Agenda and minutes

Audit Committee
Wednesday, 19th July, 2017 6.00 pm

Venue: Committee Room 2, Town Hall. View directions

Contact: Daniel Sharples  (0161 474 3209)

Media

Items
No. Item

1.

Minutes pdf icon PDF 64 KB

To approve as a correct record and sign the Minutes of the meeting held on 15 March 2017.

Additional documents:

Minutes:

The Minutes (copies of which had been circulated) of the meeting held on 15 March 2017 were approved as a correct record and signed by the Chair.

2.

Declarations of Interest

Councillors and officers to declare any interests which they have in any of the items on the agenda for the meeting.

Additional documents:

Minutes:

Councillors and officers were invited to declare any interests they had in any of the items on the agenda for the meeting.

 

The following interest was declared

 

Personal Interest

 

Councillor

Interest

John Taylor

Agenda item 10 ‘Head of Internal Audit Opinion and Annual Report 2016-2017’  as a shareholder in Dignity PLC.

 

 

 

3.

Urgent Decisions

To report any urgent action taken under the Constitution since the last meeting of the Committee.

Additional documents:

Minutes:

No urgent decisions were reported.

4.

Public Question Time

Members of the public are invited to put questions to the Chair on any matters within the powers and duties of the Committee, subject to the exclusions set out in the Code of Practice.  (Questions must be submitted prior to the commencement of the meetingon the card provided.  These are available at the meeting. You can also submit via the Council’s website at www.stockport.gov.uk/publicquestions).

Additional documents:

Minutes:

Members of the public were invited to put questions to the Chair on any matters within the powers and duties of the Area Committee, subject to the exclusions set out in the Code of Practice.

 

No public questions were submitted.

5.

Annual Governance Statement 2016-17 pdf icon PDF 55 KB

To consider a report of the Corporate Governance Group.

 

The report presents for consideration the final version of the Council’s Annual Governance Statement (AGS) for 2016/17.  The final AGS has been considered by Corporate Leadership Team and the Corporate Governance Group.  The draft AGS was considered by the Audit Committee on 9th March 2017.  There has been no material change in governance issues up to the date of this meeting.

 

The Committee are invited to consider and comment on the report.

 

Officer Contact: John Pearsall on Tel: 474 4033 or email: john.pearsall@stockport.gov.uk

 

 

 

 

Additional documents:

Minutes:

A representative of the Corporate Governance Group submitted a report (copies of which had been circulated) providing for comment the final version of the Council’s Annual Governance Statement (AGS) for 2016/2017. The report had been provided in line with the guidance issued by the Chartered Institute of Public Finance and Accountancy (CIPFA) Finance Advisory Network and the changes highlighted in the Accounts and Audit Regulations 2015.

 

Councillors asked questions in relation to governance issues relating to Stockport Together and on challenges associated with the Council’s relationship with Carillion.

 

RESOLVED – That the report be noted.

6.

Informing The Risk Assessment pdf icon PDF 54 KB

To consider a report of the External Auditor.

 

The purpose of this report  is to contribute towards the effective two- way communication between Grant Thornton (external auditors) and the Council's Audit Committee, as 'those charged with governance'. The report covers some important areas of the auditor risk assessment which are required to make inquiries of the Audit Committee under auditing standards.

 

The Committee are invited to consider and comment on the report.

 

Officer Contact: John Pearsall on Tel: 474 4033 or email: john.pearsall@stockport.gov.uk

 

 

 

 

Additional documents:

Minutes:

The External Auditor submitted a report (copies of which had been circulated) covering a number of important areas of the auditor risk assessment including management processes and the Audit Committee’s oversight of those key areas.

 

RESOLVED – That the report be noted.

7.

Grant Thornton - Audit Findings Report pdf icon PDF 537 KB

To consider a report of the External Auditor.

 

The report provides for comment the findings of the external audit.

 

The Committee are invited to consider and comment on the report.

 

Contact: Heather Green on Tel: 234 6381 or email: heather.green@uk.gt.com

Additional documents:

Minutes:

The External Auditor submitted a report (copies of which had been circulated) providing for comment the Audit Finding for the Council year ending 31 March 2017.

 

The following comments were made/issues raised:-

·         Councillors requested that a full explanation be provided into how the Chain Ladder method was applied to the progression of incurred losses.

·         Councillors welcomed the findings that the external auditors were of the opinion that the Council had proper arrangements in place to secure economy, efficiency and effectiveness in its use of resources.

 

RESOLVED – That the report of the external auditor be noted.

8.

Statement of Accounts 2016/17 pdf icon PDF 74 KB

To consider a report of the Borough Treasurer.

 

The report presents for consideration the Statement of Accounts 2016/17.

 

The Committee are invited to consider and comment on the report.

 

Officer Contact: Jonathan DaviesTel: 218 1025 or email: jonathan.davies@stockport.gov.uk

 

 

 

Additional documents:

Minutes:

The Borough Treasurer submitted a report (copies of which had been circulated) requesting the Committee to consider issues which had arisen during the audit period and to approve the final audited statement of accounts.

 

The following comments were made/issues raised:-

·         Councillors noted that for 2016/17, CIPFA had introduced two substantial changes to the Council’s Accounts with the aim of improving the readers understanding. As result there were new formats for the Comprehensive Income and Expenditure Statement and Movement in Reserves Statement, and the introduction of the Expenditure and Funding Analysis.

·         There had been a number of significant transactions during the year which were included within the Council’s 2016/17 Statement of Accounts. These included accounting for changes in the HRA housing valuations, Stockport Exchange Phase 2 development and the valuation of Merseyway shopping centre.

·         The valuation of the Council’s investment in Manchester Airport.

·         Councillors asked for a presentation to a future meeting on the Local Government Pension Scheme

 

RESOLVED – That the report be noted and the Statement of Accounts be approved including approval for the signing of the Letter of Representation by the Chair of the Audit Committee and the Borough Treasurer.

9.

Internal Audit Progress Report 1 (1st March 2017 - 30th May 2017) pdf icon PDF 60 KB

To consider a report of the Borough Treasurer.

The report sets out the progress made by internal audit against the approved
2016/17 and 2017/18 internal audit plan for the period 1st March 2017 to 30th June 2017 (Appendix 5).

The Committee are invited to consider and comment on the report.

Officer Contact: John Pearsall Tel: 474 4033 or email: john.pearsall@stockport.gov.uk

 

Additional documents:

Minutes:

The Borough Treasurer submitted a report (copies of which had been circulated) setting out progress made against the approved 2016/2017 and 2017/2018 internal audit plan for the period 1 March 2017 to 23 June 2017.

 

Councillors discussed the circumstances in which consultants were appointed and the frequency of appointment.

 

RESOLVED – That the report be noted.

10.

Head of Internal Audit Opinion and Annual Report 2016-17 pdf icon PDF 58 KB

To consider a report of the Borough Treasurer.

It is a requirement of the Public Sector Internal Audit Standards (PSIAS) that the Internal Audit and Risk Manager prepares an annual report containing an overall opinion on the Council’s control framework.
The annual report provides the evidence for the overall opinion and assurance statement of the Internal Audit & Risk Manager and his judgement whether there is generally a sound system of internal control, adequately designed to meet the Council’s objectives, and controls are being applied consistently. The overall conclusion is either substantial, moderate, limited or no assurance.

The Committee are invited to consider and comment on the report.

Officer Contact: John Pearsall Tel: 474 4033 or email: john.pearsall@stockport.gov.uk

 

Additional documents:

Minutes:

The Borough Treasurer submitted a report (copies of which had been circulated) providing for comment the Internal Audit Annual Report which contained an overall opinion on the Council’s control framework. The annual report provides the evidence forthe overall opinion and assurance statement ofthe Internal Audit and Risk Manager and his judgement whether there is generally a sound systemof internal control, adequatelydesigned to meet the Council’s objectives, and controls are being applied consistently.The overall

conclusion is either substantial, moderate, limited or noassurance.

 

The following comments were made/issues raised:-

·         Councillors welcomed the increase in 2016/17 in the overall percentage of substantial assurance ratings limited assurance ratings when compared to previous years.

·         The provision of risk management training to all members of the Audit Committee was extended to include all new members of the Council in July 2016. The training was now provided on an annual basis.

 

RESOLVED – That the report be noted.

 

11.

Annual Fraud Report 2016/17 pdf icon PDF 56 KB

To consider a report of the Borough Treasurer.

The production of this Annual Fraud Report will help the Council to demonstrate its commitment to identifying and managing fraud risk by outlining key activities, processes and findings from the previous year.

The purpose of this report is to present the work carried out during the past year to minimise the risk of fraud, bribery and corruption occurring in the Council. This supports the requirements of the Accounts and Audit Regulations (England) 2011, which state that the Council must have measures in place “to enable the prevention and detection of inaccuracies and fraud.” In this context, we have taken fraud also to refer to cases of bribery and corruption.

The Committee are invited to consider and comment on the report.

Officer Contact: John Pearsall Tel: 474 4033 or email: john.pearsall@stockport.gov.uk

 

Additional documents:

Minutes:

The Borough Treasurer submitted a report (copies of which had been circulated) providing for comment the Annual Fraud Report.  The report presents the work undertaken during the past year to minimise the risk of fraud, bribery and corruption occurring in the Council and supports the requirements of the Accounts and Audit Regulations (England) 2011.

 

Councillors discussed the implications of personalised budgets and the potential effect on preventing fraud. The fact that the number of cases reported in Stockport was low compared to other local authorities was welcomed.

 

RESOLVED – That the report be noted.

12.

Annual Report of the Chair of the Audit Committee 2016/17 pdf icon PDF 72 KB

To consider a report of the Chair of the Audit Committee.

The report demonstrates how the Audit Committee has fulfilled its terms of reference during the financial year and how it is fully committed to helping to improve the Council’s governance and control environments during the year ahead and outlines how the committee’s activities during the financial year are designed to make a positive contribution to the continual improvement of governance arrangements across the Council, as well as performing the statutory roles as identified in the Constitution.

The Committee is invited to consider and comment on the report.

Officer Contact: John Pearsall Tel: 474 4033 or email: john.pearsall@stockport.gov.uk

 

Additional documents:

Minutes:

The Chair of the Audit Committee submitted a report (copies of which had been circulated) demonstrating how the Audit Committee has fulfilledits terms ofreference during the financial year and how it is fully committedto helping toimprove the Council’s governance and control environmentsduring the year ahead. The report also outlined how the committee’s activities during the financialyear are designed to make a positive contribution tothe continual improvement of governance arrangements across the Council, as well as performing the statutoryroles as identified in the Constitution.

 

RESOLVED – That the report be noted.

 

13.

Corporate Risk Register 2017-18 - Qtr 1 Update pdf icon PDF 64 KB

To consider a report of the Borough Treasurer.

 

The report provides an update on the current status of corporate risks.

 

The Committee are invited to consider and comment on the report.

 

Officer Contact: John Pearsall on Tel: 474 4033 or email john.pearsall@stockport.gov.uk

 

Additional documents:

Minutes:

The Borough Treasurer submitted a report (copies of which had been circulated) providing an update on the current status of corporate risks.

 

The following comments were made/issues raised:-

 

 

RESOLVED -