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Agenda and minutes

Venue: Tewkesbury Borough Council Offices, Severn Room

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 advised to those present.

3.2             The Chair indicated that he had accepted an urgent item of business in accordance with Council Procedure Rule 26 as set out in the Council’s Constitution.  This would be considered at Agenda Item 17 – Depot Services Working Group.

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 Councillors C M Cody and L A Gerrard.  There were no substitutes 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 161 KB

To approve the Minutes of the meetings held on 28 March and 28 May 2019.

Additional documents:

Minutes:

6.1             The Minutes of the meetings held on 28 March and 28 May 2019, copies of which had been circulated, were approved as correct records and signed by the Chair. 

7.

Audit and Governance Committee Work Programme pdf icon PDF 241 KB

To consider the Audit Committee Work Programme.  

Minutes:

7.1             Attention was drawn to the Audit and Governance Committee Work Programme, circulated at Pages No. 12-17, which Members were asked to consider.

7.2             The Head of Corporate Services indicated that the Work Programme was quite substantial and the Committee would be busy over the course of the next year.  He advised that the Counter Fraud Unit was working on an updated Anti-Fraud and Corruption Policy which would be brought to the Committee in December and the Work Programme would be updated accordingly. 

7.3             It was

RESOLVED          That the Audit and Governance Committee Work Programme be NOTED.

8.

Counter-Fraud Unit Report pdf icon PDF 149 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. 18-26, which provided assurance over the counter fraud activities of the Council.  Members were asked to consider the annual update from the Counter Fraud Unit and make comments as necessary.

8.2             The Counter Fraud Manager advised that a new work plan had been produced for 2019/20, attached at Appendix 1 to the report, with a focus on reducing corruption in public procurement which was a big financial risk.  Staff awareness training was also being arranged and a similar session had been organised for Members in October.  It was noted that the Council Tax Reduction Scheme was now fully embedded - the Counter Fraud Unit investigated alleged fraud and abuse in relation to that scheme as well as acting as a single point of contact for the Department for Work and Pensions.  In addition, the Unit would be carrying out a National Fraud Initiative (NFI) data match review in Revenues and Benefits and would be developing its work on public protection enforcement.

8.3             A Member welcomed the presentation to Members which had been organised for October and indicated that this might also be useful for Town and Parish Councils.   The Head of Corporate Services advised that it might be possible to add something the Agenda for the next Town and Parish Council seminar in November.  It was subsequently

RESOLVED          That the annual update on the work of the Counter Fraud Team be NOTED.

9.

External Auditor's Audit Findings pdf icon PDF 1 MB

To consider the external auditor’s audit findings 2018/19.

Minutes:

9.1             Attention was drawn to Grant Thornton’s report, circulated at Pages No. 27-56, which set out the audit findings for the Council for 2018/19.  Members were asked to consider the report.

9.2             The representative 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 2019 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.  The key headlines were set out at Page No. 29 of the report and she was pleased to report that the final statement accounts process had gone very smoothly this year.  In terms of the findings, a small number of issues had been identified but none related to a material amount and there were no concerns in terms of being able to issue an unqualified opinion on the accounts.  At the time of writing the report, there were a small number of areas where work was ongoing, as set out at Page No. 40 of the report, but it was noted that these had now been concluded and the management letter of representation was the next item on the Agenda.  A final review of the Statement of Accounts would be undertaken prior to it being signed off and she extended her thanks to the Head of Finance and Asset Management and his team for their hard work and co-operation.

9.3             In terms of value for money, it was noted that an ‘except for’ conclusion had been issued in 2017/18; however, Grant Thornton was satisfied with the level of preparation made in response to the recommendations arising from that and would be pleased to issue a clean opinion this year.  The key findings from the audit were summarised at Page No. 33 of the report and showed that three issues had been identified, although none were material.  In terms of fees and charges, testing had shown that some income was related to the following year and should have been allocated as a receipt in advance and, when extrapolated, this had given a projected major error.  Additional testing was carried out in order to reduce the extrapolated error and no further errors had been identified, therefore it was not a material concern.  With regard to the cash flow statement, a few errors had been identified which had led to it being reviewed by management and subsequently being reinstated.  There was one item that could not be reconciled and, whilst not significant, it did need to be brought to the Council’s attention.  Members were advised that the third issue related to  ...  view the full minutes text for item 9.

10.

Letter of Representation pdf icon PDF 121 KB

To approve the S151 Officer’s Letter of Representation on the closure of the accounts for the year ended 31 March 2019. 

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 2019, which had been circulated at Pages No. 57-63.  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, attached at Appendix 1 to the report, 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 2018/19 pdf icon PDF 281 KB

To approve the Statement of Accounts 2018/19. 

Additional documents:

Minutes:

11.1          The report of the Head of Finance and Asset Management, circulated at Pages No. 64-153, attached the Statement of Accounts for 2018/19 which Members were asked to approve.

11.2           The Finance Manager drew attention to Page No. 65, Paragraph 2.0 of the report which summarised the financial position of the Council as at 31 March 2019 and showed a surplus of £2.7M against budget which included earmarked reserved and planning obligations for which there was no budget. She indicated that Members had gone through the accounts in detail during a training session prior to the Committee meeting but she would be happy to answer any further questions.

11.3          It was

RESOLVED          That the Statement of Accounts for 2018/19 be APPROVED.

12.

External Auditor's Fee Letter 2019/20 pdf icon PDF 534 KB

To consider the external auditor’s fee letter in relation to the audit work to be undertaken during 2019/20.

Minutes:

12.1           Attention was drawn to Grant Thornton’s fee letter, circulated at Pages No. 154-156, which set out the proposed fee for 2019/20, together with the scope and timing for the work.  Members were asked to consider the fee letter.

12.2           The representative from Grant Thornton advised that the external auditors were required to formally write to local authorities each year to set the fee for the next audit.  The Public Sector Audit Appointments Ltd (PSAA) was responsible for setting the scale fee as the result of a national procurement exercise which was undertaken every five years to award contracts to auditors.  The scope of the work was not proposed to change for 2019/20 and the scale fee for Tewkesbury Borough Council was £34,589 which was the same as 2018/19.  Any requirement to vary the fee would be reported to the Committee.

12.3           A Member indicated that he was pleased the fee remained much lower than in previous years and the representative from Grant Thornton advised that the fee had reduced by around two-thirds over the last 10 years.  It was subsequently

RESOLVED          That the Grant Thornton fee letter 2019/20 be NOTED.

13.

Internal Audit Monitoring Report pdf icon PDF 130 KB

To consider the internal audit work undertaken 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. 157-172, was the final monitoring report of the financial year and summarised the work undertaken by the Internal Audit team since the last Committee.  Members were asked to consider the audit work completed and the assurance given on the adequacy of the internal controls operating in the systems audited.

13.2          The Head of Corporate Services advised that the full details of the work undertaken were attached at Appendix 1 to the report and gave the opinion in relation to audits on the project management framework and Ubico health and safety.  A list of audit recommendations that were due to be followed-up could be found at Appendix 2 to the report; of the 10 recommendations followed-up during the period, seven had been implemented, two partially implemented and one was yet to be implemented.  Appendix 3 to the report gave an overview of the status of the Internal Audit Plan 2018/19.

13.3          With regard to the audit of the project management framework, Members were advised that this had been in place for four years and incorporated a range of documents and guidance on how key corporate projects should be managed, for example, refurbishment of the Public Services Centre, the new leisure centre etc.  It was recommended that the guidance be reviewed to ensure it was up-to-date and reflected the latest risk management strategy and General Data Protection Regulation (GDPR) privacy and retention guidelines.  All project documentation was stored on Sharepoint and could be accessed by all relevant Officers.  A limited audit opinion had been issued in terms of the operation of the framework e.g. training, ensuring completeness of documents etc.  This was overseen by the Corporate Services Officer but testing had shown that, whilst the key documentation was in place, underlying supporting documentation, such as privacy impact assessments, was not consistently available.  With regard to the Sharepoint system, assurance was obtained that this was being maintained but risk registers had not been completed for every project which was not compliant with the Council’s corporate risk management strategy.  Although the vast majority of corporate projects were identified through the framework, it was recommended that the Corporate Services team go through all service plans to ensure all potential projects were identified so that delivery could be overseen.  It was noted that the framework set out clear criteria for defining a project and the Programme Board was well-established and was providing adequate challenge.  It was recommended that projects where the overall status was ‘green’ should also be reviewed by the Board to ensure that status was accurate.  A Member noted that a limited opinion had been issued and he presumed that would be addressed going forward.  In response, the Head of Corporate Services confirmed that the recommendations arising from the audit were set out in the final column of the table at Appendix 1 to the report and a report would be taken to Programme Board by the end of October to  ...  view the full minutes text for item 13.

14.

Internal Audit Annual Report 2018/19 pdf icon PDF 352 KB

To consider the Internal Audit annual opinion and the assurance from the work undertaken during the year on the level of internal control within the systems audited.

Minutes:

14.1           Attention was drawn to the report of the Head of Corporate Services, circulated at Pages No. 173-181, which provided Members with a summary of the internal audit work undertaken in 2018/19, 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 had 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.  The audit plan took a risk-based approach and was informed by governance-related work; work on fundamental financial systems; work of a service-based nature; corporate improvement work; follow-up work; and consultancy and advice. Page No. 175, Paragraph 2.2 of the report gave an overview of the audits undertaken during the year and it was noted that one audit was outstanding in relation to ICT disaster recovery which would be completed during the first half of 2019/20.  Paragraph 2.3 of the report set out the corporate improvement work that had been carried out.  A key area of assurance work that was of particular importance to management and Members was the follow-up of internal audit recommendations and a number of days were allocated within the plan for this work.  It was noted that the team was also represented on key corporate groups such as the ‘Keep Safe, Stay Healthy’ Group.

14.3           The structure of the Internal Audit team was outlined at Page No. 176, Paragraph 3.0 of the report, and Members were informed that team comprised two part-time employees and one full-time employee with one undertaking a senior role.  This resource was deemed appropriate, sufficient and was effectively deployed to achieve the plan.  As defined in the Internal Audit Charter, the team had remained organisationally independent during 2018/19 and internal audit sat independently within the Council.  The Head of Corporate Services reported directly to the Chief Executive so had free and unfettered access and, if necessary, could also have access to the Chair of the Audit and Governance Committee.  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.

14.4           Members were advised that an independent assessment of internal audit activity had been undertaken in November 2017, as required by PSIAS, and implementation of recommendations arising from that review had been the focus for  ...  view the full minutes text for item 14.

15.

Annual Governance Statement 2018/19 pdf icon PDF 232 KB

To approve the Annual Governance Statement 2018/19. 

Additional documents:

Minutes:

15.1          The report of the Corporate Governance Group, circulated at Pages No. 182-196, attached, at Appendix 1, the Council’s Annual Governance Statement 2018/19 which Members were asked to approve. 

15.2          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 2018/19 was attached at Appendix 1 to the report and identified four Significant Governance Issues that required improvement, set out in the table at Page No. 194.  The four areas identified were: Community Infrastructure Levy (CIL) governance arrangements; Ubico financial governance; serious crime framework key policy review; and Local Code of Corporate Governance.  Progress against implementing the proposed actions would be monitored by the Audit and Governance Committee.

15.3          It was

RESOLVED          That the Annual Governance Statement 2018/19 be APPROVED.

16.

Corporate Risk Register pdf icon PDF 147 KB

To consider the risks contained within the Corporate Risk Register and assurance that the risks are being effectively managed. 

Additional documents:

Minutes:

16.1          The report of the Head of Corporate Services, circulated at Pages No. 197-217, asked Members to consider the risks contained within the corporate risk register and assurance that the risks were being effectively managed.

16.2          Members were advised that the corporate risk register was a high-level tool which helped management to consider what the corporate risks were and how they were being managed.  The scoring was based on three stages: gross risk score – the inherent risk without any mitigating controls in place; current risk score – the assessed risk after the application of controls; and target risk scores – proposed risk score by applying future controls in the current risk score was deemed to be too high.  The format of the register was commonly used throughout local government and, whilst there was no statutory requirement to have a register in place, it was seen as good practice and helped the Audit and Governance Committee to gain assurance that risks were being effectively managed.  The register in its current format had first been presented at Audit Committee in December 2018 and the template included a ‘comment’ box below each risk which provided updates on the status of the risk.  Key actions arising since the register had last been presented to the Committee were outlined at Page No. 201, Paragraph 3.1 of the report and particular attention was drawn to the risk in respect of cyber security as the Cabinet Office had now issued the certificate to confirm Public Sector Network compliance so that risk had been minimised.  With regard to the waste partnership, it was noted that a report had been taken to the Overview and Scrutiny Committee the previous day and a Depot Services Working Group had been established accordingly – the Audit and Governance Committee would be considering that report later in the meeting.  Initial discussions had taken place regarding the relocation of the Swindon Road depot and fraud awareness training had been arranged for Members, as had been reported earlier in the meeting.  The Head of Corporate Services advised that a new risk had been added to the register by the Corporate Management Team in respect of the Garden Town project and that was shown in bold at Appendix 1.

16.3          A Member drew attention to Paragraph 2.2 of the report which asked the Committee to consider whether the register was complete and if any risks were missing.  He felt it was right to include Brexit as a potential risk and suggested there was a need to consider the international impact in the context of the upcoming American election in terms of the Council’s financial position which could be significant.  The Borough Solicitor felt this was a fair point and indicated that it could be picked up the next time the Corporate Management Team reviewed the risk register.

16.4           It was

RESOLVED          That the risks and mitigating controls within the Corporate Risk Register be NOTED.

17.

Internal Audit Quality Assurance and Improvement Programme pdf icon PDF 40 KB

To consider the contents of the quality assurance and improvement programme.

Additional documents:

Minutes:

17.1          Attention was drawn to the report of the Head of Corporate Services, circulated at Pages No. 218-228, which attached, at Appendix 1, the quality assurance and improvement programme.  Members were asked to consider the contents of the programme.

17.2          Members were advised that, in accordance with standard 1300 of the Public Sector Internal Audit Standards (PSIAS), it was necessary to develop and maintain a quality assurance and improvement programme that covered all aspects of internal audit activity.  This programme was attached at Appendix 1 and included internal audit Key Performance Indicators (KPIs) at Pages No. 226-227.  A summary of the improvement actions identified was included at Page No. 228 which was essentially an action plan for this financial year.  Actions outstanding from the peer review in 2017 were annotated with an asterisk and related to the establishment of an audit manual to support internal processes; undertaking an audit of the risk management framework; and undertaking an ICT risk assessment.  Other actions related to supporting one of the team to achieve a recognised internal audit qualification; looking at feasibility of new income streams through the implementation of a training programme for other internal auditors; providing training to new Members of the Audit and Governance Committee; carrying out a management survey to ensure the value of internal audit was being maximised; undertaking an assurance mapping exercise; and reviewing audit documentation and processes including intranet and website pages.  It was intended to bring the programme to the Audit and Governance Committee on an annual basis going forward.

17.3          It was

RESOLVED          That the contents of the quality assurance and improvement programme be NOTED.

18.

Audit and Governance Committee Annual Report 2018/19 pdf icon PDF 136 KB

To approve the Audit and Governance Committee Annual Report 2018/19.

Additional documents:

Minutes:

18.1           Attention was drawn to the report of the Head of Corporate Services, circulated at Pages No. 229-242, which attached, at Appendix 1, the Audit Committee Annual Report 2018/19 for approval.

18.2           The Head of Corporate Services explained that the Terms of Reference of the Audit and Governance Committee required the production of an annual report in order to demonstrate the broad range of issues that the Committee had considered and reviewed throughout the year.  Following approval of the report, it would be presented to Council by the Chair of the Committee.  It was subsequently

RESOLVED          That the Audit and Governance Committee Annual Report 2018/19 be APPROVED.

19.

Depot Services Working Group pdf icon PDF 221 KB

To appoint a Member of the Audit and Governance Committee to sit on the Depot Services Working Group in accordance with the approved Terms of Reference. 

Additional documents:

Minutes:

19.1          Attention was drawn to the report of the Head of Community Services, circulated separately, which informed Members that the Overview and Scrutiny Committee had resolved to establish a Depot Services Working Group at its meeting on 23 July 2019.  The Committee was asked to appoint a Member of the Audit and Governance Committee to sit on that Group in accordance with the Terms of Reference attached at Appendix A to the report.

19.2          Members were advised that the approved Terms of Reference for the Depot Services Working Group set out that the Group would comprise nine Members of the Council to include six Members of the Overview and Scrutiny Committee, one Member of the Audit and Governance Committee and the Lead Members for Clean and Green Environment and Finance and Asset Management.  It was therefore necessary for the Audit and Governance Committee to appoint a Member to sit on the Group to enable it to commence its work.

19.3          It was

RESOLVED          That Councillor V D Smith be appointed to the Depot Services Working Group.