|The Evacuation Procedure was noted.|
|There were no declarations of interest.|
|Consideration was given to the minutes from the meeting which was held on the 28th November 2016 for approval and signature.|
|Consideration was given to the External Audit Progress Report, the purpose of which was to provide the Audit Committee with a report on progress in delivering Mazars responsibilities as Stockton Borough Councils external auditors.|
Mazars also sought to highlight key emerging national issues and developments which may be of interest to Members of the Audit Committee.
Members attention was drawn to the following:
National publications and other updates.
That the report was in its very early stages of the process.
|Members were presented with a letter detailing the results of certification work 2015-16.|
It was highlighted that the amount of work Mazars carried out in terms of claims and returns was limited.
Members attention was drawn to the value of the housing benefit subsidy and the fact that the value had been amended due to 3 different errors being found. Members were made aware that a qualification letter was presented to the DWP. There was nothing unusual to report to Members.
Brief discussion took place around fees for Mazars work on the Councils Housing benefit subsidy return for 2015/16.
|Members were presented with The Audit Strategy Memorandum which set out Mazars audit plan in respect of the audit of Stockton-On-Tees Borough Council for the year ending 31 March 2017. |
The plan set out Mazars proposed audit approach and was prepared to assist Stockton Borough Council in fulfilling its governance responsibilities. The responsibilities of those charged with governance were defined as overseeing the strategic direction of the entity and obligations related to the accountability of the entity, including overseeing the financial reporting process. Mazars had determined that the Audit Committee was those charged with governance for the purpose of their audit.
The main key topics discussed were as follows:
- Significant risks identified by Mazars, where additional procedures were required to mitigate the threats of there being a material misstatement in the Councils statement of accounts. These risks had been identified as:
- management override of controls; and
- valuation of the defined benefit pension scheme and pensions estimates (IAS19).
Discussion took place around the 'Value for Money conclusion'(VFM), Mazars had a duty under the National Audit Office Code of Practice to consider whether there were any aspects of the Councils operations and financial management that Mazars should reflect on and decide whether that would give rise to a VFM conclusion risk. A VFM conclusion risk would involve Mazars as external auditors giving the wrong VFM conclusion. The following significant risk had been identified by Mazars in respect of their VFM work:
That the Council continued to face financial pressure and was currently updating the medium term financial plan (MTFP). Mazars needed to ensure their knowledge of the Councils MTFP and monitoring arrangements remained up to date in order to ensure Mazars give the correct VFM conclusion.
Members attention was drawn to the Materiality Judgement, which was important for Mazars as it effectively framed the audit procedures that Mazars carried out therefore the materiality basis that was used to plan an audit was in relation to the statement of accounts. Mazars had calculated the materiality thresholds as being just over £9m. The benchmark Mazars used to get to that value was the Councils gross revenue expenditure which was considered to be the most sensible benchmark as that was where public and Members attention was focused through the year. Mazars welcomed any suggestions from Members if they had different views in relation to Mazars materiality benchmark. It was highlighted that as external auditors the Authority and Members needed to be satisfied that Mazars carried out their work independently and objectively and that the public could rely on the conclusions that Mazars gave for their opinion and the VFM conclusion. There was an independent declaration within the planning document.
There was a new ethical standard for external auditors that the financial reporting council had published last year which largely affected the external audit relationship, where none audit services were carried out, however this did not affect Mazars in relation to this authority as Mazars did not carry out any none audit services with Stockton.
Members were made aware that the Council had appointed Mazars VAT team in an advisory capacity to provide VAT advice on and ad hoc basis.
Members raised questions in relation to materiality and sought clarity on the triviality threshold for identified misstatements which had been set at £275,000. Members also queried how this compared to other authorities.
|Consideration was given to the Internal Audit Report Q3 which provided Members with an update of the work carried out by the Internal Audit Section and the progress made against the Audit Plan 2016/17. |
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. The 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 update report showed the current position in respect of the progress against the 2016/17 audit plan and the results of the work that had been undertaken.
The main issues discussed were as follows:
- 4 Audits remained to start, however the Audit Team were on track to complete the Audit Plan by March 2017.
- brief discussion took place in relation to cancelled audits.
- 2 new audits had been added to the plan.
- There was only 1high priority Audit within the authority and this was being dealt with and due to be followed up.
|Members were asked to consider a report which advised Members of the Internal Audit Charter and proposed annual Audit Plan for the coming financial year 2017-2018.|
The Procurement and Governance Manager presented the attached report to Members explaining that this was the first Audit Plan since the agreement to create an Internal Shared Audit Service between Darlington Borough Council, Tees Valley Combined Authority and Stockton Borough Council.
The main topics discussed were as follows:
- The Plan and the Audit Charter had been developed in accordance with current best practice standards which were the Public Sector Internal Audit Standards of March 2016.
- In terms of the Audit Charter which covered the 3 authorities, Members were informed that Internal audit would have a right of access to all records, documents and staff that they felt would be needed to perform their duties.
- It was highlighted that the role of 'Chief Audit Executive'(CAE), as specified by the standards was now to be undertaken by the Audit & Risk Manager.
- In terms of audit ethics each Auditor would sign an annual declaration to state that they complied with the code of practice.
- It was recognised within the Audit Plan itself that the service needed to move forward in how it conducted its business, adopting new approaches such as; moving to a continuous monitoring approach which would see more work undertaken more frequently in a number of areas and also using assurances from other sources. The new approaches were expected to take time to set up which could invariably result in timescales moving to reflect this.
- The plan itself contained within the main report covered both Stockton Borough Council and Darlington Borough Council.
- There was still to be discreet pieces of work undertaken at Darlington due to the authority still having its housing revenue account.
- The number of days estimated for each audit area was taken from the number of days each audit would typically take at each authority and averaged out, however there would be no definite figures until the service was fully operational.
- The plan had not been broken down into directorates as it had in the past as Stockton and Darlington had differing structures.
- There were a number of audits which were cross cutting which would sit under more than one directorate.
- It was indicated that there were sufficient resources within the Audit Team to achieve the Audit Plan and continue to deliver an audit opinion.
Members were informed that where an audit was highlighted say for Libraries, this meant both Darlington and Stockton would be covered in that audit however 2 separate opinions would be provided to each of the separate authorities Audit Committee.
A brief discussion took place in relation to the Internal Audit Quality Assurance and Improvement Process which was put in place to monitor the service. There were performance measures and an assurance cycle which detailed the type of information the Audit Team would produce and when. Some of the timings however may be subject to change as Committee timetables were finalised which would require synchronising across the 3 authorities.
|Consideration was given to the Corporate Risk Register Q3 report.|
The Committee were 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 October to 31 December 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 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 3 was 7.
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 at Appendix A within the main report.
Members queried the format of the report, the Senior Audit Team Manager informed the Committee that the Audit Team were reviewing their approach to recording information with management across the authority which would link into service planning and performance management. It was hoped that by the next Audit Committee meeting the risk register may be presented in the new format.
|Consideration was given to a report which detailed 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 October 2016 - 31st December 2016.|
This 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. Safety Warnings, Advice or Reminders Issued
8. Accidents Reported
9. Physical Assaults Reported
10. Verbal Assaults Reported
5 programmed corporate health and safety training sessions were delivered to a total of 38 delegates, 6 bespoke courses delivered to 56 delegates within departments.
In support of the Control of Asbestos Regulations 2012 and the Councils Asbestos Management Policy, an e-learning platform provided refresher training to key personnel, ensuring competence and compliance was maintained.
E-learning also included Manual Handling, Working at Height and Legionella training accessed by a total of 51 delegates. In total, 15 health and safety training events were delivered to 145 candidates.
Referrals to the services provided by the Well-being Team were detailed within the main report.
The number of health and safety audit inspections completed during the reporting period was 17. Individual prioritised audit opinions and audit opinion assurance levels were summarised within the main report.
In relation to Construction (Design & Management) Regulations 2015, the revised Regulations came into force on 6 April 2015. The Health & Safety Executive (HSE) objectives behind the new regulations were far-reaching and marked a significant shift in the health and safety regulatory regime for procurement, design and delivery of construction projects.
The Regulations applied to all construction work whether or not the project was notifiable to the HSE and impose specific duties onto:
Principal and Sub-contractors,
Others involved with the project.
Subject to the size and complexity of individual projects, the Health and Safety Unit acted as CDM Advisor to the Client and or the Principal Designer, as duty holders. The CDM Advisor carried out functions including:
notification to the regulator, the HSE
production of Pre-construction Information
appraisal of the Principal Contractors Construction Phase Plan
provision of construction health & safety advice.
During the reporting period 6 Pre Construction Information Documents were issued.
A total of 84.4 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.
Ensuring design management arrangements were in place, providing pro-active and practical help to Clients and designers in response to individual projects demands. Facilitating design risk management process, providing advice and assistance to Clients and designers on risk reduction and health and safety management in design.
Appraise and approve Contractors Construction Phase Health and Safety Plan. Ensuring construction management arrangements were in place prior to works commencing.
Ensure effective co-operation and co-ordination and that sufficient time had been allocated for planning and preparation of project safety.
Provide when requested advice on competence of Client appointments - Principal Contractors.
Ensure construction management systems remained in place for the duration of the construction phase.
Liaise with Client, Designer, and Principal Contractor throughout the construction phase to ensure safe design and build.
Conduct site inspections on certain construction sites where there may be specific risks to the general public.
Educational Visits Advisers role
The Health and Safety Unit performed the role of Educational Visits Adviser in accordance with the revised guidance issued by the Department for Education in February 2014.
During this quarter, the safety management safeguards of 12 schools educational residential visits had been appraised, challenged and endorsed. The risk management process involved had regularly been reviewed and revised, further improving schools and the authoritys resilience to an adverse event occurring.
The Employee Protection Register, launched in July 2008, was an on-line database of known data-subjects who presented an identified risk to the safety of the Councils and partner organisations workforce. The EPR had been successfully launched in all schools to provide additional security to Parent Support Advisers and other members of the schools workforce who may be conducting pastoral care or domiciliary visits.
The current EPR user base was detailed within the main report.
In relation to safety warnings, advice or reminders, the following had been issued:
Automatic Electronic Defibrillator recall warning issued on defective devices.
New Head Teacher induction
Advice issued to schools on unstable substances.
Multi agency advice issued to schools on seasonal fire safety measures.
Elected member training in personal safety and security.
Accidents reported to the Health & Safety Unit during this reporting period were 17. This compared with 30 in the previous reporting (quarter) period.
Physical Assaults reported to the Health & Safety Unit this period were 35. This compared with 33 in the previous reporting (quarter) period.
Verbal Assaults reported to the Health & Safety Unit this period was 2. This compared with 5 in the previous reporting (quarter) period.
|The Chartered Institute of Public Finance & Administration (CIPFA) stated that an effective Audit Committee would produce annual reports on its work and findings.|
This report was to inform members of the work of the Audit Committee during the past year and the sources of information upon which the enclosed Audit Committees opinion statement was based.
|Consideration was given to the Work Programme.|