Meeting documents

Audit Committee
Tuesday, 14th March, 2017 9.30 am

Date: Tuesday 14th March 2017 Time: 9.30 a.m. Place: Council Chamber, Civic Centre, Ebbw Vale

Please note: all Minutes are subject to approval at the next Meeting

PresentAndWithReport toReport of
COUNCILLOR J. MASON (CHAIR)
Item
No
Item/Resolution Status Action
PUBLIC
1. APOLOGIES

Apologies for absence were received from:-

Councillors K. Chaplin, G. Collier, N. Daniels, W. Hodgins,
B. Sutton

Noted
2. DECLARATIONS OF INTEREST AND DISPENSATIONS

No declarations of interest or dispensations were reported.

Noted
3. AUDIT COMMITTEE
Report (295K/bytes)

The minutes of the Audit Committee held on 20th December, 2016 were submitted.

RESOLVED that the minutes be received as a true record of proceedings.

Agreed
4. ACTION SHEET
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The action sheet arising from the meeting of the Audit Committee held on 20th December, 2016 was submitted, whereupon:-

Appendix B1 Systems Audit - Housing Benefit

This information would be reported to a future meeting of the Audit Committee.

RESOLVED, subject to the foregoing, that the action sheet be accepted.

Agreed
5. CERTIFICATION OF GRANTS AND RETURNS 2015-16 - BLAENAU GWENT COUNTY BOROUGH COUNCIL
Report (61K/bytes)
Report (166K/bytes)

Consideration was given to the Wales Audit Office report.

The Team Leader Performance & Scrutiny presented the report which summarised the results of work on the certification of the Authority's 2015-2016 grant claims and returns. For the 2015-16, 11 grant claims and returns were certified with a total value of 54,352,000, and all of the claims were certified at a total audit cost of approximately 62,500.

The Officer reported that the proposed amendments as detailed on the qualification letters identified that one claim was overstated by approximately 22,174 which represented approximately 0.4% of the overall value of the claims submitted.

He concluded that generally, the overall standard of the grant claims and papers to support the claims were of a good standard, and all claims were submitted for audit by the Authority within the required submission deadlines.

RESOLVED that the report be accepted and the information contained therein be acknowledged.

Agreed
6. WALES AUDIT OFFICE - ACCOUNTING STATEMENTS MEMORANDUM FOR 2015-16 - BLAENAU GWENT COUNTY BOROUGH COUNCIL
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WAO report (309K/bytes)

Consideration was given to the Wales Audit Office report.

The Team Leader Performance & Scrutiny presented the report and stated that on the 30th September, 2016 the Auditor General issued an unqualified auditor's report on the financial statements. The Auditor General concluded that the Council's significant financial systems could be relied upon to produce materially correct outputs. However, there was scope to improve certain internal controls within the Council's closedown and accounts preparation processes and these were detailed at Appendix 1.

RESOLVED that the report be accepted and the information contained therein be acknowledged.

Agreed
7. WALES AUDIT OFFICE - ACCOUNTING STATEMENTS MEMORANDUM FOR 2015-16
BG Report (115K/bytes)

Consideration was given to the Wales Audit Office report.

The Chief Accountant Corporate Services presented the Accounting Statements Memorandum issued by the Wales Audit Office in respect of the 2015/2016 financial year.

The Officer referred to section 2.1 of the main report which detailed Exhibit 1 of the Accounting Statements Memorandum. Appendix 1 set out a number of matters arising from the audit, and the Officer confirmed that each issue had been considered and accepted by relevant Officers, and the Appendix included a management response to each issue, outlining the corrective action to be taken.

In summary the audit opinion and Accounting Statements Memorandum represented a positive outcome for the Authority and provided evidence of the appropriate financial government arrangements in place to manage the reporting of its strategic financial affairs.

RESOLVED that the report be accepted and the information contained therein be acknowledged.

Agreed
8. 2017 AUDIT PLAN - BLAENAU GWENT COUNTY BOROUGH COUNCIL
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WAO Report (214K/bytes)

Consideration was given to the Wales Audit Office report.

The WAO Representative presented the 2017 Audit Plan which outlined work required to fulfil the statutory duties of the Auditor General under the Public Audit (Wales) Act 2004, the Local Government (Wales) Measure 2009, the Local Government Act 1999, and the Code of Audit Practice.

The WAO Officers when through the report and highlighted points contained therein.

A Member referred to the performance audit programme and asked how the WAO intended to gather evidence on how the 44 bodies were beginning to respond to the requirements of the Well-being of Future Generations Act, in light of depleting resources year on year.

In response the WAO Representative said the Council was required to undertake work to comply with the WFG Act, and ensure that the decisions it made do not compromise future generations. She said it was challenging with limited resources, however, faced with difficult periods the Council had shown it was prepared to face-up to challenges and make the necessary decisions, and had also shown willingness to work collaboratively to deliver services. It was about being more creative with the resources available.

In response to a further question raised regarding the role of the PSB Scrutiny, the WAO Representative said it would be key in ensuring accountability for its Members.

RESOLVED that the report be accepted and the information contained therein be acknowledged.

Agreed
9. AUDIT PLAN REPORTING OPTIONS
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Appex A (20K/bytes)
Appex B (47K/bytes)

Consideration was given to report of the Principal Auditor/Head of Internal Audit.

The Head of Internal Audit presented the report which provided the options on the way in which the Audit Plan progress information would be reported to the Committee.

The Audit Plan was currently produced based on the number of audit days between Departments and creating a risk assessed rank order of audits for each Department. The progress figure produced for Committee also included some unfinished audit work carried over from the previous year/period. However, whilst this provided an accurate figure of the Section's productivity for the year to date, it did not provide an accurate perception of the level of audit work that would inform the Annual Audit Opinion.

In December it was agreed that options for future reporting of the plan data would be brought back to the Committee and these options were detailed at paragraphs 1.9 to 1.12.

A brief discussion ensued when Members said their preferred option was Option 3 as it did not add to the workload of the Department.

RESOLVED that the report be accepted and Option 3 be approved as the preferred option for reporting plan progress, namely:-

i. During the production of the quarterly Performance Indicators, details of all audits undertaken by the Section be recorded and analysed and compared to the previous year's output.

ii. A graph be produced to give a visual representation of how the current year's work compared to the previous year, as this would influence the annual HIA opinion. An example of this graph was attached at Appendix A and illustrated:

- The number of completed audits to date within the current financial year.
- The gradings of the completed audits.
- How the current year's outcomes compared to the previous year (full).

iii. This graph was currently presented to CMT on a quarterly basis.

Agreed
10. AUDIT PLAN PROGRESS REPORT OCTOBER 2016 TO JANUARY 2017
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Appex a (266K/bytes)

Consideration was given to report of the Audit Manager.

The Audit Manager presented the report which updated the Committee on progress against the Internal Audit Plan for the period 1st October, 2016 to 31st January, 2017. She confirmed that during the period the Section had completed 62.98% of the Audit Plan against a target of 62.25%.

The Officer reported that a Senior Auditor post had been advertised but no applications had been received, and an agency worker had now been appointed until the end of March 2017.

The Head of Financial Service confirmed that the agency worker was funded out of the existing staffing budget. However, a review of the internal audit service was currently being undertaken which would hopefully result in a more permanent structure within the service.

RESOLVED that the report be accepted and progress made during the period from 1st October, 2016 to 31st January, 2017 be acknowledged.

Agreed
11. AUDIT COMMITTEE FORWARD WORK PROGRAMME
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Appex (50K/bytes)

Consideration was given to report of the Head of Internal Audit.

The Head of Internal Audit presented the proposed forward work programme for the 2017/18 financial year, and it was

RESOLVED that the report be accepted and the topics to be received are appropriate to the remit of the Committee and would enable the Committee to fulfil its role in line with the Local Government Measure and the Council's Constitution.

Agreed
TO RECEIVE AND CONSIDER THE FOLLOWING REPORT(S) WHICH IN THE OPINION OF THE PROPER OFFICER IS/ARE AN EXEMPT ITEM(S) TAKING INTO ACCOUNT CONSIDERATION OF THE PUBLIC INTEREST TEST AND THAT THE PRESS AND PUBLIC SHOULD BE EXCLUDED FROM THE MEETING (THE REASON FOR THE DECISION FOR THE EXEMPTION IS AVAILABLE ON A SCHEDULE MAINTAINED BY THE PROPER OFFICER)
12. A REVIEW OF THE PROCUREMENT PROCESS AND CONTRACT MANAGEMENT OF THE EBBW VALE LEISURE CENTRE DEMOLITION CONTRACT
Report (134K/bytes)
Appex 2 (108K/bytes)

Having regard to the views expressed by the Proper Officer regarding the public interest test, that on balance the public interest in maintaining the exemption outweighed the public interest in disclosing the information and that the report should be exempt.

RESOVLED that the public be excluded whilst this item of business is transacted as it was likely there would be a disclosure of exempt information as defined in Paragraph 14, Schedule 12A of the Local Government Act 1972 (as amended).

Consideration was given to report of the Senior Auditor.

The Senior Auditor presented the report which advised the Committee of the findings of the Internal Audit review of the procurement process and the contract management of the Ebbw Vale Leisure Centre demolition contract, and provided detail in respect of the additional costs incurred in addition to the original contract value.

In response to concerns raised by Member, the Head of Technical Services explained that an asbestos survey was undertaken, the findings of which were contained within the tender documentation. However, as the demolition programme commenced additional asbestos was uncovered that was not identified within the asbestos survey, and not contained within the Authority's records, and therefore not included within the tender specification. This asbestos was found to the underside of structural steelwork which was not exposed, and had been applied during construction in a different manner than was expected.

The Chair confirmed that this had been discussed with CMT, Executive and Scrutiny, and sought assurance that the relevant policies had been adhered to, and the Officer confirmed that this was the case.

RESOLVED that the report which contained information relating to the financial/business affairs of persons other than the Authority be accepted, and the Audit Committee support the findings and the recommendations contained therein.

The Chair said this was the last Audit Committee before the local elections, and took the opportunity to thank Members and Officers for their support and dedication over the past year, and also the WAO Representatives for their contribution and continued support.

He expressed best wishes to Councillor D. Owens on his retirement from his role as a local Councillor, and good luck to those standing in the forthcoming local elections.

Agreed
DECISIONS UNDER DELEGATED POWERS