Agenda and minutes

Audit and Standards Committee
Monday, 14th May, 2018 10.00 am

Venue: Blaydon Room - Civic Centre

Contact: Helen Conway- Tel: 0191 433 3993 - Email:  helenconway@gateshead.gov.uk 

Items
No. Item

ASC117

Minutes pdf icon PDF 89 KB

The Committee is asked to approve, as a correct record, the minutes of the meeting held on

Minutes:

The minutes of the last meeting held on 5 March 2018 were approved as a correct record with the amendment that Councillor Neil Weatherley was in attendance

ASC118

Declarations of Interest

Report of the Strategic Director, Corporate Resources

Minutes:

There were no declarations of interest.

ASC119

External Auditor: Audit Progress Report pdf icon PDF 64 KB

Report of the Strategic Director, Corporate Resources

Additional documents:

Minutes:

The Committee received the external auditor’s progress against planned work report.

 

The 2017/18 audit work is continuing and overall all work is on track.

 

Details of work completed and on-going were summarised as follows:

 

·         Completion of walkthroughs of key information systems; there are no significant issues to bring to the attention of Members however some internal control recommendations have been identified and will be reported to management.

 

·         Completion of auditor’s IT risk assessment: including testing of IT general controls (e.g. logical access and change management) work is ongoing in this area. If appropriate, any significant issues identified to members will be reported.

 

·         Early testing: early testing of income and expenditure transactions, testing of journals and opening balances, have been carried out, with no significant issues arising.

 

·         Early testing: property, plant and equipment. Work is on-going in this area; this is a key risk area where successful early work is key to achieving the earlier accounts deadline.

 

·         Value for money (VfM) significant risk testing – level of savings required over the period of the Medium-Term Financial Strategy; this work is on-going.

 

·         On-going with officers, including internal Audit: in particular, continuing to liaise with officers over the earlier accounts deadline for 2017/18.Officers also attended a North East final accounts workshop, held recently.

 

·         On-going review of agendas and minutes.

 

The Committee were advised that the key challenge this year is to adhere to the new statutory timetable for accounts production and audit. Work continues with officers to seek to streamline arrangements for preparing the statement of accounts. Officers plan to produce the draft accounts requiring certification by the end of May 2018 and the aim is to complete the audit by the end of July 2018.

 

The Committee also received an update on National Publications and Technical Updates and in particular the implementation of GDPR by 25 May 2018. The Committee received reassurance that Gateshead Council  were very well prepared for 25 May, having rolled out to all staff and elected members, training and briefing sessions on how GDPR will affect them. A DVD and staff leaflet is also in hand along with a web page and intranet under construction.

 

The Committee wished to place on record their thanks to Tanya Rossington and her team for the work undertaken on rolling out GDPR training across the Council.

 

It was also agreed that Tanya be invited to the next meeting to provide an update and a crib sheet for councillors and committee members on GDPR.

 

RESOLVED -

i)

That the information be noted.

 

ii)

That the Litigation and Information Rights Officer be invited to the next meeting of the committee to provide an update on GDPR implementation.

 

iii)

That the thanks of the Committee be placed on record for the work by staff on the GDPR implementation across the council.

 

 

 

ASC120

The Internal Audit Strategy Statement and Annual Plan 2018/19 pdf icon PDF 89 KB

Report of the Strategic Director, Corporate Resources

Additional documents:

Minutes:

The Committee received the proposed Audit Strategy Statement and annual plan of work to be undertaken by the Internal Audit and Risk Service in 2018/19.

 

Standards for Internal Audit in local government are set out in the Public Sector Internal Audit Standards (PSIAS). PSIAS state that the Chief Internal Auditor “must establish risk-based plans to determine the priorities of the internal audit activity, consistent with the organisation’s goals”.

 

In accordance with the PSIAS, the input of senior management must be considered in this process, all Strategic and Service Directors were given the opportunity to contribute towards the plan.

 

The Chief Internal Auditor forms an annual assurance opinion based on the programme of audit work as well as assurance obtained from other means. Combined assurance aims to optimise the assurance coverage obtained from management, and both internal and external assurance providers. This is a key area where development work will continue in 2018/19 to formalise assurance mapping across the Council.

 

In addition to audit, the Chief Internal Auditor considers any issues identified through counter fraud and irregularities or developing systems and processes insofar as they impact of the effective operation of governance, risk management or internal controls.

 

The plan for 2018/19 also includes two dedicated Corporate Fraud posts. These officers will work to develop and embed the Council’s Fraud and Corruption Strategy as well as conducting any fraud and irregularity investigations. Updates in relation to Counter Fraud activity will be presented bi-annually to the Committee.

 

The plan includes allocation for advice and consultancy to all services and partnerships where appropriate. This is an increasing area of focus given the amount of change ongoing across the Council and our partners. Time is allocated to support developing systems, ensuring early engagement and audit support across the Council.

 

Rather than a traditional cyclical-based approach, the plan focusses on the main risks to the Council. It provides a balanced approach to traditional compliance work with advisory work as a catalyst for service improvement and to sharpen focus on emerging risks. The plan is flexible and is reviewed and adjusted throughout the as necessary in response to changes in policies, systems, processes, risks and controls across the Council.

 

The Audit Strategy Statement and the Annual Plan for 2018/19 were appended to the main report. The approach to the plan is that it is flexible, supportive, challenging, prioritised and timely, all characteristics endorsed by PSIAS which ensures the plan maintains focus on emerging risks and that assurance is continually focused on the most important risks to the Council, retaining flexibility to reprioritise assurance activities as required.

 

RESOLVED -

i)

That the information is noted

 

ii)

The Committee agreed that the Audit Strategy Statement and the annual plan of work to be provided by the Internal Audit & Risk Services for 2018/19; and

 

iii)

The Committee agreed to receive quarterly monitoring reports showing progress made against the plan.

 

 

 

 

ASC121

Corporate Risk Management 2017/18, Quarterly Report to 31 March 2018 pdf icon PDF 76 KB

Additional documents:

Minutes:

The Committee received a report updating them of developments in Corporate Risk Management during the period 1 January to 31 March 2018 in compliance with the requirements of good corporate governance.

 

The Action Plan for the delivery of the Development Objectives for 2017/18 incorporating progress to date was appended to the main report and the Committee were advised that work is progressing as per the plan and further details about the specific areas are covered below:

·         All of the operational risks on the Operational Risk register have been reviewed.

·         The annual review of Business Continuity Plans and Service Impact Assessments have been completed and all Services have reviews their plans and impact assessments.

·         The Risk Management and Business Continuity Policies have been reviewed and updated to reflect organisational changes

 

The Committee were advised that the draft Strategic Risk Register was presented to Corporate Management Team to ensure all risks and controls have been included and are accurate and up to date.  It was agreed that all strategic risks have been identified and included within the draft register, however a review of some planned controls was requested to ensure that they effectively mitigate the identified risks.

 

It was also agreed that the Strategic Risk Register should be amended to reference the Council’s Thrive Agenda, once approved by Council.

 

Following the approval of the Council’s Thrive Agenda in March, the Strategic Risk Register has been updated and the Senior Office Risk Management Group have met to ensure the risks and controls are updated to reflect the work which has taken place since the previous review.

 

Further consultation will take place on the draft Strategic Register prior to it being finalised and reported to the Committee for consideration.

 

The Committee were also advised that a new crime has been introduced in the Criminal Finance Act 2017, the failure to prevent the criminal facilitation of tax evasion, which took effect from 30 September 2017. To ensure the Council has mitigated the risks associated with the Act risk assessments have been completed and the results collated into a risk register, which was then presented to the Risk and Resilience Group.

 

The outcome of the assessment was that the Council has sufficient controls in place to mitigate the risk arising from the Act and the main action arising from the risk assessment is relating to the wider communication of the Act. In response to this finding a Tackling Tax Evasion Statement has been written which documents the Councils approach to tackling tax evasion and its commitment to preventing anyone facilitating tax evasion. It details the risk assessment process and how anyone suspecting someone of facilitating tax evasion can report their concerns.

 

The Committee were advised that the statement has also been reported to the Risk and Resilience Group for comment and will now be communicated to all employees and Councillors. A copy of the statement and the risk assessment were appended to the main report for information.

 

The Risk and Resilience Group met on 25 April  ...  view the full minutes text for item ASC121

ASC122

Exclusion of the Press and Public

The Committee may wish to exclude the press and public from the meeting during consideration of the exempt agenda in accordance with paragraphs 7 of Schedule 12A to the Local Government Act 1972.

Minutes:

RESOLVED - that the press and public be excluded from the meeting during

                        consideration of the remaining business in accordance with

                        Paragraph 3 of Schedule 12A to the Local Government Act 1972.

ASC123

Internal Audit Plan 2017/18, Quarterly Monitoring Report to 31 March 2018

Report of the Strategic Director, Corporate Finance

Minutes:

The Committee received a report outlining progress made by the Internal Audit & Risk Service against the audit plan for the financial year 2017/18 and summarised the main findings arising from audit activity throughout the period 1 January 2018 to 31 March 2018.

 

RESOLVED -             that the information be noted.

 

 

ASC124

Counter Fraud Update

Report of the Strategic Director, Corporate Resources

Minutes:

The Committee received a report which provided an update on activity undertaken since 1 April 2017 by the Internal Audit and Risk Service in relation to the work of the Corporate Fraud Team.

 

The Government’s latest figures state that fraud costs local authorities an estimated £2.1 billion a year and the Council’s Audit and Standards Committee is responsible for monitoring the arrangements the Council has put in place to mitigate the risk of fraud and corruption.

 

The Committee were informed that two dedicated fraud officers were appointed in April 2017 and following a period of training are now Accredited Counter Fraud Specialists (ACFS) with CIPFA. The team are managed by a Senior Audit and Risk Officer.

 

The Corporate Fraud Officers will carry out proactive anti-fraud and corruption work, targeting the areas which have been identified nationally as being at a high risk of fraud, and include:

 

·         Council tax discounts and exemptions

·         Council tax benefits

·         Non-domestic rates relief

·         Blue badge scheme misuse

·         Procurement fraud, including links to organised crime

·         Tenancy fraud (domestic and commercial)

·         Direct payments

·         Insurance fraud

 

Other work includes carrying out fraud investigations, delivering training to increase awareness throughout the Council, maintaining and communicating the Council’s Counter Fraud and Corruption arrangements and the provision on increased support to management to prevent and detect fraud.

 

The Committee were advised that an updated Counter Fraud and Corruption Strategy, Counter Fraud and Corruption Policy, and Fraud Response Plan was agreed by Audit and Standards Committee on 29 July 2018, and approved by Council on 22 March 2018.

 

In order to support management pro-actively in the prevention and identification of potential fraud and irregularity, the Corporate Fraud Team are members of the following regional and national bodies:

 

·         National Anti-Fraud Network (NAFN)

·         North East Fraud Forum (NEFF)

·         North East Tenancy Fraud Forum (NETFF)

·         CIPFA’s Counter Fraud Centre

·         CIPFA Better Governance Forum (BGF)

·         North East Regional Investigation Officers Group (NERIOG)

 

A counter fraud communication and awareness strategy is currently being developed with the Communications Team to publicise the work of the Corporate Fraud Team, and to show the Council’s commitment to preventing and reporting fraud and corruption. The strategy will include publications in the Team Brief, Council News, Council webpage, social media and detail examples of any proactive exercises and the outcomes of any successful prosecutions.

 

A summary of the counter fraud awareness initiatives progressed to date were reported to Committee:

 

·         Development of a dedicated fraud webpage with an online fraud reporting form, email mailbox and telephone line.

·         Counter Fraud and Corruption Arrangements agreed by Cabinet and Council in March 2018.

·         Employee Bulletin issued to Members and employees to direct them to read and adhere to these arrangements.

·         Developing a Fraud Risk Register.

·         Regular alerts and warnings are received from NAFN regarding a range of frauds and scams against Councils and schools. All warnings are monitored by the Corporate Fraud Officers and communicated to the relevant service areas.

·         Attendance at NEFF workshops and seminars, receiving warnings of scams and alerts and utilising good practice.

·         Attendance  ...  view the full minutes text for item ASC124

ASC125

Other Business

Minutes:

The Committee was advised that the terms of reference would be on the agenda for its next meeting together with a report reviewing the effectiveness of internal audit including an assessment of the effectiveness of the Committee. In addition, a quarterly report would be presented to the Committee giving an update on standards issues.

 

The Committee wished to place on record its praise to the staff in the Council’s Resilience and Emergency Planning Team for the way they handled the recent fire evacuation at Regents Court.

 

ASC126

Date and time of next meeting

Monday 18 June 2018 at 10.00 am in the Blaydon Room, Civic Centre

Minutes:

The next meeting will take place on Monday 18 June 2018 at 10.00 am in the Blaydon Room, Civic Centre