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Agenda and minutes

Audit Committee
Thursday, 14th December, 2017 4.00 pm

With effect from 1 April 2016 Agenda and Minutes will be available in both Welsh and English. Reports are working documents and produced in English only in accordance with Welsh Language Standard 41 of this Council’s Final Compliance Notice from the Welsh Language Commissioner.

Venue: Meeting Room 1, Guildhall

Contact: Ken Bickerton  Committee Officer

Items
No. Item

35.

Apologies for Absence

Minutes:

Apologies for absence were submitted on behalf of Councillors Marc Jones and Nigel Williams.

36.

Welcome

Minutes:

The Chair welcomed Matthew Edwards, Financial Audit Manager, Wales Audit Office, to the meeting.

37.

Confirmation of Minutes pdf icon PDF 72 KB

To sign as a correct record the Minutes of the Meeting held on 28 September 2017.

 

Minutes:

The Minutes of the meeting held on 28 September 2017 were submitted.

 

RESOLVED – That the Minutes of the meeting held on 28 September 2017 be signed as a correct record.

 

Matters Arising

 

Updates were provided on the following:

 

·         Minute 31 Internal Audit Interim Report – April to August 2017: With reference to reducing the number of posts within the Audit Team, the Head of Finance confirmed that this would remained as part of the departmental budget saving proposals for consideration by the Executive Board in January 2018, however, alternative options were also being sought.

 

·         Minute 32 Risk Register Report: With reference to the risks associated within the Adult Social Care Reshaping Business Plan, the Chair reported that a Topic Request Form had been prepared for submission to the Scrutiny Chairs/Vice Chairs Co-ordinating Group

 

·         Minute 33 Wales Audit Office – Audit Committee Update: Matthew Edwards, Wales Audit Office reported that further information on the scope of the Wales Audit Office Service User Perspective Review had been provided to Members.

38.

Work Programme pdf icon PDF 53 KB

To consider the report of the Head of Finance.

Minutes:

The Head of Finance submitted an updated Work Programme. 

 

RESOLVED – That the Work Programme be noted.

39.

Internal Audit Interim Report April 2017 - November 2017 pdf icon PDF 73 KB

To consider the report of the Head of Finance.

Additional documents:

Minutes:

The Head of Finance submitted a report (HF/125/17) which enabled consideration to be given to the Service Manager – Audit and Technical’s Interim Report for April to November 2017.

 

The Service Manager – Audit and Technical introduced the report and drew attention to the main findings of the audit work undertaken during this period.   Eighteen audits, split between planned / unplanned work, had been completed during the reporting period, five of which had been given ‘Red/Amber’ levels of assurance.  The Executive Summaries from these audits were shown in Appendix A2 to the report. The report also included the counter-fraud work undertaken by Wrexham Internal Audit Services during the reporting period.

 

With reference to the 1st Follow Up Audit of the Highway Maintenance Contract and in accordance with the Internal Audit Charter, the Chair of the Audit Committee had requested that the Head of Environment and Planning attend the meeting to explain to Members the reasons for the high priority recommendations not being implemented effectively.

 

During discussion of the report Members raised the following matters in particular:

 

·         With reference to the 1st Follow up Audit, Highways Maintenance Contract, the Audit Lead reported that the Head of Environment and Planning had a previous appointment and the appropriate Service Area Manager was unable to attend due to a family bereavement.  The Service Manager Environment had submitted a written response and he drew Members’ attention to its contents.  

 

The contents of the written statement were noted and Members agreed that the Head of Environment and Planning, or a mandated officer, be invited to attend the February meeting of the Audit Committee to further explain the reasons for this high priority recommendations not being implemented effectively.

 

·         The number of planned audits for 2017/18 reported as ‘not started’ and the likelihood of them being completed by 31 March 2018.  The Head of Finance confirmed that this was being monitored and audits were starting earlier where possible but that a small number of audits had until the 30 April to be completed due to them not starting until March 2018.

 

·         Reference was made to the analysis which indicated that 50% of High Priority and 53% of Medium Priority audit recommendations related specifically to non-compliance with the Council’s policies and procedures.  The Service Manager Audit & Technical commented upon the proactive use of Audit Bulletins, e-Learning and training sessions with monitoring through the staff Performance Review and Development (PRD) process to raise staff awareness of, and compliance with, the corporate governance framework.  It was each Head of Department’s responsibility to ensure compliance.

 

·         Members were reminded that Heads of Department had  responsibility for the effectiveness of controls and compliance issues within their departments.  The Head of Finance agreed to raise the matter at the Council’s Senior Management Team and report back to the Audit Committee.

 

·         Audit Ref 2017/007 North Wales Adoption Service:  An Audit Lead provided further information for the Red/Amber level of assurance being given.  He stated that Wrexham was the Lead Authority for the partnership, however,  ...  view the full minutes text for item 39.

40.

Risk Management Arrangements pdf icon PDF 102 KB

To consider the report of the Head of Finance.

Additional documents:

Minutes:

The Head of Finance submitted a report (HF/120/17) which enabled the Committee to consider the effectiveness of the Council’s corporate risk management arrangements.

 

David Stewart (Audit Lead) introduced the report and reminded Members that the Audit Committee had a constitutional responsibility to consider the effectiveness of the Council’s risk management arrangements.  He also reminded Members that this report concerned the processes for managing risk whereas the Committee is reported to separately on the management of specific risks.  Based on the contents of the Risk Management Arrangements Update Report reasonable assurance could be given to the Audit Committee that the Risk Management arrangements were effective.  

 

During consideration of the report Members raised the following matters:

 

·         A Member commented that under the existing corporate risk management arrangements there was no reference in any risk register to a skills matrix to mitigate against loss of staff skills, knowledge and experience which could adversely impact on the Council’s ability to meet its statutory obligations.  Formal identification of this risk together with a greater emphasis on succession planning, should be included within the Principal Risk and Control Register.

 

The Audit Lead commented that the Strategic Leadership Team will be reviewing the risks identified in the Principal Risk and Control Register in January 2018, prior to consideration by the Audit Committee in March 2018.  The above risk could be included for comparison with existing entries in the Principal Risk and Control register at that time.

 

·         Paragraph 6.14 – Schools: Concern was expressed that recent audit findings indicated that just over half of schools within Wrexham kept up-to-date risk registers.  The Audit Lead confirmed that all schools were encouraged to adopt risk registers and information, including a Risk Management Model, was available for download via the Schools Intranet.  It was not a mandatory requirement for schools to keep risk registers and School Governing Bodies may have other measures in place to manage risk. 

 

Several Members commented on the potential advantages to all schools of adopting risk registers, for example during Estyn inspections, and this should be encouraged.  It was agreed that a list of those schools which currently maintained risk registers be circulated to Members of the Committee.

 

RESOLVED -

 

(i)         That the Risk Management Arrangements Update Report, attached at Appendix A to report HF/120/17 be endorsed.

(ii)        That a list of those schools which currently maintained risk registers be circulated to Members of the Committee.

41.

Wales Audit Office Annual Audit Letter pdf icon PDF 69 KB

To consider the report of the Head of Finance.

Additional documents:

Minutes:

The Head of Finance submitted a report (HF/127/17) which enabled representative of the Council’s external auditors (Wales Audit Office) to report directly to Members on their 2016/17 audit and inspection work.

 

Matthew Edwards, Wales Audit Office (WAO)  reported details of the Annual Audit letter dated 24 November 2017 issued by the WAO to the Leader of the Council and the Interim Chief Executive, a copy of which was attached to the report.  He informed the Committee that the Appointed Auditor had concluded that the Council had complied with its responsibilities relating to financial reporting and use of resources.  The Appointed Auditor was satisfied that the Council had appropriate arrangements in place to secure economy, efficiency and effectiveness in its use of resources.   It was further reported that work to date on certification of grant claims and returns had not identified significant issues that would impact on the 2016/17 accounts or key financial systems. 

 

The Council had agreed to participate in the second year of the Wales Audit Office  ‘outcomes pilot’ aimed to test the feasibility of a new outcomes approach on Welsh Government grants.  This work would be concluded in December 2017 and a report on the outcome of the pilot would be submitted to the Welsh Government and the Head of Finance in due course.

 

Members welcomed the positive outcomes contained within the letter.

 

RESOLVED – That the Wales Audit Office Annual Audit letter 2016/17, be noted.

42.

Additional Item of Business: Environment Enforcement Services in Wrexham

Minutes:

The Head of Finance reported that the Homes and Environment Scrutiny Committee held on 13 December 2017 had considered a report on Environment Enforcement Performance (HEP/96/17s).  The report, which provided an update on the Council’s environmental enforcement duties, had been raised as a matter for scrutiny following the submission of a Topic Request Form by the Chair of the Audit Committee.

 

RESOLVED – That the information be noted.