Agenda and minutes

None.

An apology was received from Mr R J Sutton.

Members of the public wishing to take part should notify the Director of Resources in writing or by e-mail indicating the nature and content of their proposed participation no later than 9.00am on the working day before the meeting (in this case       ). Further details are available on the Council’s website. Enquiries can be made through the telephone number/e-mail address below.

None.

To confirm the Minutes of the meeting held on 21 March 2014. (previously circulated – pink pages)

RESOLVED that the Minutes of the meeting held on 21 March 2014 be confirmed as a correct record and signed by the Chairman.

The Committee considered the Annual Statutory Financial Statement for the year ending 31 March 2014.

The report indicated that the Statement of Accounts for the year ending 31 March 2014 had been completed and independently audited to meet the statutory deadline for the 2013/14 accounts to be formally approved by 30 June 2014. The County Council went a step further than what was required statutorily (approval by 30 September 2014) and ensured these were finalised, audited and approved by 30 June 2014.

The independent external auditor had indicated that they would issue an unqualified audit opinion subject to the Committee approving the statements and there being no matters arising from the public inspection period.

The two key headlines were:

·         An underspend against the County Council's cash limited revenue budget of £0.1 million, and

·         An decrease of £10.2 million in County Council useable reserves.

There were no further matters of substance that needed to be bought to the Committee's attention.

The Head of Corporate Financial Strategy introduced the report and made the following main points:

·         He thanked Grant Thornton for the smooth running of the audit which had been completed in a short timescale which was particularly impressive given the work associated with the Waste PFI contract

·         In overall terms, revenue spending was within delegated cash limits of £341 million; The Council's General Balances were at £13.0 million, a reduction of £2.1 million from  2012/13 (they were planned to be reduced by £2.2 million when the budget was set)

·         The Council's long term assets had been compared against its liabilities and overall debt levels had reduced over the last 3 years, and

·         The audit of the Pension Fund had been particularly successful and the external auditors had been complementary about the work undertaken by the Internal Audit pensions section.

Helen Lillington and Terry Tobin introduced the Audit Findings Report of the Council and the Pensions Fund and made the following points: 

·         The audit had been very positive and presented within the proposed timescale. Work was continuing in response to issues raised in relation to the Council's waste solution which would need to be finalised before a conclusion could be reached on the Value for Money (VFM) element of the work

·         A number of adjustments to the accounts related to Property, Plant and Equipment and although efforts had been made by officers to address the issues raised last year, further focus on this area of work was required

·         If any financial questions/objections were received during the public consultation period, it was possible that the accounts could not be signed off by the proposed closure date of 18 July. To date nothing had been received but there was still time. Any delay of this nature would not detract from the work that had been done to date

·         Given the large volume of correspondence from members of the public and the unique nature of the arrangements associated with the Energy from Waste contract, a detailed review of the process had been undertaken. Although  ...  view the full minutes text for item 303.

The Committee considered the Annual Governance Statement.

The Accounts and Audit Regulations 2011 required the County Council to conduct a review at least once a year of the effectiveness of its system of internal control and publish an Annual Governance Statement (AGS) each year with the Authority’s financial statements.  Responsibility for the review and approval of the AGS had been delegated to this Committee.

The purpose of the AGS process was to provide a continuous review of the effectiveness of internal control and risk management systems so as to obtain assurance of their effectiveness.

The Annual Governance Statement confirmed the overall assurance of the Council’s systems and had been signed by the Chief Executive and Leader of the Council.

In response to a query in the ensuing debate, the Head of Corporate Financial Strategy explained that the Worcestershire Partnership Executive Group was comprised of Chief Executives of all public sector groups in Worcestershire. The Group considered issues affecting all public sector organisations.

RESOLVED that the Annual Governance Statement be approved. 

The Committee considered an overview of changes made to the risk management processes.

The report indicated that the following developments to the risk management process had taken place and were approved by Future Fit Programme Board (FFPB) on 27 May 2014:

·     the Corporate Risk Register (CRR) had been reviewed and the number of risks reduced from 24 to 10

·     a Transformation Risk Register had been produced which included the 'shared risks' and also the top three transformation risks for each directorate

·     the risk register template had been amended to provide opportunity to make the CRR and Transformation Risk Register more dynamic documents

·     a rank had been set for each risk.  The rank had been calculated using the information provided by each directorate, and

·         an owner had been suggested for each risk.  The role of the risk owner was to take responsibility for the risk and to have sufficient authority to ensure that the risk was managed effectively.

The Risk Management Strategy had been reviewed and updated to support the revised approach for the management of both corporate and transformational risks.  The strategy included a revised corporate governance structure as well as roles and responsibilities for members, officers and staff throughout the organisation. The strategy was supported by a Guide to Managing Risk which provided information for managers on how to set and manage risk, enabling a consistent approach. The Risk and Business Continuity Manager was currently creating a forward plan for reporting risk management for the next twelve months.

In the ensuing debate, the following principal points were raised:

·         How did the Council determine its risk appetite? The Risk and Business Continuity Manager explained that the overall risk appetite for the Council would be signed off by Cabinet which would occur as part of the reporting process. Before it got to that stage, it was important that officers understood the implications for the Council

·         In an organisation that was innovative/trying new things, in other words having an appetite for risk, it should be expected that things might not go to plan

·         There were potential for conflicts between different areas of risk to arise, how were these tensions resolved? Risks were managed at Directorate level and periodically each Directorate discussed risk management and potential conflicts. If there were conflicts then the issue would need to be referred elsewhere eg. The Future Fit Programme Board

·         Was any account taken of the skills and experience of staff in terms of their willingness to take risks? The Risk and Business Continuity Manager commented that no specific approach to risk-taking had been instigated. However it was important to have the right people in the right posts therefore people's experience/skills in relation to commercial knowledge and contract expertise was taken into account as part of the evaluation of candidates for posts

·         It was proposed that a report be brought to the Committee meeting on 12 December 2014 with further reports being brought on a 6 monthly basis.

RESOLVED that:

a)    The changes made to  ...  view the full minutes text for item 305.

The Committee considered the Internal Audit Progress Report 2013/14.

In the ensuing debate, the following principal points were raised:

·         In the future, it would be beneficial for the Committee to receive more information about those audits that received limited assurance, in particular in relation to disaster recovery procedures. The Senior Manager – Internal Audit and Assurance commented that as the number of projects undertaken by the Council increased, it was important to establish whether the Council was achieving non-financial as well as financial savings. Internal Audit had taken a sample of projects and although the Council was good at achieving financial savings, more work was needed to provide non-financial savings. The savings were also focussed on individual directorates rather than being cross-directorate. There was also a lack of assurance that where projects had been completed, their outcomes were still being measured

·         What were the findings/concerns in relation to the audit review of the use of consultants? The Senior Manager – Internal Audit and Assurance commented that Internal Audit had carried out an audit of the use of consultants. The key issue was whether consultants were being contracted or brought in as an employee. The ongoing monitoring arrangements of contracts for external consultants were reported to the Senior Leadership Team on a regular basis. He would circulate a report on the use of consultants to members of the Committee 

·         How were the concerns about the contractual and monitoring arrangements for the Joint Commissioning Unit being addressed? The Senior Manager – Internal Audit and Assurance commented that although the Unit had received a Limited Assurance, internal audit were reviewing this complicated area of work to ensure that these arrangements had improved

·         Future Internal Audit reports should provide information on how high risk audits were tracked

·         The term "Moderate" had been used to determine a level of assurance. Would "significant" be a better term to use?  The Senior Manager – Internal Audit and Assurance responded that "Moderate" had been used in previous audits therefore it had been retained to enable clear comparisons with previous years.

RESOLVEDthat the Internal Audit Annual Report 2013/14 set out in the Appendix to the report be approved. 

The Committee considered the final Internal Audit Risk Assessment and Operational Plan 2014/15.

There had only been two small changes to the Plan since the last meeting: the omission of specific reference to Systems and Customer Access with regard to ICT audits; and the inclusion of care and support planning.

In the ensuing debate, the following principal points were raised:

·         How did the total of 1,800 proposed audit days for 2014/15 compare with previous years? The Head of Corporate Financial Strategy commented that the number of days had reduced as a result of a reorganisation in the way the Internal Audit function operated. However despite this reduction the service would be more efficient with a better product

·         How many audit days had been allocated to data recovery?  The Senior Manager – Internal Audit and Assurance commented that 50 days had been allocated to work related to ICT audits. PricewaterhouseCoopers would be undertaking 4 specific pieces of work on behalf of Internal Audit in this area.

RESOLVED that the content of the final Internal Audit Risk Assessment and Operational Plan 2014/15 set out in the Appendix to the report be approved.

The Committee considered its future work programme.

In the ensuing debate, the Head of Corporate Financial Strategy commented that as part of the Future Fit Programme, the role of Internal Audit would be considered for commissioning. He would report the outcome of the process to the meeting of the Committee in December with a progress report to the meeting in September. He also notified the Committee that he would be taking responsibility for Section 151 duties from 1 July 2014 onwards.

RESOLVED that:

a)   the work programme be noted; and

b)    a progress report on the commissioning of the Internal Audit section be brought to the September 2014 meeting with a final report to the December 2014 meeting.