Agenda and draft minutes

Audit Committee - Wednesday, 25th September, 2024 7.00 pm

Venue: David Hicks 1 - Civic Offices, Shute End, Wokingham RG40 1BN

Contact: Madeleine Shopland  Democratic & Electoral Services Specialist

Media

Items
No. Item

13.

Apologies

To receive any apologies for absence

Minutes:

Apologies for absence were submitted from Councillors Sam Akhtar and Vishal Srinivasan.

14.

Minutes of Previous Meeting pdf icon PDF 162 KB

To confirm the Minutes of the Meeting held on 24 July 2024.

 

Minutes:

The Minutes of the meeting of the Committee held on 24 July 2024 were confirmed as a correct record and signed by the Chair.

 

The Chair indicated that an update to actions had been circulated.  Mike Drake asked if they could be circulated earlier with the agenda papers.

 

Mike Drake noted that an update had been provided from EY on the points raised around internal audit and the function of independence, staffing in the finance department and work on the valuations.  He expressed some disappointment around the response received.

 

Mike Drake referred to KPMG’s comment on the pension valuation and sought confirmation on the approach that would be taken, which was provided.  Some underlying work on the pension assets would also be required.  Mike Drake was of the view that this would help to progress the audit quicker.

 

Councillor Comber indicated that he had previously asked about the numbers relating to audit concerns.  He noted that the item relating to this was showing as closed and asked about the outcome.  The Chair responded that she and the Head of Internal Audit and Investigation had reviewed the presentation of this information, and hopefully made improvements.

 

With regards to the Pension Fund audit, Councillor Newton stated that he had attended the most recent Pension Fund meeting and indicated that because they had to come under the Royal Borough of Windsor and Maidenhead’s audits, they could not publish separately, and were following the backstop arrangements and future programme laid down by the Government.  As a result of Wokingham’s concerns, the Head of Fund had offered to attend an Audit Committee meeting to give an update and assurances, if requested.

 

Sandeep Vig asked about the EY disclaimed opinion.  The Chair stated that in terms of the audit opinions for 2021/22 and 2022/23, an update had been provided at the last committee meeting.  Further delays had been expected because of the General Election.  The Assistant Director Finance added that there had been initial plans in early 2024 outlaid for a reset, to catch up on those local authorities who were behind with audits.  A consultation had been launched in early 2024 with a proposal that by the end of September there would be a backstop for all 2022/23 or earlier audits to be completed.  At that point EY had announced their plans to undertake no further work on the outstanding audits, apart from the value for money work.  The General election had delayed the process, but the Government had confirmed its intention to continue to set backstop dates, taking consultation responses into account.  The 30 September date for all 2022/23 audits had moved to 13 December.  The Council had audits for 2021/22 and 2022/23 outstanding and would then progress with KPMG going forward.  The timeline for completing 2023/24 had now shifted from May 2025 to February 2025, with a similar date the following year for 2024/25.  The Assistant Director Finance indicated that the full guidance was still outstanding.  The Council continued to work with EY  ...  view the full minutes text for item 14.

15.

Declaration of Interest

To receive any declarations of interest

Minutes:

Councillor Stephen Newton declared a Personal Interest in Item 19 Corporate Risk Register on the grounds that he was a foster carer.

16.

Public Question Time

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

Minutes:

There were no Public questions.

17.

Member Question Time

To answer any member questions

Minutes:

There were no Member questions.

 

18.

Wokingham Borourgh Council Draft Value for Money Risk Assessment pdf icon PDF 315 KB

To consider and note the Wokingham Borourgh Council Draft Value for Money Risk Assessment from KPMG.

Minutes:

The Committee received the Wokingham Borough Council Draft Value for Money Risk Assessment from KPMG.

 

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

 

·       Jonathan Brown advised that the Value for Money Risk Assessment was draft because KPMG had to wait for EY to undertake their previous risk assessments.  The report was based on the risk assessment work already undertaken and would be updated and move into the annual audit report at the end of KPMG’s work.  It would summarise findings on the Annual Statement and Value for Money.

·       The scope of the work undertaken was set by the Audit Code of Practice and focused on financial sustainability, governance and improving economy, efficiency, and effectiveness.  The arrangements in place to deliver these, such as internal audit reports, regulator reports and processes, would be considered.

·       No risks of significant weakness in arrangements had been identified.

·       Councillor Newton questioned whether there was a disconnect between what members of the public expected of value for money and what was audited.  He queried whether a piece of work could be carried out which looked at whether the Council had paid an appropriate price, and whether there was a guarantee on road repairs for example, and if they did not last, whether the guarantee had been exercised.  Jonathan Brown responded that people termed value for money differently.  KPMG’s scope was set by the Audit Code of Practice and looked for significant weaknesses in arrangements in place.  The Assistant Director Finance added that with regards to the road maintenance contract, it was quite difficult to benchmark costs because the area and type of service could vary.  If work was required in this area this could be provided in work already completed.  The Chair commented that Internal Audit looked at value for money within the context of individual audits and suggested that she speak with the Assistant Director Finance and the Head of Internal Audit and Investigation to ascertain whether work already undertaken covered concerns raised.

·       Sandeep Vig asked about the level of detail and the scope of the different elements.  Jonathan Brown reemphasised arrangements in place.  For financial sustainability he referred to matters such as unidentified savings and planning gaps which would threaten the delivery of the plan.

 

RESOLVED:  That the Wokingham Borough Council Draft Value for Money Risk Assessment from KPMG, be noted.

19.

Annual Governance Statement 2023/24 and Update to Local Code of Corporate Governance pdf icon PDF 93 KB

To receive the Annual Governance Statement 2023/24 and Update to Local Code of Corporate Governance.

Additional documents:

Minutes:

The Chief Executive presented the Annual Governance Statement and the Local Code of Corporate Governance to the Committee.

 

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

 

·       The report highlighted how the Council met the core principles of Good Governance set out in the CIPFA and Solace framework. 

·       The actions and improvements put in place, such as the Council Plan and the changes to the structure of the Audit Committee, were highlighted.

·       Sandeep Vig noted that principle G ,’Implementing good practices in transparency, reporting, and audit to deliver effective accountability management’ had been assessed as being Effective, and questioned how this conclusion had been reached.  The Chief Executive emphasised that this related to internal controls.  She highlighted the importance of transparency and accountability.  It was important that the Council did all that it could within its control. 

·       Mike Drake commented that Principle C ‘Defined outcomes in terms of sustainable economic, social, and environmental benefits’ had been assessed as being Generally Effective, however, two of the previous year’s accounts had not yet been finalised.  Principle D ‘Determining the interventions necessary to optimise the achievement of the intended outcomes’ had been assessed as Effective, however, the accounts remained outstanding.  He suggested that more context be given to highlight that some issues were outside of the Council’s control.  The Chair indicated that the Committee could recommend that the assessment be Generally Effective, if it wished.

·       Councillor Andrea highlighted action C.3 ‘Continue to work with External Audit (EY) to conclude the Council’s Statement of Accounts for 2021/22 and 2022/23.’

·       Councillor Newton commented that in order to achieve Effective the Council needed to meet the good governance principle in all substantive respects and that this was a high bar.  He proposed that the assessment for Principle G be amended to General Effective.  This was not taken forward.

·       Councillor Jorgensen asked why health and safety had been identified as a particular area of focus.  The Chief Executive answered that the team had been moved to a different part of the Council and it was felt that there should be an increased focus on reporting in this area.

·       With regards to Principle A ‘Behaving with integrity, commitment to ethical values, and respecting the rule of law’, Councillor Comber noted the inclusion of the following in the commentary ‘The Council can do more to ensure its values are fully embedded in the culture of the organisation.’  He questioned whether this related to a specific action or if there was generally room for improvement.  The Chief Executive commented that it was the latter. 

·       The Chief Executive commented that the Council’s developing set of values had been heavily consulted on, which would help to better embed them across the organisation.

 

RESOLVED:  That

 

1)    the Annual Governance Statement (AGS) at Appendix 1 be reviewed prior to approval and the Committee considers whether it properly reflects the risk environment and supporting assurances, including the head of internal audit’s annual opinion;

2)    the Committee considers consider whether the annual evaluation for  ...  view the full minutes text for item 19.

20.

Corporate Risk Register pdf icon PDF 162 KB

To receive the Corporate Risk Register.

Additional documents:

Minutes:

The Committee considered the Corporate Risk Register and the Risk Management Policy and Guidance.

 

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

 

·       The Chief Executive advised that two risks had reduced – workforce and mainstream education provision, and two risks had increased – the Local Plan and outcomes and costs for children with SEN.

·       Members were reminded that one of the significant financial pressures was the High Needs Block deficit.  The Chief Executive detailed some of the challenges around SEN.  This pressure was being felt across the country.

·       With regards to the risk around workforce there had been a lot of focus on the workforce strategy, which had made improvements in this area.

·       Sandeep Vig commented that he understood why the detail relating to the cyber security risk had been removed from the risk register, but questioned what action was being taken to address this risk, given its high-risk nature and specialism.  The Chief Executive indicated that it was discussed at Corporate Leadership Team and was high on the agenda.  Conversations could also be had with Chair of the Audit Committee.  Sandeep Vig went on to ask whether the Council had all the knowledge and resources required in place to address this risk.  The Chief Executive responded that the Chief Operating Officer had an IT background and that she was confident that if additional resource was required, it would be highlighted.

·       Councillor Andrea referred to Risk 4 and commented that the Local Plan had now been adopted by the Council.  However, the Plan did not carry significant weight until later in the adoption process.  He questioned whether this had been taken into account.  The Chief Executive indicated that risk 4 related to uncontrolled development and the steps the Council was taking was around having a Local Plan in place, which was currently on track.  It was important that the Council had the right resources for planning and the necessary specialisms.  Benchmarking data showed that the planning service was high performing.

·       The Chair queried whether reference should be made to the Local Plan in the actions for Risk 21 Affordable Housing, as an adopted local plan should reduce this risk.  It was agreed that this would be included.

·       Councillor Newton asked about Risk 5 relating to children with SEN.  He was surprised to note the delays to the delivery of the free schools and asked what action would be taken now these delays were known, and the mitigations in place during the interim period.  In addition, he asked when the schools were now likely to open.  The Chief Executive referred to the anticipated cost of this delay.  Officers were raising with the Department for Education as to what this would actually mean.  She would ask the Director of Children’s Services for further information regarding potential timescales for the new schools.

·       The Committee was informed that there were a number of actions in place relating to the Safety Valve programme, which would have an impact on SEN.

·       Councillor Newton  ...  view the full minutes text for item 20.

21.

2024/25 Internal Audit and Investigation Plan - Quarter 1 Progress Update (to 30 June 2024) pdf icon PDF 95 KB

To receive the 2024/25 Internal Audit and Investigation Plan - Quarter 1 Progress Update (to 30 June 2024)

Additional documents:

Minutes:

The Committee received the 2024/25 Internal Audit and Investigation Quarter 1 Progress Report (activity to 30 June 2024.

 

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

 

·       The report detailed the work of the Internal Audit and Investigation Team for the first three months of the financial year.  The Head of Internal Audit and Investigations commented that often Q1 was spent completing outstanding audits from the previous financial year and commencing new work.

·       The 2023/24 debtors audit had been finalised and had moved from a Category 3 to Category 2 audit opinion.  High risks had either been superseded or had moved down to medium status.  This would be reported in the Q2 progress report, and the table summarising the high risks would be updated.

·       A number of schools’ audits had moved from work in progress to draft and final stage.  A further update would be provided in Q2.

·       The Head of Internal Audit and Investigation explained the monitoring of high risks.

·       She had tried to clarify the presentation of the high risk concerns in response to Councillor Comber’s comments at the previous meeting.

·       Mike Drake noted that a number of high risk completion dates had been extended.  He commented that medium and low risks were not presented to the Committee.  The Head of Internal Audit and Investigations commented that medium risks were tracked but not in the same way as high risks because of limited resources.  The medium risks were picked up as part of the next audit review and tracked. In the past three years there had been 151 medium risks concerns.

·       Mike Drake asked whether many risks were still in place when a reaudit was carried out.  The Head of Internal Audit and Investigations would need to collate this information.

·       Mike Drake questioned if it was endemic that target dates were being missed, and was informed that managers would also pick up medium risk concerns as part of the management process.

·       It was noted that the oldest high risk concern from 2021/22 around financial reconciliations was now due by the end of September.  The Chair sought clarification that this was either complete or would be complete by the next meeting.  The Assistant Director Finance stated that the plan for this work was for the year end.  He hoped that it would be in place by the next meeting.

·       Mike Drake asked about the type of fraud referrals received and was informed that they largely related to the council tax reduction scheme, with some also relating to housing tenancy, social care, and blue badges.

·       Councillor Andrea asked about the debtors audit which had moved from Category 3 to 2 following a reaudit, and whether the actions of the previous audit had been closed out.  The Head of Internal Audit and Investigation confirmed that this was the case.

 

RESOLVED:  That the 2024/25 Internal Audit and Investigation Quarter 1 Progress Report (activity to 30 June 2024) be reviewed and scrutinised.

22.

CIPFA Management Code pdf icon PDF 90 KB

To receive the CIPFA Management Code.

Additional documents:

Minutes:

The Committee were updated on the CIPFA Management Code.

 

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

 

·       The Assistant Director Finance indicated that it was the third time the Code had been presented to the Committee.  An assessment against the Code had been carried out in March 2023 and an update had been provided in November 2023.  At that stage it had been agreed that more regular updates on progress against the Code would be provided. 

·       The Code was a list of good practice and governance measures.  Appendix A outlined how the Council was currently performing against the Code and where improvements would be made against a RAG rating.  Appendix B was the updated improvement plan.

·       The Code had not been updated since the last update.

·       Good progress had been made in some areas such as benchmarking.  In addition, a detailed review around the Council’s financial standing and reserves had been undertaken and this had identified improvements in governance and support in some areas of children’s services. However, there had been less improvement in some areas.  A more informal approach had been taken to relevant training prior to the assessment.  The review had suggested a more formalised approach alongside this.  This had been more aligned with the corporate management training.  Whilst this had caused some delays it would create a more embedded approach.

·       The Asset Management Plan was not yet in place as this was now part of the Council’s wider review of its assets portfolio.

·       The Chair sought an update on staffing levels in the finance team and was informed that further resources and skills were now in place. Process and governance arrangements had also improved, including training of service managers to allow greater self-serve.

·       The Chair noted that Section C related to the Financial Regulations which were part of the Constitution.  She questioned whether the Committee should review the Regulations prior to their consideration by the Constitution Review Working Group, as part of the wider Constitution Review.  The Assistant Director Finance questioned how this would fit into the wider Constitution review.

·       Councillor Newton asked about financial training for officers and the Director job descriptions, and questioned whether this would include commercial training.  The Assistant Director Finance indicated that it would.  In terms of job descriptions, clarity was provided around running the business, but this would be strengthened.  

 

RESOLVED:  That the assessment and progress made against the actions previously identified, be noted.

23.

Forward programme pdf icon PDF 64 KB

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

Minutes:

The Committee considered the forward programme for the remainder of the municipal year.

 

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

 

·       Councillor Newton referred to the changes to the Home School Transport appeals process recently agreed by Council.  He requested that a review on process, policy and outcomes be carried out in a years’ time to ensure that objectives were being achieved.  It was requested that this be included in the Internal Audit Plan and the Head of Internal Audit and Investigation agreed to consider this.

·       The Chair suggested that Assurance Mapping be added to the February meeting.

·       In response to a query from Councillor Comber the Chair explained what the effectiveness of the Audit Committee review entailed.

·       Depending on the timing of the review of the Constitution Review, the Committee would review the updated Financial Regulations. 

 

RESOLVED:  That the forward programme be noted.

 

 

ACTION

OFFICER

ONGOING/CLOSED

FEBRUARY MEETING –

 

External Audit update

 

  • Committee review disclaimed opinion once issued.

 

 

 

 

Audit Committee

 

 

 

 

 Open

.

 

 FEBRUARY MEETING

 

Corporate Risk Register

  • The Chair went on to ask whether reference could be made to the Social Care Futures vision in the risk relating to adults services.  The Chief Executive agreed to take this away as an action.

 

 

Governance and Risk Manager/Chief Executive

 

 

 

 

 

Open – to be addressed in November report to Committee.

 

FEBRUARY MEETING

 

2024/25 Draft Internal Audit and Investigation Plan, Strategy, and Internal Audit Charter

 

  • 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 Investigation agreed to look if this could be included.

 

 

 

 

 

 

 

 

Head of Internal Audit and Investigations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Open This will be considered as part of the 2025/26 Internal Audit Planning process.

 

 

 

 

 

 

 

 

 

 

 

 

FEBRUARY MEETING

 

Assurance Mapping

 

  • She [the Chair] offered to have a discussion outside of the meeting as to what other improvements could be made.

 

 

 

 

Chair/Governance and Risk Manager

 

 

 

 

Open

JULY MEETING

 

Minutes

 

  • Reference being made to the Social Care Future in the risk relating to adult services, remained outstanding.

 

 

 

 

Governance and Risk Manager

 

 

 

 

Open. To be addressed in the November report to the Committee.

JULY MEETING

 

Forward Programme

 

  • A report on high-risk failures in the sector had been previously considered. Consideration would be given to what the Council could learn from this, and whether a report to the Committee in future, was required.

 

 

 

 

 

Assistant Director Governance

 

 

 

 

 

 

 

 

 

 

 

Open – to be placed on Forward Plan for November

 

 

 

 

 

 

SEPTEMBER MEETING

 

Minutes

 

·       The Chair indicated that an update to actions had been circulated.  Mike Drake asked if they could be circulated earlier with the agenda papers.

·       The Council continued to work with EY and the position on the 2021/22 and 2022/23 audits was scheduled to be presented to the November Audit Committee.  

·       [2021/22 and 2022/23 audit reports] Mike Drake asked whether there would be commentary in the reports to the Committee to  ...  view the full minutes text for item 23.