Agenda and draft minutes
Venue: The Atrium, The Copeland Centre, Catherine Street, Whitehaven. CA28 7SJ
Contact: Clive Willoughby Tel: 07385 362806
Apologies for Absence
Apologies for absence received from Councillors Allan Forster and Russell Studholme.
Declarations of Interests in Agenda Items:
Councillors Jackie Bowman and Joan Hully declared a Personal interest in any item relating to benefits, due to being in receipt of single person’s Council Tax reduction.
Consideration was given to the Minutes of the meeting held on 12 November 2020.
RESOLVED – That the minutes of the meeting held on 12 November 2020 be agreed as a correct record and signed by the Chair.
Consideration was given to the report on the implementation of Audit Recommendations.
The Performance and Risk Management Officer introduced the report and stated that at the present time there were a total of 18 priority one and two audit recommendations outstanding, with a target date for completion up to 30 April 2021. Of these 8 were Priority one and 10 were Priority two.
Of the 8 outstanding Priority 1 recommendations, 3 became overdue in the latest period and of the 10 outstanding Priority 2 recommendations, 3 became overdue in the latest period.
During the discussion that followed, Councillor Meteer asked for clarification regarding AR-AC-072 and AR-C-164 relating to Disaster Recovery and Cyber Attack.
In response, Committee was advised that the ICT Manager was being invited to attend the next meeting and would be able to expand on these.
Councillor Weir requested clarification regarding the four recommendations listed on page 11 of the agenda, where the due dates had been extended to September 2021.
Committee was advised that all four recommendations related to General Data Protection Regulations and were put back due to there being no Information Governance and Data Compliance Officer in post, that vacancy had since been filled.
The Performance and Risk Management Officer was thanked for her report and attendance at this meeting.
RESOLVED – that the progress being made in implementing outstanding recommendations be noted.
The Director of Financial Resources introduced this report to Committee which summarised the progress against the audit plan since the last Audit Committee meeting in November 2020.
Members were reminded that due to Covid-19, the Internal Audit service was suspended between March and the end of June 2020. The plan therefore covered the period July 2020 to March 2021.
Internal Audit had issued four final reports in that period being:
· Benefits (Reasonable Assurance)
· Health and Safety Follow Up (Partial Assurance)
· Payroll (Reasonable Assurance)
· Petty Cash Follow Up (Partial Assurance)
Internal Audit were currently completing work on the following audits:
· ICT Strategy and Purchasing
· Performance Management
Progress on these would be reported to committee at a later meeting.
During the discussion that followed, Councillor Hully asked if Members could be trained in basic Health and Safety.
The Director of Financial Resources agreed to consult with the Health and Safety Officer and Corporate Leadership Team.
Councillor Bowman expanded on the previous point and asked about evacuation procedures for the partially sighted/disabled.
Again, the Director of Financial Resources agreed to consult with the Health and Safety Officer and Corporate Leadership Team.
Councillor Hailes referred to agenda page 27, which stated that against the heading ‘Covid-19’, no scope areas had been decided and asked for further details.
In response, Committee was advised that Business Rates Grants and the GLL leisure contract were areas being considered.
Councillor Weir asked regarding agenda page 33 and Safe Working Practices and stated that it was essential that all staff be trained for the equipment they were using.
The Director of Financial Resources agreed and confirmed that Health and Safety was high on the Chief Executive’s priorities.
Councillor Weir then referred to agenda page 47 and an unauthorised employee operating a float made a claim for reimbursement as well as authorising the same claim.
The Chair clarified that this item had been picked up on the original report, which went to a previous Audit Committee.
The Director of Financial Resources added that the Financial Regulations were in the process of being updated and were going to Standards and Ethics Committee prior to going to Full Council.
Councillor Weir asked for a definition of ‘Pentana’ and was advised that it was an Internal Performance Management System.
RESOLVED – that the progress against the 2020/21 Internal Audit plan be noted.
Committee was advised by the Director of Financial Resources that as part of their audit of the 2017/18 financial statements the Council’s external auditors Grant Thornton made two recommendations to Council under section 24 schedule 7 of the Local Audit and Accountability Act 2014. The report included a recommendation to carry out independent Internal Audit and Audit Committee effectiveness reviews to assess their impact on improving the Council’s internal control environment.
All public sector internal audit services were required to measure how well they were conforming to the Public Sector Internal Audit Standards. This could be achieved through undertaking periodic self-assessments, external quality assessments, or a combination of both. However, the standards state that an external reviewer must undertake a full assessment or validate the internal audit service’s own self-assessment at least once in a five year period.
A review in Copeland had not been undertaken since 2016 and therefore a review was timely.
It was recommended to the Committee that an external expert be used to undertake this type of review. Committee was also advised that soft market testing had taken place with suitably qualified and experienced organisations (particularly with local government experience). Only one organisation (CIPFA) had expressed interest and provided a quote within budget, with the findings being presented to the Audit Committee in due course.
During the discussion that followed, Councillor Bowman gave a view that papers were not being issued when they should, don’t give the details Councillors require and meetings are not taking place when they should.
The Director of Financial Resources suggested these were points that should be picked up as part of the review, but agreed to look at meeting dates for the next year. He also stated that the officer reports aim to give Councillors a balanced position.
RESOLVED – that an independent external review of Internal Audit and the effectiveness of the Audit Committee be commenced.
Committee was advised by the Director of Financial Resources that as part of their audit of the 2017/18 financial statements the Council’s external auditors Grant Thornton made two recommendations to Council under section 24 schedule 7 of the Local Audit and Accountability Act 2014. The first recommendation was that ‘the Council should put in place robust arrangements for the production of the 2018/19, 2019/20 and 2020/21 financial statements, which meet statutory requirements and international financial reporting standards’.
Grant Thornton set out that in order to bring the Council’s financial statements up to date the Council must ensure that:
· sufficient resources and specialist skills are available to support the accounts production;
· the finance team has the skills and capacity to produce technically sound financial statements, with additional training provided where necessary, to ensure all staff involved in the accounts production process have the necessary technical knowledge;
· the financial statements and working papers are subject to robust quality assurance prior to approval by the Director of Finance;
· appropriate project management skills are in place to oversee the timely production of the financial statements;
· the entries in the accounts are supported by good quality working papers which are available at the start of the audit; and
· the production of the financial statements is monitored through regular reporting to Directors and the Audit Committee.
During the discussion that followed, Councillor Bowman asked if the Council was breaking any laws by delaying the accounts and was advised that Copeland had not been meeting statutory deadlines for years, but if the timetable was met, would be back on track by next year.
It was not good practice to be so far behind and was high on the risk analysis.
In a supplementary question Councillor Bowman asked if the Council would be open to a massive fine if this was put in black and white. In reply Committee was advised that this information was already in the public domain.
Gareth Kelly (Grant Thornton) assured the committee that Grant Thornton and the Council were working hard to get back on track. He stated that there were a small number of local authorities across the North West who still have audits open. He continued to explain the process and that there was a risk of continuing with unaudited accounts.
There was a real need to get back on track and the proposed timetable was challenging.
Councillor Hully asked if the audits would still go ahead if Local Government Review happened and Copeland no longer existed.
In response, committee was advised that whatever happened with the Local Government Review, these audits would be completed.
The Chair added that if the March 2022 target was met, we would go into 2022/23 in a good position.
Councillor Hully asked if any Officer or Councillor could be fined personally.
In reply, committee was advised that if Officers/Councillors had acted properly they would not be fined.
Councillor Meteer asked if the Finance team had sufficient staff and was assured it had.
He further asked ... view the full minutes text for item AU 20/31
The Director of Financial Resources introduced this report and reminded Committee that the Council was responsible for ensuring that its business was conducted in accordance with the law and proper standards and that public money was safeguarded, property accounted for and used economically, efficiently and effectively.
It had a set best value duty under the Local Government Act 1999, to make arrangements to secure continuous improvement in the way in which its functions were exercised, having regard to a combination of economy, efficiency and effectiveness. In discharging this responsibility, the Council was responsible for putting in place proper arrangements for the governance of its affairs, facilitating the effective exercise of its functions which included arrangements for the management of risk.
The Council had approved and adopted a Local Code of Corporate Governance, which was consistent with the principles of the CIPFA/SOLACE Framework for Delivering Good Governance in Local Government 2016.
Note: At this point Councillor Hully declared a non-pecuniary interest due to being Chair of Cleator Moor Town Council and also a member of Regeneration North East Copeland.
During the discussion that followed, Councillor Hailes noted that not all of the Council’s committees were shown in the report.
Councillor Meteer noted that the Overview and Scrutiny Performance Sub-Committee ceased to exist a few years ago.
Councillor Bowman asked how far the Council was in getting over the cyber attack and requested that the ICT manager be asked to give all members an update on this.
Councillor Hailes asked if committee meetings could be held via Teams and was advised that the Covid-19 regulations expired from 7 May 2021 and all meetings were to be held face-to-face again.
Councillor Weir asked how much the cyber attack had cost the Council and was advised it was approximately £2.5m
RESOLVED – that the draft Annual Governance Statement for 2019/20 be reviewed prior to its publication as a draft on the Council’s website and that it be noted that the Mayor and Chief Executive would sign the draft Annual Governance Statement prior to publication.
Gareth Kelly (Grant Thornton) presented his report to the Committee, which included oversight of the financial statements, materiality, value for money and whether there was a need to use any additional powers.
Gareth then took the committee through the significant risks identified in the agenda report in detail, providing additional information and clarification as required.
The fees being charged to the Council were then explained in detail.
During the discussion that followed, Councillor Weir asked about the property valuation, in particular, the Copeland Centre.
A detailed response was given by the Director of Financial Resources, who stated that the valuations issue was not solely the Copeland Centre and Gareth Kelly confirmed that this was a very complex area.
RESOLVED – that the
Gareth Kelly (Grant Thornton) presented his report to the Committee, which included progress in delivering their responsibilities as the Council’s external auditors. It also included a summary of emerging national issues and developments that might be relevant.
It was stated that the certification of the Housing Benefit Subsidy Claim was completed and it was a very positive report. This will be brought to the next meeting of this committee.
Committee was advised that from 2020/21 there would be a new Value for Money framework and that no ‘opinion’ would be given.
Another key change was a revised auditing standard from 2020/21.
As a result, the Audit Committee would require additional training and this should be timetabled by the end of 2021.
Grant Thornton had prepared a document ‘Accounting for grants in local government financial statements’ during Covid and it was requested this be circulated to the committee members.
RESOLVED – that the progress report be noted.
Date and Time of Next Meeting:
The next meeting of the Audit Committee will be held on
Thursday 12 August 2021 at 2:00pm.
(Subject to approval by Council at the AGM)
The next meeting of Audit Committee will be held on Thursday 29 July 2021, time to be confirmed (subject to confirmation by Council at the AGM).