Agenda, decisions and minutes

The Chair welcomed everyone present to this virtual meeting of Governance and Audit Committee.

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

No declaration of interest was received.

To present the minutes of the previous meeting of the Governance and Audit Committee held on 23 June, 2021.

The minutes of the previous meeting of the Governance and Audit Committee held on 23 June, 2021 were presented and were confirmed as correct.

To present the report of the Principal Corporate Health and Safety Advisor.

The report of the Principal Corporate Health and Safety Advisor setting out the Authority’s performance with regard to Health and Safety during the period from 1 April, 2020 to 31 March, 2021 was presented for the Committee’s consideration.

The Principal Corporate Health and Safety Advisor reported that the annual report is presented in a format prescribed by the Welsh Local Government Association (WLGA) which has developed a framework and guidance for the production of annual health and safety performance reports. The framework was not intended to be a comprehensive analysis of health and safety but should assist in identifying the commitment, ability and direction of the management of occupational health and safety. The main points to be drawn from the report were as follows –

·         The Covid 19 crisis has dominated the work carried out by the Council during 2020/21. The formation of the Emergency Management Response Team (EMRT) to oversee the corporate response to the Coronavirus pandemic and all activities and reactive work related thereto enabled the implementation of tight risk controls to address the health risk.

·         The presentation of plans and risk assessments to the EMRT before work was allowed to be carried out ensured that work was undertaken in as safe a manner as possible. The scale of the work done to ensure continued service delivery by the Council should not be underestimated. During the year to which the report refers, new risk assessment formats, new guidance and new operational plans were developed to address the risk from Covid 19 as explained in further detail in section 9 of the report. A total of 482 risk assessments and reviews were undertaken during the year an analysis of which is provided at Table 15. The risk assessment process is a continual process with risk assessments reviewed on an ongoing basis to ensure they remain current and new risk assessments being developed.

·         The Corporate Health and Safety Plan for 2020/21 was not implemented because of the need to address the immediate and evolving demands during the Covid 19 crisis. Most of the actions from the plan have been incorporated into the 2021/22 plan whilst recognising the additional risks and demand of living, working and delivering services in a Covid 19 world. There have been some amendments to the plan in acknowledgement of the possible need to address issues which may arise during the ongoing crisis situation.

·         The report contains a comparison of the data for all accidents and incidents reported during 2020/21 and the data for employee only incidents with the same data for 2018/19 and 2019/20.  For both categories there has been a significant decline in the number of incidents in 2020/21 (Tables 1 to 6 refer) on  the previous two years which is directly related to the reduced number of services operating and reduced activities under Covid 19 restrictions. The figures show an increase in incidents for the second and third quarters of the year mirroring the periods during which schools re-opened which historically account for the  ...  view the full minutes text for item 3.

To present the report of the Director of Function (Resources)/Section 151 Officer.

The report of the Director of Function (Resources)/Section 151 Officer incorporating the Treasury Management Review for 2020/21 was presented for the Committee’s consideration. The report is produced to comply with the regulations issued under the Local Government Act 2003 and with the Council’s Treasury Management Scheme of Delegation for 2020/21 and forms one of a trio of treasury management reports that are issued in accordance with the minimum reporting requirements for 2020/21. The report provides an overview of the Council’s borrowing and investment activities during the year and highlights performance against the Prudential Indicators set by the Council.

The Director of Function (Resources)/Section 151 Officer referred to the main points as follows -

·         The external factors that have influenced treasury management activity and decisions in the year including interest rate movements, the state of the UK economy and the significant impact which the Covid pandemic has had thereon as well as the part conclusion of the Brexit process with the final agreement on a trade deal.

·         The internal factors which determine the treasury management outturn position which include the following :

·         Capital expenditure and financing – the table at 3.1 shows the actual capital expenditure and how this was financed. Actual General Fund capital expenditure financed by borrowing was significantly lower than that projected (£20m actual against £39m estimated) due to the large underspend on the capital projects listed at 3.1 many of which were delayed as a result of Covid 19 restrictions.

·         Reserves and cash balances – the Council’s cash balances comprise revenue and capital resources and cash flow monies. The Council’s core cash resources are set out in the table at 3.2 of the report and they include the Council Fund General Reserve; the provisional pre-audit figures show that the General Reserve increased from £7.060m as at 31 March, 2020 to £11.594m as at 31 March, 2021. The Council’s total usable reserves and provisions stood at £45.245m as at 31 March, 2021 (up from £31.124 at 31 March, 2020).

·         Gross borrowing and the Capital Financing Requirement (CFR) – The CFR reflects the Council’s total underlying need to borrow to finance its capital expenditure  and is a gauge of the Council’s debt position. It results from the capital activity of the Council and the resources utilised to pay for the capital spend. It represents the 2020/21 capital expenditure financed by borrowing and prior years’ capital expenditure funded by borrowing which has not yet been paid for by revenue or other resources. In order to ensure that borrowing levels are prudent over the medium term and is only for a capital purpose, the Council should ensure that its gross external borrowing does not except in the short-term, exceed the total of the capital financing requirements in the preceding year plus the estimates of any additional capital financial requirement for the current and next two financial years. The gross borrowing of £124.5m at 31 March, 2021 is less than the forecast CFR for the following two years.

·         Internal borrowing – at  ...  view the full minutes text for item 4.

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

The report of the Head of Audit and Risk incorporating the Annual Counter Fraud, Bribery and Corruption report 2020/21 was presented for the Committee’s consideration. The report presents the activity carried out in 2020/21 to minimise the risk of fraud, bribery and corruption occurring within and against the Council; it highlights some of the current and emerging areas of fraud risk including those related to the Covid-19 pandemic and provides a conclusion on the effectiveness of the Council’s arrangements to minimise the risk of fraud.

The Head of Audit and Risk guided the Committee through the annual report with reference to the following -

·         The contextual information including the definition of fraud as advocated by the CIPFA Counter Fraud Centre and the reasons why countering fraud is important. Fraud poses a major financial threat for councils and can affect their reputation and divert funding from vital public services undermining public trust, financial sustainability and organisational efficiency.  In Wales the Auditor General’s 2019 report highlighted that Welsh public services could be losing anything up to £1billion per year to fraud.                           

·         The Wales wide arrangements for counter fraud. Following the transfer of fraud investigators from Local Government to the Department for Work and Pensions in 2014, most councils in Wales including the Isle of Anglesey County Council, no longer have a dedicated council wide fraud resource with the counter fraud role instead being assigned to Internal Audit. Neither is there any over-arching group or professional network that specifically promotes counter fraud in local government. To fill this gap in North Wales a sub-group of the North and Mid Wales Audit Partnership has recently been formed to share and drive good practice in relation to counter fraud.

·         Current and emerging fraud risks. UK Councils reported that approximately 47,000 instances of fraud had been detected or prevented in 2019/20 with the biggest losses arising from Council Tax fraud (estimated at £35.9m) followed by disabled parking concession and housing fraud. The largest growing fraud area in the UK is housing tenancy with an estimated £60.1m lost in 2019/20 compared to £47.7m in 2018/19. The Head of Housing Services has assessed that generally, tenancy fraud is low in Anglesey. However, an awareness raising article was included within a newsletter circulated to all tenants informing them of what to do if they suspected anything in a neighbouring property and the Service’s Housing Management Officers have undertaken tenancy fraud training.

·         Council Tax single person discount (SPD) is the next largest growing fraud area in the UK which has an estimated increase of £9.6m to an estimated value of £29m from cases detected/prevented in 2018/19. The Council uses an external company to review and validate its SPD claims on a periodic basis to identify claims at risk of fraud and error. The last exercise in August 2018 identified errors to the value of £340,347 with an error rate of 4.3%. The two highest perceived fraud risk areas for 2019/20 are procurement and Council Tax SPD followed by business rates,  ...  view the full minutes text for item 5.

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

The report of the Head of Audit and Risk updating the Committee on Internal Audit activity as at 12 July, 2021 was presented for consideration. The report provided a synopsis of the audits completed and current workload since the last report to Committee in April, 2021.

The Head of Audit and Risk referred to the assurance work completed since the last update to Committee as at Table 3 of the report with the first four reports (IT Service Continuity – Phishing; Covid 19 Emergency Management Assurance; Identification of Duplicate Invoices and Recovery of Duplicate Payments, and IT Resilience – First Follow-Up) having been presented to the Committee in May, 2021. The three remaining reports (Social Care Workforce Special Payments Scheme; Coping with Homelessness and the Effects of Covid 19 and Management of School Unofficial Funds - First Follow –Up) are presented with the agenda for today’s meeting and all have resulted in either a Substantial or Reasonable Assurance opinion with only one moderate issue having been raised in connection with the Management of School Unofficial Funds. She highlighted the contribution of the Learning Service’s staff to progressing the issues raised by the audit of the Management of Unofficial School Funds and to their having been fully engaged in the work, and she confirmed that all schools bar one have now been issued with an audit certificate for their school funds and that the remaining one is in progress. Audit work in progress is shown in Table 4 of the report and an overview of outstanding actions is provided by the dashboard at Appendix 1 of the report.

In reflecting on the information presented, the Committee queried the 35 outstanding issues/risks attributed to the Resources Service which appear disproportionate to the actions outstanding to other services. The Head of Audit and Risk clarified that as a great part of Internal Audit’s recent work has been in relation to aspects of service within Resources the greater the likelihood that a higher number of issues will be outstanding for the Resources function; however, only 7 of the 35 issues categorised as outstanding are overdue with the remainder not having reached their due date and being work in progress.

It was resolved to accept the report and to note Internal Audit’s assurance provision going forward.

NO ADDITIONAL ACTION WAS PROPOSED

To present the report of External Audit.

The report of External Audit setting out the Audit Wales Work Programme and Timetable in relation to the Isle of Anglesey County Council was presented for the Committee’s consideration.

Mr Alan Hughes, Performance Audit Lead for Audit Wales advised that the report presents the Audit Wales work programme and timetable in relation to Anglesey and nationally in a new format and includes the work scheduled to be undertaken by other regulators. Also included is a summary of Audit Wales’s published and planned national reports and other outputs. The report represents a single point of information for regulatory activities both in the offing and completed at local and national levels and it will be generated quarterly and submitted to the next available meeting of the Governance and Audit Committee.  

It was resolved to accept and to note the Audit Wales IOACC Work Programme and Timetable.

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

The report of the Head of Audit and Risk incorporating minor amendments to the approved Forward Work Programme for 2021/22 due to workload issues and/or legislative changes was presented for the Committee’s consideration.

It was resolved to note the minor amendments to the approved Forward Work Programme for 2021/22.