Agenda and minutes

To elect a Chair for the 2023-24 municipal year.

RESOLVED:  That Councillor Rachel Burgess be elected Chair for the 2023-24 municipal year.

To appoint a Vice Chair for the 2023-24 municipal year.

RESOLVED:  That Councillor Mike Smith be appointed Vice Chair for the 2023-24 municipal year.

To receive any apologies for absence

There were no apologies for absence.

To confirm the Minutes of the Meeting held on 1 February 2023 and the Minutes of the Extraordinary Meeting held on 13 March 2023.

The Minutes of the meeting of the Committee held on 1 February 2023 and the Minutes of the Extraoridary meeting held on 13 March 2023 were confirmed as a correct record and signed by the Chair.

The Chair suggested that the action tracker should be a rolling action list, and that a column be added to indicate whether the action was open or closed.  She went on to state that at the February the Committee had requested that the Director of Children’s Services attend a future meeting.  This invitation remained outstanding.  In addition, information had been circulated which responded to the financial actions identified at the 13 March meeting.

To receive any declarations of interest

There were no declarations of interest submitted.

To answer any public questions

A period of 30 minutes will be allowed for members of the public to ask questions submitted under notice.

The Council welcomes questions from members of the public about the work of this committee.

Subject to meeting certain timescales, questions can relate to general issues concerned with the work of the Committee or an item which is on the Agenda for this meeting.  For full details of the procedure for submitting questions please contact the Democratic Services Section on the numbers given below or go to www.wokingham.gov.uk/publicquestions

There were no Public questions.

To answer any member questions

There were no Member questions.

To receive an update on the progress of the audit.

The Committee received an update on the progress of the audit from Hannah Lill, Helen Thompson and Janet Dawson, EY.

During the discussion of this item, the following points were made:

·       A written update would be circulated following the meeting.

·       Helen Thompson indicated that she had been the auditor for the Council and that 2020/21 was her sixth year of signing the accounts.  Janet Dawson would pick up the audit for 2021/22 and 2022/23.  Following that KPMG would take over as the new auditors.  Helen indicated that she was leaving EY later in the year and that this arrangement outlined would help ensure a smooth transition.

·       The Committee was informed that the audit of the accounts year ended 31 March 2021 remained open and the audit opinion had not yet been issued.  Work was complete other than in a small number of areas.  The primary reason for the delay related to assurance from the pension fund auditors.  There had been delays associated with the administering body of Berkshire Pension Fund, Royal Borough of Windsor and Maidenhead Council.  The assurance letter initially sent had contained a caveat which had meant that EY had been unable to issues its opinion.  A revised letter had now been sent which removed this caveat, however it contained new wording regarding control weaknesses, which warranted further clarification.

·       The delay to 2019/20 had had an ongoing impact.

·       Members were informed that the longer an audit stayed open, the greater the risk that further issues would arise.

·       Two further issues had been identified at national level – accounting for infrastructure assets (now resolved) and the triennial report for the pension fund.  Issues could also arise from quality reviews, which needed to be taken into account as part of the audit approach.

·       Hannah Lill commented that the audit results report had been issued in March 2023.  At the time it was reported that work was largely complete, other than completion of work around the pension liability valuation.  Since then, two further issues had arisen which needed to be addressed before the audit opinion on the 2021 financial statements could be issued.  The first was the triennial pension valuation.  Changes to the roll forward position using the previous March 2019 valuation had been identified.  A review of these changes was required to ascertain if there was an impact on the March 2021 IS 19 Report issued by the actuary.  This review had been completed and no amendment was considered necessary.  Only documentation of conclusions remained outstanding.  With regards to the second factors, following regulatory findings within EY for other audits, the classification of cash and cash equivalents on all open audits had been re-reviewed.  Management had been asked to review the classification of assets held as cash and cash equivalents.  As a result, an adjustment would be required to the financial statements.

·       The other areas that remained open related to the IS19 letter with Deloitte.  EY had challenged the area around significant control deficiencies reported.  Deloitte had indicated that they  ...  view the full minutes text for item 8.

To receive the Corporate Risk Register.

The Governance and Risk Manager introduced the Corporate Risk Register.

During the discussion of this item, the following points were made:

·       The Chief Executive indicated that the Council’s top risks were budget and financial resilience and; Health and Social Care reform.

·       A new risk, Risk 21 Housing Need, had been added.

·       Risk 16 Public transport, had been removed following the successful tender and announcement of additional funding for buses.  Risk 19 Election Administration, had been removed following a successful election.

·       The Chief Executive went on to highlight other changes to the Corporate Risk Register such as the strengthening of Risk 13 – Safeguarding Adults, and an update to Risk 9 Cyber Security.

·       With regards to the Budget and Financial Resilience risk, the Chief Executive emphasised that the Council faced a number of challenges, such as increased demand for Adult Services and Children’s Services, and increased complexity of cases, and also a net reduction in the budget as the result of inflation. 

·       Councillor Harper stated that the Medium Term Financial Plan was listed as an existing control for Risk 1 Budget and Financial Resilience.  He questioned whether it was a valid control as capital expenditure for the Barkham Solar Farm was not listed within the MTFP.  He had been informed that as it had been approved by Executive it did not appear on the MTFP, and was of the view that every capital expenditure item should be included.  The Assistant Director Finance explained that the timing of the commitment affected when an item was included in the MTFP.  At the point it was approved it would be added to the MTFP for the following cycle and into the capital monitoring.  With regards to the individual scheme, it was in the carry forwards due to be approved by the Executive in June.  The Assistant Director Finance agreed to provide a fuller answer outside of the meeting.

·       The Chair suggested that the MTFP as control on its own was potentially insufficient.  The MTFP had to be robust and thorough.

·       Councillor Harper referred to Risk 14 Children’s Safeguarding and the fact that a recent Ofsted inspection had scored Requires Improvement.  He questioned whether there should be a separate risk around Children’s Services.  He felt that Risk 14 was overly narrow.  The Chief Executive stated that within the detail of the report more detail had been included around some of the improvements made.  When a judgement of Requires Improvement was made it was a journey of improvement.  Councillor Harper suggested that that the mitigating actions be amended to highlight some of the improvements made.

·       With regards to Risk 18 Elections Act Implementation, Councillor Smith asked how many voters had been turned away before entering the polling station, because they did not have sufficient identification.  The Assistant Director Governance indicated that the information collected on polling day was that required of the Council, and that this had been previously circulated to Members.

·       Councillor Smith questioned whether controls were insufficient should risks remain high.  He also asked  ...  view the full minutes text for item 9.

To receive the 2022/23 Annual Internal Audit and Investigation Report.

The Committee considered the 2022/23 Annual Internal Audit and Investigation Report.

During the discussion of this item, the following points were made:

·       The Head of Internal Audit and Investigation stated that it had been a successful year for the team.   It was the first year of the new Internal Audit and Investigation service.  She highlighted how the team was developing and becoming embedded.  For example, relationships had been developed with the Corporate Leadership Team, Chief Executive, and the Chair of the Audit Committee, which had helped to raise the team’s profile.

·       Mid year the Chief Financial Officer had requested that the team contribute to the Council’s financial savings for the year.  A Senior Auditor post had been frozen, and an apprentice post was not recruited to.  Some elements of the work programme had been deferred.  An in-year review of the Internal Audit and Investigation Plan had been taken to the Committee’s September meeting.  It had taken these changes into account.

·       The team had also undertaken work on behalf three external clients.

·       It was noted that the service had achieved its income targets.

·       The Committee had been updated on progress made against the 2022/23 Internal Audit and Investigation Plan throughout the year.

·       The annual report required the Chief Audit Executive (the Head of Internal Audit and Investigations) to provide an annual opinion on the Council’s internal control, risk management and governance framework.  From the work undertaken in 2022/23 they had concluded that it was substantially complete and generally effective but with some improvements required.

·       The report included a list of high risk concerns identified in audits throughout the year and the counter measures and targets for actioning those concerns.  An action tracker was maintained which was shared regularly with the Chair of the Audit Committee.  At the time of reporting there were no outstanding actions which had not been addressed within the agreed timescales.

·       The report highlighted any audits which had received a category 3 or 4 audit opinion, the lowest category of audit opinion.  Only debtors audit had been rated 3 and none a 4 opinion.

·       The Committee was updated on anti fraud activities which had been undertaken., including the National Fraud Initiative data matching exercise and Empty Property Relief exercise.

·       In August and October, there had been an inspection by the Investigatory Powers Commissioners Office regarding the Council’s Regulation of Investigatory Powers Act arrangements.  Positive comments had been received from the Inspector about the Councils Policy, procedures, and training arrangements.

·       The team were required to comply with the standards of their professional body, the Institute of Internal Auditors Public Sector Internal Audit Standards.  The Council’s was required to have an external review of its Internal Audit Service against these standards every 5 years.  The next review was due and would commence in July 2023, and the results would be presented to the Committee in the summer.

·       In response to a question from Councillor Davies, the Chair confirmed that she met monthly with the Head of Internal Audit and Investigation.  ...  view the full minutes text for item 10.

To consider the Annual Governance Statement 2022/23 and Local Code of Corporate Governance.

The Committee considered the Annual Governance Statement 2022/23 and Local Code of Corporate Governance.

During the discussion of this item, the followings points were made:

·       With regards to the Annual Governance Statement, the Chair reminded Members that the Committee’s role was considering whether the document was understandable, was an accurate reflection, contained an audit opinion, and whether the action plan was robust.

·       The Code of Corporate Governance set out a framework of what good governance looked like in a local authority, across seven principles.

·       Within the Annual Governance Statement there was a self assessment of compliance with the Code, which officers had completed.  This was largely positive.  Members were informed that assurance was also received from other sources.  For example, each Assistant Director and Director completed a Management Assurance Statement as part of the process.  The Head of Internal Audit Opinion had also been referred to.

·       Mike Drake commented that the Committee had discussed its role and purpose at the March Committee meeting, and had agreed that as a body it provided guidance.  However, there was reference within the documents to the Committee providing ‘independent assurance.’  The Assistant Director Governance agreed to check the documents to ensure that the terminology reflected the most up to date terms of reference.

·       Councillor Smith noted that senior officers had received training on the respective roles of officers and Members and working together, and asked whether this could be provided to Members.

·       Councillor Smith commented that in Appendix 1 Review of Compliance against Local Code of Corporate Governance, it was difficult to judge why the individual criteria had been judged as a particular assessment.  The Assistant Director Governance indicated that officers would look to clarify in the future.

·       The Chair suggested that the reasons behind the delays to the account be reiterated to highlight it was due to factors outside of the Council’s control.

·       Councillor Harper questioned the section headed Openness and Comprehensive Stakeholder Engagement, and referred to a specific example relating to a petition and a Motion.  The Assistant Director Governance indicated that there would be a Constitution Review and this issue would be picked up as part of this.

·       The Committee would receive a progress report against the Annual Governance Statement action plan, at its November meeting.

·       In response to a question regarding external reviews of governance, the Assistant Director Governance referred to the Local Government Association Peer Review.  It was agreed that the report of this review would be circulated.

·       The Chair suggested that the section relating to the Corporate Parenting Board be augmented.  In addition, she felt that further information could be added as to action taken by the Audit Committee e.g. the appointment of an Independent Member.  She also referred to a skills audit of the Committee members and private meetings between the Committee and the auditors, without officers present.

RESOLVED: That

1)     The Committee review the Annual Governance Statement (AGS) prior to approval and consider whether it properly reflected the risk environment and supporting assurances, including the head  ...  view the full minutes text for item 11.

To consider the forward programme for the remainder of the municipal year.

The Committee considered the forward programme for 2023-24.

During the discussion of this item, the following points were made:

·       The Chair questioned the inclusion of items relating to Treasury Management, particularly the Treasury Management Strategy, following amendment of the Committee’s terms of reference.

·       Councillor Davies referred to Risk 4 of the Corporate Risk Register around uncontrolled building, which referenced the Local Plan Update which was due to be agreed by the Executive in July.  He questioned whether Regulations 18 and 19 could be referenced within the risk.

·       Members were reminded that the Corporate Risk Register was reviewed on a quarterly basis.

·       Councillor Smith suggested that an additional column be added to the forward programme which indicated the expected course of action that the Committee was expected to take for each item.

RESOLVED:  That the forward programme be noted.