Agenda and minutes

Audit and Governance Committee
Thursday, 15th March, 2018 2.00 pm

Venue: Committee Suite 1,2 & 3, Westfields, Middlewich Road, Sandbach CW11 1HZ. View directions

Contact: Cherry Foreman  Democratic Services Officer

Items
No. Item

45.

Apologies for Absence

Minutes:

Apologies were received from Councillor T Dean and Mr P Gardener.

46.

Declarations of Interest

To provide an opportunity for Members and Officers to declare any disclosable pecuniary and non-pecuniary interests in any item on the agenda.

Minutes:

No declarations of interest were made.

47.

Public Speaking Time/Open Session

In accordance with paragraph 2.32 of the Committee Procedural Rules and Appendix 7 to the Rules a total period of 10 minutes is allocated for members of the public to address the Committee on any matter relevant to the work of the body in question.

 

Individual members of the public may speak for up to 5 minutes but the Chairman or person presiding will decide how the period of time allocated for public speaking will be apportioned where there are a number of speakers. Members of the public are not required to give notice to use this facility. However, as a matter of courtesy, a period of 24 hours’ notice is encouraged.

 

Members of the public wishing to ask a question at the meeting should provide at least three clear working days’ notice in writing and should include the question with that notice. This will enable an informed answer to be given.

 

 

Minutes:

Councillor D Hough asked about the work done at Wayside Linley Play area. He asked who authorised it, what was the cost, which budget pot did it come from and who has signed off the work.  The Chairman responded that this was outside the remit of the Committee but asked the Interim Monitoring Officer to look into the matter.  The Interim Monitoring Officer asked that Councillor Hough forward the detail to them.

 

48.

Minutes of Previous meeting pdf icon PDF 80 KB

To approve the minutes of the meeting held on 7 December 2017 as a correct  record.

Minutes:

RESOLVED:

 

That the minutes of the meeting held on 7 December 2017 be approved as a correct record.

49.

External Audit Plan 2016/17 - Update

The External Auditor will give an oral update in relation to the 2016/17 external audit report and other issues.

Minutes:

The Committee received an update on the External Audit Plan for 2016/17 from Jon Roberts of Grant Thornton.

 

It was expected that the work in relation to the objection to the Audit would be concluded by the end of April.  There would be a period of consultation with the objector, Council and regulators before the report could be finalised.

 

RESOLVED:

 

That the update on the External Audit Plan 2016/17 be received.

50.

External Audit Plan 2017/18 pdf icon PDF 94 KB

To receive and comment on the External Auditors planned work for the audit of financial statements and the value for money conclusion for 2017/18.

Additional documents:

Minutes:

 

The Committee considered the Audit Plan for the year ending 31 March 2018, which set out the work to be carried out by the Council’s External Auditors Grant Thornton.

 

Jon Roberts of Grant Thornton outlined the work, detailed in the Appendix to the report, which included auditing identified significant risks and Value for Money arrangements.

 

RESOLVED:

 

That the Audit Plan for 2017/18 be received.

 

 

 

 

 

51.

Arrangements for the Appointment of External Auditors pdf icon PDF 104 KB

To report on the appointment of the Council’s External Auditors following the Public Sector Audit Appointments Process Ltd process.

Minutes:

The Committee considered a report which provided an update on the appointment of an external auditor from 1 April 2018.

 

At the Council meeting on 15 December 2016 it was agreed that the Council should ‘opt in’ to a national scheme rather than make its own auditor appointment.

 

The appointment process had been undertaken by Public Sector Audit Appointments Ltd and resulted in Mazars LLP being appointed to audit the Council’s accounts for the next five years.  The proposed scale fee for 2018/19 was £119,034. 

 

RESOLVED:

 

That the outcome of the procurement exercise undertaken by Public Sector Audit Appointments Ltd which resulted in Mazars LLP being appointed to audit the accounts of Cheshire East Council for five years, from 2018/19 to 2022/23 and that the scale of fees are expected to reduce by approximately 23% compared to the 2017/18 be noted.

52.

Members Code of Conduct: Standards Report pdf icon PDF 296 KB

To note the numbers and outcomes of complaints made under the Code of Conduct for Members between 1 September 2017 and the end of February 2018.  There are two reports in order to take into account those received under the Member Code of Conduct 2012, and those under the newly introduced Code for 2018.

Additional documents:

Minutes:

The Committee considered the reports which detailed the number of complaints received under the Members Code of Conduct 2012 and the Members Code of Conduct 2018 considered by the Acting Director of Legal Services in their capacity as Monitoring Officer and the Independent Person during the period 1 September 2017 to 28 February 2018.

 

The report broke down complaints received with regard to the number of complaints made against Cheshire East Councillors and Town and Parish Councillors; the paragraph of the code alleged to have been breached and the outcome of each complaint, where completed.

 

RESOLVED:

 

That the reports be noted.

 

 

53.

Informing the Risk Assessment for Cheshire East Council pdf icon PDF 210 KB

To consider the managements responses to questions posed by the External Auditor. 

Additional documents:

Minutes:

The Committee considered a report on management’s response to a series of questions posed by the Council’s External Auditors.

 

In order to comply with International Standards on Auditing (UK and Ireland), the Council’s External Auditors -  Grant Thornton, require an understanding of management processes for fraud, laws and regulations, going concern, accounting estimates and related party transactions.

 

Appendix A to the Report detailed a series of questions on each of the above areas and the response that Grant Thornton had received from Cheshire East Council’s management.

 

The Committee commented and sought clarification on the response to the question “Are you aware of any whistleblowing reports under the Bribery Act since 1 April 2017” and it was agreed that the response would be made clearer.  The issue of planning fraud and the acceptance of bribes to approve planning applications was raised and it was reported that this was included in the bribery risk assessment.

 

RESOLVED:

 

That the management responses to the series of questions posed by the Council’s external auditors be noted.

54.

Risk Management Update pdf icon PDF 513 KB

To receive an update on risk management and business continuity activity in the Council.  This will include a briefing on the management of risk in respect of contract and relationship management.

Minutes:

The Committee considered a report which detailed the most significant threats and opportunities facing the Council which may prevent, or assist with, the achievement of the Council’s Corporate Plan 2016-20.

 

The report detailed the changes and movement of the risks since the previous update to the Committee. These included:

·       CR5 Information Security and Cyber Threat – the risk rating had been increased to 12 High Risk

·       CR7a Cheshire East Local Plan Adoption – this risk had been removed from the Register and was now dormant

·       CR11 Employee Engagement and Retention – the risk description had been updated to ensure it reflected the current most significant causes of threat to engagement and retention

·       CR04 Regeneration – the risk title had been amended to ‘Infrastructure and Regeneration’ to better reflect the risk description

·       CR12 Adult Social Care Market Strain – a new risk around market strain on the adult social care sector

·       CR13 – Capacity and Demand – a new risk around increased demand and insufficient capacity to deliver.

 

RESOLVED:

 

That the changes to the Corporate Risk Register be noted.

55.

Internal Audit Interim Report pdf icon PDF 224 KB

To consider a summary of Internal Audit work undertaken between October and December 2017.

Additional documents:

Minutes:

The Committee considered an update on the progress with the Internal Audit Plan for 2017/18, which focused on activity between October and December 2017.

 

During this quarter, in additional to planned activity, a considerable amount of time had been spent undertaking specific and focused reviews of historic land transactions and supporting unrelated investigations into irregularities in other parts of the organisation.

 

RESOLVED:

 

That the report be noted.

56.

Internal Audit Plan 2018/19 pdf icon PDF 254 KB

To approve the summary risk based Internal Audit Plan for 2018/19.

Additional documents:

Minutes:

The Committee considered the summary Internal Audit Plan for 2018/19.

 

The report detailed the key themes that had emerged which included:

·       providing assurance that previously identified significant control weaknesses have been effectively and efficiently addresses and improved

·       providing assurance on the progress and nature of improvement activity across Procurement, Commissioning and Contract Management

·       reviewing key delivery areas associated with high value financial values and high level customer interaction

·       providing assurance that identified issues in relation to land acquisitions and disposals have been effectively and efficiently addressed and improved.

 

Preparations were underway to develop a new structure for Internal Audit with consultation beginning in March 2018.  The new structure would have an impact on the Internal Audit Plan and therefore the Plan would be updated and brought back to the Committee.

 

RESOLVED:  That

 

1        the annual internal audit plan 2018/19 be approved; and

 

2        note that the plan will be developed and refined throughout the forthcoming year as a number of factors progress and the impact on the current level of audit resource become known.

57.

General Data Protection Regulations

To Committee will receive a presentation on the readiness of the Council to meet the requirements of the Data Protection Regulations.

Minutes:

The Committee received a presentation on the readiness of the Council to meet the requirements of the General Data Protection Regulations.

 

RESOLVED:

 

That the presentation be received.

58.

The Council's Whistleblowing Arrangements and New Policy - Update pdf icon PDF 271 KB

To receive a report on the outcome of the review undertaken by Public Concern at Work, including details of recommended actions and improvements, and to consider a proposed Policy.

Additional documents:

Minutes:

The Committee considered a report on the outcome of the review by Public Concern at Work of the Council’s Whistleblowing Policy and arrangements.

 

Public Concern at Work had carried out a desk based review of the current policy, procedures and supporting documents and had produced a RAG rated report with recommendations and an action plan for improvement – Appendices A and B to the report.  

 

In recognition of the comments and feedback from Public Concern at Work on the length of the existing policy, the potential for mixed messages and the benefits of a uniform definition of whistleblowing, a revised Whistleblowing Policy, based on the model policy provided by Public Concern at Work, was brought to the Committee for approval.

 

RESOLVED:  That

 

1        the progress made in implementing the action plan developed to address the finding of the policy review be noted; and

 

2        the revised Whistleblowing Policy be approved.

59.

Capital, Treasury Management and Investment Strategies - Update pdf icon PDF 100 KB

To receive a report on changes in the requirements relating to these Strategies.

Minutes:

The Committee considered a report on the changes in requirements relating to the Council’s Capital, Treasury Management and Investment Strategies.

 

CIPFA had published revised editions of Treasury Management in Public Services: Code of Practice and the Prudential Code for Capital Finance in Local Authorities in December 2017.  The changes, effective from 1 April 2018, reflected the changes in patterns of local authority behaviour regarding non-financial assets e.g. investment property portfolios and the provision of loans to local enterprises or third sector entities as part of regeneration or economic growth.

 

A member Investment Strategy Board would be establish to develop a detailed investment strategy and would be chaired by the Portfolio Holder for Finance.  The updated strategies would be brought to the Committee as part of its scrutiny role on treasury management activities.

 

RESOLVED:  That

 

1        the change in requirements to the Council’s Capital, Treasury Management and Investment Strategies following revised guidance issued by the Ministry of Housing, Communities and Local Government effective from 1 April 2018 be noted.

 

2        the establishment of a member Investment Strategy Board be noted.

60.

The Audit and Governance Committee Work Plan pdf icon PDF 232 KB

To consider the forthcoming Work Plan for 2018/19, to ensure comprehensive coverage of the Committee’s responsibilities.

Additional documents:

Minutes:

The Committee consider the Work Plan for 2018/19.

 

It was suggested that progress with implementing the General Data Protection Regulations be add as standing item and also that a review of the classes of interest to be declared by Member and included in the Code of Conduct be add to the Work Plan.

 

RESOLVED:  That

 

1        the Work Plan be received and noted;

 

2        the additional items suggested be added to the Work Plan; and

 

3        the Work Plan be brought back to the Committee throughout the year for further development and approval.

61.

Contract Procedure Rule Non-Adherences pdf icon PDF 127 KB

To receive an update on the quantity and reasons for non-adherences approved since 1 December 2017.

Minutes:

The Committee considered a report on the number and reasons for Waivers and Non-Adherences (WARNs) which had been approved between 1 November 2017 and 31 January 2018. 

 

 

 

 

 

 

RESOLVED:

 

That the number and reasons for Waivers and Non-Adherences approved between 1 November 2017 and 31 January 2018 be noted.

62.

Exclusion of the Press and Public

The report relating to the remaining item on the agenda has been withheld from public circulation and deposit pursuant to Section 100(B)(2) of the Local Government Act 1972 on the grounds that the matters may be determined with the press and public excluded.

 

The Committee may decide that the press and public be excluded from the meeting during consideration of the following item pursuant to Section 100(A)4 of the Local Government Act 1972 on the grounds that it involves the likely disclosure of exempt information as defined in Paragraphs 1 and 2 of Part 1 of Schedule 12A to the Local Government Act 1972 and public interest would not be served in publishing the information.

 

 

PART 2 – MATTERS TO BE CONSIDERED WITHOUT THE PUBLIC AND PRESS PRESENT

 

 

Minutes:

RESOLVED:

 

That the press and public be excluded from the meeting during consideration of the following item pursuant to Section 100(A)4 of the Local Government Act 1971 as amended on the grounds that it involves the likely disclosure of exempt information as defined in Paragraphs 1,2 and 3 of Part 1 of Schedule 12A to the Local Government Act 1972 and public interest would not be served in publishing the information.

63.

Contract Procedure Rules Non-Adherences

To note the approved WARNs issued since 1 December 2017.

Minutes:

RESOLVED:

 

That the WARNs be noted.