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Agenda and minutes

Audit Committee
Thursday, 22nd March, 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

53.

Apologies for Absence

Minutes:

Apologies for absence were submitted on behalf of Councillors Trevor Bates, Marc Jones, Rondo Roberts and Independent Lay Member Jerry O’Keeffe.

54.

Declarations of personal interests, if any

Members are reminded of their responsibility, under Paragraph 11 of the Members’ Code of Conduct, to declare the existence and nature of any personal interest in respect of any of the business to be transacted at this meeting.

Minutes:

There were no declarations of personal interest.

55.

Confirmation of Minutes pdf icon PDF 80 KB

To sign as a correct record the Minutes of the Meeting held on 22 February 2018.

Minutes:

The Minutes of the meeting held on 22 February 2018 were submitted.

 

RESOLVED – That the Minutes of the meeting held on 22 February 2018 be signed as a correct record.

 

Matter Arising:

 

Minute 49 Internal Audit Interim Report April 2017 – January 2018:  The Service Manager – Audit and Technical reported that he had provided Members with the information  to enable a comparison to be made of Wrexham Internal Audit Service’s performance against the respective Audit Plans at this time of the year for 2016/17 and 2017/18.   The information had indicated that the Audit Plan was marginally more complete this year. 

 

Minute 50 Audit Committee – Evaluation of Effectiveness:   The Vice-Chair referred to a discussion she had had with the Chair of the Audit Committee regarding the possible introduction of a 15 minute planning and preparation session prior to the commencement of future meetings of the Audit Committee.   These sessions could improve the effectiveness of the challenging role undertaken by Members as it would enable them to discuss possible questions for consideration at the meeting itself and she sought the Committee’s view on the matter.

 

RESOLVED – That a 15 minute planning and preparation session be held prior to the commencement of meetings of the Audit Committee for a trial period of 12 months.

56.

Audit Ref: 2017 - 013 Information Management - including Data Security pdf icon PDF 23 KB

Minutes:

The Vice-Chair welcomed the Human Resources and Organisation Development (HR&OD) Service Manager and the ICT, Customer Services and Communications Manger to the meeting and reminded Members that both officers had been invited to attend the meeting to provide an update on Audit Ref 2017-13 – Information Management including Data Security.   This had previously been reported to the Audit Committee on 22 February 2018 (HF/20/18) as having Red/Amber assurance.

 

The ICT, Customer Services and Communications Manager provided a brief outline of the Council’s Human Resources (HR)  information management system and on the procedures and controls in place to record new starters and leavers.   She reported that since 2013, there has been an integrated HR and Payroll data system and that the ICT team set up user accounts for all new starters to allow them to have access to IT facilities, to the level of information they were authorised to have, to undertake their duties.  It was the responsibility of departmental team managers to use the information in Myview to check the accuracy of the information included in their team reports. The ICT team continues to develop procedures to make it easier for team managers to report such changes to improve the accuracy/quality of the data shared.

 

With reference to information on employees leaving the Council, the HR&OD Service Manager reported that the process required the HR Service Centre (HRSC) to receive an instruction from a team manager in relation to a leaver, or receive a copy of the resignation letter.  It was essential that team managers informed HRSC of any such changes in a timely manner to ensure that the employee’s user account was closed and access to all personal and sensitive information removed.  

 

The following matters were then raised:

 

·         Members expressed concern that, although there appeared to be robust procedures in place for informing HRSC of staff leaving the authority, not all managers adhered to them and further action was required to ensure compliance.

 

·         Individual e-mail accounts may be kept open for a short period of time following an employee leaving the Council for continuity of the service, however, such accounts can only be accessed by the appropriate Line Manager.

 

·         Managers should ensure that when user accounts are set up for  temporary/agency staff they are set to automatically expire at the end of the contract date given. 

 

The Vice-Chair reminded Members that Internal Audit had given a Red/Amber  Level of Assurance for this audit.  An Action Plan had been produced and a first follow-up audit would be undertaken soon, the results of which would be reported to the May 2018 meeting of the Audit Committee.

 

RESOLVED – That the information be noted.

57.

Work Programme pdf icon PDF 49 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.

58.

Internal Audit Charter 2018/19 pdf icon PDF 99 KB

To consider the report of the Head of Finance.

Additional documents:

Minutes:

The Head of Finance submitted a report (HF/30/18) which enabled consideration to be given to the Wrexham Internal Audit Charter for 2018-19.

 

The Service Manager, Audit and Technical, introduced the report and advised Members that Wrexham Internal Audit Service’s (WIAS) Internal Audit Charter had been prepared in accordance with the framework provided by the Public Sector Internal Audit Standards (PSIAS).    The Charter also included the Internal Audit Plan for 2018/19 (Charter, Appendix 1) which detailed and prioritised the planned audit assignments to be undertaken during the year and linked each audit to the Council Plan.   The Charter also included a reserve list of other high and medium term audit assignments (Charter, Appendix 2) that could be undertaken if there was any remaining resource available once the critical work identified in Appendix 1 has been completed.  A risk based approach will be used in prioritising audit assignments and the Audit Committee will receive regular update reports of progress against the Audit Plan as part of Internal Audit’s ongoing Interim Reports.

 

During consideration of the report the Service Manager, Audit and Technical, apologised for the mistake in the numbering of the paragraphs within the report.  This had arisen during the publication process and would be rectified prior to finalisation. The following matters were then raised in particular:

 

·         Page 22 paragraph 1.20:  It was noted that the Council’s Financial Regulations and Counter Fraud Strategy required all members of staff to report instances of suspected or detected fraud and corruption and they can report such instances directly to Internal Audit or through line managers.  However, final accountability rested with Heads of Department to ensure that Internal Audit was notified of all instances of suspected fraud and corruption within their department. 

 

·         Page 23 paragraph 1.27:  With reference to the chart on qualifications held by WIAS staff, it was noted that some staff held more than one qualification.

 

·         Page 23 paragraph 1.31: Assurance was sought that WIAS had sufficient knowledge of key information technology risks to perform their assigned work.  

 

·         Page 24 paragraph 1.38:  Change wording to “Internal Audit will remain free from all interference ….”

 

·         Page 28 paragraph 1.62: In instances where Internal Audit has given a Red or Red/Amber level of assurance following the 1st Following-Up and / or subsequent audits, it was agreed that the wording be amended to require that the written report be submitted to the Audit Committee and be signed off by the Head of Department with the relevant Lead Member being made aware of the content of the report.

 

·         Page 28 paragraph 1.66 Performance Targets:  The Service Manager, Audit and Technical confirmed that the performance targets were realistic and achievable.

 

RESOLVED – That the Internal Audit Charter 2018 -19, as amended, be approved.

59.

Annual Governance Statement 2017 - Action Plan pdf icon PDF 165 KB

To consider the report of the Head of Finance.

Minutes:

The Head of Finance submitted a report (HF/32/18) which informed the Audit Committee of reported progress on the Annual Governance Statement (AGS) 2017 Action Plan up to 31 December 2017.  A copy of the Action Plan for implementation in 2017/18 was attached at Appendix A to the report.

 

The Audit Lead introduced the report and reminded Members that both the AGS and Action Plan had been agreed by the Audit Committee at its meeting held on 15 June 2017.  Progress on the actions contained in the Action Plan have been monitored during the year by officers and 5 of the 16 actions showed progress delayed from the set target date.  The reasons for the delays were set out in the report. 

 

During consideration of the report Members requested further information on the progress being made with regard to the following actions:

 

·         Ref. 1.  Asset Management:  The Head of Finance reported that the delay in the procurement of a specialist corporate asset management system had arisen due to the complexity of finalising the required business specifications.  Progress was being made and the specifications would be submitted to the Asset Management Board for approval soon. 

 

·         Ref. 4. Health and Safety:  An internal audit undertaken during 2017/18 indicated that some progress was being made in addressing the governance issues identified in 2016/17 but that assurance was still needed that the governance model is effective, particularly at operational level.  Partnership work with the Health and Safety Executive in 2018/19 will help to confirm this.   

 

·         Ref. 8. Information Management: The Head of Finance reported that a Corporate Data Protection Officer has recently been appointed as the Council continues to prepare for the introduction of the new General Data Protection Regulations (GDPR) in May 2018.

 

·         Ref.15. Service Continuity Plans: The Head of Finance confirmed that progress was being made in accordance with the agreed action plan.

 

RESOLVED – That the progress made in the implementation of the Annual Governance Statement Action Plan be noted.

60.

Risk and Control Registers Summary pdf icon PDF 370 KB

To consider the report of the Head of Finance.

Minutes:

The Head of Finance submitted a report (HF/31/18) which informed the Audit Committee of the Council’s risks and how they are being managed.

 

The Audit Lead introduced the report and reminded Members that the Council’s Risk Management Policy required the Council to have formal arrangements in place for managing risks.  Risk and Control Registers were kept for the Council’s principal risks, all departments, major projects and significant partnerships.  The purpose of the report was to provide Members with an overall view of the risks identified within the Council.  Controls to mitigate these risks are identified within the individual Risk and Control Registers.  Extracts from Departmental Risk and Control Registers as at 28 February 2018 were attached at Appendices C & D of the report.   Each Head of Department was responsible for keeping their department’s register up-to-date and for ensuring that controls remain effective and any required action implemented.  Additionally, each department register is subject to an annual challenge by risk officers and other Head of Departments.

 

Members then considered to report and raised the following matters in particular:

 

·         Page 59, PRO4 – There is a risk that revenue and capital resources are insufficient to achieve stated priorities and meet obligations at a time of increasing demand for services:  In response to a question from a Member the Head of Finance confirmed that the Council did not have a Management Demand Strategy in place to mitigate this risk.   The risk was mitigated by departments working in accordance with the business model agreed by Council, however, he would make further investigations on whether the introduction of such a strategy would be beneficial to the Council. 

 

·         Page 62, Education Department ED08 – Services were disrupted due to staff absence:  A Member commented upon the risk of a school closure due to an absence of staff and sought further clarification on whether all schools had absence management policies and procedures in place to mitigate this risk.  The Auditor Lead commented that this information was collated by the HR section and he agreed to provide Committee Members with additional information on this matter.

 

·         Page 72, Environment and Planning EP016 - A Council employee / contractor is involved in a serious road traffic crash: Clarification was sought on mitigation measures put in place to ensure that all accidents were being investigated.  The Head of Finance commented that previously not all minor accidents had been routinely investigated.  Measures had been put in place to address management attitudes within the department and to raise awareness and promote staff training in accordance with the Council’s Health and Safety policies and standards.  A recent internal audit of Fleet Management had indicated that all such incidents were now being routinely investigated.

 

RESOLVED – That the contents of the Risk Register extracts as set out in report HF/31/18 be noted.

61.

Wales Audit Office Plan 2018/19 pdf icon PDF 62 KB

To consider the report of the Head of Finance.

Additional documents:

Minutes:

The Head of Finance submitted a report (HF/33/18) which provided Members with a copy of the Wales Audit Office 2018/19 Audit Plan.

 

Mathew Edwards (Financial Audit Manager) and Paul Goodlad (Performance Audit Lead) Wales Audit Office, introduced the report and informed Members that the planned programme of work was based on their assessment of the financial and operational risks facing the Council and included financial and performance work to be undertaken in 2018/19. 

 

During discussion of the Audit Plan, Members sought further clarification on the following matters:

 

·         Page 100 – Fee: With reference to the estimated audit fees, Matthew Edwards explained that the marginal decrease in the Audit fee for 2018-19 compared to the previous year, reflected the quality of the accounts received from the Council.

 

·         Page 109 Good Practice Exchange  (GPX) – Reference was made to the planned GPX programme for 2018 and whether Members could get access to meetings of webinars and seminars online. Mathew Edwards commented that this information was available via the Wales Audit Office website and the Head of Finance agreed to e-mail Members a link to the site.

 

RESOLVED – That the Wales Audit Office Audit Plan 2018 be noted.

62.

Progress Report - External Audit and Inspectorates pdf icon PDF 64 KB

To consider the report of the Head of Finance.

Additional documents:

Minutes:

The Head of Finance submitted a report (HF/34/18) which provided Members with a copy of the Wales Audit Office progress report.

 

In introducing the report Matthew Edwards (Financial Audit Manager) and Paul Goodlad (Performance Audit Lead) Wales Audit Office, commented that the report provided an update on current and planned financial and performance audit work undertaken by the Wales Audit Office on behalf of Wrexham County Borough Council.  The report also provided information on the Auditor General’s programme on national value-for-money examinations.

 

The Head of Finance reminded Members that WAO performance audit reports relevant to local government and how their recommendations had been considered by the Council in local action plans were reported to the Audit Committee. 

 

RESOLVED – That the contents of the Wales Audit Office progress report be noted.

63.

Wales Audit Office Housing Adaptations Report - Wrexham County Borough Council Action Plan. pdf icon PDF 55 KB

WAO Housing Adaptations Report – WCBC Action Plan

Additional documents:

Minutes:

The Head of Finance submitted a report (HF/38/18) which updated the Audit Committee on the Wales Audit Office (WAO) Housing Adaptations Report and the Action Plan developed by the Council following  the WAO Recommendations.

 

RESOLVED – That the Audit Committee notes the Housing Adaptation report published by the Wales Audit Office and the Action Plan developed by the Council.

64.

Additional Item of Business: Environment Enforcement Services in Wrexham

Minutes:

The Vice-Chair reported that the Homes and Environment Scrutiny Committee arranged for Wednesday, 11 April 2018, will be considering a further report on environment enforcement performance in response to a number of questions raised by Members at its meeting held on 13 December 2017.  The Chair of the Audit Committee was expected to be in attendance at the meeting.