Agenda item

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 areas should maintain substantial assurance gradings, and where this was not the case, it should be brought to his attention as the relevant Portfolio Holder to pursue remedial action.

      v.          The Chairman noted that outstanding recommendations of two years or more would be subject to explanation by officers. The CTA referred to engagement with Portfolio Holders on audit recommendations, and stated that whilst the current system required improvements, it was hoped that the recommendations would soon be available for review on InPhase, that would enable easier access to this information.

    vi.          Cllr C Cushing asked whether additional responsibility could be given to Directors and Assistant Directors to implement audit recommendations to improve accountability. The IAM replied that this process was followed at other authorities with regular discussions held on audit recommendations by senior management. She added that on previous occasions outstanding audit recommendations had been provided to CLT, which had resulted in significant progress. The CE replied that he was in full agreement with the suggestion, and noted that the management restructure sought to improve accountability.

   vii.          Cllr P Heinrich referred to page 41 on IT process recommendations, and asked for an update on the progress. It was noted that whilst information could be sought on progress, the recommendations remained within their deadlines for implementation, and it was expected that this information would be provided in a future follow-up report.

Discussion of Appendix 3 NN2113 CSO Exemptions Position Statement took place at the end of the meeting. Discussion is included at this point for continuity of the minutes:

  viii.          The IAM introduced the appendix and informed Members that the work had been undertaken at the request of the Constitution Working Party (CWP) and GRAC. It was noted that one of the findings was considered commercially sensitive, and would require the meeting to be moved into private business if Members sought to discuss the matter in detail. The IAM stated that the Committee should consider the suggested actions, improvements and findings from the review to determine whether they were satisfied that the recommendations would provide clearer guidance and transparency throughout the exemption process. She added that it had also been recommended that a single officer take responsibility for overseeing the process to ensure continuity and accountability.  

Questions and Discussion

    ix.          Cllr C Cushing asked how the auditors could justify a reasonable assurance grading, given the high number of recommendations. The IAM replied that an assurance grading had not been provided as part of the position statement at this stage. She added that once the recommendations had been implemented, the area would be reviewed again, at which point an assurance grading could be given. Cllr C Cushing noted that the deadline for the completion of audit recommendations extended beyond a year, and suggested that he would be more comfortable with tighter completion deadlines. He added that he would also appreciate an update on the implementation of recommendations at the September meeting. The IAM replied that there was now an additional Follow-up report planned for the September meeting, and suggested that whilst position statements weren’t routinely followed-up, it would be beneficial in this case to monitor implementation of the recommendations. The DFR stated that he would be happy to take responsibility for the recommendations and provide an update at the September meeting.

      x.          Cllr P Heinrich noted that there were four exemptions granted in 2021, and eleven the previous year, and asked whether this was a reasonable number for an authority of this size. The IAM replied that she would have to review similar authorities and provide a response after the meeting. Cllr P Heinrich noted that there were actions with suggested deadlines in April and May 2021, and asked whether these had been implemented. The IAM replied that these actions were overdue, and it would be fair to request an update if further information wasn’t provided by officers. The DFR stated that a number of the actions were in progress, and the exemptions sign-off process was under review with a report being prepared for the CWP, in order to make the necessary changes to the constitution. In reference to Cllr Cushing’s comments, the DFR added that whilst some deadlines did go as far as December, the Council only had one procurement officer, and workload had to be taken into consideration. It was noted that there were also plans to increase the frequency of reporting on exemption certificates going forward.

    xi.          The Chairman referred to the comment that the Council only had one procurement officer, and asked whether this was adequate. The DFR replied that this was a challenge for small authorities, as procurement demand varied throughout the year. He added that consideration was being given to developing a procurement consortium to cover several Norfolk authorities, though this was yet to be agreed. It was noted that frameworks could also be used to help facilitate the procurement process, and whilst it would be helpful to have more resource, the Council had to operate within its budgetary constraints. In response to a further question from the Chairman, it was confirmed that the Procurement Officer did not have an additional role, though they did provide procurement advice for the whole authority. The Chairman suggested that there might be a need for additional resource, though this would be for officers to determine.

   xii.          Cllr C Cushing referred to the audit recommendations, and stated that the Committee should insist that deadlines are adhered to. He added that it would be helpful for the Committee to see a flowchart outlining the exemption process. The IAM agreed and stated that with recommendations in place to improve the process, she would be happy to arrange for an exemptions process flowchart to be brought to the September meeting.

  xiii.          The Chairman referred to comments in the report which suggested that five exemption forms had not been signed by the S151 Officer, and asked whether this would make the transactions unlawful. The DFR replied that the process required approval from a number of officers, and an email trail was always available to show that exemptions had been approved. He added that during Covid-19, it had been difficult to have all signatures on a single form, though the exemptions had still been approved by the necessary officers. It was noted that one of the recommendations would seek to simplify this process, and that the DFR’s signature was only required for historical reasons. The DFR stated that the original process was introduced to reduce the number of reports going to Cabinet, though the Pandemic had highlighted the need for improvements. The Chairman sought clarification that procurement had gone ahead without signed forms. The DFR replied that in some cases procurement may have stopped, but in the cases where procurement exemptions had been approved, there would be emails available to confirm the agreement and approval of the exemptions.

 xiv.          Cllr P Heinrich raised concerns that approval was taking place by email ,and suggested that the Council should consider using electric signatures to sign exemption certificates.

   xv.          Cllr H Blathwayt asked the IAM whether the current procurement process was unwieldly when compared with similar authorities. The IAM replied that exemptions were used at most, if not all Council’s she worked with, and the key requirement of the process was to ensure that clear reasons were given for the exemption. She added that the recommendations sought to improvement the current process. Cllr H Blathwayt sought clarification on whether there was a need for as many signatures, as was currently required. The IAM confirmed that the recommendations sought to streamline the process, whilst also improving its transparency and clarity.

 xvi.          Cllr V Gay noted that the number of exemptions had recently reduced, and asked whether the paper expected at the CWP would be ready for the June meeting. It was confirmed that the paper would be prepared in time for the CWP meeting on 28^th June.

xvii.          Cllr E Seward stated as the relevant Portfolio Holder for several recommendations, that he was fully supportive and hoped to see them implemented as soon as possible. He added that the Constitution was clear on who was required to sign-off exemption forms, though he was concerned that this was not being adhered to in all cases. Cllr E Seward asked whether actions had been taken to improve the process already, or whether the old process was still being used. The DFR replied that the new sign-off procedure was yet to be implemented, as it required approval before the necessary changes could be made to the Constitution. He added that final approval could be expected at the July Full Council meeting.

xviii.          Cllr C Cushing asked that GRAC Members be copied into the CWP agenda to allow the opportunity to review the proposed changes in full.

RESOLVED

To note the outcomes of the audits completed between 26^th February 2021 to 7^th June 2021.

ACTIONS

1.     DFR to provide an update on the implementation of the procurement exemption audit recommendations at the September GRAC meeting.

2.     A flow-chart of the exemption certificate sign-off procedure to be prepared for the September GRAC meeting. 

3.     CWP Agenda to be shared with GRAC Members to provide an opportunity to review the proposed changes in advance of approval.