Agenda and minutes

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Items
No. Item

1.

Variation of Order of Business

2.

Declarations of Interest

    Members are required to declare any disclosable pecuniary, personal or personal and prejudicial interests they may have and the nature of those interests relating to items on this agenda and/or indicate if S106 of the Local Government Finance Act 1992 applies to them.   

    Minutes:

    There were no declarations of interest.

3.

Minutes pdf icon PDF 78 KB

4.

Work Programme 2017/18 and Task and Finish Groups pdf icon PDF 440 KB

    To consider the Audit and Governance Committee’s draft work programme for 2017/18.

    Minutes:

    Members of the Committee considered the Audit and Governance Committee’s Work Programme for 2017/2018.

     

    In considering the Work Programme a Member requested that an Annual Report on the complaints received under the Code of Conduct for Elected Members be included.

     

    Members discussed the possibility of appointing 3 Study Groups for Section 106 Planning agreements, Highways and Governance related matters.

     

    DECISION:  (1) The Audit and Governance Work Programme 2017/2018 be noted.

    (2) The Interim Director of Resources be requested to include an Annual Report regarding the complaints received under the Code of Conduct for Elected Members onto future Work Programmes.

    (3) The Clerk be requested to arrange a meeting to progress the Study Group proposals as discussed.

5.

ICT Resilience Presentation

    To receive a presentation regarding ICT’s resilience.

    Minutes:

    The Committee received a presentation from The Management Information Systems Portfolio Manager regarding ICT’s response to the Cyber Security Audit which took place on 4th July 2017.

     

    The Committee were advised of:

     

    ·         The reasons for the audit;

    ·         Good practice;

    ·         Areas of improvement;

    ·         High priority issues, risk and management action;

    ·         Medium priority issues, risk and management action;

    ·         Low priority issues, risk and management action.

     

    In considering the presentation clarification was sought regarding who the designated person(s) was within the authority to approve access to systems for a Councillor and what policies were in place to determine the level of access to which systems could be authorised.

     

     

    DECISION:  (1) The presentation be noted.

    (2) The Interim Director of Resources be requested to forward a response to the questions raised.

6.

Risk Based Verification Policy pdf icon PDF 107 KB

    To note the Risk Based Policy update.

    Minutes:

    The Committee considered a report of the Chief Finance Officer that presented the ‘Risk Based Verification’ (RBV) Policy for Housing Benefit and Local Council Tax Support Claims for consideration by this Committee.  Members were advised that the policy had been approved by Cabinet on 3rd August 2015. The purpose of the RBV policy was to specify how Revenues and Benefits would operate an RBV approach to handling claims and to detail the controls and processes that needed to be followed to maximise its effectiveness.

     

    The Committee were advised that following the publication of Department for Work and Pensions Circular HB/CTB S11/2011, local authorities were able to implement a ‘risk-based’ approach to verifying claims. The main benefits associated with this approach were two-fold: for low-risk cases it would be possible to ‘fast track’ applications, which could then deliver service improvements to the customer along with cost efficiencies for the service; and for high-risk cases it would be possible to more accurately detect fraud and error at the time claims entered the system. The circular extended the RBV approach on a voluntary basis to all local authorities with effect from April 2012.

     

     RBV was a method of applying different levels of verification checks to benefit claims according to the predicted risk associated with those claims. Councils adopting RBV are would still be required to comply with relevant legislation relating to the production of supporting National Insurance documentation (i.e. to provide evidence of identity for all cases), including those identified as low risk; whilst making use of greater intelligence to target more extensive verification activity on those claims predicted to be at greater risk of fraud and error.

     

    DECISION:  (1) The Committee noted the Risk Based Verification (RBV) Policy for the processing of Housing Benefit and Local Council Tax Support Claims;

    (2) The Committee agreed that further update reports to Audit and Governance Committee were not required and the Risk Based Verification Policy be amended accordingly and that a report to Audit and Governance Committee would only be submitted if specific issues were to arise in the application of the Policy in the future.

7.

Internal Audit Quarter 4 Report 2016/17 pdf icon PDF 201 KB

    To note the Internal Audit Quarter 4 report and evaluate the work undertaken by the Internal Audit Team.

    Minutes:

    The Head of internal Audit reported to the Committee summarising the work of the Internal Audit Team during the fourth quarter period of 2016/17. This report is to enable the Audit and Governance Committee, in accordance with their work programme and overall responsibility for governance, to scrutinise Internal Audit coverage during the fourth quarter of 2016/17 on all Services within the Council. The work of RBC Internal Audit is governed by the UK Public Sector Internal Audit Standards

     

    Internal Audit was able to provide either substantial or adequate assurance over the effectiveness of risk management in all but one audit. The exception was a limited audit assurance relating to a school which was primarily due to weaknesses in financial management specifically in relation to the control over dinner money. In this regard we can confirm that financial management and control over dinner money has now significantly improved following additional support provided to the school.

     

    Internal Audit also highlighted issues relating to the management of a site demolition contract whereby Contract Procedure Rules were not adhered to and significant costs were incurred which were well in excess of budget or expectation.  Discussions focused on procurement issues associated with this contract and Internal Audit confirmed a follow up audit would be completed to confirm that agreed actions were completed promptly. Members also requested that STAR attend a future meeting to provide an update on developments within the area of procurement.

     

    DECISION: (1) The report be noted and

    (2) The Head of Internal Audit be requested to ensure that a follow up review relating to the contract management audit as detailed in 7.3 of the submitted report be completed and included in a future update to the Committee.

    (3) STAR Procurement be invited to deliver a presentation at a future meeting of the Committee and The Deputy Leader & Cabinet Member for Corporate & Resources and Assistant Director (Place) also be invited. 

8.

Internal Audit Annual Report 2016/17 pdf icon PDF 315 KB

    To note the findings, conclusions and the overall opinion expressed by the Head of Internal Audit.

    Additional documents:

    Minutes:

    The Committee considered a report of the Head of Internal Audit which summarised the work of Internal Audit during 2016/17 and presented the Head of Internal Audit’s opinion on the effectiveness of the Council’s overall control environment, governance and risk management for 2016/17.

     

    Members were advised that 96% of the planned audit work that was completed during 2016/17, audit assurance opinions issued on the adequacy of the internal controls were recorded as ‘adequate’ or ‘substantial’ in 93.1% of cases. Four audits were awarded ‘limited’ assurance opinions but none of these were considered to be significant in the wider context of the overall system of internal control and did not relate to the programme of material system audit reviews.

     

    The Head of Internal Audit concluded that the Council’s overall control framework remained adequate and had generally been complied with.

     

    DECISION: The findings, conclusions and the overall opinion expressed by the Head of Internal Audit be noted.

9.

Internal Audit Annual Fraud Report 2016/17 pdf icon PDF 154 KB

    Members to evaluate the effectiveness of the anti-fraud policy.

    Additional documents:

    Minutes:

    The Committee considered a report of the Interim Director of Resources which provided a summary for those charged with responsibility for governance on the outcome of proactive and reactive anti-fraud and investigation work during 2016/17, with the main focus being work delivered by Internal Audit, which now also included the Council’s Counter Fraud Team. It also outlined some of the areas of emerging fraud risk and the Council’s strategic and operational arrangements for managing these risks.

     

    Members were updated in relation to the key issues arising and outcomes achieved during the year.

     

    The Members proposed a vote of thanks to the Counter Fraud Team for the work undertaken and savings achieved during 2016/17.

     

    DECISION:  The report be noted.

10.

Risk Management Annual Report 2016/17 pdf icon PDF 119 KB

    To note the report and confirm the level of assurance provided through Risk Management work of the management of risk.

    Additional documents:

    Minutes:

    The Committee considered a report of the Interim Director of Resources which summarised the Risk Management work undertaken during the 2016/17 year. The report highlighted the significant progress made to improve the risk register system and provided updated guidance on methods to record and manage Service risks effectively.

     

    Members were informed that the corporate risk register continued to be proactively managed by the Leadership Team through regular risk reviews. and that the coverage of service risk registers had responded to changes to the Council structure, including development of a new register to incorporate the management of integrated care services under the Rochdale Locality Plan.

     

    It was reported that the tender for the whole insurance programme was successfully completed at renewal date in June 2017, including the communication of a wide range of positive risk information to promote the quality of our risk profile.

     

    The 2016 risk management self-assessment process undertaken by all Council Services contributed to the governance of risk management. An overall compliance score of 76.0% was viewed as positive following improvements made to risk monitoring procedures. Action had already been taken by all Service teams to address any gaps identified by their individual assessments.

     

    DECISION: The report be noted.

11.

External Audit Findings Report (including Audit and Opinion) pdf icon PDF 688 KB

    The Interim Director of Resources to report.

    Minutes:

    The Committee considered a report of the external auditor, Grant Thornton UK LLP, that highlighted the key matters arising from their audit of Rochdale Borough Council's financial statements for the year ended 31st March 2017 in accordance with the requirements of International Standard on Auditing (UK & Ireland) 260, and the Local Audit and Accountability Act 2014.

     

     Under the Audit Commission's Code of Audit Practice Grant Thornton LLP were required to report whether, in their opinion, the Council's financial statements presented a true and fair view of the financial position and expenditure and income for the year and whether the statements have been prepared properly in accordance with the CIPFA Code of Practice on Local Authority Accounting. 

     

    The external auditors were also required to consider other information published together with the audited financial statements and whether it is consistent with the financial statements and in line with required guidance and whether the Council has made proper arrangements to secure economy, efficiency and effectiveness in its use of resources.

     

    The external auditor concluded on the basis of our work, having regard to the guidance on the specified criteria issued by the Comptroller and Auditor General in November 2016, we are satisfied that in all significant respects the Authority put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2017.

     

    In response to queries from Members, The Assistant Director (Finance) clarified the situation regarding the “Lender Option Borrower Option” (LOBO) loans, emphasising the potential risks to the authority if the Council withdrew from the scheme.    

     

    DECISION: The Audit Findings (ISA260) Report for Rochdale Borough Council, including the clean opinion in respect of the Value for Money conclusion, be noted.

12.

Annual Governance Statement Year Ending 31st March 2017 pdf icon PDF 120 KB

13.

Statement of Accounts 2016/17 (and Letter of Representation) pdf icon PDF 94 KB

    The Interim Director of Resources to report.

    Additional documents:

    Minutes:

    The Committee considered a report of the Interim Director of Resources that sought approval of the Council’s audited statement of accounts for 2016/17.  On approval, there was a statutory requirement for these to be published by 30th September 2017.

     

    The unaudited statement of accounts for 2016/17 had been approved by the Chief Finance Officer on 31st May 2017 and made available for public inspection up to 10th July 2017, during which time questions and objections could be received by the District Auditor.  As a consequence of the audit undertaken by the Council’s external auditors, Grant Thornton UK LLP, a small number of changes to the statement of accounts, detailed within the submitted report, had been made in agreement with the external auditors.

     

    The Statement of Accounts 2016/17, together with the management representation letter to Grant Thornton UK LLP expressing the Council’s opinion that the financial statements gave a true and fair view, were contained within the submitted report. 

     

    In considering the report Members sought clarification regarding re-evaluation of the Manchester Airport shares and Section 106 monies as well as the £5 million assets referred to in the report.

     

    DECISION: The Rochdale Borough Council audited Statement of Accounts 2016/17 be approved;

    (2) The Management Representation letter be approved.

14.

Audit and Governance Committee Annual Report 2016/17 pdf icon PDF 92 KB

    To consider the draft Annual Report for 2016/17 prior to its submission to Full Council on 11 October 2017.

    Additional documents:

    Minutes:

    The Committee considered a report of the Head of Internal Audit advising that, in order to comply with best professional practice, the Audit and Governance Committee should complete an annual report to the Council on the work undertaken by the Committee during the previous year.  A draft Annual Report for 2016/17, prepared by the Chair in consultation with the Head of Internal Audit, was submitted for consideration.

     

    In considering the report, a Member of the Committee requested that future Annual Reports include representations of the Standards work undertaken by the Committee as discussed earlier in relation to the work programme item. 

     

    DECISION: (1) The Draft Annual Report for 2016/17 by the Audit and Governance Committee be approved and submitted to Full Council on 11 October 2017.

    (2) The Standards work undertaken be reflected in future Annual Reports to Council.