Agenda and minutes

24.1          The Chair advised that the meeting was being held under the emergency provisions of the Coronavirus Act 2020 and, specifically, the Local Authorities and Police and Crime Panels (Coronavirus) (Flexibility of Local Authority and Police and Crime Panel Meetings) (England and Wales) Regulations 2020.  The meeting was being broadcast live via the internet, it was not being recorded by the Council but, under the usual transparency rules, it may be being recorded by others. 

24.2          The Committee was advised that the Chair had used his discretion to change the order of the Agenda, consequently Agenda Items 9 – Internal Audit Annual Report 2019/20 and 10 – Annual Governance Statement 2019/20 would be taken after Item 5 – Audit and Governance Committee Work Programme.

To receive apologies for absence and advise of any substitutions. 

25.1          Apologies for absence were received from Councillors L A Gerrard, P A Godwin and H S Munro. There were no substitutions for the meeting.

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.

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

26.2          There were no declarations of interest made on this occasion.

To approve the Minutes of the meeting held on 23 September 2020.

27.1          The Minutes of the meeting held on 23 September 2020, copies of which had been circulated, were approved as a correct record.  

To consider the Audit and Governance Committee Work Programme.  

28.1          Attention was drawn to the Audit and Governance Committee’s work programme, circulated at Pages No. 10-17, which Members were asked to consider.  

28.2          The Head of Corporate Services advised that, at the last meeting, Members had asked for reassurance that the annual update on the Council’s safeguarding arrangements would be provided to the meeting in December as planned; he had now spoken to the Head of Community Services who had confirmed this would be the case.

28.3          Accordingly, it was

                 RESOLVED           That the Audit and Governance Committee work programme                                    be NOTED.

To consider the Internal Audit Annual Report 2019/20 and the assurance from the work undertaken during the year on the level of internal control within the systems audited during the year.

29.1          The report of the Chief Audit Executive (Head of Corporate Services), circulated at Pages No. 62-68, provided the Committee with a summary of internal audit work undertaken in 2019/20 to support the internal audit opinion. Members were asked to consider the internal audit opinion and the assurance from work undertaken during the year that, overall, the Council’s governance, risk management and control environment was generally effective. Where areas of concern had been identified, there had been a positive management response to recommendations made and the opinion would inform the Council’s Annual Governance Statement.

29.2          In introducing the report, the Head of Corporate Services explained that Paragraph 2.0 summarised the 2019/20 audit work. The audit plan was informed by a number of activities, namely governance related work, corporate risks, financial related systems, service related work, corporate improvement days, follow up work of previous recommendations and general consultancy and advice. That approach resulted in a comprehensive range of audits that were undertaken during the course of the year to support the overall opinion on the control environment. In compliance with the Public Sector Internal Audit Standards, monitoring reports of internal audit activity were presented at each Audit and Governance Committee. Audit work undertaken in the year consisted of: emergency planning; debtors (finance recovery); fraud and corruption; serious and organised crime framework – licensing; procurement cards; disabled facility grants; website project (corporate improvement); health and safety risk assessment (corporate improvement); General Data Protection Regulation; risk management; discretionary housing payments; complaints; debtors (service related debt); digital platform (corporate improvement); and planning scanning project (corporate improvement). There was one audit outstanding which related to a corporate risk around the effectiveness of the growth hub. Work had commenced on the audit in the latter part of 2019/20 but remained outstanding at the time of writing the report as a result of the internal audit team being deployed to the Council’s response to the COVID-19 pandemic.

29.3          Members were advised that a key area of assurance work, and one that was of particular importance to management and Members, was the follow up of internal audit recommendations. Days were allocated within the plan for the work and the status of recommendations followed up during each quarter were reported to Committee; apart from a handful of recommendations, all that were due to be followed up during the year had been followed up and reported on. The outstanding recommendations were those assigned to the Head of Community Services and had been due to be followed up in the final quarter of 2019/20, however, due to the Council’s emergency response to severe flooding it had been agreed to follow those up at a later stage. The internal audit team was also represented on key corporate groups such as the Corporate Governance Group, the Keep Healthy – Stay Safe Group, the Project Programme Board, the Information Board, the Community Infrastructure Levy Working Group and the Pool Car Project. This approach provided the team with the opportunity to offer advice on key  ...  view the full minutes text for item 29.

To approve the Annual Governance Statement 2019/20.

30.1          The report of the Corporate Governance Group, circulated at Pages No. 69-84, attached the Annual Governance Statement 2019/20. The Audit and Governance Committee was asked to approve the statement.

30.2          The Head of Corporate Services explained that the proposed Annual Governance Statement for 2019/20 was attached to the report at Appendix 1 and it identified four areas of governance that required improvement - those were detailed within the table on the last page of the statement. Progress in implementing the actions stated within that table would be reported at each Audit and Governance Committee meeting. When considering the pre-COVID governance framework, the Corporate Governance Group had recognised improvements made during the year and those were set out at Page No. 78. A review of the existing governance framework was contained at Pages No. 79 and 80 and included a statement about the impact of COVID-19 on the Council’s service delivery and governance framework; however, it was noted that the Annual Governance Statement covered 2019/20 and the majority of that period was COVID free. There was one main area of concern which was considered to be a significant governance issue in relation to the administration of Discretionary Housing Payments; the audit had identified a combination of issues which had resulted in an unsatisfactory opinion being issued. An update to the Audit and Governance Committee in September had confirmed the recommendations made were in the course of being implemented and this would be subject to a follow up review by the internal audit team. In terms of COVID-19, it would be important to learn lessons from the response and this would also be included as a significant governance issue; this had previously been discussed by the Overview and Scrutiny Committee and it was intended to present a report through that Committee in due course.

30.3          In response to a query regarding the COVID-19 response, the Head of Corporate Services confirmed that the impacts were being captured by the Council’s management team so, when appropriate, it would be possible to put them all together into a report.

30.4          Accordingly, it was

                 RESOLVED           That the Annual Governance Statement 2019/20 be                                            APPROVED.

To consider the external auditor’s report on progress against planned outputs.  

31.1          Attention was drawn to Grant Thornton’s report, circulated at Pages No. 18-48, which set out the audit findings for the year ended March 2020. Members were asked to consider the report and progress against planned outcomes.

31.2          The representative from Grant Thornton explained that the report set out the audit findings and served two purposes: to summarise the outcomes of the audit work for the 2019/20 financial statements; and to summarise the work on the value for money conclusion. The headline messages were set out on Page No. 20 and as alluded to at the last Committee meeting, it was clear that the COVID-19 pandemic had a significant impact on the normal operations of the Council. An audit plan addendum had been issued in May to identify different risks arising from COVID-19. Despite having to operate virtually, the external auditors were pleased with how the audit had progressed and they offered their thanks to the Finance Manager and her team for their assistance in ensuring the audit went well. When the report had been written, the audit was 85% complete and good progress had been made on clearing the outstanding areas of work since, with the only outstanding areas being housing benefit information; three investment confirmations from other local authorities; some documentation from the IT department in relation to control work; and an assurance letter from the external auditor for the Gloucestershire pension fund to confirm the operation of the fund in relation to Tewkesbury Borough Council. The audit itself had identified very few issues and only a small number of audit adjustments were required, none of which were of a size material to the Council. In addition, there were a small number of disclosure items that management had agreed to process. Based on the work completed, it was anticipated that an unqualified audit opinion would be issued. Due to some of the uncertainties of COVID-19 an ‘emphasis of matter’ would be made which drew attention to the property valuations material uncertainty because of the conditions that existed at that point in time. In terms of the value for money conclusion, the auditors had looked at the Council’s arrangements and concluded it had adequate arrangements so issued an unqualified opinion. In respect of statutory duties, while the external auditors could issue an opinion in line with the statutory deadline, the audit could not be closed, as a submission had to be made to the National Audit Office on the whole accounts and this could not be certified as complete until an assurance statement had been submitted but the guidance on that statement was needed before it could be completed. In drawing attention to Page No. 26, there were two items highlighted as being ‘in progress’: IFRS 16 (a new accounting standard) – the Council and the external auditors disagreed as to whether this should be included as it was a standard that had been issued but not yet adopted, and further technical consultation was being sought on that; the  ...  view the full minutes text for item 31.

To approve the S151 Officer’s Letter of Representation on the closure of the accounts for the year ended 31 March 2020. 

32.1          Attention was drawn to the Section 151 Officer’s Letter of Representation on the financial statements for the year ended 31 March 2020, which had been circulated at Pages No. 49-55.  Members were asked to approve the letter.

32.2          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. 

32.3          Accordingly, it was

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

To approve the Statement of Accounts 2019/20.  

NB: The Statement of Accounts (Appendix A to the report) will follow separately.

33.1          The report of the Head of Finance and Asset Management, circulated at Pages No. 56-61, asked Members to approve the Statement of Accounts for 2019/20. The Statement of Accounts had been circulated separately at Pages No. 1-86.

33.2          The Finance Manager explained that there were some outstanding issues to be addressed which may result in small amendments to the accounts and this was the reason for the delegation. 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.

33.3          It was

RESOLVED           That the Statement of Accounts for 2019/20 be APPROVED.