Agenda and minutes

None received.

To receive public questions, if any.

None received.

To determine any items of business which the Chairman decides should be considered as a matter of urgency pursuant to section 100B(4)(b) of the Local Government Act 1972.

None received.

Members are asked at this stage to declare any interests that they may have in any of the following items on the agenda. The code of conduct for Members requires that declarations include the nature of the interest and whether it is a disclosable pecuniary interest.

None declared.

To approve as a correct record, the minutes of the meeting of the Governance, Risk & Audit Committee held on 23^rd July 2019.

Minutes of the meeting held on 23^rd July 2019 were agreed as a correct record and signed by the Chairman, subject to Cllr N Pearce being listed as ‘in attendance’.

The Internal Audit Manager introduced the Report and informed Members that it covered the period from 1^st April to 21^st August 2019. She stated that a total of 26 days work had been completed to date, equal to fourteen percent of the overall plan.

Questions and Discussion

The Internal Audit Manager referred to the work summary on page 12 of the agenda, and informed Members that the Internal Audit Team were on-track with the agreed plan, meaning that the car parking and project management work had been completed. She added that quarters three and four had significantly more work planned and that she would work with officers to ensure that next year’s audit plan was more evenly spread across each quarter.

The Internal Audit Manager referred to the yet to be determined IT audit area and informed Members that after a discussion with the Head of IT Digital Transformation, a proposal had been made for a GIS application audit. This would look at the controls around access, administration and support for the software which was key to the Council’s planning function. The Chairman stated that he was happy for the audit to go ahead as soon as possible. In addition to the GIS audit, business continuity and cyber security had already been scheduled for quarter 4.

On the car parking audit, the Internal Audit Manager informed Members that six recommendations had been made of which three were important, and three needed attention. The three important recommendations included discrepancies between  monthly income reports of mobile app payments and actual income, contractual arrangements for emergency repairs, and the need for regular stock takes of season tickets to avoid losses. Cllr S Penfold asked if the income from car parking covered the costs of the service, to which the Chief Technical Accountant confirmed that the service did return a profit. The Chairman added that the Council’s car parking revenue was in excess of £2m. The Internal Audit Manager concluded by stating that a positive assurance had been given.

On project management, the Internal Audit Manager stated that the primary aim of the audit was to ensure that the framework was sufficient. As a result, the focus points were governance arrangements, management, and evaluation. The projects chosen for evaluation were the Digital Transformation Programme and the Cromer Sports Hub. The audit determined that a single location for all project documentation had been established, and that whilst project guidance was available, a recommendation for improvements had been made. It was confirmed that project budgets had been subject to detailed modelling. The key findings were as follows; proposals must be linked to the values and goals of NNDC, each project must be managed in the same way, senior management need a better overview and communication on the progress of each project, and finance expertise must be used to better manage project risks.

Cllr S Penfold asked whether a recommendation had been made for additional training on specialist project management skills, to which the Internal  ...  view the full minutes text for item 17.

Contact Officer, telephone number and email:

Duncan Ellis, 01263 516330, Duncan.ellis@north-norfolk.gov.uk      

The Chief Technical Accountant introduced the Report and informed Members that there had been no movement on the risks identified in the summary register. She added that a corporate projects risk had been added, and that any updates throughout the register were highlighted in green.

Questions and Discussion

The Chief Technical Accountant raised the Medium Term Financial Plan (MTFP) risk, and informed the Committee that the results of the spending review for Local Government had been announced last week. It was suggested that the outcome hadn’t brought any substantial good news for district councils such as NNDC. In summary, it was stated that the review equated to the Council’s current funding, with an increase for inflation. It was noted however, that it would not cover an increase in costs for several of NNDC’s services. The Chief Technical Accountant stated that the Council would continue to lobby ministers on the issues facing Local Government, and added that the planned fair funding and businesses rates review had been delayed for one year, which in effect provided more time to continue lobbying Government.

On recruitment, it was reported that the apprenticeships scheme had been a success, with several new members of staff recruited through the programme.

On the property assets risk, the Chief Technical Accountant informed Members that work at the Grove Lane property in Holt had been completed, and that the site was now being let as office space, providing an income for the Council.

Sheringham Leisure Centre, identified as one of the projects under the corporate projects risks, was noted to have been granted an additional £2m funding. It was stated that recommendations from the project management position statement would become actions to improve the corporate project management framework.

Members were encouraged to provide feedback on the format and content of the Corporate Risk Register, with a view to make improvements. The Internal Audit Manager noted that there was no indication of the Council’s risk appetite on the register, and suggested that risks should be articulated in a clearer fashion to reflect the cause and consequence of risks. For example, projects with impact and likelihood scores of 20 or above could be considered outside of the Council’s risk appetite, though this would be for the Council to decide. She added that it was not necessary to include low risks on the register. The Internal Audit Manager then referred to the MTFP risk and stated that though the majority of actions had been completed, the risk score had not changed, and suggested that the risk scores should be amended to reflect the current position.

On the corporate projects risks, the Internal Audit Manager stated that little detail was available for the individual projects, and suggested that risks needed to be linked to the Council’s corporate and strategic objectives. The Chairman added that whilst the corporate projects risk was new to the summary register, he was concerned that it appeared immediately as a high risk. He agreed that the corporate projects risk was  ...  view the full minutes text for item 18.

Verbal update to be provided on the current status of the Annual Accounts sign-off.

The Chief Technical Accountant provided a verbal update on the status of the annual  accounts sign-off and informed Members that no further work had been completed by the external auditors. It was noted that opportunities to progress the audit had been missed in August, and with little further contact from EY, it looked as though opportunities to complete the audit in September would also be missed. Members were informed that the Committee could either wait until the December meeting to sign-off the annual accounts, subject to completion of the audit, or grant the Chairman delegated authority in conjunction with the Section 151 Officer, to sign-off the accounts as soon as the audit was complete. The Chairman proposed that he and the Section 151 Officer be given delegated authority to sign-off the annual accounts once audited. The proposal was seconded by Cllr J Toye. The Chief Technical Accountant informed Members that she would update them on the status of the accounts sign-off as and when necessary.

The Chairman asked whether not signing annual accounts had any effect on the Council’s status or any financial impact, and whether the Council had already paid the external auditors. The Chief Technical Accountant replied that the external auditors had been paid, as this was a contractual requirement. In terms of financial impact, Member were in informed that the Council could not be reimbursed for expenditure by Central Government, which necessitated borrowing and caused a loss of investment income. The Chairman asked whether the delay was still due a disagreement between EY and NNDC on the treatment of the Council’s investments. The Chief Technical Accountant suggested that this was likely an excuse, as the work could be completed without the final sign-off. She added that the reason for the delay was more likely resourcing issues at EY.

In response to a question from Cllr J Stenton, it was confirmed that the Chief Technical Accountant had not been permitted to view the Council’s external audit contract by the PSAA, and could not therefore claim compensation for the delay. The Chief Technical added that she expected that the performance indicators outlined in the contract were likely based on audit quality, therefore delays would be inconsequential. Cllr J Stenton asked if next year’s invoice for the external audit service could be disputed, to which it was suggested that this would be difficult without reviewing the contract.

Cllr S Penfold asked whether any indication of timescale could be given for the external auditors to complete the audit, to which the Chief Technical Accountant replied that no formal date had been set. It was suggested that a worst case scenario would result in the accounts being signed off after October. Cllr N Pearce asked whether there would be a domino effect for next year’s audit as a result of the delay. The Chief Technical Accountant replied that she had raised the issue with EY, and efforts were being made to recruit staff to avoid reoccurrence. She added that it was possible  ...  view the full minutes text for item 19.

To monitor progress on items requiring action from the previous meeting, including progress on implementation of audit recommendations.

The Democratic Services & Governance Officer informed Members that all items from the action list had been completed and that there were no further updates.

To review the Governance, Risk & Audit Committee Work Programme.

The Chief Technical Accountant confirmed that the Work Programme was up to date, but stated that it was likely that the Annual Grant Certification Report could be delayed.

To pass the following resolution, if necessary:

“That under section 100A(4) of the Local Government Act 1972 the press and public be excluded from the meeting for the following items of business on the grounds that they involve the likely disclosure of exempt information as defined in part 1 of schedule 12A (as amended) to the Act.”