Agenda and minutes

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 submit the minutes of the previous meeting of the Audit and Governance Committee held on 27 June, 2016.

The minutes of the previous meeting of the Audit and Governance Committee held on 27 June, 2016 were presented and were confirmed as correct.

Arising thereon –

The Head of Function (Resources) and Section 151 Officer informed the Committee that the audit of the 2015/16 accounts is underway and although there has been some slippage on the original timetable, the Finance Service is bringing together the information required by the external auditors and it is envisaged they will be in a position to report on the outcome of the audit of the financial statements for 2015/16 to the Committee in September as is required.

To review progress on addressing any outstanding issues with regard to ICT Disaster Recovery (ICT Service and Performance Management Manager to report)

The ICT Service and Performance Management Manager provided the Committee with a verbal update on progress on implementing internal audit recommendations following the 2015/16 audit of ICT Disaster Recovery which found shortcomings in the governance, risk management and internal control arrangements in this area.

The Officer reported that the ICT Service is now in the advanced stages of designing a dedicated data back-up centre. The proposal in practice is for a second data centre away from the ICT suite in the Council’s main offices which will always be active along with the principal data centre and together, they will share the processing power of running the Council’s key systems. In the event of the main council offices becoming unusable, the second data centre will be able to run key services, namely those services identified as such e.g. social care and finance. There remains some work to do in confirming that the list of key services is up to date and an outstanding element in terms of design is the need to discuss the fire retardant element of the building which would determine for how long the data centre can survive in a fire. The data centre will have resilient power via an UPS and on site generator. Capital funding for the new facility is in place and the ICT Service is confident that the project will be delivered within budget and to a planned completion date of December, 2016. As well as a back-up, this is a high quality solution that is meant to meet the changing needs of the Council in allowing it to utilise the processing power as and when the business requires.

From the information presented the Committee took assurance that satisfactory progress has been made in responding appropriately to the issues identified by the 2015/16 internal audit report in terms of strengthening the controls with regard to Disaster Recovery to enable the risks in this area to be managed effectively. The Committee noted that it would be helpful for it to have sight of the plan for disaster recovery in due course. The ICT Service and Performance Management Manager said that the  Disaster Recovery Plan i.e. the ability to respond to  a disaster is limited by the existing infrastructure but that the Committee could be provided with a design of how  the system would operate in the event of a disaster. Once the new infrastructure is in place that design would be included in the Disaster Recovery Plan which could be presented to this Committee. The Officer confirmed  that it is intended to test the system prior to its going live in accordance with best practice requirements to ensure that it is  functioning and that data can be restored promptly and reliably in a disaster event.

It was resolved to accept and to note the update information provided with regard to progress on ICT Disaster Recovery plans.

ACTION ENSUING: The Committee to be provided with a summary document of how the back-up system would operate in  ...  view the full minutes text for item 3.

To present the Internal Audit progress report for Quarter 1 2016/17.

The report of the Head of Internal Audit on the work of the Internal Audit service during the period from 1 April, 2016 to 30 June, 2016 was presented for the Committee’s consideration in line with the requirements of the UK Public Sector Internal Audit Standards and the CIPFA UK Standards whereby the Head of Internal Audit is required to report periodically to the Committee on the Internal Audit Service’s performance relative to the 2016/17 Audit Plan.

The Internal Audit Manager reported on the following aspects of the Service’s performance:

•           That there were 6 audit projects of varying complexity in respect of 2015/16 that were not completed or issued by 31 March, 2016 and constitute work in progress as listed in paragraph 3.1.1 of the report.

•           A schedule of performance targets for the period ending 30 June, 2015 is contained in Appendix A to the report and shows that 24.19% of planned audits have been completed at this stage against an annual target of 80%.

•           A schedule of all audit assignments completed during the year to date including work in progress for 2015/16 is provided in Appendix C to the report and this summarises the audit opinions and recommendations in respect of each area reviewed. Since 1 April, 2016, two final reports have been issued from the 2015/16 Internal Audit Operational Plan and six from the 2016/17 Plan.

•           Two of the planned audits completed during the first quarter have been assessed as not providing positive levels of assurance. The Housing Benefit Key Controls and the Building Regulation Fees Inspection and Enforcement Regimes were both assessed as providing Limited Assurance.

•           Internal Audit recommendations are rated as High, Medium or Low according to the perceived risk as defined in Appendix B to the report. The percentage implementation rate as at 30 June, 2016 was 72% of High and Medium recommendations having been recorded as implemented.

•           A schedule of the 3 follow up audits conducted during the first quarter is provided at Appendix E to the report and demonstrates the number of recommendations accepted and implemented by Management along with the revised audit opinion.

•           The special investigations undertaken by Internal Audit during the period amount to 37.70 days and are outlined in Appendix F.

•           An analysis of the Internal Audit Service’s performance for the first quarter of the 201617 financial year shows that performance levels are currently on target.

The Committee considered the information presented and noted the following:

•           The Committee noted that the audits in relation to two areas (Housing Benefit and Building Regulation Fees Inspection and Enforcement) found weaknesses in the key controls in those areas meaning that the arrangements for the effective governance and the management of risk in these areas could not be deemed to be reliable. The Committee sought clarification of the actions being taken to rectify the situation and in the case of the latter; the Committee noted that the shortcomings go the root of the service. The  ...  view the full minutes text for item 4.

To present the report of the Monitoring Officer.

The report of the Monitoring Officer which provided an outline of issues arising under the Council’s Concerns and Complaints Policy for the period from 1st April, 2015 to 31st March, 2016 was presented for the Committee’s consideration. The report also included a high level summary of whistleblowing issues notified during the same period as well as Social Services complaints where the complainant is not a service user.

(Councillor Peter Rogers declared a prejudicial interest in this matter and did not participate in the discussion and determination thereof. Mrs Sharon Warnes informed the Committee that she was a member of the Public Services Ombudsman’s Advisory Board)

The Monitoring Officer highlighted the following considerations:

•           That during the said period, 261 concerns were recorded and 59 formal complaints were received.

•           The number of complaints received has fallen to 59 from 65 in 2014/15 and from 66 in 2013/14.The highest recorded number of complaints since statistics have been collected was in 2011/12 when 89 complaints were recorded under the Policy.

•           The overall response to complaints issued within the specified time limit (20 working days) is 70%.

•           Of the 59 complaints received during the periods, 10 were upheld in full, 6 were partially upheld and 43 were not upheld. 5 complaints were referred to the Ombudsman but none was accepted for investigation. A breakdown of concerns and complaints by service is provided at paragraph 8.

•           The Council also records compliments received, and 561 were recorded during the relevant period. In addition, 2,059 positive comments were received at the Oriel and 513 at the Breakwater Country Park. A breakdown of compliments by service is provided at paragraph 9.

•           The Concerns and Complaints Policy places an emphasis on learning lessons from complaints and thereby improving services. The issues noted in paragraph 10 of the report were identified as lessons learnt, but none required any formal action plans to be put in place.

•           During 2015/16, 5 complaints were made to the Ombudsman which all related to the Planning and Public Protection Services. Having looked at the complaints and the Council’s responses, the Ombudsman decided not to investigate the complaints.

•           A summary of the complaints against Elected Members is provided at paragraph 12 of the report.

•           One Language related complaint was received during the year which is recorded in the breakdown of complaints under the Lifelong Learning Service and also in paragraph 10 under lessons learnt.

•           A summary of whistleblowing complaints reported by services for 2015/16 is provided at paragraph 12 of the report.

The Committee considered the report and it noted the following matters: 

•           The Committee noted that the 261 concerns and 59 complaints received had led to the identification of only three lessons to be leant and it was suggested that this amount of feedback should be generating more learning opportunities for the Authority and that the Authority should be looking to style itself as a learning authority. The Committee was informed that 207 of the  ...  view the full minutes text for item 5.

To present the Annual Treasury Management Review for 2015/16.

The report of the Head of Function (Resources) and Section 151 Officer incorporating the Annual Treasury Management Review for 2015/16 was presented for the Committee’s consideration and comment. The report provided details of the outturn position for treasury activities in 2015/16 and confirms compliance with the Council’s policies previously approved by Members.

The Head of Function (Resources) and Section 151 Officer elaborated on the following elements of the Treasury Management review:

•           Capital activity. The Council’s actual capital expenditure and how this was financed is set out in table 2.2 of the report and forms one of the required prudential indicators.

•           The impact of this activity on the Council’s underlying indebtedness (the Capital Financing Requirement). The Council’s CFR for the year is shown in table 3.3.4 and represents a key prudential indicator.

•           The overall treasury position identifying how the Council has borrowed in relation to its indebtedness and the impact on investment balances. It was decided in light of the current and projected market interest rates and counterparty credit risks, to continue internalising borrowing at least in the short term which is a strategy that has been implemented throughout out each of the last five years. The gross borrowing position has increased during 2015/16 due to the loan from the PWLB for the HRA buy-out which replaces the former subsidy payments to Welsh Government.

•           The borrowing and investment figures for the Council as at the end of the 2014/15 and 2015/16 financial years. These are shown in paragraph 4.1 of the report and in more detail in Appendix 1. There was no debt rescheduling during the year as the average 1% differential between PWLB new borrowing rates and premature repayment rates made rescheduling unviable.

•           Investment activity.  Continued uncertainty in the aftermath of the 2008 financial crisis promoted a cautious approach, whereby investments would continue to be dominated by low counterparty risk considerations resulting in relatively low returns compared to borrowing rates. In this scenario, the treasury strategy was to postpone borrowing to avoid the cost of holding higher levels of investments and to reduce counterparty risk. The expected investment strategy was to keep to shorter term deposits although the ability to invest up to longer periods was retained.

•           Investment security and credit quality. No institutions in which the Council had made investments had any difficulty in repaying investments and interest on time and in full during the year. The UK Referendum result led to UK banks long-term outlook being downgraded from stable outlook to negative outlook. However their short and medium term ratings are still within the appropriate ratings approved in the Treasury Management Strategy 2015/16. The status of the banks and the Council’s deposits are under constant review to ensure that the Council’s risks are minimised.

The Committee noted the information and made the following points:

•           The Committee noted that the Council has complied with the key prudential and treasury indicators in 2015/16.

•           The Committee noted that borrowing was only undertaken for  ...  view the full minutes text for item 6.

·        To present the External Audit Annual Improvement Report for the Isle of Anglesey for 2015/16.

·        To present the Certificate of Compliance for the Isle of Anglesey County Council’s 2016/17 Improvement Plan.

•           The WAO’s Annual Improvement Report for 2015/16 in relation to the Isle of Anglesey County Council was presented for the Committee’s consideration. The report summarised the audit work undertaken at the Council since the publication of the last report in December 2015 and includes a summary of the findings from reports issues by other relevant regulators namely, CSSIW; Estyn and the Welsh Language Commissioner.

Mr Gwilym Bury confirmed that taking into consideration the work carried out at the Council by the relevant external review bodies in 2015/16 the Auditor General concludes that overall, the Council has continued to make progress in priority areas while restructuring its leadership and governance arrangements, that it remains self-aware and that it is likely to comply with the requirements of the Local Government Measure 2009 and secure improvement during 2016/17. Whilst the Auditor General makes no statutory recommendations, the report does make proposals for improvement in some of the areas reviewed.

Mr Gwilym Bury, WAO reported on the detailed findings with regard to the key areas assessed in relation to Performance, Use of Resources and Governance including services where improvements had been made as well as areas where performance and/or arrangements require further improvement.

The Committee considered the information presented and made the following points:

•           With regard to Estyn’s evaluation of school performance, the Committee noted the percentage of pupils achieving five A* to A grades or equivalent in Anglesey has declined since 2012 and in 2015 and is lower than the Wales average. The Committee was concerned by this downward trend particularly in the context of the Energy Island initiative and the highly skilled employment opportunities this is likely to create and sought confirmation that measures to improve pupils’ attainment levels are being implemented. The Committee was informed that the Wales Audit Office has issued a report on the quality of the School Improvement Services provided by the North Wales Consortium (GwE). The Committee deemed that it would be helpful for it to consider the report on GwE given that it links into school performance along with any Action Plan prepared by the consortium in response to the report as well as information about the support and improvement services that GwE provides from an Anglesey specific perspective.

•           The Committee noted that as well as assessing and reviewing performance and having oversight over the arrangements and processes that underpin performance, it should be looking to extend its perspective by receiving comparative information more often which would be helpful to the Committee in putting performance in context.

•           The Committee asked in the context of the CSSIW’s Performance Evaluation report for 2014/15 and the Council’s use of resources, that it be updated on the position with regard to the Council’s services for children and adults’ services. The Committee noted that in light of the national funding problems in relation to adult social care provision and issues around the financial viability of an increasing number of social care providers, it could be  ...  view the full minutes text for item 7.

Verbal update by WAO on the Performance Work Programme.

Mr Gwilym Bury, Wales Audit Officer provided  a verbal update on the status of the WAO’s Performance Work Programme encompassing value for money studies, local government studies and local performance work as regards reports published, planned and in progress. The information was noted by the Committee.