Stockton-on-Tees Borough Council

Big plans, bright future

Audit Committee Minutes

Date:
Tuesday, 29th May, 2018
Time:
4.00 pm
Place:
Conference Room 2, Second Floor, Municipal Buildings, Church Road, Stockton on Tees
 
Please note: all Minutes are subject to approval at the next Meeting

Attendance Details

Present:
Cllr Barry Woodhouse (Chair), Cllr Chris Barlow (Vice Chair), Cllr Stefan Houghton, Cllr Eileen Johnson, Cllr Ross Patterson, Cllr Paul Rowling, Cllr Mick Stoker,
Officers:
Andrew Barber, Paul Johnston, Derek McDonald, Andy Bryson, Marianne Sleeman (DCE)
In Attendance:
Mark Kirkham, Gareth Roberts (Mazars)
Apologies for absence:
Cllr Kathryn Nelson, Cllr Laura Tunney
Item Description Decision
Public
A
1/18
EVACUATION PROCEDURE
 
A
2/18
DECLARATIONS OF INTEREST
 
A
3/18
MINUTES OF THE MEETING HELD ON 26TH FEBRUARY 2018 FOR APPROVAL AND SIGNATURE
RESOLVED that the report be noted.
A
4/18
INTERNAL AUDIT ANNUAL REPORT AND OPINION
RESOLVED that the report be noted.
A
5/18
HEALTH & SAFETY REPORT
RESOLVED that the report be noted.
A
6/18
EXTERNAL AUDIT - PROGRESS REPORT
RESOLVED that the report be noted.
A
7/18
DRAFT ANNUAL GOVERNANCE STATEMENT 2017/18
RESOLVED that the report be noted.
A
8/18
CORPORATE RISK REGISTER
RESOLVED that the report be noted.
A
9/18
ANNUAL FINANCIAL STATEMENTS - DRAFT PRIOR TO AUDIT
RESOLVED that the report be noted.
A
10/18
AUDIT COMMITTEE TERMS OF REFERENCE / TRAINING - DISCUSSION
RESOLVED that the report be noted.
16.00

Preamble

ItemPreamble
A
1/18
Evacuation procedures were noted.
A
2/18
There were no interests declared
A
3/18
Consideration was given to the minutes of the meeting held on 26th February 2018.
A
4/18
Consideration was given to the report that set out progress on the internal audit for 2017/2018.

• Undertaken 63 audits throughout the year against a planned 68, 6 deferred audits were to be carried out within the first part of 2018/2019 plan..

• The majority of audits were either full or substantial assurance demonstrating good controls across the board in 2017/2018

• Overall assurance that sufficient work was carried out to provide an opinion; the opinion being that the Council continues to have an appropriate, and overall, an effective system of internal control, upon which it can place reasonable reliance to deliver the Council's objectives, and detect fraud and other malpractice within a reasonable period of time.

• Self-assessment carried out this year was validated by an external assessor who confirmed the Council did comply with Public Sector Internal Audit Standards. Three areas of improvement were identified as follows:

- Seeking feedback from the Chair of the Audit Committee to link in with performance appraisals.

- Rotation of audits; audits were rotated as much as possible and each auditor signed a code of conduct.

- Reporting lines, standards required reporting to CMT level, there was a separate reporting line into the Director of Finance and Business Service.


• All staff had completed a minimum of 20 hours Continuous Professional Development (CPD).

• Follow up work of recommendations from previous audits was undertaken and all were found to be implemented apart from 1.

The Committee considered recommendations made in 2017/2018 and given analysis to support the information offered. Overall assurance was given to members.
The Chair offered members appreciation to those who worked hard under difficult circumstances.
A
5/18
The Committee considered Section 6 of the Annual report which reflected the Health, Safety and Wellbeing performance for the council for the last financial year.

Residential Educational visits were supported by Safety Management for all maintained schools, once they converted to academy they could decline the service. The Authority had lost approximately 50% of buy back services from schools that had converted to Academies.

Discussion took place around schools not buying back from the Councils services and questions were raised as to who they buying from. It was also questioned as to whether academies were obliged to have mandatory regulations. Officers explained that Academies were not compelled to inform the Authority who they were purchasing services from.

Members were informed about the Employment Protection Register which was an in house resource to make colleagues aware of any member of the public who could pose a threat to the council's workforce.

The Committee were informed of physical and verbal assaults for the last year, where there appeared to be a reduction of accidents reported. The Committee agreed it was difficult to evidence accident reporting within Academies.
A
6/18
Members were presented with a brief update on the external audit plan. Over the last quarter Mazars had continued to undertake any work they could to minimise the impact of what was quite a pressured time in June and July. The Finance team had 2 months to prepare the accounts which allowed 2 months for audit to take place. There were no matters to be raised at today's meeting.

Since the committee last met, external audit had:

• Held internal planning meetings as part of planning process for 2017/2018 audit.

• Update meetings with finance in respect of planning for the 2017/2018 interim and final audit visits.

• Undertaken planning work to refresh the documentation in respect of the Council's systems (including undertaking walkthrough testing).

• Refreshed their understanding of the processes in place within the Council that inform the preparation of the financial statements.


That audit work was on track for this time of year, there were no matters to raise with the Committee at this stage of the audit.
A
7/18
The report detailed the draft Annual Governance Statement. Member's attention was drawn to the Councils framework and clear vision for Big Plans Bright Future.

The Committee were reminded of the constitution which had rules and procedures and various codes and protocols in place for governance of members and officers. The Authority had a Scrutiny culture in place and as a result of arrangements 2 actions were outlined for improvement:

• Conclude the review and update of the Council's Constitution.

• Conclude the review and update of directorate's schemes of delegation
A
8/18
There were no significant changes to the Risk Register.

Development control should see reduction in risk.

The Committee considered the risks to the Council around GDPR and were informed Information Asset Registers were being put in place across the board and would be carried out over the next 3 months.

The Committee were informed every member of staff would complete E-Learning training around GDPR.
A
9/18
The Committee were assured the Draft Statement of Accounts 2017/2018 would be posted on the internet within a time frame in accordance with the relevant code of practice.

The report focussed on main objectives, strategies and resources using four main statements and key financial figures:

Levels of reserves the Council had at the end of March was 77m compared to 105m at the end of 16/17, a reduction of 28m. The deficit on net expenditure chargeable to the general fund was only 843k for the year with 36m relating to adjustments between funding and accounting basis. The majority of reduction was related to technical accounting entries linked to depreciation of assets, pension funds and sale of assets.

A small reduction on non-current assets to 322m down 2m on the previous year, this reflects the sale of land, property and heritage assets under construction which reflected the sale of various land and buildings throughout the year.

Short term investments and cash total of 36m at the end of 2017/2018, a reduction of 18m on the previous year. Part of this reduction reflects the long term investment in the Churches, Charities and Local Authorities (CCLA) Property fund with the 10m value now included within the non-current asset figures.

The Council's borrowings total is 47.4m which is a small decrease of 300k on the previous year.

The Council's earmarked reserves now stand at 69m which is a decrease of 9m from the previous year. This is a result of the planned use of reserves used to fund the capital programme.

General Fund reserves have reduced by the 843k general fund overspend in year and now stand at 7.6m.

The Committee agreed the report highlighted secure financial advice.

The Chair thanked the Finance team for doing a sterling job despite interest rates being so low.
A
10/18
The Chair confirmed if anybody had any training needs they contact Democratic Services or himself and training would be organised.

The Committee considered some change of wording to the Terms of Reference but agreed it would have no impact to the Terms.

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