Venue: via Zoom
Contact: Jonah Anthony
To confirm as a correct record the Minutes of the meeting held on Wednesday 20 January 2021 (previously circulated).
The Minutes of the meeting held on 20 January 2021 were agreed as a correct record and noted by the Chairman.
Report of the Corporate Director (Public Protection, Planning and Governance), which brings to Members’ attention the current strategic and top operational risks facing the Council, as determined by Corporate Management Team and Heads of Service. These risks have been reviewed at the performance clinic in February 2021 and reflect the assessments in place for the quarter January to April 2021
Members received a report of the Corporate Director (Public Protection, Planning and Governance), which provided the current strategic and top operational risks facing the Council, as determined by the Corporate Management Team and Heads of Service. These risks had been reviewed at the February Performance Clinics. Members noted that the Brexit risk had now been removed.
That the current Strategic Risk Register and top operational risks be noted.
Report of the Shared Internal Audit Service which provides an update on the progress in delivering the Annual Audit Plan for 2020-21 as at 5 March 2021.
Members received a report of the Shared Internal Audit Service (SIAS) which provided an update on the progress in delivering the Annual Audit Plan for 2020-
21 as at 5 March 2021.
The following points were raised and discussed:
· As of 22 March 2021, an update to the table at paragraph 2.10 of the report showed that 272.5 planned days had been delivered (a success rate of 98%); and 22 out of 23 reports had been delivered (a success rate of 96%). This was an excellent achievement given the disruption in 2020-21 and was only achieved with the cooperation and engagement of Officers, in particular the Head of Resources and their team
· Members noted that SIAS will be adopting new wording for assurance ratings included in internal audit reports, in response to new guidance provided by the Chartered Institute of Public Finance and Accountancy (CIPFA). These changes were seen as minor adjustments to the existing SIAS rating which had already adopted a four-tier rating system with similar definitions. The main change would therefore be replacing Good and Satisfactory Assurance with the new ratings of Substantial and Reasonable Assurance. Changes will take effect in reports from April 2021
That the contents of the report be noted.
Report of the Shared Internal Audit Service which sets out a programme of internal audit work for the year ahead (2021-2022).
Members received a report of the Shared Internal Audit Service (SIAS) which provided details of the proposed programme of internal audit work for 2021-2022.
The following points were raised and discussed:
· There had been a reduction of 5 planned days, down to 300 days, but there were no concerns that this would impact on the work planned
· The planning process involved consideration of a number of standard elements, including horizon scanning on the impacts and issues facing local authorities, review of the Council’s risk register and engagement with each Heads of Service to better understand their key risks and priorities for the coming year. This led to a prioritised list of areas which had been included in the proposed internal audit plan
· A slightly different approach would be taken for 2021-22, in that the first six months were fixed, but the plan for the second six months would be reviewed in August and September to allow the approach to the second half of the year to be adjusted in response to events and changes in objectives, priorities and project delivery in service areas. The intention was to bring any proposed changes to the internal audit plan to the September Audit Committee meeting
· Key performance indicators would remain the same
· With regards to unexpected/black swan events, the Committee considered the merit of utilising one or one and a half days to look at the Council’s ability to withstand such unknown and unforeseen events. There were concerns that such a short period would not provide enough value/assurance (compared to a full audit), and emphasis was needed on good risk management and business continuity work. Members noted that the Council’s response to Covid-19 would be reviewed, and should cover some of these issues
· Members noted the reduction in contingency days from five to zero in the plan. SIAS explained that about three and a half days would be carried over from 2020-2021 and would provide some contingency. There was also an expectation further days would be returned to contingency. This was in addition to the new approach of reviewing the internal audit plan for the second half of the year in August and September. This would allow for adjustments to be made in the first and second half of the year
· SIAS assured Members that whilst all the internal audit work in 2020-2021 had been undertaken remotely, technology and frequent engagement had minimised disruptions and allow the work to be completed successfully
That the 2021/2020 Internal Audit Plan report be noted.
Report of Ernest & Young LLP providing the Council’s Audit planning report for the year ended 31 March 2021.
Members received the External Audit Planning report from Ernst & Young LLP which provided the Audit Committee with a basis to review the indicative audit plan for year ended 31 March 2021.
The following points were highlighted and noted:
· Impact of the Covid-19 pandemic can be seen in the delay in completing the external audit for 2019-2020, and subsequent delayed start and proposed phased working on the 2020-2021 programme
· Content impact of the Covid-19 pandemic could be seen in the continued focus on and risk assessment of, the valuation of property, including investment properties; and the going concern assessment. The external auditors would also review the Council’s administration of Covid-19 related grant schemes as this was a new area of activity
· A revised International Standards on Auditing (ISA) standard on Estimates and the Council’s inclusion of a number of material provisions in its financial reporting had led this to be a new area for the external audit to focus on
· Another new area of focus would be the treatment of Now Housing Limited in any group accounts if required
· Members noted that the planning materiality remained the same (£2.6million), with performance materiality set at £1.9million, which represents 75% of materiality
· Members noted that the National Audit Office had issued a new Code of Audit Practice. This sets out how local authority auditors are expected to approach and report their work on value for money (VFM). Members were reminded that the objective of this work was for external auditors to provide assurance that there were arrangements in place to ensure value for money was achieved. It was noted that going forward there would be reporting and assurance against three new specified criteria on the arrangement the Council has in place to secure value for money. The specified criteria were: financial sustainability; governance; and, improving economy, efficiency and effectiveness
· Audit fees had yet to be set, but would need to reflect changes in scope and work required to be undertaken
A question was raised and asked of the external auditor on whether there was any examination of any issues related to the Campus West Car Park. The external auditor confirmed that correspondence had been received from an elector, enquiries had been made to and information received from the Council, a response was being drafted and reviewed internally by the firm, and that the external auditors would respond to the elector when they were ready to do so.
In response to a question, the external auditors assured Members that despite the sudden switch to remote working in March 2020 presenting challenges, the move towards more electronic communication and data collection over a number of years had minimised the disruption caused by the Covid-19 restrictions. There were still issues with non-electronic copies of documents, mostly related to legacy contracts and agreements, but this was becoming less common.
That the External Audit Planning Report by Ernst and Young LLP be noted.