Agenda and minutes

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Contact: Saira Malin, Democracy Officer 

No. Item




Councillors Parsons and Harvey had given their apologies.


Declarations of interest


No interests were declared.


Minutes of the last meeting pdf icon PDF 104 KB

15 June 2016


The minutes of the last meeting had been circulated with the agenda.  The Chairman reminded the committee of the need to formally agree the minutes of the last meeting, which, once signed, would represent a true record of what was discussed and agreed.


Upon a vote it was unanimously


RESOLVED that the minutes of the meeting held on the 15 June 2016 be agreed and signed as an accurate record.


Public Questions

These must be received no later than 12 noon on the fourth working day before the date of the meeting


No public questions had been received.


Audit highlights memorandum - ISA 260 2015/16 including Financial Resilience pdf icon PDF 344 KB

Grant Thornton


Jackson Murray, of Grant Thornton, introduced the Audit Findings report, as circulated with the agenda.  The report highlighted key findings arising from the audit.  Members were referred to the Executive Summary, which referenced outstanding work and informed the committee that final assurances from Cheltenham Borough Homes’ auditors had now been received and whilst this had raised some issues, it was nothing material.  The final version of the final statements and the management letter of representations had been received today and signing of the opinion would take place later in the meeting, once the committee had reviewed the Statement of Accounts.  Grant Thornton were on target for the September deadline.  In relation to Value for Money (VfM), there were three areas that were assessed: decision making, sustainability and partnership working and Grant Thornton had concluded that the Council had proper arrangements in all significant respects to ensure it delivered value for money in its use of resources.  


Jackson talked through some key points:


·         Historically, the Council had produced group accounts which had included Ubico Ltd, but with the Council’s shareholdings having decreased to one-sixth with the addition of more partners, it was agreed that group accounts were no longer required.  The Council’s interest would instead be classified as an investment in Ubico Ltd on the Balance Sheet. 

·         No material adjustments were identified within the financial statements and the recorded net expenditure had remained the same.

·         There had been an increase to the balance sheets of £3.568 million as a result of the increased value of assets.  This was matched by an equal increase in the Revaluation Reserve. 

·         Recognising the size of the accounts, recommendations on a number of adjustments to improve the presentation of the financial statements had been made. 

·         No issues with the Annual Governance Statement were identified.

·         Weaknesses in relation to IT controls were identified, but these weaknesses did not alter the proposed audit strategy; instead offering scope to refine controls.

·         Under significant risks there were two presumed significant risks which were applicable to all audits under auditing standards and none of the risk that were identified related to either of the presumed risks. 

·         The Agresso upgrade had been effective and a number of potential improvements had been identified in relation to the Council’s IT Systems. 

·         Information from the valuers suggested that there was a material difference between the carrying value and fair value of some assets which were last valued in 2014.  Grant Thornton had raised a recommendation that the council consider their valuation programme to ensure that values remained material stated. 

·         The valuation of pension fund net liability represented significant estimates in the financial statements, but the audit work had not identified any issues. 

·         No issues were identified in relation to payroll and expenditure. 

·         During testing of grant income a balance totalling £0.083m was disclosed as receipts in advance and was subsequently identified as monies relating to Section 106 bond deposits. The monies were repayable to the contractor upon completion of the works per the  ...  view the full minutes text for item 5.


Statement of Accounts 2015-16 pdf icon PDF 63 KB

Deputy Section 151 Officer (see recommendations)

Additional documents:


The Deputy Section 151 Officer introduced the Statement of Accounts 2015-16.  Tonight’s PowerPoint presentation (Appendix 1) would differ from previous years and focus on the process rather than the figures, given that the S.O.A had been available in advance and Grant Thornton had already talked through their Audit Findings report.


The following responses were given to member questions: 


  • The S.O.A had been available for public inspection for four weeks on the website as well as in hard copy at the Municipal Offices.  The four week inspection period would need to include the first 10 working days of July in 2017, as it did this year. In 2018, the period will need to include the first 10 working days of June.  The statement about the public inspection would be amended next year to make clear that the S.O.A had also been available on the website.  
  • The balance sheet represented a snap shot in time.  Valuers prepare detailed valuations for a class of assets on a rolling programme basis, with a review of other assets to ensure the last valuation still reasonable. There was a legal requirement to compare the 2015/16 data to the prior year 2014/15, but not for earlier years.
  • Officers did not feel that it was appropriate to include a graph plotting how the Revenue Support Grant had reduced from previous years and instead suggested that this could be included in the MTFS. 
  • The paragraph on Members’ Allowances did state that the total of £323,852 was split between 40 councillors but Officers would look at whether they could add slightly more detail to the narrative in future years, perhaps to include a figure for the average allowance paid. 
  • Officers accepted that visuals such as pie charts were helpful to the public and that members felt it would be useful to map how money had been spent, but there was also a need for Officers to find a balance between what meaningful information to include, given the need to reduce the size of the S.O.A. 
  • Officers would give consideration to organising a member session on the S.O.A, in advance of the Audit Committee in future years, if this was something that members of the committee felt would be useful. 


The committee acknowledged that the production of shorter S.O.A involved no less work and thanked the officers involved for their hard work, especially for having them finalised earlier. 


The Section 151 Officer would speak to the Communications Team about a press release. 


Upon a vote it was unanimously




(a)  The accounts for the year ended 31 March 2016 be approved.

(b)  The Statement of Accounts and letter of representation be signed by the Chairman of the committee and the Section 151 Officer.  


Internal audit monitoring report pdf icon PDF 215 KB

Audit Cotswolds (see recommendations)


Lucy Cater introduced the Internal Audit Monitoring Report, which provided updates on the work that had been completed by Audit Cotswolds, based on the Annual Audit Plan 2016-17.  Executive Summaries for each of the audit reviews that had been concluded since the last Audit Committee meeting, were attached at Appendix 2 of the report.  She was pleased to report that since it’s publication, draft reports in relation to the HR Starters and Leavers Process, Follow-Up of Payment Channels and Income Streams had been finalised, the report on PSN had been received from the South West Audit Partnership, in line with the joint working protocols and the service were now in a position to undertake follow-up work on the Art Gallery and Museum and Car Parking reviews.  Members would also be aware, as it was included on the agenda, that Audit Cotswolds had submitted a proposal as part of the internal audit provider evaluations and were not the recommended provider. 


The Corporate Governance, Risk and Compliance Officer gave the following responses to member questions: 


  • Generally, those projects identified within the Corporate Strategy, were project managed by a Project Manager from the Project Office and followed PRINCE2.  However, there were some smaller projects, not just in terms of financials, which were managed by the services themselves and it was for projects such as this, that did not warrant a PRINCE2 approach, for which new templates had been produced.  
  • All key services across the council had their own Business Recovery Plan and ICT was integral to some of these plans.  ICT which now formed part of the wider 2020 partnership, had devised a new plan, which prioritised services and how quickly they would be bought back online.  This plan had been shared with Service Managers who had been asked if they agreed with the priority status that had been given to their service and this would be discussed further at an SLT meeting in November.  A desktop exercise would be undertaken in January, by the Business Continuity Team.  Members were reminded that following the virus issues of a few years ago, that should more than one high priority service be effected, the Team would ultimately prioritise based on the point in time i.e. payroll if this needed to be processed, etc. 

There were no further comments or questions. 


Upon a vote it was unanimously


RESOLVED that the updated assurance levels and priority ratings being applied for 2016-17 be noted. 




Whistle Blowing Policy pdf icon PDF 69 KB

Counter Fraud Unit (see recommendations)

Additional documents:


Kate Seeley had attended on behalf of Emma Cathcart, and introduced the revised Whistle-Blowing Policy.  She explained that the policies from all partner councils (Cheltenham Borough, Cotswold District, West Oxfordshire and Forest of Dean District), as well as Tewkesbury Borough, which forms part of the counter fraud service provision, had been reviewed and a single policy redrafted.  The redraft represented a best practice policy and would facilitate standardisation across all council’s.  In the past, Cabinet had approved policies and this committee had reviewed changes, but whilst the report referenced ‘significant revisions’ the committee were assured that the redrafted policy was not significantly different to the previous version and rather, the wording of the policy had been aligned across all of the authorities.  


The following responses were given to member questions: 

  • The Whistle-Blowing policy was introduced in 1997 and there was a legal requirement for the authority to have one.  In that time it had been used once but had not in fact been used appropriately.  
  • Elected Members were not referenced under item 6 of the policy (Responsibilities) as those wanting to raise concerns would not be expected to approach Elected Members. 
  • The policy would be amended to include the word ‘perceived’ or ‘suspected’ wrong-doing and the word ‘may’ would be replaced with ‘will’ in relation to being asked about personal interests.  
  • Officers were looking to develop something more condensed, which could include a decision tree.  This policy did form part of employees Terms and Conditions and therefore, already formed part of the induction process.
  • Officers said that the policy would be made available to all employees through the intranet and that their would be an exercise to raise awareness of the policy.  


The committee agreed that the Chairman should report to Council, that the revised Whistle-Blowing policy had been approved, as well as the fact that the accounts had been signed. Officers were reminded that any report requiring a decision should be supported by a completed risk assessment.


Upon a vote it was unanimously


RESOLVED that the Whistle-Blowing Policy be approved.


Counter Fraud Unit Update and Counter Fraud Unit Business Case pdf icon PDF 70 KB

Counter Fraud Unit (see recommendations)

Additional documents:


Kate Seeley, from the Counter Fraud Unit (CFU) introduced the update which summarised the activity being undertaken by the CFU and aimed to provide assurance over the counter fraud activities of the Council.  The unit had been proactively looking at Housing related fraud at both Cheltenham and Tewkesbury, would soon be undertaking work on behalf Gloucestershire County Council in relation to Blue Badge fraud and the unit were in the process of being contracted to undertake reactive work on behalf of Ubico.  A lot of focus had been given to redrafting and aligning policies and compiling the business case for a permanent CFU.


The Chief Finance Officer introduced the business case. In February 2015, Audit Cotswolds successfully bid for DCLG funding to accelerate the development of a dedicated Counter Fraud unit for Gloucestershire and West Oxfordshire.  The funding was a one-off payment and the business case being considered translated the funded project into a permanent service model that was fully self-sufficient, whilst continuing to manage and utilise the DCLG fund to set-up the unit.  Feasibility studies undertaken in 2015-16 and 2016-17 showed that the unit could expect to generate revenue and provide risk assurance and the business case argued that the benefits of a counter fraud unit would outweigh the costs of setting up and operating the unit.  Of the options set out in the business case, all would generate a guaranteed saving, though this saving was obviously smaller in relation to Options 2 and 3.  Members were reminded that with transparency regulations, there was a requirement for authorities to publicise the number of Counter Fraud Officers it employed.  Members would be aware that Council tax was set in February each year, though houses continued to be built during this time, which generated a Collection Fund Surplus, which could be distributed equitably between the District, County and Police.  This was estimated at £40k but had instead generated almost £100k this year and was being estimated at £120k next year, though this obviously could not be guaranteed. 


The following responses were given to member questions:


·      The CFU have previously been involved in proceeds of crime in relation to Housing Benefit cases, and the CFU would be looking at whether this was something that could be pursued in other areas and particularly in terms of Planning Enforcement on businesses, as this would generate a revenue stream.

·      Members were assured that processes were in place to detect fraud before it occurred and the benefit of the CFU was that information relating to attempted fraud could be shared across a wider area.   

·      £100k of the set-up cost was for new software.    

·      The Senior Finance Officer would recommend Option 3 but the other 7 Council’s would need to agree to this.  He therefore suggested that Option 2, which 3 partners had already signed-up to, with a note that the council was open to Option 3, if the other councils also preferred this option.

·      The software is able to   data matching across authorities but could  ...  view the full minutes text for item 9.


Future Provision of Internal Audit Services pdf icon PDF 88 KB

Section 151 Officer (see recommendations)

Additional documents:


This item was taken after agenda item 11 (Work Programme). 


Lucy Cater, Audit Cotswolds, was excused from the meeting. 


The Section 151 Officer introduced his report on the future provision of Internal Audit services, which members would recall having received a briefing note on the same issue at the last meeting.  Given that SWAP was an existing local authority owned (Teckal) company, it was possible for the council to request to join SWAP as a member and the service change without the requirement for a formal procurement process.  Given the various connections within the Finance Officer Group, Grant Thornton were commissioned to support the evaluation process, both by helping with the criteria for the evaluation and by providing an independent view on the quality of the two suppliers.  The proposals were evaluated using a price/quality score of 40%/60% and each person scored the proposals independently, but ultimately, SWAP scored highest in the evaluation, unanimously.  He talked through some of the reasons for this, but also highlighted the resilience that SWAP would offer given that it had a larger pool of resources to call upon.  Although not a direct issue for this Council (Audit Cotswold staff are currently employed by Cotswold District Council) Members were given assurance that all the staff would have their existing rights protected under TUPE.


The Section 151 Officer gave assurance to Members that SWAP has a strong governance model in place, which was set out in detail at paragraph 3 of the report.  The Members’ Board meet at least twice a year and make all decisions relating to strategy, policy, and the admission of new partners.  Each partner council nominates a councillor to represent them on this Board. It was being proposed that the representative for this council would be the Chair of the Audit Committee and the Chief Financial Officer would represent the council on the Board of Directors.


.  The Committee noted that the proposed fee to SWAP represented a base budget saving of £32,680 and that this fee was fixed, regardless of staff pay increases, until a time when all members decided that it needed to be increased. 


The following responses were given to member questions:


·         Despite having to deal with long term sickness, individuals within the existing Internal Audit service had done a fantastic job and whilst it was accepted that staff were feeling nervous about the future, they were not only assured a job, but potentially better opportunities going forward as part of SWAP. 

·         This report had been fast tracked to this meeting of the committee, as it was not scheduled to meet again until January 2017.  It was not scheduled for consideration by Cabinet until November 2016, as One Legal needed to consider all the relevant Articles, etc.  It was also noted that the other Council’s needed to consider the issue. 

·         365 audit days needed to be honoured due to TUPE and whilst this could be reviewed in the future, it may result in redundancies. 

·         The aim was  ...  view the full minutes text for item 10.


Work Programme pdf icon PDF 58 KB


This item was taken before agenda item 10 (Future provision in Internal Audit Services).


The Chairman raised two items relating to Ubico, which he wished to have added to the work plan.  The first, which he felt all shared services should be subject to, was an assessment of whether Cheltenham was receiving an equitable share or whether it was subsidising other authorities.  He accepted that, with the addition of more partners, Cheltenham’s share would decrease, but he felt strongly that this was something that should be regularly reviewed.


The second item related to if and how the movements of Ubico waste vehicles was monitored.  Lucy Cater interjected and advised that Internal Audit were already reviewing Fleet Management and she would ask the Auditor to raise this with Ubico directly.


Any other item the chairman determines to be urgent and requires a decision


The Corporate Governance, Risk and Compliance Officer reminded members about the self-assessment that had been emailed to them all and urged them to let Lucy Cater (Deputy Head of Audit Cotswolds) have any comments.  


Date of next meeting

Wednesday 11 January 2017


The next meeting was scheduled for Wednesday 11 January 2017.