Agenda and minutes

Audit Committee
Monday, 19th March, 2018 6.00 pm

Venue: Level 4 Rooms D and E, Civic Centre West Street Oldham

Contact: Sian Walter-Browne 

Items
No. Item

1.

Apologies For Absence

Minutes:

Apologies for absence were received from Councillors Brock, Harkness and Williams.

2.

Urgent Business

Urgent business, if any, introduced by the Chair

Minutes:

There were no items of urgent business received.

3.

Declarations of Interest

To Receive Declarations of Interest in any Contract or matter to be discussed at the meeting.

Minutes:

There were no declarations of interest received.

4.

Public Question Time

To receive Questions from the Public, in accordance with the Council’s Constitution.

Minutes:

There were no pubic questions received.

5.

Minutes of Previous Meeting pdf icon PDF 208 KB

The Minutes of the meeting of the Audit Committee held on 11th January 2018 are attached for approval.

Minutes:

RESOLVED that the minutes of the Audit Committee meeting held on 11th January 2018 be approved as a correct record.

6.

Treasury Management Strategy Statement 2018/19 pdf icon PDF 525 KB

Minutes:

The Committee gave consideration to a report of the Director of Finance which set out the 2018/19 Treasury Management Strategy (including Minimum Revenue Provision policy statement, annual investment strategy and prudential indicators).

 

The Council was required through regulations supporting the Local Government Act 2003 to ‘have regard to’ the Prudential Code and to set Prudential Indicators for the next three years to ensure that the Council’s capital investment plans were affordable, prudent and sustainable. It was also required to produce an annual Treasury Strategy for borrowing and to prepare an Annual Investment Strategy setting out the Councils policies for managing its investments and for giving priority to security and liquidity of those investments.

 

The Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on Treasury Management 2011 (the Code) also required the receipt by full Council of a Treasury Management Strategy Statement. The report met the statutory requirements and complied with both the Code and the CIPFA Prudential Code of Capital Finance in Local Authorities (the Prudential Code).

 

The report had already been approved by Cabinet on 19th February 2018 and Council on 28th February 2018. Presentation to the Audit Committee after approval by Council was due to the timing of the meetings.

 

Members asked for and received further details on the projected capital expenditure figures. Members were advised that it was accepted that there was likely to be slippage, especially on large capital projects, but the figures were based on the most up to date analysis of the profile of spend within projects and capital receipts coming in.

 

Members also asked for clarification of the impact of an interest rate rise on repayments and noted that existing borrowing was at a fixed rate and there would be no change unless the debt was rescheduled.

 

RESOLVED that the Treasury Management Strategy for 2018/19, as approved at Council on 28th February 2018, be noted.

 

7.

External Audit Plan Year Ending 31 March 2018 pdf icon PDF 519 KB

Minutes:

The Committee gave consideration to the Audit Plan for Oldham Council for the year ending 31st March 2018. The audit was a requirement in line with the Local Audit and Accountability Act 2014 and in accordance with the Code of Practice issued by the National Audit Office on behalf of the Comptroller and Auditor General in April 2015. 

 

The report outlined the challenges the Council was facing which included financial pressures and the impacts of the Grenfell Tower fire.  Changes to service delivery and financial reporting requirements were also considered.

 

The approach to the audit was outlined based on the audit risk relevant to individual elements of the financial statements and focussed on areas of highest risk of material misstatement.  Materiality was determined as a whole as a proportion of gross revenue expenditure of the Council.  An assessment of risks had been undertaken and a testing threshold had been set.  The report also identified significant risks which included two presumed risks applicable to all audits. 

 

In considering Value for Money arrangements, Health and Social care integration and working with partners had been identified as a significant risk. It was noted that the auditors would review the project management and risk assurance frameworks established by the Council, to establish how it was identifying, managing and monitoring these risks.

 

Members asked for and received clarification on the impact of external auditor staffing changes. They were informed that, although personnel had changed, the audit was still led by experienced staff.

 

RESOLVED that the Audit Plan for Oldham Council and the items referred to in the report be noted.

 

8.

Informing the Audit Risk Assessment 2017-18 pdf icon PDF 243 KB

Minutes:

Consideration was given to the responses provided by Oldham Council to the questions raised by the External Auditors in the report “Informing the Audit Risk Assessment: Enquiries to those charged with Governance”. 

 

It was explained that this was an annual report which aimed to improve the communication between the external auditors, the Audit Committee and those charged with Governance.

 

RESOLVED that the Management Responses to the matters raised in the report “Informing the Audit Risk Assessment: Enquiries to those charged with Governance – Oldham Council” be approved.

 

9.

2017/18 Proposed Accounting Policies and Critical Judgements pdf icon PDF 168 KB

Additional documents:

Minutes:

Consideration was given to a report of the Director of Finance that set out the recommendation (in line with best practice) of the Council’s External Auditors that the proposed accounting policies to be used to prepare the Council’s 2017/18 Statement of Accounts are approved by the Council’s Audit Committee.

 

The report set out the Council’s proposed accounting policies and critical judgements to be adopted in completing the 2017/18 Statement of Accounts. Members were updated on the main differences from 2016/17, introduced as a result of amendments to the Code of Practice on Local Authority Accounting 2017/18 (the Code) or as part of the Council’s annual review process.The report also explained the requirement to include a note on the critical judgements used in the production of the Statement of Accounts, which had been presented alongside the accounting policies in line with best practice.

 

Members noted that the up-front pension payment reduced the amount paid and had resulted in considerable savings over three years in accordance with a budget reduction approved by Council for 2017/18 to 2019/20.

 

RESOLVED that the Audit Committee approved the Council’s proposed accounting policies, to be adopted in completing the 2017/18 Statement of Accounts and noted the critical judgements.

10.

Internal Audit Charter 2018/19 pdf icon PDF 259 KB

Minutes:

The Committee considered a report which advised and sought approval of the proposed Internal Audit Charter for 2018/19.

 

The work of Internal Audit at Oldham Council had been governed by the UK Public Sector Internal Audit Standards (PSIAS) from 1st April 2013. The Standards comprised a revised definition of Internal Auditing, a Code of Ethics for Internal Auditors working in the Public Sector and the Standards themselves. The Standards were mandatory for all internal auditors working in the UK public sector.

 

The 2017/18 Internal Audit Charter was approved by the Audit Committee on 2nd March 2017 and Appendix 1 to the report included the updated Charter for 2018/19.

 

RESOLVED that the Internal Audit Charter, effective from 1st April 2018, be approved.

 

11.

Internal Audit and Counter Fraud Plan 2018/19 pdf icon PDF 112 KB

Additional documents:

Minutes:

The Committee gave consideration to a report that advised them on the proposed Internal Audit and Counter Fraud Plan for the financial year 2018/19 and gave Members the opportunity to highlight any potential risks they felt would benefit from an Internal Audit and Counter Fraud review.

 

The Annual Audit and Counter Fraud Plan was prepared on an annual basis and agreed with the Director of Finance, as the Section 151 Officer to the Council. The Director of Finance needed to be assured the audit coverage was sufficient to discharge the S151 officer’s statutory role. Consultation with the Audit Committee at this stage gave Members the opportunity to review and comment on the proposed Annual Plan.

 

Members asked for and received clarification in relation to partnership working. They were informed that this would be a challenge, especially in relation to major projects, where an ambitious programme of change would require consideration of joint funding and possible pooling of resources.

 

Members noted that, in relation to payroll, social care and adult social care services, there had been a number of specific audits and there had been improvements, with plans in place to promote further improvements.

 

RESOLVED that the Internal Audit and Counter Fraud Planning process and the Audit and Counter Fraud Plan for 2018/19 be noted and agreed.

12.

Exclusion of the Press and Public

That, in accordance with Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting for the following items of business on the grounds that they contain exempt information under paragraphs 3 of Part 1 of Schedule 12A of the Act, and it would not, on balance, be in the public interest to disclose the reports.

Minutes:

RESOLVED that, in accordance with Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting for the following items of business on the grounds that they contain exempt information under paragraph 3 of Part 1 of Schedule 12A of the Act, and it would not, on balance, be in the public interest to disclose the reports.

13.

Internal Control Matters in the Economy, Skills and Neighbourhoods Directorate

Minutes:

Consideration was given to a report of the Head of Corporate Governance which summarised the internal control matters identified by the Audit and Counter Fraud Team since 1st September 2016 for consideration by managers in the Economy, Skills and Neighbourhoods Directorate.

 

The report summarised the work done by Internal Audit and Counter Fraud with an Executive Summary of the findings and recommendations made detailed in Appendix 1.

 

Management progress against the agreed recommendations for the reviews had been determined and there was evidence of progress around the implementation of these recommendations.

 

Members asked for and received clarification in relation to late payments and the total number of visitors. They noted there would be updates on these matters at future meetings.

 

RESOLVED that the content of the report be noted.

14.

Annual Governance Statement for 2016/17 and New Issues on Governance

Minutes:

The Committee gave consideration to a report of the Head of Corporate Governance which updated them on the progress made to reduce the

risk of issues arising for the Council to address, where matters were identified

as areas requiring improvement in internal control within the Annual

Governance Statement for 2016/17. The report also identified new risks which, at this stage, were considered appropriate for potential inclusion in the Annual Governance Statement for the financial year 2017/18.

 

The Committee received a verbal update which highlighted the key issues in the Corporate Risk Monitor report and Corporate Risk Register. The update set out the key risks and dates for the Authority based upon an assessment as at the end of January 2018.

 

The Council, as part of its Statement of Final Accounts, produced an Annual

Governance Statement. This identified the significant governance issues that the Council needed to consider at the financial year-end to reduce its risk. The report included consideration of the progress made on the issues identified in the published Statement for 2016/17 and emerging issues considered for inclusion in the financial year 2017/18.

 

Appendix 1 detailed the issues reported in the 2016/17 Annual Governance Statement and the actions taken during this financial year to mitigate these risks. It also gave an opinion on the present risk as at 31st January 2018 based upon a Red/ Amber/ Green (RAG) rating.

 

Appendix 2 detailed those new issues that may need to be considered for inclusion in the 2017/18 Annual Governance Statement, prior to its production and signing by the Chief Executive and Leader of the Council. The Council had an opportunity to address these issues before they were formally included in the Statement.

 

Members noted that there were ongoing discussions as to how services may be delivered in future and that any major changes would be paced and incremental, with clear plans for continuity.

 

RESOLVED that the Committee noted:

·         The progress made by the Council on issues reported in the 2016/17 Annual Governance Statement.

·         The emerging issues during 2017/18 to be considered for inclusion in the Annual Governance Statement.

·         The assessment of risk as advised in the verbal update on the current Risk Monitor and Corporate Risk Register.