Agenda and minutes

To approve as a correct record and sign the Minutes of the meeting held on 18 March 2015.

The Minutes (copies of which had been circulated) of the meeting held on 18 March 2015 were approved as a correct record and signed by the Chair.

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

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)

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

No public questions were submitted.

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

The report details write offs of low level amounts of debt for the period 1 October 2014 to 31 March 2015.

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

Officer Contact: Peter Jones on Tel: 474 5824 or email: peter.jones@stockport.gov.uk

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) detailing write offs of low level amounts of debt for the period 1 October 2014 to 31 March 2015.

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 2014/15 and 2015/16 internal audit plan for the period 1st March 2015 to 31st May 2015.

The Audit 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

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) setting out the progress made by internal audit against the approved 2014/15 and 2015/16 internal audit plan for the period 1st March 2015 to 31st May 2015.

The following comments were made/issues raised:-

·         A new process for the follow up of audit recommendations had been implemented and the approach was to focus on audit which had been given a limited or no assurance opinion;

·         Investigations into allegations of improper management and contractual arrangements were still on-going and a report would be submitted to the next meeting;

·         Members raised concerns in respect to the 6 month wait for the outcome of the investigation and suggested an interim report should be circulated;

·         The Council operated a Whistleblowing Policy which gave the individual employee assurance as to who would see their allegations.

RESOLVED – (1) That the report be noted.

(2) That an interim report outlining the findings of the investigation into allegations of improper management and contractual arrangements be circulated to members of the Audit Committee.

(3) That training on the Whistleblowing Policy be provided to members of the Audit Committee.

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

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 attached report contains this statement and details the audit work undertaken in the year from which the overall opinion has been drawn.

The Audit 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

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) detailing the Internal Audit and Risk Manager’s annual report containing an overall opinion on the Council’s control framework, and details of the audit work undertaken in the year from which the overall opinion had been drawn.

The following comments were made/issues raised:-

·         Members raised concerns with the integration of health and social care and the Authority’s partnership with Carillion and it was expected that the recommendations would be addressed;

·         The necessary savings would be made from Carillion to bridge any shortfalls identified;

·         Business Continuity plans were in place and the assurance had changed from limited to moderate but those plans had not yet been tested;

RESOLVED – That the report be noted.

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

The Local Code of Governance is reviewed every year and has been substantially updated following a recent review.

The Audit 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

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) outlining the updated Local Code of Governance.

The following comments were made/issues raised:-

·         The Local Code of Governance was reviewed yearly and had been substantially updated following a recent review;

·         The Code provided an overview of the Council’s strategy for the next 12 months to relevant stakeholders.

RESOLVED – That the updated Local Code of Governance be approved.

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

The report presents the Audit Committee with a draft Annual Governance Statement for consideration by committee members. A final version will be reported to the Committee on 19th August 2015.

The Audit 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

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) outlining the draft Annual Governance Statement for consideration prior to the final version being reported to the Committee on 19 August 2015.

The following comments were made/issues raised:-

·         The Annual Governance Statement was a mandatory requirement and the final version needed to be approved by the Audit Committee at the meeting on 19 August 2015;

·         The Local Authority had to demonstrate how they had supported the six core principles of good governance as outlined in the Local Code of Governance;

·         The review of the effectiveness of governance within the Authority formed part of an action plan for 2015/16 to address any governance issues;

·         New arrangements with partners had provided new challenges as the governance of the NHS and the Private Sector differed from the Local Authority.

RESOLVED – That the report be noted.

To consider a report of Councillor Daniel Hawthorne (Chair of the Audit Committee 2014/2015)

The purpose 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.

• 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.

A representative of the Corporate Director for Corporate and Support Services 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 was 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 Annual Report be approved and that it be submitted to the Council Meeting for approval.

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

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.

The Audit 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

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) presenting 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 report set out planned work for 2015/16, highlighted some of the areas of fraud risk and provided a conclusion on the effectiveness of the Council’s arrangements to minimise the risk of fraud;

·         The Anti-Fraud, Bribery and Corruption Strategy was extensively updated in 2014 as part of a major overhaul of all people related policies throughout the council resulting in the merger of the strategy and policy documents and the streamlining of supporting procedures;

·         The Authority had engaged in a number of awareness raising activities during the year including training sessions to Audit Committee members, benchmarking and fraud workshops;

·         Members sought guidance on the Whistleblowing Policy in the circumstances that the accusation is sent to the press.

RESOLVED – That the report be noted.

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

The report sets out the action taken by management and the post audit review findings arising from the original internal audit review (undertaken by Tameside) on the pension arrangements at Stockport Council (Greater Manchester Pension Scheme), undertaken in December 2013.

The Audit 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

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) outlining the action taken by management and the post audit review findings arising from the original internal audit review (undertaken by Tameside) on the pension arrangements at Stockport Council (Greater Manchester Pension Scheme), undertaken in December 2013.

Members noted that the findings were helpful in identifying any existing issues and that a follow up report addressing these issues would be useful.

RESOLVED – That the report be noted.

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

The report outlines the outcome of the internal assessment undertaken by the Internal Audit and Risk Manager and the resultant work is captured in a PSIAS Action Plan.

The Audit 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

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) outlining the outcome of the internal assessment undertaken by the Internal Audit and Risk Manager and the resultant work which was captured in the PSIAS Action Plan.

The following comments were made issues/raised:-

·         All Local Authorities were expected to report on compliance with the Public Sector Internal Audit Standards annually;

·         The Authority had identified the areas where they were falling short and had put in place an action plan to address these;

·         It was expected that Stockport would be fully compliant with all specific public sector requirements of the Internal Audit Standards within 3 years.

RESOLVED – That the report be noted.

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

The purpose of the report is to update Members on the current status of both corporate and Investing in Stockport (IiS) risks and the updated process used to manage these risks.

The Audit 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

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) updating Members on the current status of both Corporate and Investing in Stockport (IiS) risks and the updated process used to manage these risks.

The following comments were made/issues raised:-

·         The risks in the Investing in Stockport Risk Register were very similar to those in the Corporate Risk Register therefore the registers were merged which had streamlined the process of reporting on the register on a quarterly basis and lessened the burden on management;

·         By managing risks effectively it could generate further opportunities;

·         There were a number of risks such as financial and workforce capacity that were rated as high risk which needed close monitoring.

RESOLVED – That the report be noted.

To consider a report of the External Auditor.

The Audit Committee are invited to consider and comment on 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) setting out the details of the audit fee for the Authority along with the scope and timing of work and details of their team.

RESOLVED – That the report of the External Auditor be noted.

To consider a report of the External Auditor.

The Audit Committee are invited to consider and comment on 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) outlining progress in delivering their responsibilities as the Authority’s external auditor.

The following comments were made/issues raised:-

·         There had been a significant improvement in the timeliness and quality of the accounts received from council-owned companies to consolidate in the group account;

·         The Authority could not yet consolidate the pool of budget accounts with health, but it was hoped that in future this could be resolved through Greater Manchester devolution.

RESOLVED – That the report of the External Auditor be noted.