Agenda and minutes

Audit Committee
Wednesday, 13th September 2017 6.10 p.m.

Venue: Lancaster Town Hall

Contact: Sarah Moorghen, Democratic Services - telephone 01524 582132, or email  smoorghen@lancaster.gov.uk 

Items
No. Item

11.

Minutes

Minutes of meeting held on 28th June 2017 (previously circulated). 

Minutes:

The minutes of the meeting held on the 28th June 2017 were signed by the Chairman as a correct record.

12.

Items of urgent business authorised by the Chairman

Minutes:

There were no items of urgent business.

13.

Declarations of Interest

To receive declarations by Members of interests in respect of items on this Agenda. 

Members are reminded that, in accordance with the Localism Act 2011, they are required to declare any disclosable pecuniary interests which have not already been declared in the Council’s Register of Interests. (It is a criminal offence not to declare a disclosable pecuniary interest either in the Register or at the meeting). 

Whilst not a legal requirement, in accordance with Council Procedure Rule 9 and in the interests of clarity and transparency, Members should declare any disclosable pecuniary interests which they have already declared in the Register, at this point in the meeting. 

In accordance with Part B Section 2 of the Code Of Conduct, Members are required to declare the existence and nature of any other interests as defined in paragraphs 8(1) or 9(2) of the Code of Conduct. 

 

Minutes:

There were no declarations of interest.

With the agreement of the Committee the Chairman brought forward the “Counter Fraud – Annual Report 2016/17” to allow the Corporate Fraud Manager to leave the meeting after the conclusion of this item (minute 14 refers).

14.

Counter Fraud - Annual Report 2016/17 pdf icon PDF 523 KB

Report of the Corporate Fraud Manager.

Minutes:

The Corporate Fraud Manager presented the Counter Fraud – Annual Report 2016/17 to inform the Committee of the extent and outcome of the counter fraud work during 2016/17.

 

It was reported that Local Authorities had a statutory duty under section 151 of the Local Government Finance Act 1972 to make arrangements for the proper administration of their financial affairs. In addition there was also a duty to have effective controls in place to prevent, detect and investigate fraud and error.

 

From 1st June 2015 responsibility for Housing Benefit fraud investigation had transferred to the Department for Work and Pensions and the City Council had made the decision to form a Corporate Fraud Team, shared with Preston, Lancaster and Fylde Councils.

 

The report detailed performance and counter fraud activity undertaken by the Corporate Fraud Team during 2016/17.

 

Members asked a number of questions in relation to fraudulent tenancies, performance, overpayments, prosecutions and what had been done to promote the deterrent effect.

 

Resolved:

 

That the report be noted.

15.

The Annual Governance Statement 2016/17 pdf icon PDF 1 MB

Report of the Chief Executive.

Minutes:

The Committee received the report of the Chief Executive that sought Committee’s recommendation for the adoption of the Annual Governance Statement (AGS) for the 2016/17 financial year.

 

Members were advised by the Internal Audit and Assurance Manager, that the City Council’s external auditors, KPMG required some additional wording to be inserted into the AGS. This had been circulated to Members separately via email prior to the meeting.

 

The Internal Audit and Assurance Manager explained that the AGS had been compiled following the completion of assurance statements by service managers and following a governance workshop with Chief Officers.

 

The Internal Audit and Assurance Manager took the Committee through the AGS explaining how the Council has to demonstrate compliance to the seven core principles, which are documented in the Code of Corporate Governance. She highlighted the four ‘significant governance issues’ within the statement and confirmed that an action plan would be circulated at a later date detailing the steps that would be taken to address the issues.

 

The Committee considered the Annual Governance Statement and asked a number of questions regarding risks and the meaning of ‘significant’ in the AGS, employee’s performance, the Council’s Whistleblowing procedures and reporting timescales.

 

It was proposed by Councillor Thomas and seconded by Councillor Whittaker:

 

“That the recommendations in the report be approved”

 

Upon being put to the vote, Members voted unanimously in favour of the proposition, whereupon the Chairman declared the proposal to be clearly carried.

 

Resolved:-

 

(1)          That the Annual Governance Statement for 2016/17, including the additional wording required by KPMG, be recommended for adoption and for signing by the Chief Executive and the Leader of the Council. 

16.

Statement of Accounts 2016/17 pdf icon PDF 253 KB

Report of the Chief Officer (Resources)

Additional documents:

Minutes:

The Committee received the report of the Chief Officer (Resources) which sought Member approval for the 2016/17 audited accounts to allow the completion of financial reporting.

 

In accordance with the Accounts and Audit Regulations, the draft accounts had been produced by the 30th June 2017 and certified by the Section 151 Officer on that date. They had been made available for public inspection and had been externally audited.

 

Members were advised that there was one misstatement in the accounts which required adjustment.

 

There were a small number of presentational adjustments required to the accounts. Subject to supporting documentation being completed and reviewed, an unqualified audit opinion was anticipated. An unqualified Value for Money (VFM) conclusion was also expected. It was reported that one formal objection to the accounts had been received and this was currently being considered by the External Auditor.

 

Chris Paisley, Audit Manager KPMG (UK), guided Members though the External Auditor’s formal report which was set out at Appendix A to the report, and reported on the key issues identified during the audit of the financial statements.

 

In due course, KPMG would finalise the audit and issue their opinion, subject to any outstanding objection, in time for the audited Accounts to be published by the 30th September 2017.

 

Members asked a number of questions in relation to boundaries for the Local Adjustment Factor, the surplus on provision of services, VFM opportunities, fees, the level of variance and pension’s liabilities.  

 

Resolved:-

 

1)     That the report for 2016/17, issued by the City Council’s External Auditors be noted, together with the letter of representation to be signed by the Section 151 Officer.

 

2)     That the audited Statement of Accounts for the financial year ended 31st March 2017 be approved and that the Accounts be signed and dated by the Chairman.

17.

Internal Audit Monitoring pdf icon PDF 282 KB

Report of the Interim Internal Audit and Assurance Manager.

Minutes:

The Committee received the report of the Internal Audit and Assurance Manager to advise Members of the latest monitoring position regarding the 2017/18 Internal Audit Plan and sought approval for the proposed variations to the Planas set out at paragraph 1.3 of the report;

 

 

 

Report Status

 

 

 

Category of Audit

 

Final Issued

Assurance Level

 

Fieldwork

Draft Report

Comments

Revenue Shared Service Financial Systems

 

 

 

 

 

NNDR – Strategic (rate avoidance)

 

 

P

 

 

NNDR – Transactional

 

 

P

 

 

E-Claims

 

 

 

 

Q3

 

A summary of the monitoring position up to 15th August 2017 was outlined to Members. The Committee were advised that minor changes had been made to the 2017/18 Audit Plan in respect of internal audit work under the Revenue Shared Service Arrangement, however there had been no changes made to the number of allocated days, which currently stood at 42 days.

 

Resolved:-

 

1)  That the latest monitoring position be noted.

 

2)  That the proposed revisions to the audit plan, as set out in 1.3 of the report be approved.  

18.

Local Government Ombudsman's Annual Review Letter 2016/17 pdf icon PDF 232 KB

Report of the Interim Internal Audit and Assurance Manager.

Additional documents:

Minutes:

The Committee received the report of the Internal Audit and Assurance Manager which considered the Local Government Ombudsman’s Annual Review Letter for the year ending 31st March 2017.

 

The Local Government Ombudsman’s Annual Review Letter 2016/17 was appended to the report for Members consideration. A total of 15 complaints and enquiries had been received against the City Council in 2016/17 compared to 12 in 2015/16. 17 decisions had been made in 2016/17 compared to 17 in 2015/16.

 

Members noted that 3 of the decisions related to complaints which had been investigated in detail, 2 of which had been upheld. This compared to 3 detailed investigations in 2015/16, of which 2 were upheld.

 

Members were informed that both upheld complaints had now been closed by the Local Government Ombudsman following implementation of the recommended actions.

 

Resolved:

 

That the report be noted.