Agenda and minutes

To approve as a correct record and sign the minutes of the meeting held on 25 September 2013.

The Minutes (copies of which had been circulated) of the meeting held on 25 September 2013 were approved as a correct record and signed by the Chair.

No declarations of interest were made.

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

No public questions were submitted.

To consider a report of the External Auditor.

The Audit Committee is requested to consider and comment on the report.

Officer Contact: Mick Waite on Tel: 0161 234 6347 or email: mick.j.waite@uk.gt.com

Andrew North (Grant Thornton) submitted a report (copies of which had been circulated) updating the Committee on progress with delivering on their responsibilities as the Council’s external auditors and providing a summary of emerging national issues relevant to the Council and which would be of interest to the Committee in its deliberations.

The following issues were discussed:-

·         The robustness of the Council’s approach to managing the reductions in resources and making appropriate decisions. Stockport had already begun to look at its services through the BITE Programme before the reductions were announced so had been able to address reductions more systematically. It was stressed that significant challenges remained to respond to the reductions for 2015/16-2016/17.

·         The challenge and opportunities presented by the personalisation of health and social care budgets in managing financial pressures. There were significant risks associated with this agenda which were likely to increase in the future.

RESOLVED – That the report be noted.

To consider a report of the External Auditor.

The report presents for consideration the Annual Audit Letter for Stockport Council.

The Audit Committee is requested to consider and comment on the letter.

Officer Contact: Mick Waite on Tel: 0161 234 6347 or email: mick.j.waite@uk.gt.com

Andrew North (Grant Thornton) submitted a report (copies of which had been circulated) summarising the key findings arising from Grant Thornton’s auditing of the Council up to the year ending 31 March 2013. The report summarised the detailed report considered at the last meeting on 25 September 2013.

The following comments were made/ issues raised:-

·         The complexities surrounding Housing and Council Tax Benefits, and teachers’ pensions, which had been subject to audit. In response to questions it was stated that in both cases the initial findings suggested that the Council had responded well to the challenges presented by new regulations in these areas.

·         The measures used to determine the involvement of members in the financial planning process and providing challenge were discussed.

·         Members discussed the use of surpluses from last year’s budget. In response it was stated that in the context of the overall budget this was a small amount, but that by retaining surpluses within a portfolio at year end this provided flexibility to meet future challenges. From an auditor’s perspective, the surplus demonstrated financial discipline within the Council.

·         School balances were higher in Stockport than in other authorities in Stockport’s CIPFA (Chartered Institute of Public Finance and Accountancy) family, and schools should be encouraged to make appropriate use of their unspent resources.

·         Managing costs within adult social care was of great significance to the Council as this represented an increasingly large proportion of the Council’s expenditure. Positive working relationships with the Clinical Commissioning Group would assist with this work, although there were challenges to working within the restrictive NHS budgeting process. It needed to be recognised that this work had significant ramifications for the Council, as well as the work of this Committee, but that the risks associated had to be taken in order to achieve the transformation needed.

RESOLVED – That the report be noted.

To consider a report of the Corporate Director for Corporate and Support Services.

The report sets out the progress made by internal audit against the approved 2013/14 internal audit plan for the period 1st September 2013 to 30th November 2013.

The Audit Committee are requested to consider and comment on the report.

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

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) detailing progress made against the 2013/14 Internal Audit Plan during the period from 1 September to 30 November 2013.

Questions were asked in relation to the following issues:-

·         Responding to requests for support and managing unplanned activities.

·         The impact of the new joint procurement partnership, working with other local authorities and sharing responsibility for auditing of these arrangements.

·         Provision of training in relation to bank mandating.

·         Key risks with cash collection having been addressed.

·         Minimising the impact on customers of Direct Payments.

RESOLVED – (1) That the report be noted.

(2) That the Corporate Director for Corporate and Support Services be requested to provide members with additional information in relation to SEN Grant Claims.

To consider a report of the Corporate Director for Corporate and Support Services.

The report outlines the steps undertaken to produce a revised internal audit plan for the remainder of 2013/14.

The Audit Committee are requested to consider and comment on the report.

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

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) inviting the Committee to consider changes to the 2013/14 Audit Plan. Revision of the Plan had become necessary due to the loss of audit resource through staff changes. The impact of the reduction in audit activity had been risk assessed and was detailed in the report.

Members welcomed the usefulness of the options appraisal and risk assessment carried out and included in the report.

RESOLVED – That the revised Internal Audit Plan 2013/14 be approved.

To consider a report of the Corporate Director for Corporate and Support Services.

The report outlines the content of a guidance document (appendix 8) on the process of Continuous Auditing/Monitoring.

The Audit Committee is requested to consider and comment on the report.

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

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) inviting the Committee to consider and comment upon a proposal for a new model of delivering additional auditing, known as Continuous Auditing/Monitoring. This used automated processes to supplement the work of Internal Audit and provide additional levels of assurance over key areas agreed with Management.

The following comments were made/ issues raised:-

·         Any technical solution or system that was implemented would need to complement the Council’s joint arrangements with other Local Authorities and partners, which would also have data protection and software license implications.

·         The proposed approach would supplement the work already taking place within service areas through data reconciliation processes, and would provide additional assurance. It would also supplement the allocation of auditing resources in the future. The implementation of any new process would present a challenge to staff and appropriate training and support would be needed. This should be seen as part of a more general up skilling of staff to be better able to respond to problems and manage risk in the future.

RESOLVED – That the overall approach to Continuous Auditing/ Monitoring as detailed in the report be welcomed.

To consider a report of the Corporate Director for Corporate and Support Services.

The report outlines the proposed planning methodology required to produce the Annual Internal Audit Plan (2014/15). This includes a timetable for the planning process.

The Audit Committee is requested to consider and comment on the report.

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

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) inviting the Committee to consider the methodology that was required to be used to produce the 2014/15 Internal Audit Plan.

Members discussed the challenges associated with assessing ‘political and reputational risk’.

RESOLVED – That the report be noted.

To consider a report of the Corporate Director for Corporate and Support Services.

The report sets out the assessment made by the Internal Audit and Risk Manager on the Council’s current Risk Management arrangements against a national performance model developed by the Association of Local Authority Risk Managers (ALARM).

The Audit Committee is requested to consider and comment on the report.

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

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) inviting the Committee to consider the arrangements for an assessment of the Council’s current Risk Management arrangements against a national performance model developed by the Association of Local Authority Risk Managers, to identify areas of good practice, areas for improvement and training needs for staff in the management of risk.

The following comments were made/ issues raised:-

·         Concerns about the arrangements for managing the risks associated with Greater Manchester wide projects and ensuring lead authorities had undertaken robust risk management assessments.

·         The increased profile being given to risk management was welcomed.

RESOLVED – That the report be noted.