|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 20th February 2017 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:
Mazars had carried out interim work and were now on site testing the Draft Statements of Accounts and were about half way through the programme. The reason for the early testing was to prepare for the earlier timetable for completion required by end July 2018.
Evidence to date had indicated that all was on track and Mazars envisaged completing their work by end of July 2017.
|Consideration was given to the Internal Annual Report of the Head of Internal Audit as required by the Public Sector Internal Audit Standards (PSIAS). The report included the Audit & Risk Manager's annual opinion on the overall adequacy and effectiveness of the Council's internal control and governance processes. As such it formed an integral part of the formulation of the Council's Annual Governance Statement. |
The report encompassed the reporting requirements specified in Standard 2450 of the PSIAS.
The main areas of discussion were as follows:
- The regulations the Council worked towards.
- There had been 75 audits planned however only 65 audits were completed. 12 audits had been cancelled and a further 2 audits had been added.
- The planned audit days had seen the number of unproductive days increase due to unexpected maternity leave.
- The number of Audit Recommendations for 2017/18 was 78, most of which were in the low to medium risk categories.
- In relation to assurance opinions for 2016/17, 34 had been given full assurance, 21 substantial assurance, 2 moderate and 8 where opinion was not applicable.
- In terms of the overall opinion the Audit Team were satisfied that sufficient work had been undertaken in order to give an opinion and it was the opinion that the Council had appropriate controls in place.
Questions were raised as to what the 6 high level of recommendations were following the quarterly Audit reports. The Audit & Risk Manager agreed to circulate the information to all Members.
|Members were presented with the Internal Audit Progress Report and asked to consider the work carried out by the Internal Audit Section and the progress made against the Audit Plan 2017/18.|
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 Annual Audit Plan for 2017/18 was approved by the Audit Committee in March 2017 and this report covered progress made during the first two months of the year i.e. to 31 May 2017.
The main issues discussed were as follows:
- The report was the first report which had included shared services with Darlington. There had been time spent team building and understanding both Councils cultures.
Work had started to come through and was going well.
The Chair informed the Committee that he had received excellent feedback from new members of the team which had transferred to Stockton.
|Members were presented with a report of the Council's Draft Annual Governance Statement for 2016/17.|
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 2016/17 was 30 June 2017 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 this Committee on the 25 September, 2017.
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 statement's 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 Council's Annual Governance Statement for 2016/17 was contained at Appendix A of the main report. 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.
The main topics of discussion were as follows:
- With regards to the Governance Framework, there was a clear vision for the Borough which detailed the Councils purpose and intended outcomes for citizens and service users. Arrangements were in place to review the vision on a regular basis.
- The Council Plan which set out the Councils priorities and significant actions the Council intended to take. Arrangements were in place to measure the quality of the Councils services and monitor them through performance management arrangements.
- The roles and responsibilities of Council members and Employees were clearly documented. The Council had a constitution which set out how the Council operated. It was now time for the constitution to be reviewed and updated in light of organisational changes particularly around management structure. This would be one area that would be pulled out from the Annual Governance report and put into an action plan which be taken forward and presented later this year. The Head of HR,Legal and Communications would lead on this work.
- The Constitution also included Rules of Procedure and various Codes and Protocols, one of which was the Code of Conduct for Members. The Code of Conduct for Members was also due for review this year which would also be extracted and be contained within the action plan.
- During the year the Council had a system of Scrutiny in place which many Members would have been involved with.
- A range of Financial and HR Policies and procedures were in place. The authorities financial management arrangements conformed to the governance requirements of the CIPFA Statement on the Role of the Chief Financial Officer in Local Government (2010).
- The Council had an Audit Committee.
- Arrangements were in place to ensure compliance with relevant laws, regulations, internal policies and procedures and that expenditure was lawful.
- The Council continued to have arrangements in place for whistle-blowing and for receiving and investigating complaints from the public.
- Arrangements were in place to identify the development needs of Members and Senior Officers in relation to their strategic roles.
Channels of communication had been established with all sections of the community to promote accountability and encourage consultation.
- The Council continued to work with their partners in the Voluntary, Community and Social Enterprise (VCSE) sector and the private sector.
-Part of the Annual Governance Statement was to review the effectiveness of all of the above controls in place which had primarily been undertaken by the Procurement and Governance Manager, taking into account various sources of assurance, including Internal Audit Annual report, of which the opinion was that the Council continued to have an appropriate and effective system of internal control of which reasonable reliance could be placed to deliver the Council objectives and detect fraud and malpractice within a reasonable period of time.
Overall, it was highlighted that there was good system of control in place. 4 actions had been identified to be undertaken during this and the next financial year as detailed within the main report.
|Members were asked to consider and note the Draft Statement of Accounts for 2016/17.|
The accounts had been completed in accordance with the "Code of Practice on Local Authority Accounting in the United Kingdom 2016/17" 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 approve Annual Governance Statement by 30th September for the financial year 2016/17. Thereafter the publication date would become 31st July.
In preparation for the new earlier deadlines the accounts had again been completed one month early, by 26th 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 been set. This was a period of 30 working days which, for 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 26th June 2017 and would end on 4th August 2016. The right to inspect the accounts had been extended this year to include journalists and "citizen" journalists; however those rights did not include the right to question the auditor.
The following key financial issues were included in the accounts:
Non-Current Assets amounted to £324 million; this was a decrease of £26 million over 2015/16. This reflected the sale of land and buildings, such as the Education Centre; the continuation of the Academy School programme, and the transfer of long term loans by TVU to the new Combined Authority.
Investments and Cash amounted to £54 million. This was a decrease of £38.5 million 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 2015/16 and which had since been transferred.
The Council's current Long and Short-Term Borrowings totalled £48.1 million which was a reduction of £0.2 million.
The Council's earmarked reserves (excluding schools) stood at £73.1 million which was a decrease of £51.1 million from the previous year. This again reflected the transfer of funds to the new Combined Authority, and other planned use of reserves in support of the MTFP.
The level of General Fund balances at the 31st March stood at £8.5 million and School Reserves stood at £5.6 million.
The Council's Pension Scheme deficit had decreased to £212.8m, a decrease of £15.7m. 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.
The main issues discussed were as follows:
The Chief Accountant highlighted that there had been some changes to the format of the accounts, the key ones being the Income and Expenditure which in the past had been specified by the service report and code of practice. The new format reflected the new internal management structure, therefore members would be able to see the major directorates. One or two small areas such as Xentrall had been grouped together.
- There had been an implementation of a new statement which was included at Note 2: Expenditure and Funding Analysis. This was to try and bridge the gap between standard reporting during the year when reporting on budgets compared to the differences which were presented within the accounts at year end.
- Members attention was drawn to the fact that the establishment of the Tees Valley Combined Authority(TVCA) had impacted on the accounts this year. Stockton had been the accountable body for Tees Valley Unlimited(TVU), the accounts had closed last year with £35 million in earmarked reserves which was made up of over £30 million cash and £5 million of debtors and creditors. As soon as the TVCA was established that money was transferred, therefore the earmarked reserves within the Draft Statement of Accounts were considerably less. This also reflected the intended and planned transfer to support the budget for the 2016/17 MTFP, ongoing projects such as street lighting and the end of some contracts.
- Major items were highlighted within the front of the report and published on the website for inspection as detailed above. There had already been an enquiry as to when the Draft Statement of Accounts was to be published therefore interest already evident.
- The Chief Accountant explained to the Committee that one of the required notes within the report to highlight each year related to party transactions . These were organisations which the Authority had influence over or people who were in a position of influence within the Council. All Members and Senior Officer were written to each year for a response . The Authorities External Auditors had commented a couple of times the response from Members was not as good as it should be, reminders had been sent out. Members were asked to send relevant information back as soon as possible.
The Chairman acknowledged and congratulated the level of work which had been undertaken in such a short period of time.
|Consideration was given to a report relating to Corporate Risk Register for quarter 1 (2017/18).|
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.
As part of the ongoing review of the Authorities approach to risk management and recording, the format of the register had been updated. It was intended that future iterations of the register would incorporate all strategic risks regardless of the score and these would be reported to this committee in a simple table format. Detailed risk reporting would continue for risks scoring 15 and above. This process was on-going and the focus of the work to date had been on updating the risks previously recorded on the Corporate Risk Register.
Appendix A showed the detailed risk report for those risks scoring 15 and above. The reports were as yet incomplete they needed updating to show desired outcomes and action plan owners/implementation dates.
For the next audit committee it was expected that the detailed risk reports for the 7 risks shown in Appendix A would be complete and the strategic risk register would be complete with up to date scores provided for each.
The main issues discussed were as follows:
- Discussion took place around the reduction in workforce versus increase in workload. It was highlighted that there was a current scrutiny review being carried out focusing on staff sickness levels. The work was still in its infancy however the information coming through was very informative and detailed.
- Questions were raised in relation to whether Stockton Schools were asbestos free. Officers confirmed that a number of schools still had asbestos, however the asbestos was always contained and as long as it was not disturbed did not pose a risk. All schools had asbestos surveys and information to enable contractors to work safely around the asbestos.
|Consideration was given to a report which detailed the regular non-responsive services provided by the Council's 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 2016 - 31st March 2017.|
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. Premise Audit Findings
4. Construction (Design and Management) Regulations 2015
5. School's 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
The main issues discussed were as follows:
- This was the annual Health and Safety report which amalgamated the data from the regular quarterly updates.
- Investment continued to be made in Health and Safety training in order to prevent accidents and incidents within the Council. There had been a significant programme of training courses where a total of 194 delegates had attended some of the planned and bespoke training courses over the year. When online training was added to that figure, 362 delegates had completed training.
- The Physiotherapy work assessment programme continued. There was a significant number of referrals into that service and ongoing work through the physiotherapy contract.
- Another significant area of the Audit Teams preventative approach to Health and Safety was the premises that were audited. 79 audits had been carried out over the year of which the bulk was given full or substantial approval and only 1 which received moderate assurance. A significant number of those premises were schools. There had been 51 audits of schools of which the vast majority were full or substantial. 28 departmental buildings had been audited which had achieved full or substantial assurance levels.
In terms of recommendations there was a full breakdown contained within the main report. The emerging themes from premise audits included;
- Lapses in refresher training or training needs identified following staff leaving. A large proportion of that was in schools where someone had left who was the person trained in asbestos training, therefore schools had to be reminded to ensure another person was trained in asbestos awareness so there was always two members of staff strained.
- Communicating winter gritting arrangements effectively, this was mainly schools.
- Reviewing COSHH data sheets to latest iteration, schools could be a little slow when updating COSHH data sheets for example when using a different chemical/cleaning product.
It was highlighted that minor housekeeping issues generally occurred following changes to Head Teachers or Premise Managers/ Caretakers.
The Health and Safety Team continued to provide input into Construction Design & Management (CDM)Regulations on any construction projects the Council may be involved with.
The team also continued to provide the Educational Visits Advisor Role to schools for domestic and foreign visits.
Safety Warnings and Advice was also provided to schools, particularly around asbestos which was detailed within the main report.
Members attention was drawn to appendix 2 of the main report which highlighted the number of accidents which had been reported during the year compared to that of the previous year. The majority of accidents were lifting and handling, slips trips and fall.
There had been 147 reports of physical assaults and 14 verbal assaults this year which was up on the previous year. The detail was contained within the main report.
Members were given the opportunity to make comments/ask question, these could be summarised as follows:
Questions were raised in relation to office temperatures during periods of hot weather and if there was a higher limit which was considered unsuitable for office workers and also whether or not air conditioning was being considered across the authority. Officers explained that although there wasn't a legal limit in regards to how hot an office got, there was a legal minimum limit. There were no plans currently to install air conditioning units within offices across the authority, however a situation would be managed where it was felt the office was hot by opening windows, operating fans and closing blinds etc.
|The Work Programme was noted.|