18 was attached at Appendix 1 to the report and identified eight Significant Governance Issues that required improvement, set out in the table at Page No. 204.  The eight areas identified were: risk management; Council Constitution; business continuity; Audit Committee effectiveness; General Data Protection Regulation (GDPR); workforce development strategy; Local Code of Corporate Governance; and licensing.  Progress against implementing the proposed actions would be monitored by the Audit Committee.

16.3          In response to a query regarding the review of the Council’s Constitution, the Borough Solicitor recognised this had been delayed but provided assurance that the review would be complete by December 2018 in accordance with the timescale set out in the table.  Accordingly, it was

RESOLVED          That the Annual Governance Statement 2017/18 be APPROVED.

17.

Data Protection Policy pdf icon PDF 218 KB

To recommend to the Executive Committee that the Data Protection Policy be approved. 

Additional documents:

Minutes:

17.1          Attention was drawn to the report of the Head of Corporate Services, circulated at Pages No. 206-223, which attached, at Appendix 1, a draft Data Protection Policy describing the Council’s arrangements for compliance with the General Data Protection Regulation (GDPR).  Members were asked to recommend to the Executive Committee that the Data Protection Policy be approved.

17.2           The Head of Corporate Services advised that anyone processing personal data must comply with six principles of good practice i.e. that personal data must be: processed lawfully, fairly and in a transparent manner; only obtained for specified, explicit and legitimate purposes; adequate, relevant and not excessive; accurate and kept up-to-date; not be kept for longer than necessary; and processed in a secure manner.  Page No. 208, Paragraph 3 of the report, set out the roles and responsibilities that had been established to oversee compliance which included appointment of a Senior Information Risk Owner (SIRO) -  to ensure that information was appropriately managed and to take responsibility for the whole information governance framework and the risks associated with it - and a Data Protection Officer - to undertake the statutory role by monitoring compliance and providing training advice and assistance to the SIRO.  A summary of the key roles of the Data Controller, Data Protection Officer and the Information Commissioner was set out at Appendix 2 to the report.  The Council’s Data Protection Policy had been revised to take account of the changes and this was attached at Appendix 1 to the report.

17.3          A Member questioned whether Members’ roles and responsibilities were outlined in the policy and was advised that this was covered at Page No. 218.  A Member indicated that he was also a Gloucestershire County Councillor and a footer had been produced for Members of that authority to use on emails to explain what they did with personal data, for example, how long it was retained.  The Borough Solicitor explained that a template footer was currently being developed which Tewkesbury Borough Councillors may choose to use along with a template for a privacy page which could be made available on the Council’s website alongside the existing information about each Councillor.  Notwithstanding this, it was important to recognise that Members had a responsibility to protect themselves and, whilst these templates would be available to use, each individual Member would need to decide for themselves how long they wished to retain data.

17.4          A Member indicated that her biggest concern was residents contacting Members with questions as it was very rare that the Member could answer outright and therefore the information needed to be shared.  The Borough Solicitor felt that this needed to be addressed in the privacy pages but her general advice would be that, if the query was being passed on to anyone other than an Officer of the Council, it would be necessary to go back to the person to ask for permission; this included passing the query on to other Members.  Whilst it was reasonable to expect that  ...  view the full minutes text for item 17.

18.

Annual Audit Committee Report pdf icon PDF 135 KB

 To approve the annual Audit Committee Report.

Additional documents:

Minutes:

18.1          Attention was drawn to the report of the Head of Corporate Services, circulated separately, which attached, at Appendix 1, the Audit Committee Annual Report 2017/18 for approval.

18.2          The Head of Corporate Services explained that it was good practice to produce an annual report to demonstrate the broad range of issues that the Audit Committee had considered and reviewed throughout the year.  It had also been agreed at an Audit Committee Workshop that an annual report would help to raise the profile of the Committee as the perception among the wider Membership was that it was purely financial.  A report had been compiled based on the work that the Committee had undertaken in 2017/18 including: Internal Audit monitoring reports; Annual Governance Statement; financial reporting including the presentation and approval of the Council’s Statement of Accounts; Gloucestershire Counter Fraud Unit reports; external audit monitoring reports; reports on key governance frameworks e.g. safeguarding, health and safety etc.; and Internal Audit operational reports such as the Internal Audit Charter and Internal Audit Peer Review.  Following approval, the annual report would be presented by the Chair of the Audit Committee at Council in September 2018.

18.3          The Chair felt this was a good start in terms of changing perceptions of the Audit Committee which was much more than just a finance committee and was actually becoming increasingly about policy and governance.  It was subsequently

RESOLVED          That the Annual Audit Committee Report 2017/18 be APPROVED.