|The Evacuation Procedure was noted.|
|Councillor Barry Woodhouse declared a personal interest in relation to the item 'Draft Statement of Accounts' as the report made reference to Teesside Pension Fund and Councillor Woodhouse was a member of the Board.|
Councillor Eileen Johnson and Councillor Kathryn Nelson declared an interest in relation to item 'Draft Statement of Accounts' as the report made reference to Teesside Pension Fund. Councillor Eileen Johnson was in receipt of a pension from Teesside Pension Fund and Councillor Kathryn Nelson was in receipt of a pension from Teesside Pension Fund.
|Consideration was given to the minutes from the meeting which was held on the 1st March 2016 for approval and signature.|
|Consideration was given to a report that updated Members on Mazars progress in meeting their responsibilities as the Council's external auditor. Also included in the report were key emerging national issues and developments which could be of interest to the Audit Committee and actions that may want to be considered.|
Mazars had update meetings with finance in respect of planning for the 2015/16 final audit visit;
undertaken some early testing on aspects of the 2015/16 financial statements (March/April);
undertaken work to obtain assurance in respect of the Councils arrangements to secure value for money (in line with Mazars Audit Strategy Memorandum, presented to the Committee in March 2016); and
Mazars had started their final audit visit, starting their audit of the financial statements in early June, with their aim that their audit of the statements would be substantially complete by the end of July. This was earlier than in previous years as Mazars prepared, with the finance team, for the earlier deadlines due from 2017/18.
Mazars audit work was on track, and there were no matters arising which needed to be brought to the attention of the Committee at this stage of their audit. There were no changes to the significant risks Mazars had identified in their 2015/16 Audit Strategy Memorandum presented to the March meeting.
Appendix 1 contained within the main report provided a summary of progress for Mazars 2015/16 audit.
In relation to certification and claims Members were aware the Council was required by funding bodies to arrange independent certification of a range of grant claims and returns.
Mazars had not undertaken any work of this nature since their last progress report to the Committee and as such had nothing to report at this stage.
The report contained information relating to the following:
- National publications and other updates
- Oversight of audit quality: quarterly compliance reports 2015/16 Q4, Public Sector Audit Appointments, April 2016
- English Devolution deals, National Audit Office, April 2016
- Fighting fraud and corruption locally: the local government counter fraud and corruption strategy 2016 to 2019, Department for Communities and Local Government, April 2016.
|Members were asked to consider and note a report that provided the Committee with the annual report of the Director of Finance and Business Services as required by the Public Sector Internal Audit Standards (PSIAS). The report included the Director of Finance and Business Services annual opinion on the overall adequacy and effectiveness of the Councils internal control and governance processes. As such it formed an integral part of the formulation of the Councils Annual Governance Statement, as required under the Accounts and Audit Regulations 2015 and the CIPFA Framework for Delivering Good Governance in Local Government. |
The report encompassed the reporting requirements specified in Standard 2450 of the PSIAS.
Internal Audit was an independent appraisal function established by the Council to objectively examine, evaluate and report on the adequacy of internal controls. The role ensured that there was proper economic, efficient and effective use of resources. It also ensured that the Council had adequate accounting records and control systems.
Committee Members were reminded that the list of audit assignments undertaken in the current year to date had been circulated to all Councillors prior to the meeting. he intention was to give Councillors the opportunity to raise questions on issues that affected their ward or other areas of responsibility and for answers to be provided at the meeting.
The attached report showed the current position in respect of the progress against the 2015/2016 audit plan and the results of the work that had been undertaken.
The main areas of discussion were as follows:
Under the Accounts and Audit Regulations 2015, the Council was required to undertake an effective internal audit to evaluate the effectiveness of its risk management, control and governance processes, taking into account public sector internal auditing standards or guidance. For the purposes of the 2015/16 opinion the standards for proper practices for internal audit were laid down in the CIPFA Local Government Application Note for the United Kingdom Public Sector Internal Audit Standards (PSIAS).
The report brought together the results of all the audit assignments that had been taken during the year which then fed into the annual governance statement. The Audit Plan that included all of the audits was approved by the Audit Committee on the 23rd February 2015.
Members attention was drawn to a table detailing the original number of 91 planned audit engagements. There had been some movement from the original plan, 6 unplanned engagements had been added and 21 had been removed cancelled or deferred. The Committee were informed that there were a revised number of 76 planned audit engagements. 74 Engagements had been completed, although 10 were at draft stage awaiting management confirmation of the findings and 2 engagements were ongoing although the vast majority of work was completed on those.
The Procurement and Governance Manager highlighted the 2015/16 Audit Plan - Planned v Actual days for completed Audits across the Council. From April 2016 the new Audit plan would be based on the Councils new directorate.
It had been highlighted that it had been a difficult year in relation to managing resources within the internal audit team and delivering the plan. Some of that had been due to staff leaving the authority and the time lapse to replace those staff. There had also been a member of staff on maternity leave and a vacant post which had not been carried for a period of time.
Members were informed that the Audit team had raised 164 recommendations from the 74 completed audits. The vast majority were 1 and 2 star which was low to medium priority. There had only been 15 high priority findings throughout the year. This then fed into assurance levels across the 74 completed audits of which 63 were either full or substantial which indicated that the assurance process was robust and delivering a decent level of assurance. This then concluded into the overall assurance statement that allowed the authority to state that the Council continued to have an appropriate, and overall an effective system of internal control, upon which it could place reasonable reliance to deliver the Councils objectives and detect fraud and other malpractice within a reasonable period of time.
Members raised questions in relation to staffing levels. Officers confirmed that the Audit Team were now fully staffed although one member of staff was still on maternity leave and another was to commence maternity leave in October for which options were being looked at in relation to staff cover.
|Members were presented with a report of the Councils Draft Annual Governance Statement for 2015/16.|
The Accounts and Audit Regulations 2015 required all authorities in England to conduct a review at least once a year of the effectiveness of its governance framework and produce an Annual Governance Statement to accompany its Statement of Accounts. The deadline for completion of the Statement of Accounts for 2015/16 was 30 June 2015 at which point they were subject to the external audit process.
The audited Statement of Accounts and the Annual Governance Statement would be presented for approval to the Audit Committee on the 26 September, 2016.
A further requirement of the regulations stated that the Statement should be signed by the Chief Executive and the leading Member of the Council, following approval by the Committee. A key objective of this signing off process was to secure corporate ownership of the statements contents.
The Annual Governance Statement included an acknowledgement of responsibility for ensuring that proper arrangements were in place around the governance of its affairs and an indication of the level of assurance that the system provided. The statement also included a description of the key elements forming the governance framework, a description of the process applied in reviewing the effectiveness of this framework, including the system of internal control, and an outline of the actions taken or, proposed to be taken, to deal with significant governance issues.
The Councils Annual Governance Statement for 2015/16 was attached at Appendix A. At this time the Council had not identified any significant issues that were not being addressed within the Statement. Officers would be present at the meeting to report on the governance framework and control environment in place within the Council that enabled the detailed preparation of the statement. Mazars LLP, The Councils external auditors, had been consulted on the process and the identification of key governance issues.
The main topics of discussion were as follows:
- The scope of responsibility which defined the scope of the statement and the purpose, described that it was in place to give assurance that a governance framework was in place to deliver the Councils objectives.
- The framework itself was made of 6 different dimensions as follows:
The first one focusing on the purpose of the Authority and on outcomes for the community and creating and implementing a vision for the local area.
The second dimension was around Members and Officers working together to achieve a common purpose with clearly defined functions and roles. There was a clear constitution within the Council and a scheme of delegation which sat within that which defined Members and Officers roles and how the two should work together.
The third dimension was promoting values for the authority and demonstrating the values of good governance through upholding high standards of conduct and behaviour. There was a code of conduct in place around how both members and Officers should behave. A requirement for investigating Members had been reviewed by the Director of Law Democracy in September 2015, however no changes were made and a further review would take place in September 2017.
The fourth dimension was taking informed and transparent decisions which were subject to effective scrutiny and managing risk. The Council had a clear constitution about how decisions were made, where they were made and how scrutiny can be formed on those decisions and a scheme of delegation which defined what decisions could be delegated down to Officers.
The fifth dimension was developing the capacity and capability of Members and officers to be effective.
The sixth dimension was engaging with local people and other stakeholders to ensure robust public accountability.
Members were informed that the Audit Team regularly reviewed the effectiveness of the dimensions at various levels such as Cabinet, Council, Scrutiny Committees the Audit Committee, the Audit Team and the work of the Monitoring Officer and the Chief Financial Officer, Policy and Performance Team and the Risk Management Team who constantly reviewed the governance arrangements across the board.
|Consideration was given to a report on the Corporate Risk Register Progress Report|
Quarter 4 (2015/16) - Period Ending 31st March 2016.
The Committee was reminded that quarterly reports on the Corporate Risk Register were presented for the purpose of reviewing the key risks that had been identified as having the potential to deflect services from achieving their objectives over the next 12 months and beyond. They also set out the actions being taken to ensure that the risks, and possible adverse outcomes, were minimised.
As a reminder, risks were scored on a scale of one to five for both impact and likelihood. The scores were multiplied to generate a total score and any risks with a score of 15 or above were included on the Corporate Risk Register. For information, any risks scored between 9 and 12 were included on Service Group Risk Registers.
The Committee had requested that, in the absence of substantial changes to the register, quarterly reporting should be confined to highlighting significant additions and amendments since the previous update.
The report covered the period 1 January to 31 March 2016. All Service Groups had been contacted and the returns indicated that there had been no additions to the Corporate Risk Register. There had been 2 deletions relating to data quality and records management, this followed internal audit feedback on the adequacy of controls in place. In addition there had been some minor updating to the risks previously included on the Councils Corporate Risk Register over the months in question. The changes comprised a general update to all risks to reflect ongoing progress.
As a result, the total number of significant risks in the Corporate Risk Register at the end of Quarter 4 was 10.
For purposes of record, the changes referred to above had been incorporated in the latest version of the full Corporate Risk Register. This was available in Appendix A of the main report.
Members were informed that the Internal Audit Team had carried out very detailed work during internal audits challenging services about data quality and records management, which had resulted in the team now having a body of evidence to indicate that data quality and records management were getting better and improvements had been made across the board and therefore reducing the risks around the quality of data and how records were managed within the Authority.
The Procurement and Governance Manager drew Members attention to the tables contained within the main report which detailed the previous and current assessments relating to data quality and records management where a reduction had been seen which had resulted in both areas dropping off the corporate risk register.
Brief discussion took place around the impact on risk following the recent elections where Britain had voted to come out of the European Union. Members also discussed the negative impact this may have had on the Authorities investments and the advice which was now being given by CIPFA and the length of time investments should be made for by Local Authorities.
It was clear at this stage targets which had already been agreed would not be met due to the types of accounts such as deposit accounts offering lower interest rates.
|Members were presented with a report detailing the regular non-responsive services provided by the Councils Health and Safety Unit to monitor, improve and to ensure compliance of the health, safety and well-being control environment for the period 1st April 2015 - 31st March 2016.|
The detail encapsulated the regular, non-responsive activity of the Health and Safety Unit, and accident and assault statistics:
1. Health and Safety Training
2. Health and Wellbeing Update
3. Premises Audited
4. Construction (Design and Management) Regulations 2015
5. Schools Educational Residential Visits
6. Employee Protection Register Activity
7. Accidents Reported
8. Physical Assaults Reported
9. Verbal Assaults Reported
6 programmed corporate health and safety training sessions were delivered to a total of 331 delegates, with 15 further bespoke courses delivered to 177 delegates within departments, academies and external clients.
In support of the Control of Asbestos Regulations 2012 and the Councils Asbestos Management Policy, an on-line e-learning platform had been made available to provide refresher training to key nominated personnel with responsibility for managing asbestos containing materials. This would ensure compliance was maintained amongst Services and individual premises personnel with responsibility for the effective management of asbestos containing materials.
Additional on-line training had been made available for Legionella, Manual Handling, Hand Arm Vibration, Confined Space Awareness, Control of Substances Harmful to Health and Working at Height.
A total of 272 delegates had undertaken online training.
In total, 55 health and safety training courses were delivered to 780 candidates.
Further details of training activity were available at Appendix 1 of the main report.
Referrals to the services provided by the Well-being Team were tabled within the main report.
It was highlighted to Members that out of the 87 premises which had been audited only 2 had partial assurance which demonstrated that there was a good handle on Health and Safety within the authorities buildings. 155 recommendations had resulted from the audits.
The Authority continued to provide a Construction Design Management Regulation Client Adviser Role. A total of 746.55 hours of resources were dedicated to the preparation, planning, monitoring and reviewing of a broad range capital works construction projects to ensure compliance with the CDM Regulations and other associated statutory provisions.
The Educational Visits Advisor Role was continued to be given to schools . There had been an increase in the number of visits to primary schools, but a decrease in secondary schools, which was reflected in a number of schools turning into academy's and arranging their own Educational Visit Advisor.
The Employee Protection register was available for staff that were potentially going out to meet individuals who may pose a risk to health and safety.
Members attention was drawn to the accidents reported from 1st April 2015 - 31st March 2016. The figures which were presented within the report were based on the old management structure however going forward the figures would be based on the new management structure. There had been 86 accidents reported this year which was down by 21% on the previous year. There had however been an increase in accidents which were reported to the HSE by 50% which had gone up from 8 to 12. This was predominantly down to back injuries which, if lasted more than 7 days was reportable.
The number of physical assaults had reduced by 28% on the previous year and none were reportable to the HSE.
The number of verbal assaults had reduced by 26% on the previous year and none were reportable to the HSE.
The Procurement and Governance Manager was hopeful that the reduction in accidents and assaults was down to training, premise inspections and audits carried out, however it could be down to the lack of individuals reporting incidents.
Members sought clarity as to the effectiveness of e-learning. It was still a relatively new approach however it was reaching a lot more people than the traditional classroom based training had. Officers gave an example of the COSH e-learning module which was now being shown to all catering and cleaning staff. There had not however been any studies by Stockton Borough Council to prove how effective e-learning had been.
E-learning did operate a certificate based course and if the courses were failed it was reported back to an individuals manager.
Members queried whether there were strict deadlines to complete e-learning courses. Officers confirmed that specific times were required to complete some courses and some had to be carried out every 2 years. E-learning had not replaced classroom based learning but was in addition.
Members welcomed the fact that eye test vouchers were issued for those having difficulty when using Display Screen Equipment, and if necessary a free pair of basic glasses were provided. It was explained to Members that advice and guidance was given to staff in relation to how long they should be operating Display Screen Equipment.
Members were informed that if they wanted to access the Employee Protection Register they should contact Democratic Services in the first instance.
|Members were asked to consider and note the Draft Statement of Accounts for 2015/16|
The accounts had been completed in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom 2015/16 which was prepared under International Financial Reporting Standards.
The Accounts and Audit Regulations (England) 2015 came in to effect on 1st April 2015. The regulations changed the arrangements for the approval and publication of the Statement of Accounts and the Annual Governance Statement. Under the regulations the Council must publish its audited Statement of Accounts and approved Annual Governance Statement by 30th September for the financial years 2015/16 and 2016/17. Thereafter the publication date would become 31st July.
In preparation for the new earlier deadlines the accounts had been completed one month earlier, by 31st May, and the external audit process had started in early June.
The period in which electors had the right to examine the accounts, question the auditor and to make objections at audit had also changed. This was now a period of 30 working days which for 2015/16 and 2016/17 must include the first ten working days of July. In 2018 this would become the first ten working days of June. The inspection period for this year commenced today and would end on 5th August 2016.
The following key financial issues were included in the accounts:
Non-Current Assets amounted to £350 million; this was a slight increase of £2 million over 2014/15.
Investments and Cash amount to £93.4 million. This was an increase of £21.5million from the previous year. This was largely due to the funds that the Council was holding on behalf of the new Tees Valley Combined Authority at the end of the financial year.
The Councils current Long and Short-Term Borrowings total £48.3 million which was a reduction of £0.3 million.
The Councils earmarked reserves (excluding schools) had increased to £124.2 million which was an increase of £12.4 million from the previous year. This again reflected the funds being held on behalf of the new Combined Authority.
The level of General Fund balances at the 31st March stood at £9.6 million and School Reserves stood at £7.2 million.
The Councils Pension Scheme deficit had increased from £224.1m to £228.5m, an increase of £4.4m. This resulted from the actuaries assessment of fund performance and the re-measurement of scheme assets and liabilities.
The external auditors, Mazars LLP had already commenced the statutory audit.
Members were informed that the Annual Financial Report for Stockton on Tees Borough Council would be presented differently as a narrative report as oppose to what was previously an explanatory report. The current statement was draft and would be presented as a final report in September 2016.
|Members were asked to highlight any needs/requirements for training they felt necessary in relation to their roles as Members of the Audit Committee and contact the Chairman Councillor Barry Woodhouse or Democratic Services.|
Officers were more than happy to provide training around any areas Members felt unsure about and in addition the external auditor from Mazars also agreed to offer any help should Members require it.
Democratic Services would forward on any requests to the necessary personnel.
|The Work Programme was noted.|