Agenda, decisions and minutes
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Contact: Peter Gray Email: peter.gray@hackney.gov.uk
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Apologies for Absence Decision: 1.1 Apologies were submitted on behalf of Councillors Chapman, Moema and Williams. Minutes: 1.1 Apologies were submitted on behalf of Councillors Chapman, Moema and Williams. |
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Declarations of Interest Decision: 2.1 There were no declarations of interest. Minutes: 2.1 There were no declarations of interest. |
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Minutes of previous meeting Decision: 3.1 The minutes of the previous meeting were agreed as a correct record.
Minutes: 3.1 The minutes of the previous meeting were agreed as a correct record.
Matters Arising
Payroll System
Michael Honeysett reported to the Committee that work was ongoing with Payroll on quality of payroll data and that Dan Paul, Head of Human Resources had attended a recent Pensions Committee to discuss this matter and report on a restructure within the team. The BACS file had started to work automatically. The Chair commented that this area remained a red risk and Michael Honeysett reported that this was progressing and that there would be an update at the next meeting.
ACTION: Michael Honeysett |
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External Audit Plan 2017/18 Additional documents: Decision: RESOLVED:
To note the contents of the attached report from KPMG, the Council’s external auditor. Minutes: 4.1 Jennifer Townsend presented the KPMG External Audit Plan 2017/18. She reported that KPMG had identified two significant risks in relation to the Authority’s accounts where audit attention would focus due to the likelihood of potential financial misstatement, these being in respect of the valuation of land and buildings and the valuation of the Pension liabilities. In completing the initial planning VfM risk assessment the auditors had not identified any significant risks to the VfM conclusion. She identified two areas of audit focus which were financial resilience and contract monitoring. For the Authority materially for planning purposes had been set at £15m and the threshold above which individual errors were reported to the Audit Committee was £750k. In addition, to the main audit fee, the charge for audit of the Pension Fund accounts was expected to remain the same as in 2016/17
4.2 The Committee asked, in relation to value of land and buildings whether systems were in place to ensure resilience in the event of a downturn and it was confirmed that sensitivity analysis is carried out in this areas and the necessary information was available to respond. The Committee stressed that the quality of pensions’ information was not compromised through its fast production.
4.3 The Chair expressed concern that the tightening of deadlines did not affect the quality of financial statements and it was noted that systems in place ensure the quality of these statements.
4.4 Anne Canning referred to the reorganisation of the STP and that financing was required across the entire website and not only of individual Boroughs. In response to the Chair question on reporting mechanisms Anne Canning confirmed that the reporting arrangements were not significantly different to those currently in existence with additional scrutiny from other organisations. The escalation of risks was being considered.
4.5 The Chair thanked all concerned for the report.
RESOLVED:
To note the contents of the attached report from KPMG, the Council’s external auditor. |
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Directorate Risk Register review - Children, adults and Community Health Decision: RESOLVED: Minutes: 5.1 Anne Canning introduced the report on the corporate risks for the Children’s, Adults and Community Health Services Directorate as at February 2018. The report identified how risks within the Directorate were identified and managed throughout the year and the approach to embedding risk management. Anne Canning reported that risk to adults was covered by an effective Safeguarding Board. There had been an escalations in demand for children and families services and that the management of this demand was being considered with sign posting to services to be used as opposed to interventions.
5.2 In relation to the Hackney Learning Trust Anne Canning highlighted some additional risks:
Hackney Learning Trust That the transport strategy was to be reviewed with the implementation of a feasibility strategy. The Early Years national Funding Formula had a negative impact on HLT’s ability to support settings
The risk of failing to meeting the new statutory requirements for SEND, given the current resource pressure. The Council was currently overspending on this service, funded by reserves. Spend was reviewed through a Council Budget Board. The Committee noted that a recent SEND inspection had produced positive results. It was noted that, separate to this, early years funding had decreased. Public Health - The services highest area of spend and risk related to sexual health services. This was a demand led service and controls on spending included the introduction of an online service for residents to order self-testing kits. Further, KPIs were tightly monitored. Adult Services - Adult services was demand led with increased financial challenges on the service. Work was underway to remodel demand and pressures on social care. A government green paper on care and support for older people was expected to be published in the summer of 2018. This was to set out a view for the long term sustainability of the care and support systems for older people.
Anne Canning told the Committee that the only new risk added to the risk register related to the Integrated Learning Disability Services. A significant review of the service had been carried out so that a better relationship now existed between children and adults. Integrated Commissioning Over the past year the new arrangements had come into effect including the development of risk management arrangements. There were no four workstreams within the integrated Commissioning framework.
5.3 Jackie Moylan reported high costs of children services with an increase of children in care from 10 to 27 and that it was more appropriate to reserve fund this. With identified savings the actual overspend on SEND was reduced to 2m.
5.4 The Chair stated that the symptoms of austerity were now coming to the fore and stressed the need to identify internal and external risk.
RESOLVED: |
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Directorate Risk Register Review - Finance and Corporate Resources Additional documents: Decision: RESOLVED: Minutes: 6.1 Michael Honeysett introduced the report updating on the current Finance and Corporate Resources Directorate Risk Register as of April 2018. The report also identified how risks within the Council are identified throughout the financial year and the Directorate’s approach to embedding risk management. He highlighted the main cross cutting risks around pensions, ICT, including resilience and Cyper/information security, revenue and benefits, including universal credit and temporary accommodation. Micheal Honeysett told the Committee that there remained some high level, cross cutting risks in relation to problems with contractors and suppliers. A final cross cutting risk related to Major Capital Programmes and the financial exposure the Council was exposed to. The Chair stressed the need to continue with risk around pensions and Capital Programmes remained as areas of concern.
RESOLVED: |
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Treasury Management Update Decision: RESOLVED:
To note the report. Minutes: 7.1 Michael Honeysett introduced the fourth of the treasury reports relating to the financial year 2017/18, setting out the background for treasury management activity from January 2018 to March 2018 and the action taken during this period. Interest rates currently stood at 8.5 % and further rises were likely. The Committee noted that short term borrowing had increased and there had been a decrease of 15m in the investment balance. The decrease in the investment balance year on year was the result of the continued approach of maintaining borrowing and investments below their underlying levels.
RESOLVED:
To note the report. |
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Internal Audit Annual Plan 2018/19 Additional documents: Decision: RESOLVED:
To approve the proposed internal Audit Annual Plan, which includes the key performance measures for 2018/19. Minutes: 8.1 Julie Sharp introduced the proposed Internal Audit Plan and resources for 2018. She highlighted integrated work with Counter fraud, to ensure that significant risks are managed and compliance work with schools. Further, the importance of monitoring the effectiveness of the work of Internal Audit was emphasised. She confirmed that the Internal Audit Team was highly qualified to carry out the role. When specialist skills were required there was provision in the budget to use an external provider. It was agreeing the words ‘Unproductive Time’ in Table 1 be amended.
RESOLVED:
To approve the proposed internal Audit Annual Plan, which includes the key performance measures for 2018/19. |
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Code of Corporate Governance Additional documents: Decision: RESOLVED:
To approve the revised draft version of the Council’s Code of Governance, wit the option for in-year changes. Minutes: 9.1 Julie Sharp introduced the revised Code of Governance for the Committee’s approval. The draft version had been revised to incorporate current CIPFA best practice.
RESOLVED:
To approve the revised draft version of the Council’s Code of Governance, with the option for in-year changes. |
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Performance Overview Additional documents:
Decision: RESOLVED:
To note the performance indicators in appendix 1 and the Risk Management Scorecard in appendix 2 to the report and the current capital monitoring update in appendix 3. Minutes: 10.1 Michael Honeysett introduced the report providing an updated set of key performance indicators along with an update on risk management with Corporate Scorecard and accompanying commentary on the Council’s risk approach. Bruce Devile reported that new performance systems were being put in place. DLO performance was on the whole acceptable but there was an issue with the main contractors.
10.2 Following Councillor Michelle Gregory’s suggestion it was agreed that a narrative to the performance indicators and details of gender pay gap together with women’s grades be built into the performance indicators.
RESOLVED:
To note the performance indicators in appendix 1 and the Risk Management Scorecard in appendix 2 and the current capital monitoring update in appendix 3. |
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Audit and Anti Fraud Quarterly Progress Report Additional documents: Decision: RESOLVED: Minutes: 11.1 Michael Sheffield introduced the report on the performance of the Audit and Ant-Fraud Service up to the end of March 2018, the areas of work undertaken, and information on current developments in Internal Audit and Anti-Fraud, together with statistical information about the work of the investigation team. Michael Honeysett reported that 93% of planned internal audit assignments had been completed or were in progress and went on to report on outcomes from the performance indicators. TMO audits resulted in no assurance audit reports being issued due to a number of issues concerning a failure to establish a robust control framework. Recommendations had been made and their implementation was being tracked by the TMO Regulatory Services Team. All recommendations made had been accepted by the TMO and all recommendations due to be implemented had been implemented.
11.2 Michael Honeysett report that 89.9% of ‘high’ priority recommendations from audits undertaken from 2014/15 to date had been implemented. 2.5% had been partially implemented. The Committee noted that the estimated saving arising from enquiries amounted to £1,606,699.
11.3 Michael Sheffield told the Committee that consideration was being given to increasing the number of prosecutions, a process which would involve discussion with the Legal Department on evidence criteria, etc. The Committee stressed the need to consider the risks and benefits of this course of action. A report back to the committee would be made on the processes involved. It was agreed to inform Councillor Gregory of the number of prosecutions underway.
ACTION: Michael Sheffield RESOLVED: |
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Annual Report of the Audit Committee Decision: RESOLVED: Minutes: 12.1 The Chair introduced the annual report of the Audit Committee, detailing the role of the Committee and summarising the key activities and achievements in 2017/18 that demonstrate hoe the Committee has fulfilled this role effectively and to measure consistency with the guidance issued by the Public Sector internal Audit Standards and other statutory requirements. He reported a positive meeting with the Mayor on the future work of the Audit Committee and stated that specific issues that the future Audit Committee should be particularly aware of included:
- Devolution - Use of reserves - Role of outsourcing and of the private sector - Oversight of joint commissioning boards
He told the committee that CIPFA recommended having external people on the Committee.
12.2 Councillor Michelle Gregory stressed the need for the Audit Committee to make more use of technology in its work and suggested a more proactive role for the committee, looking at how it communicates outwardly.
RESOLVED: |
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Whistle-blowing Progress Report Decision: RESOLVED:
To note the contents of the report. Minutes: 13.1 Michael Honeysett introduced the report summarising the Council’s arrangements for whistleblowing and providing an update on the cases received on 2017 /18.
RESOLVED:
To note the contents of the report. |
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Decision: RESOLVED:
To note the Audit Committee work programme 2018/19. Minutes: RESOLVED:
To note the Audit Committee work programme 2018/19. |
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Any other business that the Chair considers urgent Decision: 15.1 There was no urgent business. Minutes: 15.1 There was no other urgent business. |