Agenda and minutes

To note any substitution of Committee members made in accordance with Council Procedure Rules.

The following substitutions had been made in accordance with Council Procedure Rules:

Councillor S. Thusu for Councillor J. Boulton

Councillor S. McNamara for Councillor S. Kasumu

Apologies for absences were received from Councillors J. Boulton and S. Kasumu.

To confirm as a correct record the Minutes of the meeting held on 27 September 2021 (previously circulated).

The minutes of the meeting held on 27 September 2021 were deferred until the next meeting as Councillor J.P. Skoczylas raised an issue with accuracy which Officers agreed to investigate following the meeting.

To note declarations of Members’ disclosable pecuniary interests, non-disclosable pecuniary interests and non-pecuniary interests in respect of items on this agenda.

Councillor S.Thusu declared a non-pecuniary interest in items on the Agenda as a Member of Hertfordshire County Council.

Report of the Head of Public Health and Protection on the current strategic risks facing the Council, as determined by Corporate Management Team.  These risks have been reviewed in place for the quarter October to December 2021.

Members received a report of the Head of Public Health and Protection which provided the current strategic risks facing the Council as determined by the Corporate Management Team for the quarter October to December 2021.

Officers stated that there were no strategic risks to draw attention to but there had been a significant change in ownership whereby strategic risks were now going to the individual heads of service for ownership. A further review would take place in the next few months and it was noted that there would be changes to the strategic risk register.

The following points were raised and discussed:

·         Members questioned the Housing Maintenance probability score as it had not changed from the previous meeting in September and should have been higher. Members stated that they have not had assurance that the matter had been investigated properly.  Officers stated that the probability score of 2 was low and that weekly updates were produced to show where the checks were at present.

·         Members wanted an update on Housing Maintenance risk management as it had been 4 months since the last meeting.  Members stated there should have been an update on the matter.  Officers stated that they would email Members with an update on the issue.

·         Members questioned IT services and why it was in red and asked if the red status would continue in the future. In particular Members were keen to understand if the rating was due to critical failures within the IT systems associated with a high level of home working.  Officers stated that remote working did have a significant impact on the risk of attack, as both public and private companies adapted to working from home there were increased cyber attacks. However, the probability scores reflected the fact that the Council was regularly at risk of external threat. The Council did have strong controls in place and have implemented different measures over the years particularly recently with Microsoft tools particularly with emails. Members noted there was a vulnerability in quarter 3 where the team had responded really quickly, identifying the network that was affected and putting in patches. Officers stated that the probability of an attack increased during the pandemic and would need to be reviewed as the Council moved into the recovery phase.

RESOLVED

(unanimous)

The committee noted the current Strategic Risk Register and comments in respect of each risk shown.

Report of the Shared Internal Audit Service (SIAS) which provides details on the progress made by SIAS in delivering the Council’s Annual Audit Plan for 2021/22 as at 14 January 2022.

Report of the Shared Internal Audit Service (SIAS) in delivering the Council’s Annual Audit Plan for 2021/22 as at 14 January 2022. Proposed amendments to the 2021/22 Annual Audit Plan report were highlighted, as were the implementation status of previously agreed audit recommendations.  An update on performance management information was also provided.

Members noted that the 2021/22 Annual Audit Plan was approved by the Audit Committee at its meeting on 17 March 2021.

The following points were raised and discussed:

• SIAS had completed 5 audits with positive assurance outcomes and only two medium priority recommendations raised. It was noted that the table at 2.2 under assurance level were classified as ‘not assessed’, this was because it was a follow up audit and an assurance opinion was not re-issued. SIAS stated that they did follow up on the recommendations that were made in the previous audits that were undertaken.
• The paragraph at 2.4 captured amendments to the audit plan. This was essentially allocating additional time for contingencies to projects that were slightly larger than originally budgeted for. It was noted that the salary budgeting and monitoring project changed to look at financial regulations. This was in response to changes to the financial regulations and a desire to get some assurance on the implementations and applications of the changes, rather than look at salary budgeting which was deemed a lower priority.
• SIAS had added an additional advisory note to look at the ongoing management of the Mears contract with reference to changes made to contract management.   The Community Infrastructure Levy (CIL) had been removed due to the outcomes of the Local Plan, which meant the value of an audit in this area at this time was reduced.
• At paragraph 2.7, the remaining high priority recommendations resulted in building services asset management audit on corporate property. It was noted that it had been implemented to a satisfactory level. Many of the medium priority recommendations had now been implemented, although there were two medium priority recommendations where revised target dates had been added.
• It was noted that the table at 2.11 had been updated since the report had been written. The planned days had increased to 58%. It was noted that SIAS felt it may be challenging to reach 95% this year as there had been many disruptions, such as organisational change and restructure which resulted in 4 redundancies within the team. They will strive to reach as close to 95% as possible but the focus for the rest of the year was to ensure that they had completed enough work to be able to provide an annual opinion at the end of the year.
• It was noted that SIAS were required to have an external quality assessment every 5 years. This was with an independent assessor and took place in June 2021.The result of the assessment was a rating of ‘partially conforms’. This was mainly around the clarity of SIAS’s audit charter which was applicable across all partners. To rectify this, SIAS had  ...  view the full minutes text for item 20.

Report of the Head of Resources on the appointment of external auditors for the period of 2023/24 to 2026/27.

Report of the Head of Resources on the appointment of external auditors for the period of 2023/24 to 2026/27.

Councils were required under the legislation to appoint their own external auditors and the legislation set out two options for the Council:

·       The Council could run its own procurement exercise.

·       The Council could utilise the Public Sector Audit Appointments (PSAA), under the appointing persons regime (Local Audit (Appointing Person) Regulations 2015).

PSAA wrote to Councils in September 2021 to invite them to be part of the next procurement exercise which would seek to grant 5-year framework contracts. The Council needed to provide a response by 11 March 2022. The Council recognised that the current audit system was not ideal, with only 9% of local audits having been completed by the end of September. The areas raised in review were being considered as part of the national exercise including trying to widen the pool of potential firms that could bid for the work. Direct procurement had been considered but given the local government audit market it was unlikely that this would be the best means of securing an external auditor.  Direct procurement would be resource intensive to administer and would see the Council looking to draw from the same pool of auditors that would be bidding for work under the national scheme.

The following points were highlighted and noted:

·       Members thought it was a good organised scheme.

·       Members asked why would the Council not go with the scheme and was it value for money? Officers stated that some Councils had considered moving away from the national scheme given some issues that had arisen.  The national market for audit had come under scrutiny recently with a number of Councils failing to have their accounts audited by the deadline as set out in the statutory guidance. Also, there were some Councils that are blaming the issue on the auditors undertaking the work, and felt a more direct procurement approach may provide them with better contract management controls.   The Council recognised that regardless of whether they opted for direct procurement or joined with the national scheme, the Council would attract the same pool of auditors.  Officers advised that joining the national scheme would provide better value for money and offer a higher quality of service with the controls in place to manage contracts.

RESOLVED:

(unanimous)

That Audit Committee recommended to Council that the Council opts into the appointing arrangements made by Public Sector Audit Appointments for the appointment of its external auditors for the years 2023/24 to 2026/27.