Agenda and minutes

To confirm the Minutes of the Meeting held on 1 March 2021 and published on the Council’s Website.

The Minutes of the meeting held on 1 March 2021 was agreed as a correct record.

To receive apologies for absence.

Apologies for absence were received from Cllrs John Gray, Michaela Wicks and George Wilson.

To receive from Members, declarations of interests in relation to any items included on the Agenda for this meeting, in accordance with the Waverley Code of Local Government Conduct.

There were no disclosure of interests submitted for this meeting.

The Chairman to respond to any questions received from members of the public of which notice has been duly given in accordance with Procedure Rule 10.

There were none.

The Chairman to respond to any questions received from Members in accordance with Procedure Rule 11.

There were none.

This report details the work undertaken by the Audit Committee over the municipal year 2020/21. The purpose of this annual appraisal of the work of the Committee is to help Members review the previous year’s work and plan for the coming year.

Recommendation

It is recommended that the work carried out by the Audit Committee in

2020/21 be noted.

The Committee NOTED the Annual Activity Report for the municipal year 2020/21.

It is good practice for the Committee to keep its Terms of Reference under review, therefore the Committee are asked to consider the attached current Terms of Reference including the core functions and membership and to make comment.

Following the review last year an informal meeting was held on 29^th October and a further meeting was held on 26^th November. It was hoped that following this meeting the revised Terms of Reference could be presented to full Council early 2021, however due to pressures imposed by COVID-19, this has not yet happened.  There were very little revisions proposed and the main focus was the linking up and overlaps with Value for Money O&S which would be picked up by the review of the constitution.

Recommendations

To consider the TOR as a whole and pass comments.

The Committee considered the current terms of reference and discussed whether there were areas of concern that were not being met.

Comments:

·         8.3 (a) ii – It was questioned whether this was being complied with in respect of the Air Quality Action Plan and Mitigation of Habitats regulations.  The chairman advised that he was currently in discussions regarding the Habitats regulations and requested that formal questions/concerns be submitted in writing for him to investigate.

·         It was raised that a number of actions cross paths with other areas and it would be useful to have these crossovers identified

To note the attached External Audit Plan 2020/21 from Grant Thornton.

Paul Cuttle, Grant Thornton, outlined the highlights from the 2020/21 Audit Plan.  The Committee were updated on the headlines and scope of the audit.  He advised that the report set out:

·         the approach taken and the most significant areas to focus on.

·         how we are dealing with new standards

·         the changes in the value for money arrangements.

He advised that a binary opinion was no longer provided and a separate auditors report would be provided.

The Committee were advised that the Audit had yet to commence due to capacity issues.  Grant Thornton have agreed a revised timescale with senior officers.  It was hoped to start the Audit this month and be able to report back to the Committee in November.

It was questioned whether the lateness of the report would have any implications? They were advised it would have no adverse implications and they were just playing catch up after the last eighteen months of issues.

The Committee NOTED THE External Audit Plan 2020/21.

To enable the Committee to consider the Draft Annual Governance Statement

and raise any potential emerging governance issues that may need to be addressed.

Recommendation

The Committee is invited to consider the Draft Annual Governance

Statement and raise any potential emerging governance issues for

consideration.

Patrick Tuite, Procurement Officer, presented the draft Annual Governance Statement (AGS) advising this had been populated from work carried out in the previous year.

It was noted that the majority of areas that needed populating when version 2 of the report came out had been completed in version 3 which the committee were viewing, however, the area not expanded on was the habitats regulations.  The chairman and officers were asked when the evidence of appropriate assessments would be supplied.  The Chairman advised this was currently being investigated but that the Head of Planning had advised that he was happy we were complying.

Action: The document evidencing that we are complying to be circulated once made available.

The Committee raised concern about the lack of risk analysis and recommendations.  Recent discussions around a single management team and the selection of a joint CEO appear to have a lack of identified key risks.  There had also been requests regarding a risk assessment for holding a full Council meeting in the chamber. There had been a risk matrix circulated but it had been a 5x5 matrix which did not match with the Council’s usual 4x6 Matrix.  It was pointed out that 8.3 (a) iv of the terms of reference  stated ‘To monitor the effective development and operation of internal control in the Council with particular reference to all aspects of risk management, including Waverley’s Corporate Risk Registers’.  It was questioned therefore if section 7 of the AGS was fit for purpose.It was suggested that the AGS for this year needs to flag that major operational decisions are not benefiting from the level of risk analysis that policy requires and that action needs to be taken to assure that this situation is rectified as soon as possible.

Other areas the committee felt should be mentioned in the AGS was the 2 changes to the planning structures and the proposed changes to the O&S structure.

Action: review of Risk Assessments to be put onto the work program and scheduled to be discussed at an informal meeting.

The Committee noted that section 5.3 of the AGS alluded to the challenges faced this year but it was felt this could be made more robust.

It was asked if it was appropriate to mention rule changes affecting financial viability in the AGS?  They were advised that, whilst setting the budget and MTFP did not fall within the Audit remit, financial resilience was an Audit concern. An update of the Financial Management Code would be presented to an informal meeting in October.

The Committee asked that their comments be taken into consideration.

The Audit Committee to consider and note the annual internal audit report and

audit opinion for 2020-21.

Gail Beaton, Internal Audit Manager, gave an overview of the work completed over the previous year. 

The committee felt it was a clear and concise report.

It was asked if future reports could demonstrate the time taken to implement actions/recommendations as it was felt we should review late deliveries and the reasons behind them.

The Committee NOTED the Annual Internal Audit Report and Audit Opinion for 2020-21.

To inform the Audit Committee of Senior Management’s progress in implementing the recommendations raised by Internal Audit  following a review in their service areas. This report will enable the Committee to consider what action is required in respect of those that are overdue or appear likely to be implemented later than the target date.

Recommendation

It is recommended that the Committee considers the information contained and, following discussion at the Audit Committee meeting identifies any action it wishes to be taken.

Gail Beaton outlined the review of the progress in the implementation of the internal audit recommendations.  They were advised that COVID-19 had impacted on last years actions but that many although showing as outstanding had now been implemented.

Although implementation had taken place on many of the actions it was felt there was a reputational risk when a report shows a sea of red.  It was suggested the RAG rating may need reviewing.

There was concern that action IA21/17.004.2 around safeguarding was showing as red. It was noted the due date was 30 September, therefore it was emphasised this should be pushed ahead to meet the due date.

Action: A revised Review on Progress in the Implementation of Internal Audit Recommendations would be circulated with the minutes to inform on the changes since the agenda publication.

The Committee considered the information in the report and asked for their comments to be taken into consideration.

The Committee’s Terms of Reference include provision for the Committee to approve, monitor and comment on the progress made in the achievement of the Internal Audit Plan.  An update on the current position of the internal audit reviews is attached.

Recommendation

It is recommended that the Committee notes the contents of the Internal Audit Progress report as attached.

The Committee were advised that the Terms of Reference include provision for the Committee to approve, monitor and comment on the progress made in the achievement of the Internal Audit Plan. Gail Beaton gave an update on the current position of the Internal Audit Plans for 2020-21 and 2021-22 to note.

The Committee were advised that quite a few of the of the reviews have now been started and some completed since the publication of the agenda.

The committee commented that there were some useful key observations set out in the report and asked if there were any schemes for analysing the findings and the route causes for the actions being necessary and how they could be avoided.

It was noted that page 154 was missing a budget balance.

The Committee NOTED the Internal Audit Progress report.

The report provides an update to the Committee on the work being completed in investigating fraud, primarily focusing on Housing Tenancy Fraud.

Recommendation

It is recommended that the Audit Committee notes the success of the fraud investigation activity.

Gail Beaton outlined the Fraud Investigation Summary. She explained it covered all of 2020/21 and the first quarter of 2021/22.  It was highlighted that over £1m of savings were identified.  Annexe 1 identified savings of just under £100k for quarter 1.

The Committee discussed the amount of work that goes into investigations and agreed this was an amazing achievement.

Action: A revised Fraud Investigation Summary would be circulated with the minutes to update the typographical changes since the agenda publication, this does not affect the figures reported.

The Committee NOTED the success of the Fraud Investigation activity.

To endorse the Internal Audit Charter.

The Committee were advised that this was an annual review and that nothing had changed since the previous review.

The Committee ENDORSED the report.

The Committee’s annual recurrent work programme is attached.  The work programme details regular items, but other items can be submitted to each meeting on an ad hoc basis or at the request of the Committee.

Recommendation

The Audit Committee is invited to note its recurrent annual work programme.

The Committee NOTED the recurrent annual work programme and agreed the amendments discussed in the meeting.

To consider the following recommendation on the motion of the Chairman:

Recommendation

That pursuant to Procedure Rule 20 and in accordance with Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting during consideration of the following item(s) on the grounds that it is likely, in view of the nature of the business to be transacted or the nature of the proceedings, that if members of the public were present during the item(s), there would be disclosure to them of exempt information (as defined by Section 1001 of the Act) of the description specified in the appropriate paragraph(s) of the revised Part 1 of Schedule 12A to the Local Government Act 1972 (to be identified at the meeting).

At 8.43pm, the Committee RESOLVED that, pursuant to Procedure Rule 20 and in accordance with Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting during consideration of the following item on the grounds that it was likely, in view of the nature of the proceedings, that if members of the public were present during the item, there would be disclosure to them of exempt information (as defined by Section 100I of the Act) as specified in paragraph 3 of the revised Part 1 of Schedule 12A to the Act, namely: Information relating to the financial or business affairs of any particular person (including the authority holding that information).

To consider any matters relating to aspects of any reports on this agenda which, it is felt, may need to be considered in exempt session.

Whilst in Exempt session, the Committee asked for an update from Officers on recent developments regarding (a) Property Development and (b) a possible fraud issue.

At 8.58pm, the Committee returned to Open session and confirmed that they had received the updates requested.

It was requested that Officers be asked to provide version control on documents as when various versions of a document are sent out it was difficult to know which document is being referred to.