Agenda and minutes

Minutes of meeting held on 25^th November 2020 (previously circulated). 

The minutes of the meeting held on 25^th November 2021 were agreed as a true record, and would be signed by the Chair at a later date.

There were no items of urgent business.

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

Councillors 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, Councillors 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, Councillors 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. 

There were no declarations of interest.

Report of the Internal Audit and Assurance Manager (Chief Internal Auditor).

The Internal Audit and Assurance Manager (IAAM) presented a report on the Annual Review of the Audit Committee Terms of Reference (TOR).

The IAAM reported that since the TOR was last reviewed, in February 2020, no further amendments had been made. However, it was noted that whilst the Committee had approved theTOR for the last two years, they had yet tobe presented to Full Council for endorsement, this would be rectified at the FullCouncil meeting that immediately followed this meeting.

It was proposed by Councillor Paul Stubbins and seconded by Councillor Geoff Knight:

“That the recommendations as set out in the report be approved”.

It was agreed by all, and the Chair declared the proposal to be carried.

Resolved:

(1)   That the Audit Committee’s Terms of Reference be accepted and adopted and referred to Full Council for approval.

Report of the Internal Audit and Assurance Manager (Chief Internal Auditor).

The Internal Audit and Assurance Manager presented a report which sought approval of the Annual Review of the Internal Audit Charter.

It was reported that the annual review of the Audit Charter had only identified one minor change in relation to paragraph 6.8 (page 15 of the Agenda). The Charter now clearly documented the existing arrangements for reporting audit assurance opinions to the Committee and the escalation processes should an audit opinion remain limited / minimal following two follow-up reviews.

It was proposed by Councillor Geoff Knight and seconded by Councillor David Whitworth:

“That the recommendations as set out in the report be approved”.

It was agreed by all, and the Chair declared the proposal to be carried.

Resolved:

(1)    That the Audit Committee agree the revised Internal Audit Charter.

Report of the Internal Audit and Assurance Manager (Chief Internal Auditor).

The Internal Audit and Assurance Manager presented a report which sought the Committees approval of the Internal Audit Strategy and consideration and approval of

the Draft Audit Plan Priorities for 2021/22.

It was reported that no changes had been made to this strategy since it was last reviewed by the Audit Committee in February 2020. However, the IAAM advised the Committee that at present, Internal Audit were not in a position to successfully deliver on all of its responsibilities as identified in the strategy. Help from the Executive Team was needed to enable the Internal Audit Team to meet its obligations to the organisation and ensure that standards of risk, governance and internal control were improved.

The Internal Audit and Assurance Manager explained that owing to a number of uncertainness over the coming months it seemed more appropriate to present the Audit Committee with a draft quarterly audit plan instead of the usual annual plan. A further audit plan for the remaining three quarters of the year would need to be presented to the Audit Committee for approval at a later date. It was hoped that the development of strategic and operational risk registers would assist with the drafting of the future plan. The Internal Audit and Assurance Manager explained that the first section of the plan was work identified  as a priority and which required completion during the first quarter (April – June). The second section detailed known forthcoming priorities for quarter 2-4. It was recognised however, that these would need to be revised.

It was proposed by Councillor Geoff Knight and seconded by Councillor Keith Budden:

“That the recommendations as set out in the report be approved”.

It was agreed by all, and the Chair declared the proposal to be carried.

Resolved:

That;

(1)        The Internal Audit Strategy be approved by the Audit Committee and it be noted that the IAAM was reporting that at present the work of the Internal Audit Team was not fully aligned to the current strategy.

(2)        The Audit Committee considered and approved the draft audit plan priorities for Quarter 1 of 2021/22 and note that further development of the plan is required to ensure an overall audit opinion can be delivered as at the 31 March 2022.

(3)        The Audit Committee note that the current arrangements with Wyre Borough Council for the sharing of the Chief Internal Auditor role will cease on the 31 March 2021.

Report of the Corporate Fraud Manager.

The Internal an Audit and Assurance Manager presented a report on the Annual Review of the Council’s Counter Fraud Policies.

It was reported that no changes had been made to either policy since they were last reviewed by the Audit Committee in February 2020.

The Internal Audit and Assurance Manager (IAAM) explained that the Money Laundering Policy will be brought to the next Audit Committee for approval and that the Raising Concerns Policy will be approved by the Personnel Committee at a later date. Given one of the Audit Committee’s responsibilities is the oversight of the Council’s counter-fraud arrangements, the IAAM advised the Audit Committee going forward to monitor any significant changes made to this policy.

It was proposed by Councillor Paul Stubbins and seconded by Councillor David Whitworth:

“That the recommendations as set out in the report be approved”.

It was agreed by all, and the Chair declared the proposal to be carried.

Resolved:

That;

(1)    That the Audit Committee approve the refreshed counter fraud policies, namely;

a) Anti-Fraud, Corruption and Bribery Policy; and

b) Sanctions Policy.

(2)    The Audit Committee note the Raising Concerns Policy (formally Whistleblowing Policy) will be reviewed by the Monitoring Officer and approved by the Personnel Committee in accordance with their Terms of Reference later in year.

(3)    The Audit Committee note that the Anti-Money Laundering Policy will be reviewed by the Money Laundering Officer and approved by the Audit Committee at their meeting on the 26 May 2021.

Report of the Internal Audit and Assurance Manager (Chief Internal Auditor).

The Internal Audit and Assurance Manager presented a report which updated the Audit Committee on the progress made in relation to both strategic and operational risk management and sought approval of the council’s refreshed Risk Management Policy.

The Committee were advised that the work completed in 2019 and early 2020 included the development and approval of a Risk Management Policy, which had been approved by Audit Committee in November 2019, the procurement of risk management software, in January 2020, and the production of a strategic risk register.

It was reported that there had been little change to the strategic risk register since it was last reported to the Audit Committee in November 2020.  Whilst it was hoped that the Internal Audit Plan for 2021/22 would have been derived from the strategic risk register this had not been possible given the register was still considered to be in its infancy and required further development.

It was agreed with the Director or Corporate Services that risk management training would be delayed whilst Internal Audit worked with Service Managers to identify key operational risks for their services. This was to allow a more tailored training package to be delivered ensuring it was appropriate for the varying levels of knowledge and understanding of risk across the organsiation. To date approximately eleven service areas have returned their key operational risks. Internal Audit are currently populating the GRACE risk management software with these risks and mitigating action plans.

It was proposed by Councillor Geoff Knight and seconded by Councillor Paul Stubbins:

“That the recommendations as set out in the report be approved”.

It was agreed by all, and the Chair declared the proposal to be carried.

Resolved:

(1)    The Audit Committee notes the progress made in relation to both the council’s strategic and operational risk management arrangements and notes the amended strategic risk register at Appendix A of the report.

(2)    That the Audit Committee approves the refreshed Risk Management Policy at Appendix B of the report.

Report of the Chief Finance Officer.

The Chief Finance Officer presented a report which sought approval from the Committee in respect of the changes to the Council’s Accounting Policies for the 2020/21 financial year.

The Committee was advised that there had been no changes from the policies used to prepare the 2019/20 Statement of Accounts.

It was reported that International Financial Reporting Standard (IFRS) 16 was meant to have been introduced for Local Authorities from 1^st April 2020 which meant that the annual accounts for 2020/21 should have been the first set of accounts produced in accordance with that standard. However, due to COVID-19 and additional pressures on Local Authorities the Financial Reporting Advisory Board (FRAB), had announced the deferral of IFRS 16 implementation to 2022/23.

The IFRS 16 was designed to improved levels of accuracy and transparency to the reporting process and in practical terms officers would need to identify and review the existing lease arrangements in the forthcoming year.

The Committee were advised that The Code of Practice on Local Authority Accounting required the Council to disclose as a note in the 2020/21 accounts, information relating to the impact of an accounting change required by a new standard that had been issued but not yet adopted by the 2020/21 Code.

It was proposed by Councillor Paul Stubbins and seconded by Councillor Geoff Knight:

“That the recommendations as set out in the report be approved”.

It was agreed by all, and the Chair declared the proposal to be carried.

Resolved:

(1)    That the Committee approves the accounting policies set out in Appendix 1 of the report.

Verbal report of the Chief Internal Auditor.

The outgoing Chief Internal Auditor read out a statement to the Committee which was to assist the Council and the incoming Chief Internal Auditor in relation to the current position of the organisation in relation to risk management, governance and internal control. The statement is appended to these minutes.