Agenda and draft minutes

To receive any apologies for absence

An apology for absence was submitted by Councillor Sam Akhtar.

To confirm the Minutes of the Meeting held on 29 November 2023.

The Minutes of the meeting of the Committee held on 29 November 2023 were confirmed as a correct record and signed by the Chair.

To receive any declarations of interest

Councillor Stephen Newton declared a Personal Interest in item 52 Corporate Risk Register on the grounds that he and his wife were foster carers.

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 the Wokingham Borough Council - Audit Update.

The Committee received the Wokingham Borough Council Audit Update.

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

·       Janet Dawson, EY, indicated that the report built on the position reported to the last Committee meeting in terms of the national context of what the Department for Levelling Up and Communities were intending to do.  There had been a small change in the timeframe.  The backstop date for delayed audits of 31 March 2024 had now been moved to 30 September 2024 so as to give sufficient time to lay the relevant legislation.

·       EY had written to all the bodies that it provided audit services to, to set out how it would be responding to this and how resources would be prioritised, with a view to closing as many historical audits as possible before then focusing on closing out all the value for money work across all the bodies and planning for 2023/24 audits.

·       Janet Dawson set out the implications for the Council.  Unfortunately, it had not been possible to complete all the necessary fieldwork by Christmas, as targeted.  In addition, no further progress had been made with the pensions fund audit and receiving the assurances required on this. 

·       It was highly likely that EY would disclaim the 2021/22 audit, and focus its resources on closing out the value for money work for 2021/22 and 2022/23, and then work on a transition with the incoming auditors.  EY was unable to allocate further resource to close the 2021/22 audit.

·       Councillor Newton expressed disappointment at EY’s position and felt that this was not in the Council or residents’ best interests.  He stated that an additional 6 months was available to undertake the work, and questioned whether EY would reconsider their position.  Janet Dawson responded that lengthy discussions had been had with officers about whether there was an opportunity to close the audit.  However, the amount of work required, particularly around valuations, was significant.  Resources had been allocated to ensure close out by the original intended target date, had all necessary information required been received.  However, resources were now fully allocated to other priorities.  The additional 6 months did not give extra time for the Wokingham audit as the resources were already allocated elsewhere.

·       In response to a question from Councillor Newton regarding capacity, Janet Dawson commented that the increase in staffing numbers at EY related to an increase in regulatory requirements.  In order to be able to deliver a public sector audit, team members had to be based in the UK and met the necessary clearance standards, meet the quality training requirements and to have  the necessary specialism.  There were 300 in the UK team.  The contract could be delivered where there was no significant delay which then resulted in a double running of audits.  A double running of audits would also create pressure on Council officers.  She reminded the Committee that EY’s contract was with the Public Sector Audit Appointments (PSAA).  Discussions had been held with the PSAA on the  ...  view the full minutes text for item 51.

To receive the Corporate Risk Register.

The Chief Executive presented the Corporate Risk Register.

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

·       Risk 1 – Budget and Financial Resilience, had been updated.  The Council continued to face significant financial pressures. The Council was on course to set a balanced budget, which would include significant savings.

·       A new risk, risk 25 had been added around the Procurement Act 2023.  The rules governing public procurement were changing.  The changes would require the Council to alter the way in which it procured goods, works and services that were ‘covered procurements’ and over a certain threshold (value).  Members were notified that the main risk related to compliance with the new regulations.

·       Risk 4 Local Plan Update had been updated.  Since the last Committee the Government had published the new National Planning Policy Framework.  Members were disappointed to note that past over-delivery in the context of plan making was not permitted.

·       The focus of Risk 9 Climate Emergency had been amended to focus on the Council’s delivery of the Climate Emergency Action Plan.

·       The risk target had increased for Risk 13 Adult Safeguarding and Risk 14 Children’s Safeguarding.

·       Risk 17 Mainstream Education had reduced following the move of the Forest School to be co-educational.

·       The Election risk (risk 18) had reduced to medium risk.  This remained a priority for the Corporate Leadership Team.

·       Councillor Smith asked why risk 7 had not been included.  This was an error and the Governance and Risk Manager agreed to circulate the information to Members following the meeting. 

·       Councillor Smith went on question why risks 16 and 23 were not included and was informed that they were no longer part of the Corporate Risk Register.  He suggested that this be explained in the covering report.  It was suggested that the risks be renumbered, and an appendix included in future iterations which identified where risks had been removed.

·       Councillor Smith commented that the explanation relating Risk 4 Local Plan Update was confusing.  Further clarification would be requested from Planning.

·       With regards to Risk 3, Workforce, Sandeep Vig asked if there was a good understanding of critical functions and roles where a targeted approach was taken.  The Chief Executive indicated that a targeted approach was taken for recruiting to some roles, such as Children’s Social Workers, which helped to reduce a reliance on agency costs.  Discussions were being held with the other Berkshire authorities around approaches that could be taken.

·       Sandeep Vig noted that one of the mitigating actions for Risk 19 Information Governance was overdue.  He asked whether that had a link or dependency to cyber security.  The Assistant Director Governance indicated that there were no direct links.  There was a current acceptable use policy, but this had not been updated very recently.

·       Mike Drake asked if the balanced budget referred to 2024/25 and was informed that it did.  The Chief Executive commented that there were in year pressures which were being mitigated, and the need to present a balanced budget for 2024/25.

·       Mike  ...  view the full minutes text for item 52.

To receive the 2023/24 Internal Audit and Investigation Plan - Quarter 3 Progress Update to 31 December 2023.

The Committee received the 2023/24 Internal Audit and Investigation Plan - Quarter 3 Progress Update to 31 December 2023.

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

·       The report outlined progress made of work against the 2023/24 Internal Audit and Investigation Plan to 31 December 2023.

·       There were no new audits which had resulted in a Category 3 or Category 4 audit opinion.

·       The Head of Internal Audit and Investigations highlighted the high risk concerns and the progress made against them.  No new high risk concerns had been identified.

·       Councillor Smith noted the table of risks at November 2023 and questioned why risks 2023/24, 2025/26 had not been included.  The Head of Internal Audit and Investigations responded that this report detailed progress against the 2023/24 audit plan.  The following report would cover the coverage of Key Corporate Risks over a three year period.

·       In response to a question regarding high risk concerns, the Head of Internal Audit and Investigations explained that there were three high risk concerns that were not yet due for follow up.

·       With regards to the Recruitment and Retention Processes and References audit which had been deferred to 2024/25, Councillor Davies asked whether the existing policies had not been superseded and had been audited previously.  This was confirmed.

·       Mike Drake commented that it was odd to extend the reconciliations implementation date by a year.  He questioned whether a hard close was only undertaken once a year.  The Head of Internal Audit and Investigations commented that it was not just financial reconciliations, it was also non financial reconciliations.  The key financial systems reconciliations were picked up as part of the regular audit work undertaken in each area.  The Assistant Director Finance added that the frequency of reconciliations varied.  A hard close was undertaken once a year.  Mike Drake suggested that a hard close on a quarterly basis was better practice.  The Assistant Director Finance offered to discuss the matter in more detail outside of the meeting.

·       The Chair referred to a table which detailed the key corporate risks and a summary of the position of the audits.  She asked where the status was blank, if the Head of Internal Audit and Investigations had any concerns that it may not be possible to complete the plan within the year.  The Head of Internal Audit indicated that where they were blank, they were yet to be started.  There had been some variation in the plan during the course of the year.  For example, on the Governance of Companies’ audit, an external inspection had been taking place and the outcome of this was awaited to ensure that value could be added and that duplication did not take place.  In its place, a procurement audit had been scheduled in readiness for the introduction of the new Procurement Legislation in 2024.

RESOLVED:  That the 2023/24 Internal Audit and Investigation Quarter 3 Progress Report (activity to 31 December 2023) be reviewed and scrutinised.

To receive the 2024/25 Draft Internal Audit and Investigation Plan, Strategy and Internal Audit Charter.

The Committee received the 2024/25 Draft Internal Audit and Investigation Plan, Strategy, and Internal Audit Charter.

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

·       The 2024/25 Internal Audit Plan was aimed at informing the Head of Internal Audit’s Annual Opinion on the governance, risk management and internal control framework.  The Strategy detailed the approach for Internal Audit and Investigations work for the forthcoming financial year.

·       Guidance from our professional audit and accountancy bodies and networking groups had been considered in the preparation of the Plan and the Strategy.  The Head of Internal Audit and Investigations had attended Directorate management meetings and the Corporate Leadership Team meetings to discuss corporate and directorate risks and priorities  and where Internal Audit could add value, especially in the current financial climate affecting all local authorities.

·       Appendix A(i) detailed the proposed internal audit and investigation work plan areas for 2024-25.

·       Sandeep Vig commented that he would have expected an audit on the forthcoming procurement changes and was informed that work was in progress to scope an audit for the current year.

·       Councillor Newton questioned whether consideration could be given to measuring customer satisfaction, if there were ways in which efficiency could be improved, and value for money, with regards to the Council undertaking adaptations to vulnerable residents’ properties to meet their needs.  The Head of Internal Audit and Investigations agreed to consider whether this could be included.

·       Members were pleased to note Directorate Management Teams and the Corporate Leadership Team’s engagement in the internal audit and investigation planning process.

·       With regards to the Internal Audit Strategy, Internal Audit propose to audit Key Corporate Risk 1 (Budget and Financial Resilience) every year and each of the other Key Corporate Risks once every three years. The top four corporate risks will have audit coverage during 2024/25 due to them being categorised as Very High Risk under the Council’s risk assessment process. Councillor Smith asked whether each of the four top corporate risks should be audited each year.  He was informed that whilst the team were planning ahead, the risk register could be subject to change.  The current approach was the best with the resources available and should anything significant arise from the audit of those four key risks in 2024/25, then provision can be made to include coverage in subsequent years.

·       The Internal Audit Charter was refreshed annually.  Minor amendments had been made.

·       With regards to the Internal Audit Charter, Councillor Davies commented that the changes that the Committee had requested the previous year had not been carried over.  He asked that these be reintroduced.

RESOLVED: That

1)    The 2024/25 draft Internal Audit and Investigation Plan and Strategy be reviewed and scrutinised.

2)    The 2024/25 Internal Audit Charter be approved subject to the previously agreed changes being reintroduced.

To receive the Audit Committee Effectiveness Self-Assessment.

The Committee considered the Audit Committee Effectiveness Self-Assessment.

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

·       The effectiveness of the Audit Committee has been reviewed in line with the Chartered Institute of Public Finance (CIPFA) self-assessment of good practice. The overall effectiveness was found to be satisfactory with a few areas of improvement which require consideration.

·       The overall score has increased from 162/200 to 179/200.  How this had been achieved was outlined within the report.  An action plan would detail how any shortfalls would be addressed.

·       Councillor Harper sought an explanation as to why the Committee only partially complied or improvement was needed regarding ‘Has the committee obtained positive feedback on its performance from those interacting with the committee or relying on its work?’  The Governance and Risk Manager explained that feedback was not currently collected but that a mechanism for this would be introduced.

·       Mike Drake sought clarification about the following ‘Does the committee publish an annual report in accordance with the 2022 guidance, including: • compliance with the CIPFA Position Statement 2022 • results of the annual evaluation, development work undertaken and planned improvements’ which had been scored as partial compliance or improvements needed.  The Governance and Risk Manager indicated that this had been addressed in the Audit Committee Annual Report.

RESOLVED: 

1)    That the Committee reviews and agrees its annual assessment of the Committee’s effectiveness at Appendix A based on the October 2022 CIPFA guidance on local authority audit committees;

2)    That the Committee reviews and agrees the associated action plan

To receive a report regarding Assurance Mapping.

The Committee received a report regarding assurance mapping.

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

·       The report provided the Committee with the first draft of an assurance map for the Council.  The report used the Local Government Association (LGA’s) draft Assurance and Improvement Framework to identify the governance arrangements of the Council and utilised this to map the different high-level sources and types of assurance the Council received. 

·       The map could help to shape the Committee’s work programme going forwards.

·       The Governance and Risk Manager sought feedback from the Committee as to the value the document provided.

·       In response to a comment from Councillor Harper regarding Full Council decisions and the Constitution, the Assistant Director Governance commented that the Constitution was the Council’s rules procedure and was just one element of assurance.  The review of the Constitution was still in reasonably early stages and an update report would be presented at the March Council meeting.

·       The Chair asked that the terms First, Second and Third lines of defence be explained, and that External Audit and Internal Audit be more specifically referenced.

·       It was clarified that AGS referred to the Annual Governance Statement.

·       The Chair commented that it was a good starting point but that the layout was a little confusing.  It needed to be clear which areas gave assurance and which gained assurance.  She suggested that the Media and Public boxes could be increased in size.  She offered to have a discussion outside of the meeting as to what other improvements could be made.

RESOLVED:  That the assurance mapping report be noted.

To consider the Audit Committee Annual Report 2023-24.

The Assistant Director Governance presented the draft Audit Committee annual report 2023-24.

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

·       Members were informed that there had been two areas of limited assurance – Right to Buy and Information Governance.  These would be added to the report.

·       The section regarding External Audit would be updated following the comments made at this meeting.  Councillor Smith asked that the Committee’s disappointment with the situation and the fact that the Council’s finances had been well looked after, be made clear.

·       Members asked that it be clarified in the introduction that the Committee also included the two independent members.

·       It being the last meeting of the year the Chair extended her thanks for the valuable contributions made to the Committee by its members, the external auditors, and the internal auditors, and she thanked the officers for their support of the Committee during the year.

RESOLVED:  That the Audit Committee annual report 2023-24 be recommended to Council for approval.