Agenda and minutes

Apologies were received from Cllr P Butikofer.

Cllr P Heinrich substituted for Cllr P Butikofer.

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 meetings of the Governance, Risk & Audit Committee held on 9^th and 25^th March 2021.

The Minutes from the meetings held on 9^th and 25^th March 2021 were agreed as a correct record and signed by the Chairman, subject to the following amendment:

Location of the meeting held on 9^th March 2021 to be changed to a ‘remote meeting’.

The IAM introduced the report and informed Members it covered reports finalised up to 7^th June 2021. It was noted that 145 days of programmed work had been delivered and whilst one report on remote access had been in draft, it was now finalised with no changes made. The IAM referred to the position statement on Coronavirus Response and Recovery, and noted that there were a number of suggested points raised, of which a number were still in progress. On the performance of the contractor TIAA, it was noted that there had been difficulties finalising reports, due to the unprecedented circumstances caused by the Pandemic. It was noted that there had been lessons learnt on securing the engagement required to complete scheduled audit work. The IAM referred to appendix 1 which outlined the final plan of all scheduled work, its current status, and the recommendations and assurance levels given. She added that appendix 2 provided the individual audit’s executive summaries. The private sector housing disabled facilities grant arrangements on page 35 were noted, due to two recommendations which were believed to present good risk management, that had not been taken forward. The IAM noted that the first important recommendation related to performance management of the DFG process, as there was not a target in place that would facilitate better performance monitoring. The second ‘needs attention’ recommendation suggested quarterly rather than annual reconciliations, to ensure that any errors were spotted prior to the year end.

Questions and Discussion

       i.          The Chairman noted that appendix 3 would be discussed towards the end of the meeting, to account for any potential requirement to move into private business.

      ii.          The CE noted that he was not fully aware of the details of the DFG recommendations, but would be happy to discuss these with the IAM and report back to the Committee, if required.

     iii.          Cllr S Penfold referred to the process of internal audit recommendations, and asked whether there was there a process in place for resolving recommendations that had not been accepted. The IAM replied that audit recommendations were not enforceable, which meant that the Committee held ultimate responsibility for ensuring good governance and risk management, and could therefore request that further consideration be given, if necessary.

    iv.          Cllr C Cushing referred to page 32 on key controls and assurance arrangements, and stated that whilst a reasonable assurance grading had been given, what actions would be required to return these controls and arrangements to a substantial grading. The IAM replied that these had been significantly impacted by Covid-19, and it was expected that the key controls and assurance arrangements would likely return to a substantial assurance grading in the future. She added that the reasonable assurance grading given was still positive, with four suggested actions accepted by management. Cllr C Cushing stated that in his opinion, key financial controls should maintain a substantial assurance grading at all times, and asked Cllr E Seward whether he agreed. Cllr E Seward agreed that these  ...  view the full minutes text for item 7.

The IAM introduced the report and informed Members that it included the number of outstanding audit recommendations for each audit year. She added that there were thirty outstanding recommendations, and whilst a number were low priority, it remained important that these were completed as soon as possible. The IAM noted that existing suggestions to create greater accountability and input the recommendations into InPhase were a positive step that should help to facilitate implementation of the recommendations. It was noted that all outstanding recommendations were listed in appendix 1 on page 58, and those that were greyed-out had since been completed with evidence provided. From page 59 the outstanding recommendations were listed on a yearly basis with details including the officer responsible, due dates, revised due dates and latest responses. The IAM suggested that given the number of outstanding recommendations, it could be beneficial to increase the frequency of follow-up reports to quarterly until the backlog was resolved.

Questions and Discussion

       i.          The Chairman referred to outstanding section 106 agreements and asked whether this was normal, or whether there had been delays in the process. The IAM replied that it was specific recommendations that had caused delays, and whilst good progress had been made, there was still work to do.

      ii.          Cllr E Seward stated that as a North Walsham Member he had been alerted that there was section 106 money available for the town that remained unspent dating back to 2010, though this was now beginning to be used. He added that whilst there had been resourcing issues in Planning that had delayed some section 106 agreements, these issues had now been resolved. It was noted that North Walsham Town Council had also developed their own system to monitor agreements. Cllr E Seward stated that proposing projects for section 106 funding was often more complicated than expected, and suggested that the sooner an IT monitoring system could be implemented, the better.

     iii.          The Chairman asked whether the Council maintained a section 106 register, and it was confirmed that this was held on a spreadsheet that was adequate for information purposes, but could be improved upon. It was confirmed that the list was substantial and contained links to the details of agreements with planning reference numbers. It was noted that local Members didn’t have personal access to the list without making a request via officers. The CE noted that the recommendation to implement an automated monitoring system was a longstanding action that came as a separate module of the Uniform planning system. He added that section 106 agreements were often related to complex developments with specific requirements that could take months or years to fulfill. It was noted that the weakness of the current system was the risk of loss around the maintenance of the monitoring spreadsheet, as well as there not being any automated flagging system to alert officers to trigger payments on outstanding agreements. The CE stated that the five recommendations provided should help to development a more robust  ...  view the full minutes text for item 8.

The IAM introduced the report and stated that the overall opinion provided on page 71 was reasonable, which was a positive assurance grading. She added that there were three substantial assurance gradings provided for accounts payable, Council tax and NNDR, and Payroll/HR. It was noted that work had also been completed on the Council’s response to the Covid-19 pandemic, remote access, contract standing order exemptions and procurement/contract management. The IAM stated that throughout the audits, there had not been any findings to suggest that Covid-19 had detrimentally impacted the Council’s ability to deliver core services. It was noted that the audits did not provide assurances of the business grants administered by the Council, as this would be covered in the year ahead. The IAM referred to the Cromer Tennis Hub audit, and stated that whilst no assurance grading had been given, good progress had been made on implementing the recommendations . This included implementing a new project management framework, improvements to governance arrangements and adding project risks to InPhase. The IAM referred to issues that had been recommended for inclusion in the Annual Governance Statement (AGS), and noted that until the Tennis Hub audit recommendations were verified as complete, they should remain part of the AGS. She added that section 5 of the report covered Internal Audit’s own performance, with a self-assessment completed against the public sector internal audit standards, and an external assessment due in 2022. On contractor performance, it was noted that Covid-19 had impacted the completion of audits, though this was to be expected as a result of repriortisation and resourcing issues. The IAM stated that she was due to meet with the contractor to discuss these issues, and performance would be expected to improve in the current year. It was noted that appendix 1 covered all work completed, whilst appendix 2 provided details on the assurance gradings over a number of years.

Questions and Discussion

       i.          Cllr C Cushing referred to areas that hadn’t recently been audited on page 82, and asked whether these would be scheduled in the year ahead. The IAM replied that the Strategic and Internal Audit Plan was the next item on the agenda, and would cover all planned work. Cllr C Cushing noted that cyber security was a particular concern, and it was confirmed that this would be covered.

RESOLVED

1.     Receive and consider the contents of the Annual Report and Opinion of the Head of Internal Audit.

2.     Note that a reasonable audit opinion has been given in relation to the framework of governance, risk management and control for the year ended 31 March 2021.

3.     Note that the opinions expressed together with significant matters arising from internal audit work and contained within this report should be given due consideration, when developing and reviewing the Council’s Annual Governance Statement for 2020/21.

4.     Note the conclusions of the Review of the Effectiveness of Internal Audit.

The IAM introduced the report and informed Members that the strategic plan covered the next three years, taking into account the business plan, the strategic risk register, areas deferred from last year’s plan due to Covid-19, and any potential key risks. She added that whilst the annual plan was usually provided in March, delays caused by Covid-19 meant that it was more prudent to present the plan once the previous year was complete. It was noted that Internal Audit Charter on page 69 was presented bi-annually, to explain Internal Audit’s authority and function. It was reported that the internal audit strategy was explained how the audit work would be undertaken. The IAM stated that the annual internal audit plan covered the year ahead, with 170 days and 16 internal audit reviews planned, two of which related to IT processes. She added that cross-cutting reviews such as business strategy and performance management, counter fraud and corruption, Covid relief grants, and the annual governance statement would be a consortium-wide review.

Questions and Discussion

       i.          Cllr L Withington referred to the performance management audit on page 103, and asked whether InPhase would be covered in future audits. The IAM replied that she would expect this to be part of the audit, and was aware of the improvements it had made. She added that it would be in addition to a wider review of the corporate planning process, to ensure that targets and aims had changed in response to the Pandemic.

      ii.          The recommendations were proposed by Cllr S Penfold and seconded by Cllr H Blathwayt.

RESOLVED

To notes and approve:

a) the Internal Audit Charter

b) the Internal Audit Strategy

c) the Strategic Internal Audit Plans 2021/22 to 2024/25;

d) the Annual Internal Audit Plan 2021/22.

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

The DSGOS informed Members that there were no outstanding actions from the two meetings held in March. He added that Cabinet discussions had taken place regarding the recommendation to review the new project governance framework, in order to ensure that it was robust enough to address the concerns raised by the Committee. Cllr V Gay confirmed that the recommendation was being progressed with the addition of guidance for declarations of interest on all agendas, and the approval of a new Code of Conduct to further strengthen governance around interests.

RESOLVED

To note the update.

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

       i.          The DSGOS informed Members that the Whistle Blowing Policy was expected to come to the July meeting, in addition to the External Audit Plan.

      ii.          The CTA stated that the draft statement of accounts was expected to come to the September meeting, as a result of delays caused by Covid-19 and the increased workload relating to Covid Support Grants. She added that the external audit of the 2019/20 accounts was expected to be delivered by the year end, and the audit results report would therefore be delayed until March 2022. It was noted that there were no dates confirmed for the 2020/21 external audit, though it was EY’s intention that this would be completed soon after the 2019/20 audit, in order to be on-track for 2021/22. The CTA noted that external audit still had resourcing issues that would continue to cause delays for the foreseeable future.

     iii.          The Chairman asked whether officers were comfortable that the Council had the resource required to complete audit work and deliver the draft statement of accounts in September. The CTA replied that she was confident that the September date would be achieved, though it would present a challenge. She added that once the outcome of the Redmond Review was known, potential changes to requirements could impact audit resourcing both internally and externally, but it was unlikely to impact the current year’s audit. The CE stated that throughout Covid-19, internal audit contractors had been furloughed which had caused delays. In reference to the Redmond Review, it was noted that concerns regarding external audit resourcing had been raised in nationally in a municipal journal, and external auditors had responded publicly to the concerns.

    iv.          Cllr L Withington referred to comments made at a recent conference and confirmed that external audit delays were a national issue that had impacted Councils across the Country.

RESOLVED

To note the Work Programme.

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.”