Agenda and minutes

To approve as a correct record and sign the Minutes of the meeting held on 9 July 2017.

The Minutes (copies of which had been circulated) of the meeting held on 19 July 2017 were approved as a correct record and signed by the Chair.

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

No declarations of interest were made.

No urgent decisions were reported.

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).

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.

To consider a report of the Borough Treasurer.

The report outlines details in respect to write offs of low level amounts of debt for the period 1 April 2016 to 31st March 2017.

The Audit Committee is invited to comment on the report.

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

The Borough Treasurer submitted a report (copies of which had been circulated) providing the Audit Committee with a summary of details debt write offs of low level amounts of debt for the period 1 April 2016 to 31 March 2017.

The following issues were discussed:-

·         Using all means at the disposal of the Council to ensure that companies do not use insolvency as a mechanism to avoid their debt obligations.

·         The Council worked with debtors to arrange repayment schedules, or used those already agreed through other enforcement agencies.

RESOLVED – That the report be noted.

To consider a report of the Borough Treasurer.

The report sets out the progress made by internal audit against the approved

2017/18 internal audit plan for the period 1^st July 2017 to 30^th September 2017 (Appendix 2).The purpose also informs Members of the resources utilised by Internal Audit during the period, the activities undertaken in the reporting period, and the status of work currently being undertaken. 

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

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

The Borough Treasurer submitted a report (copies of which had been circulated) detailing progress against the 2017/18 internal audit plan for the period 1 July 2017 to 30 September 2017.The report also set out the resources utilised by Internal Audit during the period, the activities undertaken in the reporting period, and the status of work currently being undertaken.

The following issues were discussed:-

·         In light of the complexity of the Stockport Together programme assurance was sought on the robustness of audit and control arrangements. In response it was acknowledge that this programme was a key area of risk and Internal Audit had been advising and supporting colleagues as the programme developed to address the currently theoretical risks. All partners to the programme needed to be cognisant of each other’s risks.

·         In relation to the Debtors On Hold Continuous Audit Report, it was explained that many of the invoices raised were for debts related to complex packages of adult social care where dispute often arose. Work was taking place to put in measures to address any concerns earlier in the process before invoices and notices were issued.

·         Assurance was sought in relation to the Borough Care improvement programme in light of difficulties being experience by Carillion. In response it was stated that the Council had sought to take steps to protect itself as soon as concerns about Carillion became known.

RESOLVED – That the report be noted.

To consider a report of the Borough Treasurer.

The report informs Members of the proposed planning methodology required to produce the Annual Internal Audit Plan (2018/19). This includes a timetable for the planning process.

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

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

The Borough Treasurer submitted a report (copies of which had been circulated) updating the Committee on the proposal planning methodology that would be used to the produce the Annual Internal Audit Plan for 2018/19, including a timescale for that process.

RESOLVED – That the proposed Internal Audit Planning Methodology be approved.

To consider a report of the Borough Treasurer.

All principal Local Authorities and other relevant bodies subject to the Accounts and Audit (England) Regulations 2015 (amended), the Accounts and Audit (Wales) Regulations 2005, Section 95 of the Local Government (Scotland) Act 1973 and the Amendment to the Local Government (Accounts and Audit) Regulations (Northern Ireland) 2006, must make provision for Internal Audit in accordance with the Public Sector Internal Audit Standards (PSIAS) as well as the (CIPFA) Local Government Application Note.

The purpose of this report is to inform Members of the results of Stockport’s external assessment undertaken in June/July 2017.

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

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

The Borough Treasurer submitted a report (copies of which had been circulated) informing the Audit Committee of the outcome of its external assessment of its internal audit functions, carried out in June and July 2017, as required by the Public Sector Internal Audit Standards and CIPFA guidance. The assessment had found the Council conforms to all the requirements of audit regulations.

The Chair congratulated the Internal Audit service for their achievement and thanked all those involved in the assessment for their hard work.

The assessment had identified areas for further consideration, including training of staff. The Audit Committee was assured that all training needs of auditors were regularly reviewed and addressed, and where appropriate this would include sharing learning across the team.

Members also discussed the need for flexibility in the Annual Plan to ensure that there was capacity to respond to emerging needs. In response this need was acknowledged and assurance given that this was factored into the planning process. Work to respond to financial concerns about Carillion and fire safety of Stockport Homes controlled properties were cited as examples of where such flexibility had been used.

RESOLVED – That the report be welcomed.

To consider a report of the Corporate Governance Group.

The Action Plan outlines the key governance issues currently facing the Council along with agreed controls put in place to manage the issue.  A quarterly update is provided via communication and challenge to nominated officers specified by the Corporate Governance Group.

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

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

The Borough Treasurer submitted a report (copies of which had been circulated) providing the Audit Committee with a quarterly update on progress with implementing the Annual Governance Statement Action Plan as agreed by the Audit Committee in July 2017.

The following issues were discussed:-

·         Work done on digital capacity. This was a key risk for the Council and had also been raised by the Corporate, Resource Management & Governance Scrutiny Committee. Where appropriate, any concerns about risk would be shared with this Committee.

·         Clarification was sought on potential costs to the Council were the Strategic Property Alliance (SPA) to end, and whether the inclusion of the SPA in the Action Plan was an indication that it was deemed fit for purpose. It was commented that work was ongoing with colleagues in Asset Management to assess, understand and plan for the financial risks. In response to comments about learning from the experience of the SPA, it was stated that this was something the Council would always seek to do but that the particular issues with the SPA were not foreseeable at the time it was established. Nevertheless it demonstrated the value in diversifying the Council’s supply chain.

RESOLVED – That the report be noted.

To consider a report of the Borough Treasurer.

The report updates members on the current status of corporate risks.

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

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

The Borough Treasurer submitted a report (copies of which had been circulated) providing the Audit Committee with an update on the current status of the Corporate Risk Register at the end of the second quarter of 2017/18.

Comments were made welcoming the approach taken to considering potential risks early to allow for a quicker response should the need arise, but also stressing the importance of transitional planning during the process of change management.

RESOLVED – That the report be noted.

To consider a report of the External Auditor.

The External Auditor presents for the comment the Annual Audit letter.

The Audit Committee is invited to comment on the report.

Officer Contact: Sarah Howard on Tel: 0161 953 6370 or email: sarah.howard@stockport.gov.uk

The External Auditor submitted a report (copies of which had been circulated) summarising the key findings arising from Grant Thornton’s work with Stockport Council up to the end of the 31 March 2017.

The Letter stated that the external audit had included only unqualified opinions of the Council’s annual accounts, and that staff and the services in question were fit for purpose.

RESOLVED – That the report be welcomed.

To consider a report of the External Auditor.

The External Auditor presents for the comment the Annual Audit letter.

The Audit Committee is invited to comment on the report.

Officer Contact: Sarah Howard on Tel: 0161 953 6370 or email: sarah.howard@stockport.gov.uk

The External Auditor submitted a report (copies of which had been circulated) updating the Audit Committee on progress with the delivery of Grant Thornton’s responsibilities as external audit as at 8 November 2017.

There was a discussion about changes to the CIPFA Code for the coming year and the impact this would have on the Council’s outturn position because of the requirement to include the valuation of the Manchester Airport Group shareholding. It was reported that Greater Manchester authorities had written to the International Accounting Standards Board to express their concern and ask that a statutory override be permitted.

RESOLVED – That the report be noted.

To consider a report of the Borough Treasurer.

The report informs  Members of the arrangements for appointing External Auditors.  The Local Audit and Accountability Act 2014 (the Act) at Section 7 states that a “relevant authority must appoint a local auditor to audit its accounts for a financial year not later than 31 December in the preceding financial year.” Current auditor contracts were extended for 12 months, therefore for this Council the appointment of an auditor must be completed by 31 December 2017 for the audit year 2018/19.  

The Audit Committee is asked to note the current position in respect of arrangements for the appointment of external auditors.

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

The Borough Treasurer submitted a report (copies of which had been circulated) informing the Audit Committee of the arrangements for appointing external auditors for the audit year 2018/19. This process, as previously agreed by the Committee, was in conjunction with AGMA Councils and GMCA through the Public Sector Audit Appointments Limited (PSAA). Through that procurement process the Council had been notified by PSAA that it was proposing to appoint Mazaars LLP.

RESOLVED – That the report be noted and that representatives of Mazaars LLP be invited the next meeting of the Audit Committee.