Agenda and minutes

The Committee is asked to note any apologies for absence and substitutions received from Members.

No apologies for absence were submitted on behalf of Councillors on this occasion.

To confirm and sign as a correct record, the minutes of the last meeting of the Committee, held on Thursday 30 March 2023.

The Minutes of the last meeting of the Committee held on Thursday 30 March 2023 were approved as a correct record and were signed by the Chairman.

Councillors are invited to declare any Disclosable Pecuniary Interests, Other Registerable Interests of Non-Registerable Interests, and the nature of it, in relation to any item on the agenda.

There were no declarations of interest made on this occasion.

Subject to providing two working days’ notice, a Member of the Committee may ask the Chairman of the Committee a question on any matter in relation to which the Council has powers or duties which affect the Tendring District and which falls within the terms of reference of the Committee.

No Questions on Notice pursuant to the provisions of Council Procedure Rule 38 had been submitted on this occasion.

To provide the Committee with a periodic report on the Internal Audit function for the period March 2023 – May 2023, as required by the professional standards.

The Committee  was provided with a periodic report on the Internal Audit function for the period March 2023 – May 2023 and the Internal Audit Manager’s Annual Report for 2022/23 as required by the professional standards.

This report was split into three sections:

1)         Internal Audit Plan Progress 2022/23

2)         Annual Report of Internal Audit Manager

3)         Internal Audit Plan Progress 2023/24

 Members heard how the Public Sector Internal Audit Standards (PSIAS) required the Chief Internal Auditor (Internal Audit Manager) to make arrangements for reporting to senior management (Management Team) and to the board (Audit Committee) during the course of the year, and for producing an annual Internal Audit opinion and report that  could be used to inform the Annual Governance Statement.

The Accounts and Audit Regulations 2015 required that: “a relevant authority must undertake an effective internal audit to evaluate the effectiveness of its risk management, control and governance processes, taking into account public sector internal auditing standards or guidance”.

In respect of the Internal Audit Plan the  PSIAS required the Internal Audit Manager to: -

• Establish a risk based Internal Audit Plan, at least annually, to determine the priorities of the Internal Audit function, consistent with the Council’s goals.

• Had in place a mechanism to review and adjust the plan, as necessary, in response to changes to the Council’s business, risks, operations, programmes, systems and controls.

• Produces a plan that takes into account the need to produce an annual Internal Audit opinion.

• Considers the input of senior management and the Audit Committee in producing the plan.

• Assesses the Internal Audit resource requirements.

It was reported to the Committee that all expected audits for the 2022/23 Internal Audit Plan had been completed. A total number of eight audits  had been completed during April 2023 to May 2023. Two audits in that period had received an overall opinion of ‘Improvement Required’ (Housing Repairs and Maintenance and Housing Allocations) with the other six receiving satisfactory assurance opinions with no significant issues being identified. The audits receiving an overall opinion of ‘Adequate’ or ‘Substantial’ in that period were Risk Management, Health and Safety, Recycling and Waste, IT Governance, Freedom of Information / Subject Access Requests and Procurement. Internal Audit continued to provide advice on internal control, risk management and governance arrangements on a consultative basis.

All audits completed in the year had been assessed against the following risk:-

“The department has not managed or adapted to post Covid-19 working arrangements therefore current processes do not align with service demand potentially leading to process inefficiencies and gaps in internal control”. All procedural changes had been recorded and recommendations would be made throughout the year if procedural changes were needed; however, all departments reviewed to date had adapted well to the challenges brought by the Covid-19 pandemic and no significant issues specifically relating to the above risk  had been identified.

The Committee also heard that the  Internal Audit section remained focussed on delivering the message that it was  ...  view the full minutes text for item 5.

To present to the Audit Committee the updated Corporate Risk Register.

The Committee was presented with the updated Corporate Risk Register, which had been last presented to the Committee in September 2022. The Terms of Reference for the Audit Committee included a responsibility to provide independent assurance of the adequacy of the risk management framework and the associated control environment. The Corporate Risk Register was, where possible, brought to the Committee at six monthly intervals to enable the Committee to fulfil its role.

Corporate Risk Register

Members heard that the register had been subject to the review process with some highlights as follows.

A Covid 19 element continued to form part of all ongoing audits. Any significant findings identified would be provided at a later meeting by the Internal Audit Manager.

The Assurance and Resilience Manger continued to review the Council’s Business Impact Assessments (BIA) to ensure the Council was able to identify the operational and financial impacts resulting from any potential disruption of business functions and processes. The purpose of the review was to consider how the Council could recover and continue to provide a service to our residents should a significant disruption occur. A more in-depth update would be provided to the Audit Committee once the review had something to report.

Members also heard that the Council continued to deal with issues relating to Corporate IT and was committed to ensuring users were not put at risk of cyber-attack. Online training was provided, which was tailored towards identifying the weaknesses throughout the authority that could make the Council vulnerable to cyber-attacks and reduced the risk of the council being held to ransom by any attacker.

The Committee was informed that recruitment continued to be a challenge, but the Council had recently worked with the East of England Local Government Association to carry out an independent review of some areas of its pay structure and employment offer. This had led to some options to support the best use of the National Joint Council pay spine in alignment with the employment market. Those had included salary and benefits benchmarking, improved marketing of vacancies and employment offers, and expanding the well-established "grow your own" ethos. Those options were currently being considered as part of the Assistant Director change program.

The national and global "landscape" continued to impact the Council, and a full review of the Corporate Risk Register would be carried out during 2023/24. This would be done in consultation with Senior Officers and Members/Audit Committee. The changes to the Corporate Risk Register set out in this report reflected small changes undertaken since the Committee had last considered the register in September 2022 and provided updates on changing deadlines.

The Committee was also informed that a review of the Council's Risk Management concept would be carried out and brought back to the Audit Committee in the next six months. This work would include a review of the current risks included, along with the consideration of any changes or additions to reflect the most up-to-date position/changes faced by the council. This review would  ...  view the full minutes text for item 6.

The Committee will receive an oral update from our External Auditors.

The Committee was joined, via a remote Microsoft teams call, by Steve Bladen, who was a Director with BDO (the Council’s External Auditors) who gave an update on the Council’s outstanding Audit from 2021/22.

Members heard that, in relation to transactions and balances, this section of the Audit was now complete.

However, BDO still needed to resolve the following:

·         The calculation of property plants and equipment, in particular those assets that were valued on a depreciated replaceable costs basis.

·         The valuing of property, this was based on floor plans which still needed to be provided. This should be concluded within the week.

·         Material Infrastructure Assets, notably coastal defences. The Council had supplied BDO with a letter from a Civil Engineer as evidence to this. As of yet BDO still needed to perform due diligence on this letter.

Members asked BDO a number of robust questions challenging three key points, being summarised as:

• General on-going External Audit Delays, especially in respect of the 2020/21 accounts;
• What work was outstanding and how long any outstanding work would take to complete; and
• On-going impacts and the thresholds required in terms of external advice to support the finalisation of the 2020/21 Accounts.

During the course of this item Steve Bladen ‘dropped out’ of the remote call and was unable to return. Tshiamo Hlatshwayo (also from BDO) who was also present on the teams call, undertook to revert the following question to BDO:-

“What experience/qualifications would BDO expect from the person drafting the letter of evidence, in relation to the coastal defences item, to facilitate the audit?”

To present to the Committee the progress on outstanding actions identified by the Committee along with general updates on other issues that fall within the responsibilities of the Committee.

The Committee was presented with a report on the progress of outstanding actions previously identified by the Committee along with general updates on other issues that fell within the responsibilities of the Committee. The Table of Outstanding Issues had been reviewed and updated since it had last been considered by the Committee in March 2023.

There were currently two main elements to this report as follows:

1) Updates against general items raised by the Committee

2) Updates against the 2021/22 Annual Governance Statement Action Plan

Members heard that in terms of item 1) above, there were no significant issues to raise, with actions remaining in progress or further details set out in the report.  In terms of item 2), at the time of finalising this report, the Annual Governance Statement for 2023 remained subject to being finalised alongside the Statement of Accounts, where there had been a delay in its publication due to the ongoing impact of the External Auditor’s delay in completing their necessary work for earlier years (the Statement of Accounts for 2020/21 and 2021/22 remained subject to this ongoing delay). 

In terms of the review of the Annual Governance Statement for 2023 mentioned above, the associated action plan set out within that Statement would include the on-going / outstanding items set out within Appendix B along with the consideration of a number of actions that aimed to reflect the issues and challenges now faced by the Council such as:-

•           Review of the Local Code of Corporate Governance and Key Policies and Procedures

•           A review of the Council’s Corporate Risk Register and business continuity

           arrangements

•           Delivering financially sustainability

•           Developing the management of performance and delivery

•           Review of the Effectiveness of the Audit Committee

•           Review of Departmental Plans in the context of corporate priorities and vision

As highlighted above the Statement of Accounts 2020/21 remained subject to the conclusion of the work of the External Auditor.  The External Auditor had indicated a commitment to finalise their work by September 2023 and therefore, subject to the availability of their associated audit completion report, it might be possible to present this to the September meeting of this Committee.  If this was not possible then it was proposed to arrange a special meeting of the Committee in consultation with the Chairman as soon as possible after that date.

RIPA – Regulatory Investigatory Powers Act 2000

Members were informed that this Authority had not conducted any RIPA activity in the last quarter and that it was rare that it would be required to do so.

Whistleblowing Policy

The Committee was informed that, at the meeting of Human Resources and Council Tax Committee, held on 6 July 2023, that Committee had considered a comprehensive review of the Council’s Whistleblowing Policy and procedure, in line with identified best practice and employment legislation.  The review had focused on the Authority’s reporting and investigation mechanisms for dealing with, and responding to, whistleblowing concerns, and the responsibility of those involved in managing  ...  view the full minutes text for item 8.