Agenda, decisions and minutes

Virtual Meeting (At present, members of the public are not able to attend), Audit and Governance Committee
Tuesday, 1st September, 2020 2.00 pm

Venue: Virtual Meeting

Contact: Ann Holmes 01248 752518 

Items
No. Item

The Chair welcomed all those present to this virtual meeting of the Audit and Governance Committee.

1.

Declaration of interest

To receive any declaration of interest by any member or officer in respect of any item of business.

Minutes:

Councillor Peter Rogers and Mrs Annwen Morgan, Chief Executive both declared a prejudicial interest with regard to item 4 on the agenda and neither was present when this item was considered by the Committee.

2.

Minutes of the Previous Meeting pdf icon PDF 342 KB

To present the minutes of the previous meeting of the Audit and Governance Committee held on 21 July, 2020.

Minutes:

The minutes of the previous meeting of the Audit and Governance Committee held on 21st July, 2020, were presented and were confirmed as correct.

 

Arising thereon –

 

           With reference to the request by the Vice-Chair that the Committee’s two lay members be invited to the all-member monthly briefing sessions held to inform elected members about major developments, strategies and budget proposals, the Chief Executive confirmed that the matter had been considered by the Senior Leadership Team and in addition was put to the Political Group Leaders following which an e-mail was sent to the Vice-Chair on 7 August, 2020 in explanation of the Council’s viewpoint on this matter and why it was not possible for the Lay Members to be invited to the briefing sessions.

 

In expressing disappointment that this conclusion had been reached, the Vice-Chair said that he was not aware of having seen the e-mail; the Chief Executive advised that the e-mail would therefore be re-sent to the Vice-Chair to the e-mail address specified by him as the preferred address.

 

           With reference to the discrepancy between the figure in the final accounts and that in the External Audit draft Audit Plan for  fees payable to Audit Wales, the Director of Function (Resources)/Section 151 Officer clarified that in its draft Audit Plan, Audit Wales had set out a figure of £70k as the cost of undertaking grant audit work for the year whilst in the draft Statement of Accounts the cost was shown as £135k the difference being attributable to ongoing grant work relating to the Housing Benefit Subsidy claim from the 2017/18 financial year for which a charge will be made once that work has been completed. The figure in the accounts is an accrued sum for the outstanding amount which is approximately £65k. Given that the work is time based, is ongoing and the audit has since transferred from Deloitte to Wales Audit, the final charge may vary from the £65k provision; the final fee for the item will be discussed upon the conclusion of the work. In the meantime, the figure in the accounts is for an estimated accrued amount in addition to the amount set out by Audit Wales for grant work relating to the 2019/20 financial year.

3.

Information Governance: Annual Report of the Senior Information Risk Owner (SIRO) 2019/20 pdf icon PDF 523 KB

To present the report of the Director of Function (Council Business)/ Monitoring Officer.

Minutes:

The Annual Report of the Senior Information Risk Owner (SIRO) for 2019/20 was presented for the Committee’s consideration. The report set out the SIRO’s statement and overview of the Council’s compliance with the legal requirements and relevant codes of practice in handling corporate information and, at Appendices 1 to 7 provided information about the Council’s contact with external regulators, security incidents and breaches of confidentiality or near misses along with Freedom of Information requests and complaints during the period.

 

The Director of Function (Council Business)/Monitoring Officer and designated Senior Information Risk Owner (SIRO) highlighted the main points arising on the Annual Report as follows –

 

           That this was the first year the SIRO felt able to state with confidence that there is significant documented evidence to demonstrate that the Council’s data protection and information governance arrangements are good and not just satisfactory as has been the opinion in the previous years.

           This assessment is based on the information governance systems, processes, policies and training the Council has in place which have been strengthened during the past year. The report also provides evidence of how the Council deals with data with it being the SIRO’s considered opinion that this particular work has remained stable for some time. Additionally, the SIRO considers that information governance is now embedded within the operational culture of the Council and that this was demonstrated during the response to the Pandemic.

           That the nature of requests for the Legal Service’s guidance and support has changed; in the past services were reluctant to share instances of data  breaches or to ask for advice thereon, in more recent years services have progressed to actively seeking the Legal Service’s advice on how to respond to data breaches whereas by now services are seeking the  Legal Service’s endorsement of actions they propose to take in response to identified data incidents in line with what they understand are the expectations.

           That appendices 2,3,4 and 5 demonstrate a pattern of  robust action with regard to dealing with specific requests for information on a day to day basis e.g.

 

           Of the 6,905 Freedom of Information questions submitted and dealt with, 12 resulted in requests for an internal review of the decision made by the Council with the original decision upheld in 9 cases; 2 cases resulted in the Council Service’s response being changed and new refusal notices issued and in one case a determination was made that a Section 21 refusal notice should have been issued as the information was available to the applicant by other means. A total of 3 FOI appeals were lodged with the ICO during this period one of which was withdrawn; in one of the  other two cases the Council was required to provide advice and assistance to the requestor within a specified timescale and in the other case the Council was required to respond within 10 working days.

           Of the 7 Data Protection Act (DPA) complaints to the Council none of the  ...  view the full minutes text for item 3.

4.

Annual Report - Concerns, Complaints and Whistleblowing 2019/20 pdf icon PDF 539 KB

To present the report of the Director of Function (Council Business)/ Monitoring Officer.

 

Minutes:

The report of the Director of Function (Council Business)/Monitoring Officer providing information on issues arising under the Council’s Concerns and Complaints Policy for the period 1 April, 2019 to 31 March, 2020 was presented for the Committee’s consideration. The report also included Social Services complaints but only those where the complainant was not a service user. Service user complaints are dealt with under the Social Services Representations and Complaints Procedure and are reported annually to the Corporate Scrutiny Committee.

 

Having declared a prejudicial interest in this matter, the Chair of the Committee withdrew from the meeting for the discussion thereon. The Vice-Chair took the chair for the item.

 

The Chief Executive had also declared a personal interest in this matter and withdrew from the meeting for the discussion thereon.

 

The Director of Function (Council Business)/Monitoring Officer reported on the main points as follows –

 

           That during the period covered by the report, 136 concerns were received and 69 complaints were made with two being withdrawn prior to investigation. Therefore 67 complaints have been investigated and responded to during this period. The number of complaints received remains at around the same level as in 2018/19 and are broken down by service in the table within the report. The Council publishes complaints data monthly.

           Of the 67 complaints dealt with during the period, 13 were upheld in full, 5 were partly upheld and 49 were not upheld.8 complaints that had been through the internal process were escalated to the PSOW and all 8 were rejected.

           The overall rate of responses to complaints issued within the specified time limit (20 working days) was 94%. 8% of the complaints received (down from 9% in 2018/19) resulted from escalated concerns which continues to indicate that services are dealing effectively with concerns thereby limiting formal complaints.

           The Concerns and Complaints Policy places an emphasis on learning lessons from complaints and thereby improving services. Appendix 1 to the report explains what lessons have been learnt and any practice which has evolved as a consequence of the findings from the 13 upheld and 5 partially upheld complaints during 2019/20.

           Where the complainant remains dissatisfied with the Council’s response to a complaint, the Concerns and Complaints Policy includes the option of escalating the complaint to the PSOW. There were 20 complaints relevant to this process within the timescale of the report lodged with the PSOW – 8 were escalated following formal responses under the Council’s Complaints Procedure and 12 complaints were made directly to the PSOW None of the complaints were taken into investigation.

           During 2019/20, one code of conduct complaint against a County Councillor was received by the PSOW but was closed after initial assessment without any investigation.

           Whilst there were no formal language related complaints during the year, 6 expressions of concern were received and recorded relating to the matters documented in the report. All 6 issues were resolved without being escalated into formal complaints.

           During 2019/20, one whistleblowing  ...  view the full minutes text for item 4.

5.

Policy Acceptance - Year 3 Compliance Data pdf icon PDF 447 KB

To present the report of the Director of Function (Council Business)/ Monitoring Officer.

 

Minutes:

The report of the Director of Function (Council Business)/Monitoring Officer setting out the level of compliance in relation to policy acceptance via the Council’s Policy Portal Management system for the third year of monitoring was presented for the Committee’s consideration.

 

The Director of Function (Council Business)/Monitoring Officer reported on the main points as follows –

 

           That on 10 June, 2019, the Senior Leadership Team decided to reduce the number of policies in the core set from sixteen to the nine policies listed in the report. The first of these policies (Display Screen Equipment Policy) was introduced for re-acceptance on 1 October, 2019. The nine policies will be subject to acceptance once in every two-year period but will be compulsory for new staff throughout that time.

           The process of re-introducing policies for acceptance was suspended on 23 March, 2020 owing to the need to re-prioritise the Council’s work to respond to the Covid-19 emergency although the Portal remained open for access to policies for information. As a result of the decision to suspend the process only the Display Screen Equipment Policy and the Corporate Health and Safety Policy have been re-introduced for acceptance to date. The report also includes compliance data for the final policy in the previous series – the Equality and Diversity Policy – which was introduced for acceptance on 29 July, 2019 but not included in last year’s report because the six-week acceptance period had not ended.

           Compliance data as at 28 July, 2020 for the three policies is set out in Appendix 1 to the report. A comparison of the average compliance rates for each service for the past three years is provided within the report (the policies reported upon in 2018 and 2019 are listed in Appendix 2)  and shows that whilst the majority of services have maintained high compliance levels, compliance in Housing Services is on a downward trend.

           A pilot requiring middle managers to accept certain policies that are not applicable under the click and accept arrangements to other members of staff was re-scheduled from January to March, 2020 but was further delayed because of the Covid-19 emergency; this is now due to commence in October, 2020.

           Ensuring compliance by staff who do not have access to the Policy Portal because they are not users of the Council’s Active Directory remains an issue and is unresolved despite discussions to identify workable and proportionate solutions to address the risk.

           A system has been developed to provide the Council with assurance that staff who are not technically employed by the Council who work for agencies, consultancies and partnerships etc. are aware of and comply with the key corporate policies listed. It is proposed to introduce a statement asking those staff to ensure that they are aware of and abide by the policies. 

 

In noting a year on year decline in the policy acceptance compliance level in the Housing Service over the past three years the Committee queried whether the Head  ...  view the full minutes text for item 5.

6.

Statement of the Accounts 2019/20 pdf icon PDF 14 MB

To present the Statement of Accounts 2019/20.

Minutes:

The report of the Director of Function (Resources)/Section 151 Officer highlighting the main issues arising since the draft Statement of Accounts was presented to the Audit and Governance Committee on 21 July, 2020 was presented.

 

The Director of Function (Resources)/Section 151 Officer -

 

           Advised that the Council’s draft Statement of Accounts for 2019/20 was presented to the Council’s external auditors for audit on the 6 July, 2020. Whilst the detailed audit work is now substantially complete, External Audit is not able to provide an audit opinion or publish its ISA 260 report on the financial statements due to outstanding reviewing and reporting work. The delay is a result of resourcing issues within the audit team which has been compounded by a delay in NHS audits because of Covid-19.

           Explained the process that would be followed in the absence of the Auditor’s opinion and report which would entail subject to Audit and Governance scrutiny and Full Council, the Director of Function (Resources)/Section 151 Officer signing the Statement of Accounts without the audit opinion and publishing the Statement on the Council’s website on or before 15 September, 2020 with an explanatory notice regarding the unavailability of the audit opinion and ISA 260 report. It is hoped that the audit opinion and report will be available as soon as possible thereafter. Consequently, additional Audit and Governance Committee and  Full Council meetings will need to be convened to review  the accounts again with the Auditors’ opinion and report and following endorsement by Full Council, they will be signed by the Director of Function (Resources)/Section 151 Officer and published definitively with a notice of completion of audit.

           Highlighted that since the draft accounts were published a small number of changes have been made by the Council’s accounting team together with a small number of amendments to the disclosure note as recommended by the external auditors (Section 3 of the report refers). The most significant amendment (detailed in paragraph 3.1) is in relation to the Pension Fund valuation as a result of a recent judgement in the McCloud case in respect of the provision of protection to early retirees against adjustment to their pension as a result of early retirement. Whilst the change in the valuation of the Pension Fund is reflected in the accounts, the pension liability is adjusted out when the amount to be charged to local taxation is calculated; therefore while there is a resulting change in the value of the Balance Sheet it does not affect the Council’s general reserves position.

           Asked the Committee to support the revised process and make a recommendation to the Council to confirm the acceptance of the 2019/20 Interim Final Statement of Accounts and to endorse the Annual Governance Statement and refer it to Full Council for approval and to be signed by the Leader of the Council and the Chief Executive.  Welsh Government has issued guidance that the accounts closure and approval process should be completed by 30 November, 2020 and based  ...  view the full minutes text for item 6.

7.

Update on the Internal Audit Strategy and Priorities 2020/21 pdf icon PDF 524 KB

To present the report of the Head of Audit and Risk.

Minutes:

The report of the Head of Audit and Risk providing an update as at 18 August on the work of Internal Audit  since the last report to Committee on Internal Audit activity in February, 2020 together with  the priorities for the short to medium term was presented.

 

The Head of Internal Audit –

 

           Updated the Committee on the assurance work completed for 2019/20 comprising of 3 audits the results of which were presented to the Committee’s July meeting as part of the Internal Audit Annual Report for 2019/20. Due to services being heavily involved in responding to the emergency, work on four audits were suspended (paragraph 9 refers). Once staff return from their redeployment, work on those audits will resume

           Reported that early on in the Covid-19 emergency, the Deputy Chief Executive on behalf of the Emergency Management Response Team (EMRT) commissioned Internal Audit to provide assurance that the Council’s emergency response arrangements were safe, robust, effective and fit for purpose. The outcome of this work was reported in two parts and provided Reasonable Assurance for each. Six Issues/Risk were raised and these were reviewed a month later and all were found to have been addressed. (Copies of the reports were issued separately to the Committee’s members).The work which the review of the emergency response entailed is ground-breaking in so far as no other local authority Internal Audit service has conducted such a review and consequently Anglesey’s Internal Audit Service has been asked by CIPFA to produce a case study.

           Explained that due to services being heavily involved in responding to the emergency, work on following up actions to address the Issues/Risks raised previously in audit reports was suspended with the result that a number of actions have become overdue. The 4action dashboard at Appendix 1 shows that as at 18 August 5 Major and 6 Moderate actions were overdue. The Committee was further advised that as at present only 1 Major action remains overdue and is within the Learning Service and relates to the absence of central compliance monitoring to ensure policies and guidance are followed with regard to Primary School income collection. Also, the Major outstanding actions have reduced from 19 to 15 with Moderate outstanding actions remaining at 34.

           Referred to the Corporate Risk Register priorities confirming that in 2019/20 50% of the risks in the corporate risk register with a red or amber residual risk rating were reviewed (83% over a 17 month rolling period).The remaining 3 risks that need to be reviewed to complete red and amber risk coverage over a 12 month rolling period will have to be parked until capacity is restored, as in the current circumstances they are considered a low priority. The EMRT has developed a separate risk register to capture the risks associated with the pandemic – it contains 35 risks and these are a priority which Internal Audit will be focusing on to provide assurance that they are being effectively managed.

           Outlined the priorities  ...  view the full minutes text for item 7.

8.

External Audit: Financial Sustainability Assessment - Isle of Anglesey County Council pdf icon PDF 336 KB

To present the report of External Audit.

Minutes:

The report of External Audit which sought to assess the sustainability of the Council’s short to medium term financial position as part of a broad study of the financial sustainability of all 22 councils in Wales was presented for the Committee’s consideration. The report focused on the financial strategy of each council as well as reviewing financial indicators of each council’s financial position in relation to performance against budget; delivery of savings plans; use of reserves, Council tax and borrowing.

 

Mr Alan Hughes, Audit Lead, in introducing the report acknowledged that despite its having been overtaken by events and its publication delayed by the Covid-19 pandemic, the contents of the report remain relevant from the perspective of setting out the fundamental principles of good public financial management. He referred to the overall conclusions of the report as noted below and guided the Committee through the substance of the detailed report highlighting the findings which formed the basis of those conclusions 

 

           Overall it was found that the continual funding of unrealised savings and year end overspends from general reserves is not sustainable; the Council needs to develop a more sustainable financial strategy to deliver services within available funding whilst building usable reserves to improve its resilience. This conclusion was reached because -

           The Council has had an overall overspend in recent years and is allocating significant additional resources to fund the increased pressure in key services.

           The Council has a track record of delivering a substantial amount of planned savings, but undelivered savings create additional financial pressure; the Council is likely to find identifying and delivering savings increasingly challenging going forwards.

           The Council’s continued use of reserves to fund year end deficits and planned revenue expenditure is not sustainable.

           Council Tax collection rates have remained stable and council tax as a proportion of the Council’s income has grown over the last decade; and

           The Council has no purely commercial focused projects and overall borrowing is set to increase.

 

The Director of Function (Resources)/Section 15 Officer responded to the report’s findings highlighting that changes do happen in a normal year but that the scale of the changes brought about by Covid 19 has impacted significantly on the Council’s finances. Notwithstanding, the need to draw on the Council’s reserves to balance the 2019/20 budget did not materialise and consequently, the level of general balances is now approaching the target of 5% of the net revenue budget as agreed by Council. It is difficult to predict how  the 2020/21 financial year will evolve – with reduced income and additional costs the Authority could potentially find itself with an overspend of £2m to £3m dependent upon how quickly restrictions are lifted and the extent of additional financial support that Welsh Government may provide. In the longer term the Council’s financial situation will be influenced by when social distancing measures  are lifted thereby enabling resources such as leisure centres to operate closer to normal capacity. In accepting that the  ...  view the full minutes text for item 8.

9.

External Audit: Wellbeing of Future Generations : An Examination of Early Intervention and Prevention to Ensure that Children are Safe And Supported - IOACC pdf icon PDF 345 KB

To present the report of External Audit.

Minutes:

The report of External Audit on the findings of its examination of the extent to which the Council is acting in accordance with the sustainable development principle in Early Intervention and prevention to ensure that children are safe and supported was presented for the Committee’s consideration.

 

Mr Alan Hughes, Audit Lead reported that in accordance with the Well-being of Future Generations Act the Auditor General for Wales is statutorily required to examine public bodies to assess the extent to which they have acted in accordance with the sustainable development principle when setting their well-being objectives and taking steps to meet them. The report above sets out External Audit’s findings from its examination of Early Intervention and prevention to ensure that children are safe and supported, a step the Isle of Anglesey County Council is taking to meet its wellbeing objectives. In order to act in accordance with the sustainable development principle, public bodies must take account of the “five ways of working” as defined in the Welsh Government’s Well-being of Future Generations (Wales) Act 2015 The Essentials document which relate to safeguarding the ability to meet long-term needs; acting to prevent problems occurring or getting worse; considering integrating the public body’s well-being objectives with their other objectives or other public body’s objectives; acting in collaboration with any other person or different parts of the body itself and involving persons with an interest in achieving the well-being goals ensuring that those persons reflect the diversity of the area which the body serves.

 

The report found that –

 

           The Council has considered and applied the sustainable development principle in developing Early Intervention and prevention to ensure that children are safe and supported, but there are opportunities to further embed the five ways of working.

           The Council has sought to design services with a view to encouraging individuals to engage with services early in order to reduce longer-term demand and the need for higher levels of intervention, but it is unclear if funding is sustainable in the long-term.

           The Council has sought to understand the factors that impact on children but needs to continue to further analyse data to understand root causes and inform its preventative activities.

           The Council has considered how its step has contributed to its well-being objectives but a more widespread knowledge of the definition of integration under the Well-Being of Future Generations Act may help to realise operational benefits.

           The Council has taken steps to collaborate with partners and reflect the needs and wishes of local communities, but could improve how it reviews the effectiveness of collaboration.

           The Council has involved stakeholders in the shaping of the service but needs to review the effectiveness of its approach to identify good practice and see if there are lessons to be learnt.

 

Mr Alan Hughes elaborated on the strengths identified under each of the headline findings above along with the opportunities for improvement. Following the conclusion of the fieldwork, External Audit’s findings were presented to  ...  view the full minutes text for item 9.

10.

Annual Report of the Audit and Governance Committee 2019/20 pdf icon PDF 311 KB

To present the report of the Chair of the Committee.

Minutes:

The Annual Report of the Chair of the Audit and Governance Committee detailing the Committee’s activities during 2019/20 was presented for the Committee’s endorsement.

 

In endorsing the Annual Report the Chair thanked the head of Audit and Risk both for compiling the report and for her and her team’s support during the year.

 

It was resolved to endorse the Annual Report of the Audit and Governance Committee for 2019/20 prior to be submission to the Full Council meeting on 8 September, 2020.