Agenda and minutes

To approve as a correct record and sign the Minutes of the meeting held on 23 March 2016.

The Minutes (copies of which had been circulated) of the meeting held on 23 March 2016 were approved as a correct record and signed by the Chair.

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

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

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

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 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).

No public questions were submitted.

To consider a report of the Deputy Chief Executive.

The report details write offs of low level amounts of debt for the period 1 October 2015 to 31 March 2016.

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

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

A representative of the Borough Treasurer submitted a report (copies of which had been circulated) detailing write offs of low level amounts of debt for the period 1 October 2015 to 31 March 2016.

RESOLVED – (1) That the report be noted.

(2) That the Borough Treasurer be requested to continue to submit the six monthly debt write off reports to the Committee, and that future reports also include comparative data from previous quarters.

To consider a report of the Deputy Chief Executive.

The report is the final version of the Council’s Annual Governance Statement (AGS) for 2015/16. The draft AGS had been considered by Corporate Leadership Team on 14th June 2016, the Executive on 21st June 2016 and the Corporate Governance Group on 13 July 2016. There had been no material change in governance issues up to the date of this meeting.

The Audit Committee is asked to approve the Annual Governance Statement prior to signing by the Leader of the Council and the Chief Executive.

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

A representative of the Borough Treasurer submitted a report (copies of which had been circulated) providing the final version of the Council’s Annual Governance Statement (AGS) for 2015/16.

The following comments were made/ issues raised:-

·         Commissioning and pooled budgets were in the audit plan for 2016/17 and pooled audit arrangements were being considered by the Internal Audit team, the findings of which would form part of an internal audit report to be submitted to the Audit Committee.

·         Members noted the significant expansion of the pooled budget with the Clinical Commissioning Group for 2016/17 to c£200m.

·         Stockport Council first signed a Section 75 agreement with the Primary Care Trust in 2009 and therefore was well versed in dealing with the mechanisms of pooled budgets.

·         As part of the current Section 75 agreement there had been a delineation of duties between the Clinical Commissioning Group as the commissioning lead and the Council as the financial lead.

·         Grant Thornton acted as the external auditors for both Stockport Council and Stockport Clinical Commissioning Group which simplified the external auditing of the pooled budget.

·         The Internal Audit team had received funding for a dedicated two year post with the primary responsibility relating to health & social care integration, pooled budgets and commissioning.

RESOLVED – (1) That the 2015/16 Annual Governance Statement be approved and the Leader of the Council and the Chief Executive be recommended to sign the document.

(2) That the Borough Treasurer be requested to provide regular updates to the Audit Committee on the governance issues arising from the Annual Governance Statement.

To consider a report of the External Auditor.

The report highlights the key issues affecting the results of Stockport

Metropolitan Borough Council ('the Council') and the preparation of the group and Council's financial statements 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.

The External Auditor submitted a report (copies of which had been circulated) highlighting the key issues affecting the results of Stockport Metropolitan Borough Council’s audit and the preparation of the group and Council's financial statements for the year ended 31 March 2016.

RESOLVED – That the report be noted.

To consider a report of Deputy Chief Executive.

Grant Thornton LLP is the Council’s external auditor and has undertaken the audit of the Council’s Statement of Accounts for 2015/16.  The Audit Committee is asked to consider the issues that have arisen during the audit and approve the final Statement of Accounts presented as a separate document to the report.  Amendments made to the draft version of the Statement of Accounts since 6 June 2016 are highlighted throughout the final document.

The Audit Committee is asked to consider and approve the 2015/16 Statement of Accounts.

Officer Contact: Jonathan Davies on 0161 218 1025 or email jonathan.davies@stockport.gov.uk.

The Borough Treasurer submitted a report (copies of which had been circulated) containing the 2015/16 Statement of Accounts.

The following comments were made/ issues raised:-

·         The Statement of Accounts had been submitted for approval ahead of the statutory deadline and the Borough Treasurer recommended bringing forward the July 2017 Audit Committee meeting to allow for an earlier approval of the accounts. Concerns were raised however that there were often new members of the Committee who required training and preparation for the role.

·         There was a capital outturn of £122m in 2015/16 which was the largest capital program the Council had ever delivered, and it was expected to be exceeded in the subsequent year following the acquisition of Merseyway.

·         Concerns were raised at the decreased value of the Council’s shareholding in Manchester Airport Group in light of the current expansion of the airport and the increasing number of passengers. It was reported that the nine minority shareholders in Manchester Airport Group relied on professional advice and valuation of the shareholdings and it was believed a degree of caution had been exercised in the valuation;

·         Concerns were raised as to whether the £8.8m of reserves for 2015/16 were necessary. It was reported that the reserves were earmarked for future spending commitments and in recognition of future risk.

·         The Council had sought legal advice from PwC regarding its control over the Special Purpose Vehicle for Stockport Exchange.

·         It was hoped that both Solutions SK and Stockport Homes’ accounts could be consolidated at the same time for the next financial year.

RESOLVED – That the 2015/16 Statement of Accounts be approved.

To consider a report of the Deputy Chief Executive.

The report sets out the progress made by internal audit against the approved 2015/16 and 2016/17 internal audit plan for the period 1st March 2016 to 31st May 2016.

The Audit Committee is asked to note the report.

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

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 2015/16 and 2016/17 internal audit plan for the period 1st March 2016 to 31st May 2016.

The following comments were made/ issues raised:-

·         Members raised concerns with the Highways Investment Programme and questioned whether the approach that had been taken was the most cost effective.

·         The Internal Audit team had been liaising with Mersey Internal Audit Agency who co-ordinated the auditing of Stockport Together to ensure that audit work was not being duplicated.

·         The Internal Audit team had also been working with Greater Manchester audit colleagues to provide a Greater Manchester level assurance regarding devolution.

RESOLVED – (1) That the report be noted.

(2) That the Borough Treasurer be requested to make arrangements for a risk workshop to take place prior to the next scheduled meeting, to provide detailed information on risks regarding the Highways Investment Programme, how these had been mitigated and to give members the opportunity to ask questions of the client.

To consider a report of the Deputy Chief Executive.

The report contains the statutory Internal Audit and Risk Manager’s annual statement on the Council’s control framework and work undertaken in the year from which the overall opinion has been drawn.

The Audit Committee is asked to note the report.

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

A representative of the Borough Treasurer submitted a report (copies of which had been circulated) containing the statutory Internal Audit and Risk Manager’s annual statement on the Council’s control framework and work undertaken in the year from which the overall opinion had been drawn.

The following comments were made/ issues raised:-

·         Members were encouraged by the high proportion of agreed audit recommendations being implemented.

·         Computer auditing was a particularly specialist skill and the internal audit team had been working with colleagues at Salford City Council  to develop capacity within the service to allow for audits to be completed in-house in the future. The internal audit team were in agreement with Salford City Council that they could commission their work on an ad hoc basis if it was required.

RESOLVED – That the report be noted.

To consider a report of the Deputy Chief Executive.

The report presents 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.

That the Audit Committee considers and comments upon the annual fraud report as part of its monitoring role.

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

A representative of the Borough Treasurer submitted a report (copies of which had been circulated) outlining the work carried out during the previous year to minimise the risk of fraud, bribery and corruption occurring in the Council. This supported the requirements of the Accounts and Audit Regulations (England) 2011, which stated that the Council must have measures in place “to enable the prevention and detection of inaccuracies and fraud.”

The following comments were made/ issues raised:-

·         The importance of protecting personal budgets in order to support individuals with their wellbeing and independence was emphasised, as the alternative was institutional care which was often more costly to the authority.

·         As part of the National Fraud Initiative the Internal Audit team was required to review anomalies in matched data from the Cabinet Office. It was noted that not all of the anomalies were fraudulent activity and the Internal Audit team had to make judgments on the level of risk to ensure time was managed effectively.

RESOLVED – That the report be noted.

To consider a report of Councillor David Sedgwick (Chair of the Audit Committee 2015/16).

The aim of the report is to demonstrate 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.

Also to outline 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 Audit Committee is asked to approve the Annual Report prior to it being submitted to the Council Meeting for final approval.

The Chair of the Audit Committee submitted a report (copies of which had been circulated) demonstrating how the Audit Committee had fulfilled its terms of reference during the financial year and how it had fully committed to helping to improve the Council’s governance and control environments during the year ahead. The report also outlined how the Committee’s activities during the financial year were 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.

RESOLVED – That the report be approved and referred to the Council Meeting for consideration.

To consider a report of the Deputy Chief Executive.

The purpose of this report is to update Members on the current status of both corporate and Investing in Stockport (IiS) 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.

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

RESOLVED – That the report be noted.