Agenda and minutes

Audit and Standards Committee
Monday, 28th October, 2019 10.00 am

Venue: Blaydon Room - Civic Centre

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

Items
No. Item

ASC235

Minutes pdf icon PDF 318 KB

The Committee is asked to approve, as a correct record, the minutes of the meeting held on 22 July 2019.

Minutes:

The minutes of the last meeting held on 22 July 2019 were approved as a correct record.

 

With regard to minute ASC228, the Committee was advised that its request for the font for security warnings on all Council PCs to be enlarged was being progressed as part of the upgrade to Windows 10.

ASC236

Declarations of Interest

Members of the Committee are invited to declare interests in any agenda items.

Minutes:

There were no declarations of interest.

ASC237

Audit and Standards Committee Work Programme 2019-20 pdf icon PDF 124 KB

The Committee is asked to note the current work programme.

Minutes:

RESOLVED -

That the Committee’s work programme for 2019/20 be noted.

 

ASC238

Training and Development Requirements pdf icon PDF 121 KB

Report of the Strategic Director, Corporate Sevices and Governance

Minutes:

Consideration has been given to a suggested development plan to meet the Committee’s training needs. In addition, members were given an update on the training carried out to date in 2019.

 

RESOLVED -

(i)         That the update be noted.

 

(ii)        That the development plan set out in the report be       approved.

 

ASC239

Quarterly Standards Update pdf icon PDF 159 KB

Report of the Strategic Director, Corporate Services and Governance

Minutes:

Consideration has been given to the quarterly update highlighting national and local standards issues.

 

Members expressed concern at the proposals for voter ID and asked for these to be brought to the attention of the Council’s Elections Team.

 

RESOLVED -

That the update be noted.

 

ASC240

External Auditor: Annual Audit Letter 2018/19 pdf icon PDF 120 KB

Report of the Strategic Director, Corporate Resources

Additional documents:

Minutes:

Consideration has been given to the external auditor’s Annual Audit Letter 2018/19.

 

The letter provides a summary of the external auditor’s work and findings for 2018/19 in respect of the following:

 

·         Audit of the financial statements

·         Value for money conclusion

·         Other reporting responsibilities

·         Fees

·         Forward look

 

RESOLVED -

That the content of the external auditor’s Annual Audit Letter 2018/19 be noted.

 

ASC241

External Auditor: 2018/19 Audit - Additional Fee pdf icon PDF 191 KB

Report of the Strategic Director, Corporate Resources

Additional documents:

Minutes:

The consolidation of Gateshead Housing Company into the Council’s group accounts for 2018/19 necessitated additional external work in order for the opinion on the accounts to be given by the deadline of 31 July 2019.

 

The Council received a letter from the external auditor advising that the additional work had resulted in an additional fee of £9,724.

 

RESOLVED -

That the contents of the letter from the external auditor be noted.

 

ASC242

Results of 2018/19 CIPFA Audit Benchmarking pdf icon PDF 240 KB

Report of the Strategic Director, Corporate Resources

Minutes:

The Internal Audit Service is required to objectively examine, evaluate and report upon the adequacy of the control environment as a contribution to the proper economic, efficient and effective use of the Council’s resources. Benchmarking data allows the comparison of the Internal Audit Service with ten other local authorities.

 

A summary report of the 2018/19 benchmarking results has been presented. Overall this continues the trend from previous years and highlights the Council’s Internal Audit Service as being low cost with high productivity in comparison with other local authorities in the benchmarking data. The information is based upon 2018/19 actual results taken from the financial ledger and the internal audit management system.

 

RESOLVED -

That the information be noted.

 

ASC243

Corporate Risk Management 2019/20 - Quarterly Report to 30 September 2019 pdf icon PDF 157 KB

Report of the Strategic Director, Corporate Resources

Minutes:

Consideration has been given to developments in Corporate Risk Management during the period 1 July to 30 September 2019 in compliance with requirements of good corporate governance.

 

With regard to the Strategic Risk Register, a new risk in relation to climate change is being discussed with responsible officers. The Council is carrying out a strategy refresh to establish targets and actions to ensure achievement of its’ climate objectives by 2030 and an initial report is anticipated in January 2020. This report will enable the strategic risks to be drafted along with the necessary mitigations to manage the risk, which will be presented to the Committee for consideration.

 

Updates have also been given on operational risk, business continuity, critical IT systems and the work of the Risk and Resilience Group.

 

The work on the risks associated with climate change were welcomed but it was pointed out that this may have implications for the cost of future schemes and initiatives. The Committee was advised that climate change is one of the key priorities for the Council and a fundamental part of the setting of capital and revenue budgets. The risks were being addressed as part of the strategy refresh.

 

A member asked how the Council ensured the effectiveness of its risk management arrangements. The Committee was informed that the risk management champions for all services were on the Risk and Resilience Group which ensured the effectiveness of the arrangements. The Committee was also responsible for monitoring the arrangements. In addition, risk management training was provided to services and the effectiveness was also addressed as part of the benchmarking arrangements.

 

RESOLVED -

(i)         That the information be noted.

 

(ii)        That the Council’s risk management arrangements      be confirmed as being effective.

 

ASC244

Treasury Management - Performance to 30 September 2019 pdf icon PDF 42 KB

Report of the Strategic Director, Corporate Resources

Minutes:

The Committee has reviewed the treasury management performance for the six months to 30 September 2019 covering investments and borrowing, in line with approved performance management arrangements.

 

The report covers:

 

·         Investment performance

·         Rate of return

·         Brexit and the Economy

·         Borrowing

·         PWLB Government Intervention

 

The projected net impact of investment and borrowing activity on the revenue budget in 2019/20 is an underspend of £2.107m, comprising £1.678m General Fund and £0.429m HRA.

 

Investment returns are likely to remain relatively low during 2019/20 and beyond and interest rates are expected to be below long-term borrowing rates. Therefore, value for money considerations indicate that best value can be obtained by delaying new external borrowing and by using internal cash balances to finance new capital expenditure in the short term.

 

The current approach to borrowing internally provides benefits in terms of reduced credit risk, as the Council has less cash invested than if it had gone to the markets and borrowed externally. This means that cash balances and investment returns are historically low resulting in reduced levels of income, which is significantly outweighed by the savings achieved from avoiding external borrowing. The additional element of interest rate risk will continue to be monitored.

 

The Committee expressed concern at the possible impact of the Government’s recent changes to the PWLB loans. The Committee was advised that these may potentially have an impact on the HRA and on some schemes and initiatives in the Borough. There was concern that the Government may do something similar again and this would have to be factored in.

 

RESOLVED -

That the treasury management performance to 30 September 2019 be noted, prior to its submission to the Cabinet.

 

ASC245

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.

 

ASC246

Mid Year Counter Fraud Update 2019/20

Report of the Strategic Director, Corporate Resources

Minutes:

Consideration has been given to activity undertaken since 1 April 2019 by the Internal Audit and Risk Service in relation to the work of the Corporate Fraud Team. This includes action taken to raise awareness of the risk of fraud and corruption, details of the cases of potential fraud and irregularity, and updates on any proactive counter fraud work and progress of the Council’s participation in the National Fraud Initiative.

 

RESOLVED -

That the information be noted.

 

ASC247

Internal Audit Plan 2019/20 - Quarterly Monitoring Report to 30 September 2019

Report of the Strategic Director, Corporate Resources

Minutes:

The Committee received a report outlining progress made by the Internal Audit and Risk Service against the audit plan for the financial year 2019/20 and summarising the main findings arising from audit activity throughout the period 1 July to 30 September 2019.

 

From the reviews carried out to 30 September 2019 audit work was found to be complying with the Public Sector Internal Audit Standards and the Audit Manual.

 

Performance information for the year to date is as follows:

 

·         94% of audits were completed within budgeted time against a target of 90%.

·         Productive or chargeable time was recorded at 72% of overall time against an annual target of 73% of overall time.

·         The average score of the customer satisfaction questionnaires returned is 3.91 against a target of 3.4.

·         The target for implementation of audit recommendations due is 100% for high priority recommendations and 90% for medium priority recommendations. The current rate of implementation of all recommendations due is 95.6%, with 100% of all high priority and 91.6% of all medium priority recommendations having been implemented.

 

RESOLVED -

That the information be noted.

 

ASC248

Date and time of next meeting

The next meeting will be held on Monday 27 January 2020 at 10.00 am in the Blaydon Room, Civic Centre

Minutes:

The next meeting of the Committee will be held on Monday 27 January 2020 at 10.00am in the Blaydon Room.