Agenda and minutes

To receive apologies for absence.

Apologies were received from Cllr David Beaman.

To confirm the Minutes of the Meeting held on 20 June 2023 and published on the Council’s website

The Minutes of the last meeting held on 20 June 2023 were agreed as a correct record.

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.

The deadline for receipt of questions is 5pm on Monday 4 September 2023.

There were none.

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

The deadline for receipt of questions is 5pm on Monday 4 September 2023.

There were none.

Committee to approve appointment of Cllr Michaela Wicks as new Vice-Chair.

Cllr Michaela Wicks was elected as Vice-Chair of the Audit and Risk Committee.

The purpose of this report is for the Audit Committee to consider and approve the Statement of Accounts for the year ended 31 March 2022.

Recommendation to Committee

That the Audit Committee approves: 

a.     Delegation to the Chair of Audit Committee and the S151 Officer to approve the Statement of Accounts for the financial year ended 31 March 2022; 

b.    Delegation to the Chair of Audit Committee and the S151 Officer to approve the Letter of Representation for 2021/2022; and 

c.     Confirms that the accounts have been prepared on a going concern basis. 

Rosie Plaistowe, Financial Services Manager, outlined the Statement of Accounts circulated in the agenda. She explained that the accounts were not quite at a close as yet as the External Auditors were awaiting a couple of items relating to a letter of assurance from SCC around the pension fund and information about the investments from the bank. Members asked for the assurance letter to be circulated once available.

There had been a couple of amendments relating to the Additional Rest Grant being in the wrong section and needing to be re-categorised and a re-banding adjustment. Otherwise there had been no material changes.

Officers were confident the accounts would be signed off by end of October.

Officers were asked what the rational was for saying we are a going concern considering the issues other local Authorities were having. Rosie Plaistowe directed members to Paragraphs 7.10 and 7.11 which state:

7.10. CIPFA has issued specific guidance on how local authorities should report their going concern statement in the light of the Covid-19 impact. Whilst this guidance confirms that local authorities cannot cease to be a going concern, or be liquidated or cease to operate, it suggests areas that should be reported to give assurance to the Council about the organisation’s current and future financial position.

7.11. Waverley’s Medium-Term Financial Plan (MTFP) (2022/2023 to 2024/2025) was agreed by Council in February 2022, and further updated MTFP (2023/24 to 2025/26) agreed by Council in February 2023. The MTFP forecasts the Council’s financial performance and identifies budget pressures for the three years of the plan and demonstrates that the Council has sound plans to continue operating. The external factors have continued to directly and indirectly affect the Council’s operations and financial position. This ongoing impact was considered in the MTFP and was carefully scrutinized through the approval process. Officers have implemented more robust and more frequent monitoring arrangements to ensure that the Council has early warning of adverse variations to the forecast so that it can take corrective action.

Richard Bates, Interim S151 Officer, advised that the key document for members to be assured we are a going concern was the S25 Report.

That Audit Committee AGREE:

·      Delegation to the Chair of Audit Committee and the S151 Officer to approve the Statement of Accounts for the financial year ended 31 March 2022, subject to no substantial changes;

·      Delegation to the Chair of Audit Committee and the S151 Officer to approve the Letter of Representation for 2021/2022; and

·      Confirms that the accounts have been prepared on a going concern basis.

External Audit Findings Report 2021-22. The Audit findings report presents the observations arising from the audit that are significant to the responsibility to those charged with governance to oversee the financial reporting process, as required by International Standard on Auditing (UK) 260. It’s contents have been discussed with Management and the Audit Committee.

Paul Cuttle, Grant Thornton, outlined the report circulated with the agenda. He explained that the audit was substantially complete and has been for 6 months but there had been a requirement to wait for direction on pension valuations which was outside the control of Waverley Borough Council.

The Committee were advised that there were only 1 page of adjustments which was credit to the finance team for their hard work as often adjustments can run into 15 pages or more.

The Audit and Risk Committee NOTED the report.

Committee to note the Value for Money report.

Paul Cuttle, Grant Thornton, outlined the report circulated with the agenda. He directed the committee to page 156 of the agenda pack which outlined the powers of the auditor and page 164 which outlined the Improvement Recommendations. He highlighted that in the auditors opinion the Council was well placed to manage pressures.

The Committee Chair highlighted comments in the report regarding a lack of a workforce strategy and a procurement strategy. Robin Taylor advised that work was currently being carried out on a Workforce Strategy and Richard Bates advised that officers at Guildford were working on a joint Procurement Strategy.

The Audit and Risk Committee NOTED the report.

Committee to note and comment.

Rosie Plaistowe, Financial Services Manager, advised that a letter had been received from Central Government outlining a wide range of broad proposals and actions to address the backlog of local audits in England. A schedule of statutory deadlines would be set to clear the backlog and if necessary qualifications and disclaimers of opinion may be necessary.  If audits are unable to obtain assurances they will be allowed to move on to their next audit to allow that to be completed without delay.

Timescales will be generous but members were assured that Waverley were currently at low risk as they had completed their 2021/22 accounts as discussed earlier in the meeting and were well on the way with the 2023/23 ones.

The Audit and Risk Committee NOTED the report.

The purpose of this report is to reflect the journey taken in 2022/23

to improve our information and data management (IDM) practices across the organisation, and inform about the next planned steps.

Recommendation

-        Committee to note the report and pass on their comments and observations back to the officers, the senior management team and the portfolio holders as appropriate

-        Agree to annual receipt of the report going forward at the June committee cycle

Robin Taylor, Executive Head of Organisational Development gave a brief overview of the report and expressed thanks to Nora Copping, Information Manager, and her team for all their hard work and progress in how we are managing data.

Nora explained that the team aspire to improve Waverley’s practices in collecting good quality data.

The Chair welcomed the report and highlighted this was a great step forward. He asked if where officers titles are mentioned that their names also be included.

Cllr Peter Clarke, Deputy Leader & Portfolio Holder for Customer Services, Business

Transformation and IT, endorsed the report and expressed that this was a key asset for Waverley Borough Council which required a robust governance and clear strategy. The main challenges are culture, skills, business case and embedding this in the organisation.

Nora advised that the team would be engaging with senior management on ways to address these challenges.

Officers were asked if a exempt session could be held with members of the committee and officers to discuss items that may be confidential such as cyber crime etc.

Action: A session would be arrange in due course.

The Audit & Risk Committee AGREED to:

·      Note the report and pass on their comments and observations back to the officers, the senior management team and the portfolio holders as appropriate

·      Annual receipt of the report going forward at the June committee cycle

Committee to look at Reviewof WaverleyBorough Council’s CovertInvestigative PowersPolicy and alignment with the Policy of Guildford Borough Council

Recommendation

Thatthe draftPolicy inAppendix 1to thisreport beadopted, subject to the same policy being adopted by Guildford Borough Council.

Jayne La Gura, Deputy Borough Solicitor, outlined the draft policy set out in the agenda pack.  She explained this has been aligned with Guildford Borough Council’s policy which was agreed by them on the 24^th August 2023.

Members asked how often these powers are exercised and were advised that it was very infrequent and the last time they were used was 2021.

The Chair commended the clarity of the report and expressed the social media expectations of officers was very onerous. He asked if there would be training and was advised that there was mandatory training for all staff and key officers would have extra training.

The Audit and Risk Committee AGREED that the draft Policy in Appendix 1 is adopted, subject to the same policy being adopted by Guildford Borough Council.

Annual update and review of our Anti Money Laundering Policy. To adopt legislative changes and reflect best practice in the industry.

Recommendation to Audit Committee

The Audit Committee agree that the proposed amendments be approved and incorporated. 

Rosie Plaistowe, Financial Services Manager, outlined the report circulated with the agenda. She advised that the only changes required was to change 5.1 to read Richard Bates as Interim Executive Head of Finance instead of Peter Vickers and some additional links were added to the report.

The committee asked how many reports Waverley receives and was advised that we  had none recently and any reports would be highlighted in the Annual Governance Statement.

The Audit Committee AGREED that the proposed amendments be approved and incorporated.

The Audit Committee is asked to consider the update to the Financial Regulations and recommend them to the Council, in compliance with the Audit Committee Terms of Reference under Article 8 of the Constitution. Specifically, the Audit Committee is required to maintain an overview of the Council’s Constitution in respect of financial regulation

Recommendation to Audit Committee

It is recommended that the Committee recommends the update to the Financial Regulations to the Council for adoption

Rosie Plaistowe, Financial Services Manager, outlined the report circulated in the agenda. The transactions reporting needed no change and no internal audit changes were recommended.

The Supplementary Estimate Limit (SEL)had not been increased for a number of years and it had been agreed to move it up from £100k currently to £250k going forward. It was felt the process was robust enough that there was little risk.

Members suggested there should be a SEL aggregate limit but were informed there were no Regulations to deal with this.  In addition there were usually very few requests and of those not many were for large amounts.  We have a strong leadership team with the Council’s finances at the heart of their decision making.

Members felt their should be some control measures and asked the S.151 officer to look at reporting methodology.

The Committee recommends the update to the Financial Regulations to the Council for adoption

Committee to receive presentation from Robin Taylor (Executive Head of Business Transformation). To receive updates on any Risk Management issues and for the Members to raise any issues for discussion.

Robin Taylor gave a short presentation to the Committee on Risk Management, slides to be circulated, explaining what risk management is and the current approach.

The presentation outlined:

·         Risk Management – what and why

·         Red Amber Green (RAG) overview

·         AGS – statement of principles on risk management

·         Policy and toolkit

·         Strategic risk register

·         Impact and likelihood

·         Risk Appetite statement

·         Internal Audit Recommendations from March 2023 report

It was suggested that the Risk Appetite Statement be reviewed and updated.

The Committee agreed with the weaknesses identified and suggested that the Executive and Senior Management Team have more input into the framework. The Committee felt that the risk management process was on a voyage and requested that the committee have input throughout the journey.

Members felt the register was siloed so some minor risks if put together could raise a significant risk.  Robin advised that there were learning exercises carried out from near misses and lessons learnt reviews. Members also asked how the impact levels were determined and were advised these were historical and needed reviewing.

Members asked about the risks involved in recruitment and retention and asked for an update at a future meeting.

The Audit and Risk Committee NOTED the update.

To enable the Committee to raise any potential emerging governance issues that may need to be addressed.

Recommendation

The Committee is invited to raise any potential emerging governance issues for consideration.

The Committee were advised that the Annual Governance Statement was a live document signed off once a year but presented at each meeting for noting and to identify any areas that need to be included or areas of governance that need investigation.

Members suggested that:

·         Changes to the Planning Committee from two to one should be referenced.

·         An update on Data management should be included.

·         The threat of designation should be addressed.

·         An update on the Executive Working Groups should be included.

The Audit and Risk Committee NOTED the report.

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.

Gail Beaton outlined the highlights of the report included in the agenda pack. She explained that appendix 1 outlined the progress and noted that it had been a little slow mainly due to annual leave causing staffing shortages so now the holiday period had passed this should pick up.

It was highlighted that Business continuity is being improved but the action had been deferred to Q1 2024/25 therefore 10 days had been taken back from the budget. Car parking PCN’s required an increase of 3 days but this was covered by the 10 day refund.

The Audit and Risk Committee NOTED the report.

.

To inform the Audit Committee of Senior Management’s progress in implementing the actions 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 reminded the committee that at a previous meeting she had been requested to include an introduction which was supplied in this report.

Three actions had been submitted by Housing for extension of time. Two were asked to move from 31/07/2023 to 30/09/2023 and one from 31/07/2023 to 31/10/2023.

Appendix 3 would be discussed in exempt session at the end of the meeting.

The Audit and Risk Committee NOTED 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 Audit and Risk Committee NOTED the Annual Work Programme and the items scheduled for inclusion at the next 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 20.53 the Chairman requested the webcast be terminated for discussion of Exempt item Appendix 3 of the Review of Progress in the Implementation of Internal Audit Actions.

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.