Agenda and minutes
Venue: County Hall, The Rhadyr, Usk, NP15 1GA
Contact: Democratic Services
Declarations of Interest
No declarations of interest were made.
Public Open Forum
No members of the public were present.
To note the Action List from the previous meeting PDF 277 KB
The action list from the last meeting was noted.
1. Key collaborations: The Performance and Data Insight Manager provided an update to the Committee that a draft list of key collaborations was complete ready to share with Internal Audit and the Strategic Leadership Team prior to adding to the Forward Work Plan.
Action Status: Open (Recommend to Close - 24th November 2022)
2. Cross-referencing Reports with the Committee’s Terms of Reference: The Chief Internal Auditor will review Governance and Audit Committee reports against the Committee’s terms of reference. Going forward, he will ensure that reports on the Forward Work Plan have a cross reference.
Action: Open (Ongoing until March 2023)
3. Internal Audit Outturn Report:
i) Invite service managers to next meeting re: Limited Opinions (Concessionary Travel) and Fleet (Health and Safety and Driver Management): This item is on the agenda for today’s meeting.
Action Status: Closed
ii) Provision of Fraud figures (not percentages): The Chief Internal Auditor
advised that the information has been collated and commentary added to circulate to Committee Members.
Action status: Open (Recommendation to Close – 24th November 2022)
4. Action List: The action list has been reformatted
Action status: Closed
5. Statement of Accounts:
i) The Acting Assistant Head of Finance stated the amendments have been made and the document will be finalised by this Committee at the next meeting.
Action status: Open (Recommendation to Close – 24th November 2022)
ii) 20mph speed limit scheme and funds availability for scheme reversal: A response will be circulated by the end of the week.
Action: Open (Recommendation to Close – 24th November 2022)
6. Audit Wales Quarterly Update and Timetable: The Audit Wales Assurance and Risk Assessment report is on the agenda for the meeting today.
Action status: Closed
7. Audit Wales Springing Forward Report:
i) The Chief Internal Auditor and Deputy Chief Executive are meeting with the Chair; scrutiny arrangements for the people and asset strategies will be discussed.
Action status: Open
ii) The Chair will discuss progress against interim key milestones at the above meeting.
Action status: Open
iii) Update and Completion of Corporate and Community Plan: The Performance and Data Insight Manager explained that the Plan is on the agenda for Cabinet next week and will be considered by Council on 27th October 2022. The Plan sets an initial direction to be further developed. The full Plan is scheduled for publication in early 2023 alongside the budget.
Action status: Open
8. Whole Authority Strategic Risk Assessment
The Chair offered support on the actions listed at the last meeting to close them by the end of the calendar year. The Performance and Data Insight Manager explained that the Risk Register’s revised format will take account of the comments made and a draft version will be shared with the Chair.
The Housing risk has been re-assessed as “High”. The risk register has been amended accordingly.
Action status: Open (Recommendation to Close – 24th November 2022)
9. Scheduling meetings closer to ... view the full minutes text for item 3.
Anti bribery Risk Assessment PDF 213 KB
The Deputy Chief Executive provided a presentation on the arrangements in place for anti-fraud, bribery and corruption. The Chief Internal Auditor confirmed that Internal Audit considered the CIPFA tracker report and data analysis to identify key frauds nationally, their relevance to Monmouthshire and to ensure appropriate mitigation is in place. Following the presentation, questions and feedback were invited:
· A Member asked about cyber risk, specifically:
- if staff training and refresher courses are available;
- if it is mandatory for relevant staff;
- how the profile of anti-fraud, bribery and corruption is raised with staff; and
- if there is a whistleblowing policy.
The Deputy Chief Executive confirmed the existence of a whistleblowing policy; communicated to staff upon induction. It was accepted that the training is a work in progress, also the degree to which it is mandatory. Work is in hand to introduce a new learning management system to assess individual training needs, including mandatory training for each role.
The Chief Internal Auditor informed the Committee that the draft training for anti-fraud, bribery and corruption had been presented to the previous Committee and was rolled out to Internal Audit and Procurement staff. There is further refinement required before further roll out to all relevant staff. The Anti-fraud, Bribery and Corruption Policy is available on the Intranet and will be on the Internal Audit page on The Hub. The Whistleblowing Policy is available on The Hub should a member of staff wish to report concerns. Induction training will include online anti-fraud, bribery and corruption training.
Regarding cyber risk, the Deputy Chief Executive noted that this is contained in the Strategic Risk Register. An annual report on the Management of Cyber Security is on the Forward Work Plan and the previous report will be made securely available to committee members.
· A Member asked if there is enhanced vetting for key staff. The Deputy Chief Executive explained that safeguarding checks are made via DBS (Disclosure and Barring Service). There are no financial checks or checks for criminal activity. The Deputy Chief Executive will contact the Member outside the meeting to discuss further.
· A Member enquired about any benefits or impact on procurement due to the collaboration with Cardiff City Council. The Deputy Chief Executive explained that it is proving to be a good collaboration that has enhanced capability and expertise. Other councils in the region are now considering the same arrangement. It was explained that the procurement strategy is scrutinised by the Performance and Overview Scrutiny Committee. The Chief Internal Auditor explained that audits include checks on compliance with council policies and procedures including the Contract Procedure Rules and Financial Procedure Rules.
· A Member queried if there is a user-friendly guide for raising concerns (including a process to determine the level of concern). The process for members of the public to raise concerns was questioned. The Deputy Chief Executive informed the Committee that the policy will be updated this financial year to include simple guidance. The Chief internal Auditor explained that there ... view the full minutes text for item 4.
Audit Wales: Assurance and Risk assessment review and Management Response PDF 385 KB
The Audit Wales Officer introduced the Audit Wales Assurance and Risk Assessment Review of Monmouthshire County Council. The Council’s Management Response was provided by the Performance and Data Insight Manager. Following presentation of the report and the Council’s Management response, questions were invited:
· A Member queried the recommendations of the net zero strategy especially the elements included in the new Community and Corporate Plan with a proposed completion date of July 2023. It was questioned how much had been incorporated into the interim plan and what is to be developed for the longer plan, and medium-term financial strategy. The Head of Policy, Performance and Scrutiny responded that the new Community and Corporate Plan will be considered by Cabinet next week, then by Council. The Plan is relatively light touch adjusting the direction of the budget set by the previous council. There are many ideas and contributions yet to be considered and possibly added to the final version which will be aligned with the new budget. Poverty and inequality, and decarbonisation and climate change are the two overriding priorities and will be aligned with any resetting of the climate and nature emergency strategy to embed in further actions.
· In response to a question, the Deputy Chief Executive explained that there is not an explicit management response to the points raised by Audit Wales on the Medium Term Financial Strategy as the Council has separately provided a management response to the recommendations contained in an Audit Wales financial sustainability review confirming our strategy for medium term sustainably; this can be circulated separately. The Audit Wales Officer confirmed that there are no recommendations on medium term financial planning in this report because there are two outstanding proposals for improvement in the previous financial sustainability report. These relate to more sustainable savings planning. Officers assured that once the new council was in place there would be a new medium-term financial plan containing a longer-term approach to savings planning. Progress will be reviewed at the end of this financial year.
· A Member asked where the boundary of carbon footprint is drawn referring to the energy consumed working from home, as that element needs to be accounted for. The Head of Decarbonisation, Transport and Support Services said that there is a standard carbon baseline assessment for all public sector that includes commuting. The matrix does not yet include working from home but there has been a discussion with WG on factoring this in. The Member suggested this was an aspect Welsh Government and Audit Wales should consider. It was confirmed that an update on last year’s carbon baseline assessment will be presented to Council in December 2022.
The Chair commented that after due consideration, the Council’s Management response is adequate. He noted the significant financial challenges facing the Council which may impact the timetable for completing some of these actions.
Annual Grants report PDF 304 KB
The Audit Wales Officer presented the Annual Grants Report that summarises the key findings of Audit Wales’s work on claims and returns for 2020/21. The report is delayed this year because of Housing Benefit work, and due to the pandemic. Following presentation of the report, questions and comments were invited:
· A Member asked if Audit Wales is generally satisfied with the standard of reports, and if there were any common or repeated issues that management should be addressing. It was confirmed there are no recurring themes year on year. Housing benefit claims are complex to audit and frequently, different issues appear. There is a good relationship with the Benefits Team and no specific concerns.
· A Member asked and was informed that the Benefits Team is alerted to underpaid benefits to ensure the correct payments reach claimants.
· A Member referred to the NNDR (National Non-Domestic Rates Return) and problems identifying empty properties for payments. The authority is required to verify empty properties ready for claims but, due to the pandemic, were unable to go out to confirm properties were empty for the entire period being claimed. This was the same for all authorities. There were other sources of evidence that provided some assurance.
· Noting four of five claims were qualified, a Member asked about the outcomes. Audit Wales submits findings to the grant paying bodies and it is their decision to act. The Deputy Chief Executive confirmed that the amounts are trivial, so comeback was unlikely. Overall, there is a good control environment. The Audit Wales Officer will feed a message back to suggest that grant awarding bodies have a minimum threshold.
Summing up, the Chair drew comfort from the report’s conclusion in that there were sound arrangements in place and noted that the qualified opinions were solely due to the identification of a few minor, technical breaches.
Invitation of officers & Heads of Service regarding Limited Opinions PDF 461 KB
The Chief Internal Auditor introduced the report on limited opinions explaining that the Governance and Audit Committee had invited Service Managers and Heads of Service to provide an update on progress. The Committee had the option to accept the assurances provided which will be verified with a follow up report as included in the Audit Plan or if explanations from the Managers are not accepted, then the Committee can raise concerns with the Chief Officer and SLT to escalate their concerns.
1. Concessionary Travel:
i) Hardship payments totalling over £46k had been claimed from Welsh Government which had not been invoiced for by the operators or paid over to them: The Passenger Transport Unit Manager explained that the report is focused on a Local Government Concessionary Travel Scheme funded by the Welsh Government. During the pandemic Welsh Government agreed that operators were to be paid at pre-pandemic levels to provide sustainability of bus services. At time of the audit these payments were being paid to the operators. The limited opinion regarding payments of £46,000 being claimed from Bus Emergency Scheme 2 (BES2) but not paid out links into other grant funding schemes. The money to be repaid was from English corporate operators who were going to sign up to the BES2 scheme, but they had funding from the Department for Transport instead. This was added to the claim as it was close to the end of the financial year (unknown if they would apply) and the money was repaid to the Welsh Government in full. The issue won’t recur as, from 1st August 2022, Welsh Government has returned to actual claims not historic. The money had been accrued before for this financial year and now it has been paid back to Welsh Government at Quarter 4.
ii) Quarterly Claims: The Passenger Transport Unit manager explained that there has been an issue with signing off forms to send to Welsh Government at the end of the quarter with a deadline of the 20th of the following month. This allows little time to receive details from the operators and return the form. Addressing the comment that they were submitted without the signature of the s151 Officer, this was confirmed as correct as these were draft reports. The audit process is that the finance team checks to make sure the ledger agrees with the return. The return can then be signed by the s151 Officer. Previously, it was only the final return that was returned to Welsh Government with signature by the s151 Officer. The quarterly returns were signed by the Head of Service. An e mail from Welsh Government explained that the 20th day of the following month for the submission of concessionary fare claim forms was chosen as half of the authorities submitted either a final or a draft version of the claim form within that timescale but Welsh Government understood that when the operators return the information affects when an authority can submit a final signed form. There ... view the full minutes text for item 7.
Audit Wales Work Programme: Council Progress Update PDF 577 KB
The Performance and Data Insight Manager introduced a report to provide a quarterly update on the Council’s progress against the Audit Wales Work Programme and its management response to relevant recommendations for local and national reports. Following presentation of the report, questions from Committee Members were invited:
· The Chair referred to the current economic position and emphasised the importance of officers further strengthening key elements of the Medium-Term Financial Plan (MFTP). Continuing, the Chair suggested that the MTFP needed to be based on a range of plausible scenarios and subject to stress testing. It was the Chair’s opinion that the Committee doesn’t have sufficient visibility over the end to end MTFP process nor an understanding of the key financial operational assumptions underpinning the plan.
Regarding proposed savings to deliver a balanced budget, the Chair advised that it is essential that the Committee understands where these cost savings will be made and to gain assurance from officers that this does not materially impact levels of internal control, governance or other matters that appear on our work programme.
The Chair will raise these points with officers.
The Deputy Chief Executive stated that there is a level of assurance provided to the Governance and Audit Committee around the budget process. Last year the S151 officer opinion statement was presented to the committee ahead of the budget being approved so the committee could reassure itself of the robustness of the budget process and the adequacy of reserves. If the Committee wants to strengthen assurance, a Cabinet report can be made available that provides context and an outline of the budget process. Additionally, the MTFP strategy will be presented to Council in December/January and a draft version can be presented to the committee.
· A Member commented that considering measures to close budget gaps or anticipate what will happen over the next four years is difficult for this committee and suggested that scrutiny committees would be better placed to consider this on an ongoing basis.
The Chair, Chief Internal Auditor and Deputy Chief Executive will meet on Monday to consider more fully the Committee’s role in reviewing the MTFP and budget recovery plan with a specific emphasis on ensuring its work complemented that of the Performance and Overview Committee). It was considered that the Governance and Audit Committee should focus on control and process when discussing the budget to assure itself of the means by which savings are identified, how risk and consequences are assessed as a result of that and financial sustainability over the medium term. Some discrete elements fall to this committee, others to the Performance and Overview Scrutiny Committee.
· A Member, referring to national studies, asked where the response to net zero fitted in the scrutiny process. It was confirmed that the response to climate emergency strategy action plan falls to the Performance and Overview Scrutiny Committee.
The Chair, in summary said the Committee carefully reviewed the progress made in addressing the points made by Audit Wales and is generally satisfied with the ... view the full minutes text for item 8.
Governance and Audit Committee Forward Work Plan PDF 265 KB
The Governance and Audit Forward Work Plan was noted
· The Deputy Chief Executive highlighted the potential risk to the closure of the audit process on the accounts from being finalised that may affect presentation to Committee in November. CIPFA was consulting its members and local authorities in terms of infrastructure assets and FRAB (Financial Reporting Advisory Board) has drawn some conclusion that is not helpful. Audit Wales and Welsh Government need to work through some matters and that might impact on the audit process. An update from Audit Wales was requested.
· The Q3 Internal Audit Progress report was moved from March to February 2023.
To confirm minutes of the previous meeting held on 8th September 2022 PDF 514 KB
The minutes of the previous meeting held on the 8th September 2022 were confirmed as an accurate record.
The agenda item will be amended to “approve” instead of “confirm” the minutes in future.
To note the date of the next meeting as 24th November 2022 at 2.00pm