Audit Committee (ceased to operate 21/05/2019) Minutes

Date:
Monday, 26th November, 2018
Time:
4.00 pm
Place:
Conference Room 2, Second Floor, Municipal Buildings, Church Road, Stockton on Tees
 
Please note: all Minutes are subject to approval at the next Meeting

Attendance Details

Present:
Cllr Chris Barlow(Vice-Chairman), Cllr Stefan Houghton, Cllr Eileen Johnson, Cllr Ross Patterson, Cllr Paul Rowling, Cllr Mick Stoker, Cllr Laura Tunney
Officers:
Andy Bryson, Andrew Barber, Martin Skipsey (F&BS), Sarah Whaley (DCE
In Attendance:
Mark Kirkham, Gareth Roberts (Mazars), Press
Apologies for absence:
Cllr Barry Woodhouse
Item Description Decision
Public
A
27/18		 EVACUATION PROCEDURE
Preamble
 
A
28/18		 DECLARATIONS OF INTEREST
Preamble
 
A
29/18		 MINUTES OF THE AUDIT COMMITTEE MEETING WHICH WAS HELD ON THE 24TH SEPTEMBER 2018
Preamble
RESOLVED that the minutes be approved and signed by the Vice-Chair as a correct record.
A
30/18		 EXTERNAL AUDIT PROGRESS REPORT
Preamble
RESOLVED that the report be noted.
A
31/18		 INTERNAL AUDIT PROGRESS REPORT
Preamble
RESOLVED the report be noted.
A
32/18		 TREASURY MANAGEMENT MID TERM REVIEW

Preamble
RESOLVED that the report be noted.
A
33/18		 CORPORATE RISK REGISTER
Preamble
RESOLVED that the report be noted
A
34/18		 HEALTH AND SAFETY REPORT
Preamble
RESOLVED the report be noted.
A
35/18		 ANNUAL REPORT OF THE AUDIT COMMITTEE

Preamble
RESOLVED that the work carried out by the Committee be noted.
A
36/18		 WORK PROGRAMME
Preamble
 

Preamble

ItemPreamble
A
27/18		The Evacuation Procedure was noted.
A
28/18		There were no declarations of interest.
A
29/18		Consideration was given to the minutes of the meeting which was held on the 24th September 2018 for approval and signature.
A
30/18		Consideration was given to the External Audit Progress Report, the purpose of which was to provide the Audit Committee with a report on progress in delivering Mazars responsibilities as Stockton Borough Councils external auditors.

The report highlighted key emerging national issues and developments which may be of interest to Members of the Audit Committee.

Mazars highlighted that the Housing Benefit Subsidy claim was on track and Mazars expected to certify the claim by the DWP deadline of 30
November 2018. Mazars would report findings from this work to the Audit Committee at its next meeting. The Claim was on track to be signed of week commencing 26th November 2018.

This was to be Mark Kirkham of Mazars last meeting, Mark thanked the Committee for the help he had received since becoming Lead Auditor at Stockton in 2011.

The Vice-Chair also thanked Mark for all the work and help he had provided the Council and Audit Committee and wished him well in his next posting.
A
31/18		Consideration was given to a report which provided members with an update of the work carried out by the Internal Audit Section and the progress made against the Audit Plan 2018/19.

The main topics discussed were as follows:

The Audit Team were making good progress in relation to planned audits.

Counter fraud was still progressing.

In terms of 'engagement opinion' for each audit carried out, 3 had received full assurance and 3 had received substantial assurance and 1 was categorised as N/A.

Where recommendations had been issued the majority of these were considered medium and low priority.

Member’s attention was brought to the 'Trend Analysis' graph. It was explained that the Audit Team generally worked on 70% being satisfactory. There were two areas 'Management of Income' and 'Management of Employees’ which were just below 70% and needed to be monitored more closely. Officers agreed to report back if there was further deterioration in those areas.

It was highlighted that where Audit information had been provided by Service Group there had been 1 fail in previous recommendations. Officers agreed to email Members with the detail behind that.
A
32/18		Consideration was given to a report which informed Members of the performance against the treasury management and prudential indicators set in the Treasury Management Strategy approved by Council in March 2018.

Main issues discussed were as follows:

- Brief discussion took place around the economic background and commentary regarding key areas such as borrowing and investment.

- The Council had not yet taken any further borrowing and were letting loans mature.

- In terms of investment, this was a similar level to that in March 2018. £5m that was available for longer-term investment was moved from banks and local authorities into property funds.

- It was highlighted that 'Non Treasury Investments' must be reported, which included £6.6m of investments. Of that £6.6m, £6.339 was invested in directly owned property and £0.264m in loans to local businesses and landlords. These investments had generated £0.364m of investment income for the Authority after taking account of direct costs during 2017/18.

- In terms of compliance the Director of Finance and Business Services reported that all treasury management activities undertaken complied fully with the CIPFA Code of Practice and the Authority’s approved Treasury Management Strategy.

- Members attention was drawn to the outlook in terms of the expectations of interest rates for the remainder of 2018/2019, details of which were contained within the report.

- Members had requested that Officers bring back information detailing the Ratio of Financing Costs to Net Revenue Stream of other neighbouring authorities. Officers confirmed this as follows:

- Stockton 1.2%
- Redcar Cleveland 12%
- Darlington 4%

The figures for Middlesbrough and Hartlepool were not yet available however Officers would report back as soon as they had received them.

Members pointed out that Stockton was in a fortunate position with the addition of Ingleby Barwick which was generally considered to be an affluent area. Wealthy areas had better rating properties which helped Local Authorities. Some areas in neighbouring Authorities had real challenges and were losing residents.

- Whilst it was accepted Stockton was expanding it was expressed by some Members that services were not increasing at the same rate to support this.
A
33/18		Consideration was given to the Corporate Risk Register update report.

The Committee were reminded that quarterly reports on the Corporate Risk Register were presented for the purpose of reviewing the key risks that had been identified as having the potential to deflect services from achieving their objectives over the next 12 months and beyond. They also set out the actions being taken to ensure that the risks, and possible adverse outcomes, were minimised.

As a reminder, risks were scored on a scale of one to five for both ‘impact’ and ‘likelihood’. The scores were multiplied to generate a total score and any risks with a score of 15 or above were included in detail in this update. All other risks on the strategic risk register were reported in summary detail only.

The main topics discussed were as follows:

- Areas of high risk were highlighted within HR where they were still dealing with budget pressures.

- Development Control were now in the latter stages of getting the Local Plan ratified.

- Discussion took place around how the Risk Register was looked at and how often. The whole Risk Register was looked at quarterly.

- Officers confirmed the Risk Register did not get presented to the Senior Management Team.

- The Vice-Chairman queried the documentation used for reporting the Risk register specifically the section 'Owner and Target Date' as there appeared to be no owners identified. It was explained that the Risk Register linked into the Councils Service Plans where owners would be identified and then would appear within the document.
A
34/18		Consideration was given to a report which detailed the regular non-responsive services provided by the Council’s Health and Safety Unit to monitor, improve and to ensure compliance of the health, safety and well-being control environment for the period 1st July 2018 - 30th September 2018.

This detail encapsulates the regular, non-responsive activity of the Health and Safety Unit, and accident and assault statistics:

1. Health and Safety Training
2. Health and Wellbeing Update
3. Premise Audit Findings
4. Construction (Design and Management) Regulations 2015
5. School’s Educational Residential Visits
6. Employee Protection Register Activity
7. Safety Warnings, Advice or Reminders Issued
8. Accidents Reported
9. Physical Assaults Reported
10. Verbal Assaults Reported.

The main topics discussed were as follows:

- Workplace assessments were carried out using an online tool.

- The number of accidents and assaults fell during times of school closure, otherwise the figures were pretty much consistent.
A
35/18		The Chartered Institute of Public Finance & Administration (CIPFA) stated that an effective Audit Committee would produce annual reports on its work and findings.

This report was to inform members of the work of the Audit Committee during the past year and the sources of information upon which the enclosed Audit Committees opinion statement was based.
A
36/18		The Work Programme was noted.

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