Agenda and minutes

To approve as a correct record and sign the Minutes of the meeting held on 19 August 2015.

The Minutes (copies of which had been circulated) of the meeting held on 19 August 2015 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.

No declarations of interests were made.

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 Corporate Director for Corporate and Support Services.

The report details write offs of low level amounts for the period 1 April 2015 to 30 September 2015.

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 Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) detailing write offs of low level debt amounts for the period 1 April 2015 to 30 September 2015.

The following comments were made/issues raised:-

·         The review of Council Tax and Business Rates arrears in 2015/16 remained on-going and a new write off policy would be submitted to the next meeting of the Committee;

·         Members wished to consider the new policy before deciding on whether to continue to receive the Debt Write Off report;

·         The Authority used an external tracing agency to trace debtors who utilised a variety of sources;

·         The Department for Work and Pensions database could be used to track down housing benefit debts;

·         Methods of tracing debtors also included checking the electoral register and applications for credit;

·         Councillors suggested that consideration be given to the possibility of writing off some of the debts in excess of £500 in order to deliver a balanced budget.

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 2015/16 internal audit plan for the period 1st August 2015 to 30th November 2015.

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.

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 2015/16 internal audit plan for the period 1st August 2015 to 30th November 2015.

The following comments were made/issues raised:-

·         In view of Rose Hill Primary School’s limited assurance rating and in light of the resignation of the Chair of Governors, it was suggested that the Corporate Director for Corporate and Support Services closely monitor the situation;

·         Concerns were raised regarding the risks associated with the Highways Investment Programme;

·         Officers in the insurance team were liaising with colleagues in highways and finance to test the correlation between the Highways Investment Programme and insurance claims;

·         Following the audit trail for projects carried out in partnership with other authorities provided a challenge and would be considered in more detail by the external auditor;

·         Further concerns were raised in respect to the number of high grade recommendations for schools;

·         There was a disparity between the category for recommendations and the overall assurance rating as schools could have high grade recommendations but have a moderate assurance rating;

·         Where recommendations were classed as low a follow up was not requested.

RESOLVED – That the report be noted.

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

The report informs Members of the proposed planning methodology required to produce the Annual Internal Audit Plan (2016/17). This includes a timetable for the planning process.

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.

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) outlining the proposed planning methodology required to produce the Annual Internal Audit Plan (2016/17) and the timetable for the planning process.

RESOLVED – That the report be noted.

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

The report sets out the quality assurance arrangements in place for internal audit for 2015/16 and 2016/17.

The Audit Committee is asked to note the Quality Assurance & Improvement Programme and consider and approve the proposed approach for the external assessment of internal audit.

Officer Contact: John Pearsall on Tel: 0161 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 quality assurance arrangements in place for internal audit for 2015/16 and 2016/17.

The following comments were made/issues raised:-

·         The Internal Audit team provided their services to Solutions SK through a Service Level Agreement, however the company had their own governance structure and Audit Committee which the Head of Internal Audit reported to;

·         Stockport Homes used an external firm to provide their audit function;

·         The issue of whether there was a conflict of interest in the Council’s Internal Audit service providing the audit function to Solutions SK was discussed.

RESOLVED – (1) That the report be noted.

(2) That the proposed approach for external assessment of internal audit be approved.

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

The report 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 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.

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) outlining the key governance issues currently facing the Council along with agreed controls put in place to manage the issue. A quarterly update was provided via communication and challenge to nominated officers specified by the Corporate Governance Group.

Concerns were raised in respect to the potential for rising costs associated with digital capability and capacity.

RESOLVED – That the report be noted.

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

The report updates Members on the current status of both corporate and Investing in Stockport (IiS) risks for quarter 3 2015/16.

The Audit Committee is asked to consider this report which contains an update on the corporate risk environment for quarter 3 (2015/16).

Officer Contact: John Pearsall on Tel: 0161 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 for quarter 3 2015/16.

The following comments were made/issues raised:-

·         Concerns were raised regarding the financial risks associated with the Digital by Design project and members requested a more detailed report on these risks;

·         The Internal Audit team and the External Auditors were involved in the Digital by Design project and were being constructive in their approach;

·         Further concerns were raised in respect to how work was prioritised within Digital by Design projects.

RESOLVED – (1) That the report be noted.

(2) That the Corporate Director for Corporate and Support Services be requested to provide a detailed update on risks associated with the Digital by Design project to future meetings.

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

The report informs Members on the transitional arrangements for procuring external audit services from April 2017. The Secretary of State for Communities and Local Government has decided to extend the transitional arrangement for principal local government bodies (including Stockport Council) to 1 April 2018. Once the transitional audit arrangements come to an end, local public sector bodies will have the power to appoint their own auditors.

The Audit Committee is asked to note the contents of the update report. 

Officer Contact: John Pearsall on Tel: 0161 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) informing members on the transitional arrangements for procuring external audit services from April 2017. The Secretary of State for Communities and Local Government had decided to extend the transitional arrangements for principal local government bodies (including Stockport Council) to 1 April 2018. Once the transitional audit arrangements came to an end, local public sector bodies would have the power to appoint their own auditors.

RESOLVED – That the report be noted.

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

The report sets out the findings of recent research into the effectiveness of Audit Committees in a range of corporate, public and not for profit organisations, undertaken by Grant Thornton, the Council’s external auditors.

The Audit Committee is asked to note the contents of the report. 

Officer Contact: John Pearsall on Tel: 0161 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 findings of recent research into the effectiveness of Audit Committees in a range of corporate, public and not for profit organisations, undertaken by Grant Thornton, the Council’s external auditors.

The following comments were made/issues raised:-

·         Continuity of Audit Committee membership was an aspiration;

·         There still remained a need for a certain degree of turnover in the membership of the Committee as newcomers could often provide an alternative perspective.

RESOLVED – That the report be noted.

To consider a report of the External Auditor.

The report provides members with a report on progress in delivering our responsibilities as your external auditors. The report also includes a summary of emerging national issues and developments that may be relevant to you; and a number of challenge questions in respect of these emerging issues which the Committee may wish to consider.

The Audit Committee is 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) updating members on the progress in delivering their responsibilities as the external auditor. The report also included a summary of emerging national issues and developments; and a number of challenge questions in respect of emerging issues.

The following comments were made/issues raised:-

·         Assessing the value for money in pooled budgets provided a significant challenge;

·         A longer term view was needed in how to assess value for money for pooled budgets as partnership working increased;

·         The Council was keen for pooled budgets to be hosted by the Council to address concerns surrounding the complexity of assessing value for money;

·         Additional resources were being allocated to the audit of health and social care integration;

·         A more flexible and interactive approach was needed to provide the information to Councillors in a way that was more understandable.

RESOLVED – That the report be noted.