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Agenda and minutes

Audit Committee
Thursday, 22nd February, 2018 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

43.

Apologies for Absence

Minutes:

An apology for absence was submitted on behalf of Councillor Rondo Roberts.

44.

Declarations of Personal Interest, if any.

Minutes:

There were no declarations of personal interest.

45.

Confirmation of Minutes pdf icon PDF 77 KB

To sign as a correct record the Minutes of the Meeting held on 14 December 2017.

 

Minutes:

The Minutes of the meeting held on 14 December 2017 were submitted.

 

RESOLVED – That the Minutes of the meeting held on 14 December 2017 be signed as a correct record.

 

Matters Arising

 

Updates were provided on the following:

 

Minute 39 – Internal Audit Interim Report April2017 to November 2017:  The Head of Finance reported that he had raised with the Council’s Senior Management Team (SMT) the Committee’s concern regarding continued audit findings of non-compliance with the Council’s governance framework.  He commented that following discussion by SMT it had been noted that all identified cases of non-compliance with the Council’s policies and procedures were taken seriously and acted upon by the relevant Head of Department.  However, SMT did note that given the size and complexity of the organisation, the number of instances of non-compliance discovered by internal audits was comparatively small.   Work was also being undertaken on a Council wide basis to raise staff awareness of, and compliance with, the corporate governance framework, including the use of e- learning modules, with monitoring through the staff Performance Review and Development process.  If further assurance was required, an offer had been made for the Chair and Vice-Chair of the Audit Committee to attend a meeting of the Senior Management Team to discuss directly with them the Audit Committee’s concerns, alternatively, representatives from SMT could attend a meeting of the Audit Committee.

 

It was agreed that the Chair and Vice-Chair of the Audit Committee attend a meeting of SMT and that the Head of Finance makes the appropriate arrangements. 

 

Minute 40 - Risk Management Arrangements:  The Head of Finance gave a verbal update on the number of schools within Wrexham that kept up-to-date risk registers in line with the Schools Risk Management Model devised by the Education Department and Wrexham Internal Audit Services.   Of the 70 schools within Wrexham, 26 had adopted the model, 30 had not adopted the model, while the remaining schools were not sure or had not replied. 

 

Several Members expressed concern that under half of the schools kept risk registers and that a list of those schools which currently maintained risk registers had not be circulated to Members. 

 

The Head of Finance commented that the summary information had only recently been finalised and he would forward to Members a list of those schools that did not maintain risk registers..  In addition, the Head of Education had agreed to highlight the availability of the Risk Management  Model to Headteachers in order to encourage more schools to maintain risk registers.

 

Some Members commented upon the opportunities for Local Authority Appointed Governors to question at meetings of the Governing Body whether their school complies with the Council’s financial and governance framework.

46.

Audit Ref: 2017/706 Highways Maintenance Contract - 1st Follow up pdf icon PDF 62 KB

Minutes:

The Chair commented that the Head of Environment and Planning had been invited to attend the meeting to explain to Members the reasons for the high priority recommendations not being implemented.

 

The Head of Environment and Planning commented that the original audit had found weaknesses in relation to two significant processes together with the absence of effective monitoring arrangements.  An assigned officer has been identified to undertake those tasks and the post should be filled by the end of March 2018.   In addition, a service review of Streetscene was being undertaken by Castlerigg Consulting, the findings of which should be available by the end of April 2018.

 

The Committee sought further clarification with regard to the time taken to satisfactorily implement the audit recommendations and the work undertaken by Castlerigg Consulting in the department, together with the costs incurred.

 

The Head of Environment and Planning outlined the work being undertaken by Castlerigg Consulting and that this work was not directly linked to the Audit recommendations but will impact upon all processes in the department.  The delay had occurred as the post redefined an officer’s role which has resulted in a job evaluation and recruitment process being undertaken.  The department has adopted interim measures to ensure that there was compliance with the policies and procedures. 

 

With reference to consultancy costs, the Head of Finance reported that Castlerigg Consulting had been undertaking work within several departments, including Streetscene, as part of the Council’s ICT/Digital Strategy and Reshaping Agenda.  He did not have the costs to hand but would forward the information to Members of the Committee following the meeting.

 

RESOLVED – That the information be noted.

47.

Audit Ref: 2017/007 North Wales Adoption Services pdf icon PDF 62 KB

Minutes:

The Chair commented that the Head of Children’s Services had been invited to attend the meeting to provide further information on the implementation of the new funding model for the North Wales Adoption Services (NWAS). 

 

The Head of Children’s Services was in attendance and commented that NWAS was a partnership between the six North Wales local authority adoption teams.  The Partnership was delivering effective adoption services across North Wales and Wrexham has been the lead authority for the Partnership since its inception in 2010.  The internal audit found that there was a weakness in the current financial arrangements in that the Partnership Agreement did not take into account the full costs incurred by the authority in hosting the service.

 

The Head of Children’s Services advised that each local authority within the NWAS remained responsible for employing sufficient staff to undertake the work required in preparing children for adoption.  It was the additional costs associated the Lead Authority role in the management of the NWAS Partnership that were under review.  At present these costs were billed to the other local authorities on a half yearly basis.  Several funding models were being considered by the partner organisations although it was unlikely that a new financial model would be in place by April 2018.

 

RESOLVED – That the information be noted.

48.

Work Programme pdf icon PDF 54 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.

49.

Internal Audit Interim Report April 2017 - January 2018 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/20/18) which enabled consideration to be given to the Service Manager – Audit and Technical’s Interim Report for April 2017 – January 2018.

 

The Service Manager – Audit and Technical introduced the report and drew attention to the main findings of the audit work undertaken during this period. Ten audits, split between planned / unplanned work, had been completed during the reporting period, two 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.

 

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

 

·         Audit Ref 2017-013 Information Management – including Data Security:  Members sought further information on the robustness of the Human Resources notification procedures and ICT security networks in place to ensure that once people were no longer employed by the Council, their access to all personal and sensitive information was removed.   Members requested that representatives from the Human Resources and ICT departments be invited to attend the March 2018 meeting of this Committee to provide an update on the matter.

·         The Service Manager Audit and Technical reminded Members that, in accordance with the adopted Audit Charter, the Chair of the Audit Committee may consider inviting a Head of Department to appear before the Audit Committee to explain to Members the reasons why a high priority (Red or Red/Amber) recommendation was not being satisfactorily implemented after a first follow up audit had been undertaken.  Members were considering inviting the Head of Corporate and Customer Services (or a mandated officer) to appear before the Audit Committee following the initial audit.  He sought clarification on whether Members were minded to review this aspect of the Audit Charter for 2018/19.

·         There was a general consensus that the current arrangements were operating satisfactorily, however, if the consequence of a failure to implement a recommendation could result in a high risk of expose to the Council, the Audit Committee should be able to request the attendance of a Head of Department prior to a first follow-up audit.

·         Audit Ref 2017-032 Bank Reconciliation: The Head of Finance provided further information on the systems used to complete the bank reconciliation process.

·         Reference was made to the number of planned audits included in the 2017/18 Audit Plan reported as not yet started and the likelihood that they would be completed by April 2018.   Information on how many audits were outstanding during the same period in 2016/17 was also requested.

·         The Service Manager – Audit and Technical reported that the Audit Plan was being monitored and it was the intention to complete all of the audits listed by April, however, there may be a need to limit the scope of some planned audits to only focus on high risk areas.  He did not have the comparative figures from 2016/17 to hand but he believed that they would be  ...  view the full minutes text for item 49.

50.

Audit Committee - Evaluation of Effectiveness pdf icon PDF 174 KB

To consider the report of the Head of Finance.

Minutes:

The Head of Finance submitted a report (HF/21/18) which enabled consideration to be given to the results of the Audit Committee – Evaluation of Effectiveness Survey 2018 and provided a comparison of responses with the preceding two annual surveys.

 

The Chair introduced the report and highlighted the main points contained therein.  There had been a significant increase in the number of completed returns compared to 2017, however, comparison with the previous surveys should take into account the change of Membership of the Council following the May 2017 Local Government elections.  The results of the survey would help to identify areas of good practice as well as suggestions for the continued improvement of the functioning of the Committee. 

 

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

 

·         Only 9 of the 13 Members of the Audit Committee had completed the survey.  The Audit Lead, responded that a further two Members of the Audit Committee had informed him that they could not access the survey via the internet due to technical difficulties.

·         There was a general consensus on the continued need to raise public awareness of the work undertaken by the Audit Committee in ensuring effective corporate governance within the Council, including the use of the internet and social media.  It was noted that a press release was issued in advance of every Audit Committee.

·         The survey had identified a possible training need to raise Member awareness on the role and responsibilities of the Audit Committee.  It was agreed that a short training session to cover the Terms and Reference of the Audit Committee be included within the Audit Committee Training Schedule for 2018/19. 

·         A Member suggested that a copy of the Terms of Reference be attached to every Audit Committee Agenda.  The Head of Finance reminded Members that the Terms of Reference were available on the Council website.  A report on the Internal Charter 2018/19 will be submitted to the March 2018 meeting of the Audit Committee and he suggested that a copy of the Terms of Reference be attached to that report.

·         Reference was made to the ‘Analysis of Strongly Disagree and Disagree Responses’ attached at Appendix 3 to the report and the tendency for respondents to express general comments, whereas raising specific concerns would have been helpful.

·         The introduction of the Audit and Scrutiny Protocol has been effective in strengthening the relationship and defining the different roles and responsibilities of the Audit Committee and Scrutiny Committees.

·         The Head of Finance advised that if Members had any further views on other actions that could be taken to improve the effectiveness of the Audit Committee.to contact the Service Manager – Audit and Technical.

 

RESOLVED – That the information be noted and that the Audit Committee Terms of Reference be included as a topic for future Audit Committee training.

51.

Wales Audit Office National Reports pdf icon PDF 158 KB

To consider the report of the Head of Finance.

Minutes:

The Head of Finance submitted a report (HF/12/18) which updated the Committee on the national performance reports published by the Wales Audit Office over the last twelve months.

 

RESOLVED – That the national reports published by the Wales Audit Office and the responses made by the Council as set out in report HF/12/18 be noted.

52.

Wales Audit Office - Fee Scheme 2018 - 19 pdf icon PDF 63 KB

To consider the report of the Head of Finance.

Minutes:

The Head of Finance submitted a report (HF/24/18) which provided Members with a copy of the Wales Audit Office (WAO) Fee Scheme 2018-19.

 

Derwyn Owen (Engagement Director and Engagement Lead – Financial Audit, Wales Audit Office) introduced the report and commented that the published scheme had been approved by the National Assembly’s Finance Committee.   Rates were agreed in advance of any work being undertaken and were dependent upon an estimate of the skills mix and number of days required to complete the work.  Legislation did not permit the WAO to generate profits on fees, however, they were set at a level to cover the full cost of the service provided.

 

During consideration of the report Members queried the level of audit fees charged to the Council.  Derwyn Owen commented that the level of fees, being lower than those charged to most other similarly sized local authorities, demonstrated that Wrexham was not perceived to be a high risk authority.

 

RESOLVED – That the Wales Audit Office Fee Scheme 2018-19 be noted.