Agenda and minutes

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No. Item


Declarations of Interest

To receive declarations of personal and prejudicial interest (if any) from Members/Officers in accordance with the provisions of the Members’ Code of Conduct adopted by Council from 1 September 2014




Approval of Minutes pdf icon PDF 65 KB

To receive for approval the minutes of the Audit Committee of 24 November 2016. 


RESOLVED:                    That the minutes of the meeting of the Audit Committee of 24 November 2016 be approved as a true and accurate record subject to the addition of apologies for absence from Cllr CA Green.


The Corporate Risk Assessment 2017-18 pdf icon PDF 82 KB

Additional documents:


The Risk Management and Insurance Officer presented a report explaining the outcome of the annual Corporate Risk Assessment and informing the Committee of the proposed risk management timeline contained in Appendix 2 of the Risk Management Policy.


The risk assessment had been reviewed in consultation with Corporate Directors, Business Managers and Heads of Service and was considered by the Senior Management Team on 9 January 2017. It identified the main risks facing the Council, their links to the Council’s priorities and the likely impact on services and the wider County Borough, what was being done to manage the risks and which individual was responsible for the Council’s response.


The risk assessment was subject to review on a quarterly basis by Senior Management Team, as part of the Corporate Performance Assessment and twice yearly by the Audit Committee. 


The Risk Management and Insurance Officer reported the main changes such as Making the Cultural Change necessary to deliver the Medium Term Financial Strategy.  The risk description had been changed to reflect the 2017-18 Local Government revenue settlement.  Whilst the overall headline increase of 0.1% in Aggregate External Finance was a better settlement than was anticipated, funding on a like for like basis was a reduction of - 0.3%.  This compared favorably with the -3.2% “most likely” assumption that was in the Council’s Medium Term Financial Strategy 2017-18, but it still provided significant challenges.  The risk description also noted that there was no indication of allocations for future years.  However, in the UK Government Autumn statement, a forecast was made that UK Government finances would be worse off by £122bn in the period to March 2021 than was predicted in March 2016. 


The risk description confirmed that the increase in the Council Tax rate of 2.9% was less than was originally planned. The risk impact noted that the Council’s budget for 2017-18 to 2020-21 forecasted a £33.610 million budget reduction requirement.


The risk mitigation measures noted that the delivery of the MTFS would be supported by the disposal of assets.  An estimated £21 million could be generated by the enhanced disposals programme with £13 million of this figure already delivered.  It was anticipated that this would increase to £14.3 million by the end of 2016-17 with a further £6.6 million over the next three years. The risk score remained unchanged.


There were further changes in Supporting Adults at Risk. The risk description had changed to note that there was a plan in place to manage the significant number of cases that were coming through because of the Deprivation of Liberty legislation.


The risk mitigation measures had been changed to show that the Social Care Workforce Development Programme was providing an extensive programme of training including the Continuing Professional Education and Learning of Social Workers in the 1st and 2nd year of professional practice workforce development.  This included the establishment of a team to work with persons in the secure estate and this was supported by a WG grant.


The risk mitigation  ...  view the full minutes text for item 289.


Treasury Management Strategy 2017-18 pdf icon PDF 77 KB

Additional documents:


The Head of Finance presented the proposed Treasury Management Strategy for 2017-18 which include the Borrowing Strategy 2017-18, the Investment Strategy 2017-18, the Treasury Management and Prudential Indicators for the period 2017-18 to 2020-21 and the Annual Minimum Revenue Provision Statement 2017-18.


The Audit Committee had delegated responsibility for ensuring effective scrutiny of the Treasury Management Strategy and policies. The Treasury Management Strategy for 2017-18 confirmed the Council’s compliance with the CIPFA Code, which required that formal and comprehensive objectives, policies and practices, strategies and reporting arrangements were in place for the effective management and control of Treasury Management activities, and that the effective management and control of risk were the prime objectives of these activities.


The Treasury Management Strategy was to be presented to Council for approval in March 2017 and whilst the main body would remain unchanged there might be variations to some of the figures if there were any changes (such as the capital programme) to reflect the most up to date information.


The Committee referred to the potential for the Bank of England to set its Bank Rate at or below zero and the possible impact on the authority. The Head of Finance explained that advice from external advisors was that this was possible but relatively unlikely and other options could be considered although care would have to be taken to avoid exposing the authority to liquidity issues.


RESOLVED                  That Members gave due consideration to the Treasury Management Strategy 2017-18 before it was presented to Council for approval in March 2017 as part of the Medium Term Financial Strategy.  


Information and Action Requests by Committee pdf icon PDF 53 KB

Additional documents:


The Chief Internal Auditor presented a report which summarised actions and information requests made by the Audit committee at its last meeting on 24th November 2016. The report also included a response to a request made on 21 April 2016 regarding the high percentage of savings achieved in Legal and Regulatory Services. The Chief Internal Auditor apologised for the delay in providing the response and confirmed that there had been no increase in external fee costs.


The Chief Internal Auditor reported that there had been a misunderstanding with the number of employees attending absence management training courses reported to the 24th November meeting and that the figure related to one Directorate not the whole Council. The Committee asked for the percentage figure that had attended and were advised that this figure would be reported to the next meeting.


RESOLVED:                   That the report be noted.        


Completed Audits pdf icon PDF 49 KB

Additional documents:


The Chief Internal Auditor presented a report summarising the findings of the audits recently completed by Internal Audit Shared Service. Recently completed audits relating to 2016/17 were summarised in Appendix A attached to the report.


The Committee was advised that the audit opinion for the Townscape Heritage Initiative was “Substantial” and for the Corporate Change Fund the audit opinion was “Reasonable” although a recommendation was made regarding the lack of supporting evidence. There was a “Reasonable” opinion on the Built Environment Process Review although this area would be revisited because of slippage due to a lack of resources. The Supporting People Grant Verification received a “Reasonable” audit opinion.


The Committee asked for clarification regarding the Corporate Change Fund and the actual savings required to demonstrate the effectiveness of the fund. The Chief Internal Auditor agreed to look into the matter and report back. The Committee asked if the full amount had been committed and the Chief Accountant confirmed that there was an amount uncommitted and the bidding process was still underway. A report on this would be submitted to the next meeting.


RESOLVED:                  That Members considered the summary of completed audits to ensure all aspects of their core functions were being adequately reported.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                


Outturn Report - April to December 2016 pdf icon PDF 68 KB

Additional documents:


The Chief Internal Auditor presented a report informing the Audit Committee of the actual Internal Audit performance against the nine months of the audit plan year covering April and December 2016.


The figures showed that 821 actual days had been achieved, 31 days more than the expected target of 790 days. This figure was likely to fall over the next few months due to resource issues. 22 reviews/jobs had been completed and closed, 20 of which had an overall substantial/reasonable audit opinion. Of the remaining 2, 1 identified significant weakness in the overall control environment and the other was closed with no opinion provided due to the nature of the work undertaken.


The Chief Internal Auditor gave reasonable assurances but added that there was still a lot of work to be done. Performance had slipped when it came to the percentage of audits completed in planned time, a consequence of resource issues and audits taking longer with expanding scopes. There were no significant cross cutting internal control weaknesses identified so far this year however specific weaknesses had been identified with the Bus Services Support Grant.


Members raised concerns about the number of significant recommendations that were three or more months overdue. Members requested more information on this to a future meeting.     


The Chief Internal Auditor reported that an external assessment of the Internal Audit Shared Service was about to start.


RESOLVED:                    1) That Members gave due consideration to the Internal Audit Outturn Report covering the period April to December 2016 to ensure all aspects of the core functions were being adequately reported.  

                                          2) That more information be submitted to a future meeting regarding the significant recommendations that were three or more months overdue.


Audits not Undertaken 2016-17 pdf icon PDF 67 KB


The Chief Internal Auditor presented a report summarising the audit work that was included within the 2016/17 Internal Audit Annual Risk Based Plan that would not now be undertaken, together with an explanation.


The report detailed the audit area and an account of why the work would not be undertaken. Members were assured that even though these reviews would not now be completed, they would be included within the 2017/18 Risk Based Audit Plan and this would not affect the ability of the Head of Audit to provide her annual opinion.


Members raised concerns about Transformational Change and were advised that a detailed report on progress had been received and this would be an item on the 2017/18 plan.


The Committee referred to the Medium Term Financial Strategy and the financial resilience review undertaken by WAO during August and November 2016, the results of which were due to be published soon. Members requested that if the review indicated that more work was required then this work would be undertaken.


RESOLVED:                    1. That the report be noted.


                                         2. That work be undertaken on the MTFS if the financial resilience review undertaken by WAO indicated that further work was required.


Update on Staff Vacancies within the Internal Audit Shared Service pdf icon PDF 58 KB


The Chief Internal Auditor presented a report providing a position statement on the current staff vacancies within the Internal Audit Shared Service as requested by Members at a previous Audit Committee meeting.


At the 24th November meeting, it was reported that the overall structure of the section was based on 18 Full Time Equivalent employees and the Section was carrying 4 FTE vacant posts which had now increased to 6 FTE vacant posts. A recent recruitment campaign was unsuccessful and a review of the current structure was being considered to determine its suitability in an ever changing dynamic audit environment.


The Chief Internal Auditor reported that there was no career progression for staff and morale was low. The Authority was not attracting the number of applicants required and those that had applied were not suitable.  It was important to keep staff when they qualified and a structure was required to support this. In the short term, CIPFA, agency staff and neighbouring authorities had been approached but were unable to provide any cover.


The Committee asked how salary levels compared with neighbouring authorities. They were advised that salaries compared favourably and that this was a problem across Wales, although Bridgend had been significantly affected. Prior to job evaluation the structure included grades that allowed staff to progress as they qualified but this no longer existed. A new structure could help to address this problem.


The Committee commended the pilot in which specialist ICT skills of the Internal Audit Shared Service Section had been utilised to undertake an audit for Newport City Council.


RESOLVED:                   That the Committee noted the report and awaited a further report following the review of the current structure.


Updated Forward Work Programme 2016-17 pdf icon PDF 59 KB

Additional documents:


The Chief Internal Auditor presented an update on the 2016/17 Forward Work Programme for the Committee’s information.


The Committee referred to the significance of asset transfers as a means of meeting budget requirements and requested that it be included in the work programme for 2017/18.   


RESOLVED:                    That the Committee agreed the request and noted   the updated Forward Work Programme to ensure that all aspects of the core functions were being adequately reported.     


Urgent Items

To consider any other items(s) of business in respect of which notice has been given in accordance with Rule 4 of the Council Procedure Rules and which the person presiding at the meeting is of the opinion should by reason of special circumstances be transacted at the meeting as a matter of urgency.


There were no urgent items.


Exclusion of the Public


The report relating to the following item is not for publication as it contains exempt information as defined in Paragraphs 14 and 18 of Part 4 and Paragraph 21 of Part 5, Schedule 12A of the Local Government Act 1972, as amended by the Local Government (Access to Information) (Variation) (Wales) Order 2007.


If following the application of the public interest test the Committee resolves pursuant to the Act to consider this item in private, the public will be excluded from the meeting during such consideration.


RESOLVED :                     That under Section 100A(4) of the Local Government Act 1972, as amended by the Local Government (Access to Information) (Variation) (Wales) Order 2007, the public were excluded from the meeting during consideration of the following item of business as it contained exempt information as defined in Paragraph 14 of Part 4 and Paragraph 21 of Part 5 of Schedule 12A of the said Act.


            The Legal Officer explained the public interest test, and following this, Members resolved that pursuant to the provisions of the Act referred to above, to consider the undermentioned item in private with the public being excluded from the meeting as it would involve the disclosure of exempt information as stated above.


Risk Based Verification Report


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