Agenda and minutes

Audit Committee
Tuesday, 22nd March, 2016 2.00 pm

Items
No. Item

1.

Declarations of Interest pdf icon PDF 43 KB

Members are reminded of the need to consider whether they have a personal or prejudicial interest to declare in any of the items on this agenda.  If so, the nature of the interest must be declared at the start or as soon as the interest becomes apparent, of the meeting.  In addition, the attached form must be completed and passed to the Committee Administrator.  The Officers will be pleased to advise, if necessary, and any request for assistance should be made, in the first instance, to the Committee Administrator whose name appears at the end of this agenda.  Ideally, such advice should be sought before the day of the meeting so that time is available to consider any uncertainty that might arise.

Minutes:

Councillor D Chance declared a personal and non-pecuniary interest in Agenda Item 11 (Partnerships: Financial Standing) on the ground that he had been appointed by the Council to the Board of the Creative Industries Centre. He remained in the meeting for the duration of the item. 

2.

Minutes pdf icon PDF 88 KB

To approve and sign as a correct record, the minutes of the meeting held on 1 December 2015.

Minutes:

RESOLVED:     that the minutes of the meeting held on 1 December 2015 be approved as a correct record and signed by the Chairman. 

3.

Public Question Time

To consider any public questions of which due notice has been given and which are relevant to the business of the Audit Committee.

Minutes:

There were no questions received from members of the public. 

4.

AUDIT PROGRESS REPORT pdf icon PDF 308 KB

To receive the attached update on the External Auditors’ progress in delivering their responsibilities to the Council, and to note the key emerging national issues and developments which may be of interest to Committee Members. 

Minutes:

Mr James Collins, External Auditor, presented the audit progress report which apprised the Committee of progress made in delivering external audit’s responsibilities.  He drew Members’ attention in particular to the accounting and auditing workshop for officers which had been held in January 2016 and had been attended by some of the Council’s finance and audit staff.  A further meeting with officers would be held to discuss the significant changes taking place in respect of the accounting requirements for infrastructure assets and the potential impact on the Council’s financial statements.  He also reported that the first North Yorkshire Governance Forum meeting had been well attended and had received positive contributions from the Council’s representatives.

 

Mr Collins outlined the changes to the public inspection of accounts, arising from the Accounts and Audit Regulations 2015, and the revised criteria on the Value for Money (VfM) conclusion, published by the National Audit Office.  External Audit had produced an initial risk assessment in respect of the latter, the results of which had been reported in the Audit Strategy Memorandum. 

 

RESOLVED:     that the Audit Progress Report be noted

5.

AUDIT STRATEGY MEMORANDUM pdf icon PDF 308 KB

To receive the attached summary report on the External Audit approach, any highlighted significant audit risks and any areas of key judgements. 

Minutes:

The Committee considered the Council’s Audit Strategy Memorandum for the year ending 31 March 2016, which summarised the external auditors’ approach, highlighted significant audit risks and areas of key judgements.  Mr Collins highlighted a 25% decrease in audit fees in comparison to the previous year. 

 

RESOLVED:     that the report be received.

6.

GRANTS REPORT pdf icon PDF 161 KB

To consider the attached letter from the External Auditor, detailing the findings of work undertaken on a Housing Benefit Subsidy claim/return under the Public Sector Audit Appointments (PSAA) regime.

Minutes:

The External Auditor, Mr J Collins, reported on a claim for 2014/15 in relation to Housing Benefit Subsidy Return, which had been amended and was subject of a qualification letter.  Findings had indicated that errors had been identified and reported to the Department for Work and Pensions, and he outlines the External Auditors’ recommendation in relation to these. 

 

RESOLVED:     that the report be noted.

7.

TOP RISKS pdf icon PDF 154 KB

To consider a verbal update report from the Director Mr N Edwards, on the Council’s main areas of risk.

Minutes:

Mr N Edwards, Director, apprised the Committee of the top risks facing the Council, as set out below:

 

Current Position

Risk

Movement

Time

Officer

1.

Budget

?

*****

NE

2.

Coast Protection

?

***

LD

3.

Futurist

?

***

NE

4.

Maintenance of Assets

?

***

NE

5.

The Sands

?

**

NE

6.

Middle Deepdale  

?

**

NE

7.

Leisure Village

?

**

TW

8.

Upper Harbour

?

**

NE

9.

Endeavour Wharf

?

**

NE

10.

Senior Management Restructure

?

*

JD

 

The following principal points were raised in discussion:

 

The Budget: The Council’s budget remained the most significant risk, with further cuts required over the next four years, resulting in a period of potential turbulence in terms of finance and service delivery.  Currently a significant amount of work was being undertaken in respect of mid-term planning, and the in-year structure for balancing the budget was under revision.  In response to a question, Mr Edwards explained that the consequences of not collecting small business rate relief would be a reduction in the Council’s overall budget.  The full impact of the central government changes to small business rate relief would not be known until 2019/20. 

 

Coast Protection: Reserve funding had been set up.  In respect of Whitby piers, Mr Edwards confirmed that this project was out to tender, and that funding would be achieved through a combination of grants and additional beneficiaries. 

 

Futurist: This item was now on the Cabinet Forward Plan and would be considered in due course.

 

Leisure Village: Good progress had been made on the building works, with two buildings now going up. 

 

Upper Harbour: Match funding was currently being sought.  An agreement had been verified with the contractor to extend their lease agreement, thereby providing a long-term solution to the project.

 

Endeavour Wharf: The necessary legal agreements were in the process of being drafted.

 

Senior Management Restructure: The new structure was now embedded, and although still a risk, good progress had been made in maintaining a stable leadership.

 

In response to a question, Mr Edwards confirmed that the Alpamare Water Park at the Sands development was on schedule to open to the public in mid-July. 

 

RESOLVED:     that the report be noted. 

8.

RISK MANAGEMENT STRATEGY AND ACTION PLAN UPDATE pdf icon PDF 132 KB

To consider the attached Council’s Draft Risk Management Strategy (report ref.16/88). 

Additional documents:

Minutes:

Members considered the Council’s draft Risks Management Strategy.  He reported that it was broadly in similar form to previous strategies, and remained in draft due to the requirement to consult the Risk Champions first.  He drew the Committee’s attention to the action plan at Appendix B to the report, stating that members would receive training on risk as part of its implementation, followed by guidance notes, and further updates to the plan and the Corporate Risk Register.  A further report on the Risk Management Strategy would be considered by the Audit Committee later in the year.

 

RESOLVED:     that the Council’s Draft Risk Management Strategy be received. 

9.

GOVERNANCE UPDATE

To receive a verbal update report on Council Governance from the Director, Ms Lisa Dixon.

Minutes:

The Deputy Monitoring Officer and Regulation and Governance Manager provided a verbal update on Council governance.  He referred to the changes to the Council’s Overview and Scrutiny structure, with one single Board replacing the previous scrutiny committees, as a way to achieve a more focussed scrutiny function.  The Area Committees had also been abolished, and there was a report elsewhere on the agenda proposing the amalgamation of the Audit and Standards Committees.  In addition, an overall review of the Constitution was underway, to reflect the recent changes to the Committee structure, and to ensure that the document was fit for purpose going forwards. 

 

RESOLVED:     that the report be noted. 

10.

AUDIT AND STANDARDS COMMITTEES pdf icon PDF 151 KB

To consider a report from Mr David Kitson, Deputy Monitoring Officer and Regulatory and Governance Manager, in respect of a proposal to merge the Council’s Audit and Standards Committees (ref.16/89).

Minutes:

The Deputy Monitoring Officer and Regulatory and Governance Manager, Mr D Kitson, presented his report in respect of a proposal to merge the Council’s Audit and Standards Committees.  The aim of this would be to achieve a more streamlined and joined up governance role, to promote the visibility of the ethical agenda, and to assist the Council in meeting its statutory duty to ensure high standards of conduct. 

 

In response to questions from Members, Mr Kitson confirmed the following:

 

     The system for dealing with complaints had become more efficient under the implementation of the Localism Act 2011, and many complaints were now dealt with through the Council’s independent persons.  This did sometimes mean that complaints information was not as available as previously, and he suggested that the Committee received a report every six months, outlining the various standards complaints and their outcomes. 

 

     The proposal would be the subject of further consultation with Parish Councils, the Governance Working Group, and other stakeholders, and a report would be considered by Cabinet and Council in due course. 

 

RESOLVED:     that the Audit Committee supports the proposal to add the terms of reference of the Standards Committee to those of the Audit Committee, thereby merging the two committees.  

11.

PARTNERSHIPS: FINANCIAL STANDING pdf icon PDF 204 KB

To note the attached report and in particular, approve the financial accounts of the Council’s partnership organisations listed in the report, and to note their financial position (report ref.16/81). 

Minutes:

Mr H Hughes presented his report in respect of the financial accounts and position of the various Council partnership organisations, and he went through the key isueres with each organisation in turn.  Overall, the Council’s partners were reported to be in a position of ongoing financial stability.

 

RESOLVED:            that the report be noted, and in particular the financial accounts of the following partnership organisations be noted:

 

·         Scarborough Museums Trust;

·         Creative Industries Centre Trust

·         North Yorkshire Procurement Partnership

·         North Yorkshire Building Control Partnership

·         Sheffield International Venues Ltd

·         Yorkshire Energy Partnership

·         Sport and Leisure Management Ltd

12.

WORK PROGRAMME pdf icon PDF 55 KB

To consider the attached Audit Committee Work Programme for 2016/17 (report ref.16/63). 

Minutes:

The Committee noted the latest version of its work programme. 

 

RESOLVED:     that the report be received

13.

AUDIT MONITORING REPORT - INCLUDING FOLLOW-UP REPORT pdf icon PDF 129 KB

To note the attached results of audit and fraud work undertaken so far during 2015/16 (report ref.16/87)

Additional documents:

Minutes:

The Audit Manager presented a report which outlined the results of the audit and fraud work undertaken in 2015/16, and gave opinion on the Council‘s internal control environment. 

 

The Follow-up report at Appendix 2 to the report indicated the recommendations that had been agreed by management in relation to areas requiring improvement, and she reported that 70% of them had been implemented to date.  Cases where no implementation had taken place, related to actions that had been given a revised target date, or actions that had not been implemented (7 in total) due to Management accepting the level of risk around the controls tested. 

 

RESOLVED:     that the result of audit and fraud work undertaken to date during 2015/16 be noted. 

14.

FILEY BRIGG CARAVAN PARK

To consider progress made in respect of Filey Brigg Caravan Park, and to consult the responsible officer, who will be in attendance at the meeting. 

Minutes:

The Scarborough Open Air Theatre Venue Manager  Mr Stuart Clark, apprised the Committee of progress made in implementing the recommendations of the Council’s internal auditors in relation to Filey Brigg Caravan Park.  It was noted that there had been no change in the situation since the previous Audit Committee meeting, and that some of the recommendations remained unimplemented.  Mr Clarke had recently acquired managerial responsibility for the site, however, and would shortly be discussing necessary operational changes with members of staff there as follows:

 

·         The implementation and monitoring of a system to trace receipts, with all reconciliations and banking sheets being submitted to Mr Clarke;

·         The establishment of best practice in cashing-up procedures in accordance with Audit’s recommendations;

·         The correct numbering of pitches and implementation of a new, fit for purpose computerised booking system.  This would include the ability for customers to book pitches online in order to optimise the number of bookings.  The new system would be simple to implement and would be cheaper.  The Council’s ICT team would assist with ensuring that the system fulfilled the Council’s obligations in relation to the Data Protection Act;

·         A twice-weekly collection cash collection between March and October, with scope for an extra collection at times of high income and for a third collection on Sundays as necessary;

The Committee thanked Mr Clarke for his ongoing work, and requested an update report in September 2016.

 

RESOLVED:     that

 

(i)        the measures being taken to implement the recommendations of the Council’s internal auditors be noted; and

 

(ii)       a progress report be considered by the Audit Committee at its September 2016 meeting.

15.

DATES OF FUTURE MEETINGS

To note the following proposed Audit Committee meeting dates which will be considered by Cabinet on 15 March 2016, and full Council on 9 May 2016 (all Audit Committee meetings starting at 2.00 p.m.):

 

Thursday 30 June 2016;

Thursday 22 September 2016;

Thursday 1 December 2016; and

Thursday 23 March 2017.

Minutes:

The Committee noted the following dates of future meetings:

 

Thursday 30 June 2016, 2.00 p.m.;

Thursday 22 September 2016, 2.00 p.m.;

Thursday 1 December 2016, 2.00 p.m.; and

Thursday 23 March 2016, 2.00 p.m.