Agenda and minutes

Audit Committee
Wednesday, 30th November, 2016 6.00 pm

Venue: Meeting Room 6, Town Hall. View directions

Contact: Stephen Fox  (0161 474 3206)

Media

Items
No. Item

1.

Minutes pdf icon PDF 68 KB

To approve as a correct record and sign the Minutes of the meeting held on 20 July 2016.

Additional documents:

Minutes:

The Minutes (copies of which had been circulated) of the meeting held on 20 July 2016 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 interests were declared:-

 

Personal Interest

 

Councillor

Interest

 

 

John Taylor

Agenda Item 6 – ‘Internal Audit Progress and Performance Report 2’ as a shareholder of the Co-op.

 

Personal & Prejudicial Interest

 

Officer

Interest

 

 

Heather Green

Agenda Item 13 – ‘Local Audit Panel Options’ as a representative of the current External Auditor.

 

Heather Green left the meeting and took no part in the discussion of this item.

 

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 meeting on 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:

No public questions were submitted.

5.

Debt Write Off pdf icon PDF 60 KB

To consider a report of the Borough Treasurer.

 

The report details write offs of low level amounts of debt for the period 1 April 2016 to 30 September 2016.

 

The Audit Committee is asked to note and comment upon the information provided, and confirm if it wishes to receive this report.

 

Officer Contact: Alison Blount on Tel: 0161 474 5107 or email: alison.blount@stockport.gov.uk.

Additional documents:

Minutes:

A representative of the Borough Treasurer submitted a report (copies of which had been circulated) detailing irrecoverable write offs of low level amounts of debt for the period 1 April 2016 to 30 September 2016.

 

The following comments were made/ issues raised:-

 

·         Members acknowledged the resources required to produce the debt write off report.

·         Concerns were raised regarding the suggestion that the debt write off report be no longer submitted to the Audit Committee.

·         It was suggested that the end of the calendar year was a better time for a yearly report on debt write off to be submitted to the Committee, rather than twice yearly.

·         There had been a sharp increase in the number council tax debt write offs as a result of liquidations and bankruptcies.

 

RESOLVED – (1) That the report be noted.

 

(2) That the Borough Treasurer be requested to submit future debt write off reports to the Committee on an annual basis.

6.

Internal Audit Progress and Performance Report 2 pdf icon PDF 59 KB

To consider a report of the Borough Treasurer.

 

The report sets out the progress made by internal audit against the approved 2016/17 internal audit plan for the period 1st June 2016 to 31st October 2016.

 

The Audit Committee is asked to note the internal audit progress report.

 

Officer Contact: John Pearsall on Tel: 0161 474 4033 or email: john.pearsall@stockport.gov.uk.

Additional documents:

Minutes:

A representative of the Borough Treasurer submitted a report (copies of which had been circulated) setting out the progress made by Internal Audit against the approved 2016/17 internal audit plan for the period 1 June 2016 to 31 October 2016.

 

The following comments were made/ issues raised:-

 

·         Members welcomed the approach being taken to the auditing of Stockport Together.

·         Risk workshops were identified as particularly useful to members and it was suggested that more should be scheduled.

·         The risks associated with Marks & Spencer potentially closing its Merseyway store had been reviewed and the situation was being closely monitored.

·         The transition to digital services posed significant risks and needed to be more robust.

 

RESOLVED – That the report be noted.

7.

Revised 2016/17 Internal Audit Plan pdf icon PDF 61 KB

To consider a report of the Borough Treasurer.

 

The report outlines the results of the risk assessment of the remaining audit work to complete before the end of March 2017

 

The Audit Committee is asked to approve the revised internal audit plan 2016/17.

 

Officer Contact: John Pearsall on Tel: 0161 474 4033 or email: john.pearsall@stockport.gov.uk.

Additional documents:

Minutes:

A representative of the Borough Treasurer submitted a report (copies of which had been circulated) outlining the results of the risk assessment of the remaining audit work to be completed before the end of March 2017.

 

RESOLVED – That the revised internal audit plan for 2016/17 be approved.

8.

Internal Audit Planning Methodology 2017/18 pdf icon PDF 54 KB

To consider a report of the Borough Treasurer.

 

The report outlines the proposed planning methodology required to produce the Annual Internal Audit Plan (2017/18).

 

The Audit Committee is invited to comment on the proposed planning methodology.

 

Officer Contact: John Pearsall on Tel: 0161 474 4033 or email: john.pearsall@stockport.gov.uk.

Additional documents:

Minutes:

A representative of the Borough Treasurer submitted a report (copies of which had been circulated) outlining the proposed planning methodology required to produce the Annual Internal Audit Plan (2017/18).

 

RESOLVED – That the report be noted.

9.

Annual Governance Statement – Action Plan November 2016 pdf icon PDF 53 KB

To consider a report of the Borough Treasurer.

 

The report outlines the Council’s Annual Governance Action Plan arising from the latest Annual Governance Statement (AGS) for 2015/16.

 

The Audit Committee is asked to comment on the Annual Governance Statement Action Plan.

 

Officer Contact: John Pearsall on Tel: 0161 474 4033 or email: john.pearsall@stockport.gov.uk.

Additional documents:

Minutes:

A representative of the Borough Treasurer submitted a report (copies of which had been circulated) outlining the Council’s Annual Governance Action Plan arising from the latest Annual Governance Statement (AGS) for 2015/16.

 

The following comments were made/ issues raised:-

 

·         Further clarification was sought on the reward and recognition scheme. In response, it was stated that the scheme was launched in October 2016 to recognise the contributions made my employees and had subsequently brought about 19 nominations, the recipients of which had been sent letters from senior management thanking them for their service.

·         Initial dialogue on the Section 75 pooled budget arrangements between the Internal Audit team and their Clinical Commissioning Group (CCG) colleagues had begun, and the main focus was providing assurances on the risks to the Council associated with pooled budgets.

·         Members stressed the urgency in developing audit arrangements for the Section 75 pooled budget and the need for a diverse approach in order to make faster progress.

·         A two year post in the Internal Audit team dedicated to the Stockport Together programme had been filled by an officer with experience in auditing for the National Health Service.

·         The sickness absence management streamlining involved a shift towards less HR support and more responsibility from managers, by attending mandatory training to ensure there was a consistent and correct approach to the management of sickness absence.

·         The half year position on sickness absence was 5.16 days per full-time equivalent employee, which meant that it was likely that the full year position would be within the tolerance target of 9.5 to 10.5 days.

·         Sickness absence was on the corporate risk register and therefore being monitored, and was being considered for inclusion on the Internal Audit Plan for the following year.

·         Any managers who did not attend the mandatory sickness absence management training would receive a personal request from the Chief Executive and assurances were given to members that all managers would attend the training.

 

RESOLVED – (1) That the report be noted.

 

(2) That the Borough Treasurer be requested to submit a report to the next meeting of the Audit Committee with further details on the audit responsibilities and actions for the Stockport Together programme.

10.

Corporate Risk Register - Half Year Update pdf icon PDF 70 KB

To consider a report of the Borough Treasurer.

 

The purpose of the report is to update Members on the current status of corporate risks.

 

The Audit Committee is asked to consider this report which contains an update on the corporate risk environment for the financial year 2016/17.

 

Officer Contact: John Pearsall on Tel: 0161 474 4033 or email: john.pearsall@stockport.gov.uk.

Additional documents:

Minutes:

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

 

It was reported that since the report was published, the Department for Local Government & Communities had written to the Leader of the Council to advise that they had accepted the efficiency plan as part of the four year settlement arrangements, and the Local Government finance settlement was expected in December.

 

RESOLVED – That the report be noted.

11.

Grant Thornton - Audit Committee Progress Report and Update pdf icon PDF 2 MB

To consider a report of the External Auditor.

 

The report provides an update on Grant Thornton’s progress in delivering their responsibilities as the external auditor.

 

The Audit Committee is asked to note the report.

 

Officer Contact: Sarah Howard on Tel: 953 6370 on email: sarah.howard@uk.gt.com.

Additional documents:

Minutes:

The External Auditor submitted a report (copies of which had been circulated) providing an update on Grant Thornton’s progress in delivering their responsibilities as the external auditor.

 

RESOLVED – That the report be noted.

12.

Grant Thornton - Annual Audit Letter pdf icon PDF 332 KB

To consider a report of the External Auditor.

 

The report summarises the key findings arising from the work Grant Thornton have undertaken at Stockport Metropolitan Borough Council for the year ended 31 March 2016.

 

The Audit Committee is asked to note the report.

 

Officer Contact: Sarah Howard on Tel: 953 6370 on email: sarah.howard@uk.gt.com.

Additional documents:

Minutes:

The External Auditor submitted a report (copies of which had been circulated) summarising the key findings arising from the work Grant Thornton had undertaken at Stockport Council for the year ending 31 March 2016.

 

The following comments were made/ issues raised:-

 

·         The Value for Money conclusion was based upon arrangements for the integration of health and social care as opposed to the outcomes.

·         An updated risk assessment would be undertaken for 2016/17 and reported back to the Audit Committee in March 2017.

 

RESOLVED – That the report be noted.

13.

Local Audit Panel Options pdf icon PDF 93 KB

To consider a report of the Borough Treasurer.

 

The report outlines the options for appointing an external auditor for the audit year 2018/19.

 

The Audit Committee is asked to consider the proposal for the establishment of a local joint procurement arrangement with GMCA and other neighbouring authorities for the provision of external audit services from 2017/18 and;

Delegate to the Chair of the Audit Committee, under advice from the Borough Treasurer, to agree the final recommendation to be made to Full Council before March 2017.

 

Officer Contact: John Pearsall on Tel: 0161 474 4033 or email: john.pearsall@stockport.gov.uk.

Additional documents:

Minutes:

A representative of the Borough Treasurer submitted a report (copies of which had been circulated) outlining the options for appointing an external auditor for the audit year 2018/19.

 

Councillors discussed the options set out in the report, and the following comments were made/ issues raised:-

 

·         Concerns were raised regarding the potential for a lack of accountability with a sector led body.

·         Guidance was clear that external auditors could not be employed by a local authority in which an employee of theirs was a serving councillor.

·         A sector led body appointed multiple companies who would be allocated to each region so that in the event of a councillor becoming employed by the current external auditor, a different company could then be employed.

·         It was acknowledged that the likelihood of a serving councillor being employed by the appointed external auditor was low; but that the impact if it were to occur under a non-sector led body appointment was significant.

·         The Public Sector Audit Appointments Limited (PSAAL) offered economies of scale in terms of procurements of auditors and was a better deal than going to the market alone, as it was likely that the pool of interested auditors would be small.

·         There was a need to set out Stockport Council’s requirements to the PSAAL and ask what opportunities would be provided to the people of Stockport should they be appointed.

 

RESOLVED – (1) That the decision to agree the final recommendation to be made to the Council Meeting before March 2017 be delegated to the Chair of the Audit Committee, under advice from the Borough Treasurer.

 

(2) That the Borough Treasurer be requested to provide further assurance to the Council Meeting on the appointment of a sector-led body prior to the decision being made.