Agenda and minutes

There were no items were the public and press needed to be excluded.

The Chair extended a warm welcome to Councillor John Healy, former Member of the Committee and Dr Stuart Green, newly co-opted Independent Member to their first meeting of the Audit Committee for this term.

There were no declarations made at the meeting.

RESOLVED that the minutes of the Audit Committee meeting held on 26th April, 2022 be approved as a correct record and signed by the Chair.

The Committee considered the Actions Log report, introduced by Peter Jackson, Head of Internal Audit which updated Members on actions agreed at previous Audit Committee meetings.

It was reported that all actions had been completed and there were no actions outstanding from previous meetings.

RESOLVED that the Audit Committee note the progress being made against the actions agreed at previous Audit Committee meetings.

Neil Concannon, Head of Service, Litigation and Regulatory, presented the annual update report on the use of the Council’s statutory powers provided under the Regulation of Investigatory Powers Act 2000. In addition, the report provided the outcome of a remote inspection undertaken by the Investigatory Powers Commissioner’s Office in April 2022, and provided details of any proposed changes required to the Council’s RIPA Policy and procedures.

Local authorities were required to put in place appropriate arrangements in place relating to RIPA authorisations and covert surveillance, and that it was properly and lawfully carrying out covert surveillance if requested. In addition, the Home Office issued statutory codes of practice on the use of RIPA powers that must be complied with, including requiring Elected Members to have oversight of the use of RIPA powers and to agree the RIPA Policy/Procedures on an annual basis.

Since the last RIPA update report to the Committee in January 2022, one surveillance application had been authorised by Magistrates in March 2022, concerning illicit sales of tobacco products on 8 premises.  The test purchase operation had confirmed that 5 out of the 8 premises were selling illicit tobacco products in contravention of legislation, and appropriate enforcement action would be taken.

The Investigatory Powers Commissioner’s Office had carried out a remote inspection of the Council on 14th April 2022. The Council’s policies, Audit Committee reports, recent authorisations and training details, had been provided to the Inspector for his consideration in advance of the inspection.

The Inspection report dated 26th April 2022 had found the Authority to be in a good place with no recommendations necessary. 

Members noted that no further changes were proposed to the RIPA Policy and procedures since the last minor amendments approved by the Committee in June 2019, following the Investigatory Powers Commissioners previous inspection recommendations in March 2019 and the recent inspection made, recommending no changes.

The Chair, on behalf of the Committee, commended Officers for an excellent report and congratulated the Head of Service, Litigation and Regulatory, the Principal Legal Officer and her team, regarding the positive outcome of the investigation.

RESOLVED:-

(1)             to note that the Council has had one surveillance application authorised under the Regulation of Investigatory Powers Act (RIPA) since the last report to the Audit Committee on the 26th January 2022;

(2)             to note that the Investigatory Powers Commissioner's Office has carried out a remote inspection on 14th April 2022. The report dated 26th April 2022 states ‘Your authority has been found to be in a good place’ with no recommendations necessary; and

(3)             to note that there are no changes proposed to the Council’s Regulation of Investigatory Powers Act (RIPA) Policy and Procedure. The last minor amendments were approved by the Committee in June 2019, following the Investigatory Powers Commissioner’s Inspection recommendations.

The Head of Internal Audit presented the Audit Committee’s Prospectus, as attached at Appendix A of the report, which set out the scope, standards applicable to the Committee and indicative work programme for the 2022-23 Municipal Year.  The report also informed the Committee of minor changes made to the Terms of Reference of the Committee, as approved by the Council at its Annual Meeting on 20th May 2022. The changes were minor in nature and sought to clarify or make more specific the existing Terms of Reference, rather than representing any changes to the actual responsibilities of the committee

The Prospectus included a draft work programme which demonstrated how the Committee would fulfil its Terms of Reference for the year and also provided an indicative work programme of training and awareness sessions for Members of the Committee.

Members’ attention was drawn to an error in relation to the recommendation in the report, which was amended to read as ‘and to note the minor change to the Terms of Reference for the Audit Committee for the 2022/23 Municipal Year,  to reflect that a change had been made to the Terms of Reference.

Dr Stuart Green highlighted the importance of the Committee’s Work Plan in ensuring that the Council met its statutory deadlines and discharged its responsibilities under its Terms of Reference. He sought clarity whether there was a need to modify the Work Plan during the year and what processes were in place to accommodate any changes. In response, the Head of Internal Audit advised that the Chair and Vice-Chair of the Committee would be consulted on any proposed changes to the work plan and those changes would be included in the Action Log report reported to the Committee, and also be incorporated into the Committee’s work programme.

In noting the update briefings and training provided to Members of the Committee as part of the indicative work programme, the Chair asked Members to review those areas identified in the work plan, as set out at Appendix 1, and to notify the Head of Internal Audit if they wished any further training/awareness sessions to be included in the list.

RESOLVED:-

(1)      that the Prospectus setting out the Audit Committee’s scope, standards and work programme for the year, be approved; and

(2)      to note the minor changes made to the Terms of Reference for the Audit Committee for the 2022/23 Municipal Year, as approved by full Council at its Annual Meeting on 20th May 2022.

The Committee received a report, introduced by the Head of Internal Audit, which provided the Committee with an update on progress of the work undertaken by Internal Audit for the period 1st April to 30th June 2022 and showed this in the context of the Audit Plan for the year.  The report also included progress on the implementation of management actions arising from Internal Audit recommendations and Internal Audit performance information, as detailed in sections 3 and 4 of the report.

The Head of Internal Audit summarised the key points relating to each of the four sections of the report and responded to questions and comments from Members as follows:-

Section 1: The Audit Plan / Revisions to the Plan

In noting the reduction of staffing resources in the Internal Audit team and the incoming work with the transition of services of the DCST to the Council, Dr Green asked whether there were sufficient resources in the Internal Audit team to complete the planned work. The Head of Internal Audit advised that a review of the resources in the Internal Audit team was currently being carried out and having completed an assessment of the audit and taking into to account any newly emerging issues, and excessive demands on the team for investigative work, confirmed that the team could manage the current revised work plan with less resource. However, if the situation became unsustainable, steps would be taken to bring additional resources in to the team. Members were informed that the Head of Internal Audit had also looked at future workforce planning in terms of further training and apprenticeship opportunities being incorporated in to the team to bring sustainability. Internal Audit would also be working with the external contractors to DCST, to utilise their skills, external expertise and knowledge to ensure work was not duplicated within the Council.

Dr Green, in commenting on the agility of the Audit Plan, expressed the view that the Plan compared well to the plans that he had seen in local authorities elsewhere. In response to a further question, the Head of Internal Audit clarified that all requests received from directorates to delay the planned audits were assessed on a case by case basis, and the Internal Audit team endeavoured to accommodate those requests as far as possible.  However, he explained that if operational problems arose by delaying the audit, or better value could be achieved by carrying out the audit, sometimes circumstances dictated that the audit had to take place, and the reasons for that were clearly outlined and understood with the senior management team. 

Further to a request from the Chair, the Head of Internal Audit provided an update on two items that had been removed from the Audit Plan. It was noted that Internal Audit was to carry out a review of the North Bridge Stores.  An Improvement Plan had been established at the Stores, however, due to a delay in appointing to the Stores Manager post, the implementation of the Improvement Plan  ...  view the full minutes text for item 60.

Scott Cardwell, Assistant Director of Economy and Environment and Dave Stimpson, Head of Property Services, introduced a report which provided an update on the quarterly progress on the North Bridge operational activities instigated following the Stores Management Review in response to the internal audit carried out in 2019, and their involvement in the Personal Protective Equipment (PPE) stocktaking in 2020. The report was the fifth update provided to Members on the activities that had commenced. Since the last update provided to the Audit Committee in April 2022, paragraph 9 of the report outlined the key milestones identified to be completed by the end of June 2022.

The Head of Property Services summarised the salient points in the report, advising that since the publication of the report, interviews had been held for the Stores Manager position and the Council had been successful in appointing a suitable candidate into the role.  However, due to personal reasons, the candidate had since decided not to accept the position. In light of this, discussions had been held with the Head of Internal Audit, Assistant Director of Economy and Enterprise and Board Members, at the recent Stakeholder Board meeting, where it was agreed that arrangements be put in place for a further recruitment exercise. It was anticipated that recruitment to the post would commence within the next week, with shortlisting for candidates during the first week in September and to have someone in post mid-September, with the Implementation Plan to be progressed thereafter.

The Head of Property Services then reported on the current progress made with regard to:-

Implementation of the Improvement Plan

Stakeholder management meetings had been strengthened to deal with routine issues and improvement areas by the creation of a third tier. Meetings were now being held with senior managers, in addition to the meetings being held with team leaders and respective key holder personnel on a monthly basis, which had proved a useful approach to strengthen relationships. Work continued with the stocktakes, with 35 stocktakes programmed before the next reporting period, which continued to show low variances of a small value.  Processes were also in place to map out a timetable for implementation of the Plan. Officers were currently looking at what further improvements to be made, pending the Stores Manager post being appointed to in September and at what point to re-issue the timetable for delivery of the Plan, to ensure that the Plan was deliverable, and was delivered in a timely manner, setting out the rigorous targets to be met. The Head of Property Services gave an undertaking to provide Members of the Committee with a copy of the revised timetable as an interim position, prior to the next scheduled meeting of the Committee, in order that progress be reported at future meetings.  He highlighted that the outstanding items mainly related to procedural issues in terms of strengthening the processes in place rather than the fundamental risks identified at the commencement of the audit process relating to stock control and  ...  view the full minutes text for item 61.

The Committee considered a report which set out the Council’s unaudited Statement of Accounts for the 2021/22 financial year. The report highlighted the overall position for the year, a summary accounts closure timetable and information relating to the Council’s performance, including improvements achieved in terms of accuracy and quality of the accounts. Details of the key changes to the accounts were set out at paragraphs 16 to 36 and Appendices A-D of the report.

In accordance with the Accounts and Audit (Amendment) Regulations 2021, the publication date of the unaudited 2021/22 accounts had been extended from 31st July to 30th September 2022 for all local authority bodies.  In December 2021, the Department of Levelling-up, Housing and Communities, announced an intention to further extend the deadline for publication of the audited statement of accounts to 30th November 2022.

The Chief Financial Officer and Assistant Director of Finance provided a brief overview of the report. She highlighted the importance of the draft accounts being presented to the Committee at an early stage in line with good practice guidance. It was noted that dedicated training on the accounts had been provided to Members of the Audit Committee in order that the Committee had sufficient time to understand and review the statements, and provide the opportunity to ask questions. The unaudited Statement of Accounts was published on the Council’s website on 6th July 2022 and provided to the Council’s External Auditor Grant Thornton. The Chief Financial Officer and Assistant Director of Finance wished to place on record her thanks to the Financial Management team for completing the draft accounts in challenging circumstances and in meeting the statutory deadline.  The Financial Planning and Control Manager was also in attendance to respond to Members questions.

In answer to questions from Dr Green, it was noted that nothing unexpected or of particular concerns had come to light when producing the accounts other than the impact from Covid-19 from the previous year.  In relation to the sufficiency of the balance position of the Council’s General Fund reserves, Members were informed that Doncaster was in an extremely positive year-end position and based on Grant Thornton’s Value for Money report issued in February 2022, which was considered by the Committee at its meeting in April, had provided comparative information in relation General Fund Balance reserves of other local authorities, which had found that Doncaster was in the top quartile of all local authorities in the country.  An undertaking was given to provide Dr Green and Members of the Committee, with a copy of the report for comparative purposes.  Members noted that the Internal Audit team would be reviewing CIPFA guidance in the future. The General Fund Balance Reserves would also be reviewed as part of the budget process and the Section 151 Officer would consider whether the reserves were reasonable and sufficient. 

Arising from concerns raised by Councillor Healy regarding future potential cost pressures and the impact on the Council’s budget and implications for the Council post Brexit and given  ...  view the full minutes text for item 62.

The Committee received an update on the External Auditor’s 2021-22 Audit Plan for the year ending 31st March 2022 which provided an overview of progress on their work in delivering its responsibilities as the Council’s External Auditor.

Gareth Mills, Key Audit Partner and Engagement Lead and Perminder Sethi, Engagement Senior Manager, Grant Thornton, were in attendance and outlined some of the key messages from the report.

Members’ attention was drawn to key matters, setting out the Council’s outturn position for 2021/22 which had shown an underspend of £8.9m. The Council was to update its Medium Term Financial Strategy (MTFS) during the summer in preparation for the 2023/24 budget setting process. Since the approval of the Council’s budget in February 2022, the financial outlook had worsened due to inflation and the impact of rising energy and fuel costs, and also the recent pay award for local government sector employees had created significant financial pressures on Local authorities budgets. However, it was reported that Doncaster was in a better position than other local authorities in terms of the budget. It was reported that a key area of focus for External Audit next year was Children’s Services in terms of the Value for Money arrangements. As part of the Council’s requirement of the Group Audit accounts, financial Statements had been prepared for St. Leger Homes of Doncaster (SLHD) and Doncaster Children’s Services Trust (DCST). The External Auditor would be undertaking targeted audit work regarding the key material differences between the group accounts and the Council accounts in relation to pension liability of these respective organisation. The External Auditor outlined the significant risks for the Council with regard to management over-ride of controls, valuation of land and buildings, and valuation of the net pension fund liability.

Members were informed that there has been a reduction in materiality of the Council to that of previous years, which was because of changes to the way materiality was calculated which had been brought in to line to that of other authorities by using the net gross expenditure. In relation to Value for money arrangements, the Auditors had not identified any significant areas of risks or weakness to date. This would be kept under review as the audit progressed and the Committee would be kept informed of any issues arising from this work.

With regard to audit logistics, External Audits interim visit had taken place in March and April 2022 and it was envisaged that the audit work be completed by the end of September, to be finalised by end of October and November 2022. The ISA 260 report would be presented to the Audit Committee in October 2022, followed by the Council’s VFM arrangements report in January 2023. It was noted that the 2022/23 financial year would be the final year of the 5-year contract that Grant Thornton were awarded by the Public Sector Appointments Committee (PSAA). Grant Thornton had submitted a bid to the PSAA for the next round of contracts covering the audits for  ...  view the full minutes text for item 63.