Agenda and minutes

Apologies were received from Councillor Michael Harrison. Councillor Victoria Oldham was acting as a substitute for Councillor John Ennis.

(5.32 pm)

Members to advise of any declarations of interest.

No declarations of interest were made at the meeting.

(5.33 pm)

Of the meeting of 22 March 2021.

The Minutes of the meeting of the Committee held on 22 March 2021 were approved as a correct record.

(There were two votes for the motion and two abstentions.)

(5.33 pm)

To determine whether to exclude the press and public during the consideration of any exempt information items – item 10 (part).

Appendix one of the item considered at Minute 10/21 was considered exempt under paragraph 3 of schedule 12A of the Local Government Act 1972. This item was discussed in open session and the exempt appendix was not referred to.

(5.34 pm)

To consider any questions under Standing Order 27.

There were no public questions to consider under Standing Order 27.

(5.35 pm)

The Senior Manager (Mazars) to submit a written report.

The Chair welcomed Diane Harold the Senior Manager of Mazars LLP, the Council’s external auditor, to the meeting to present the 2019/20 Annual Audit Letter. The Audit Letter summarised audit work for the 2019/20 financial year and was published on the council’s website. Ms Harold set out the results of the audit opinion on the financial statements, which was unqualified. The value for money conclusion was also unqualified and there were no statutory reporting issues. The letter also summarised the fees for the work undertaken.

RESOLVED (UNANIMOUSLY):

That the Committee note the content of the report.

(5.36 pm – 5.38 pm)

(D)

The Senior Manager (Mazars) to submit a written report.

The Chair welcomed Diane Harold the Senior Manager of Mazars LLP, the Council’s external auditor, to present the 2020/21 Audit Strategy Memorandum. Ms Harold explained that this was the plan for the coming year. It set out how and when the audit work would be carried out and the significant risks. It was anticipated that the audit completion report would be brought to the Committee in November. The draft significant risks were pensions, property valuations and management override of controls. COVID-19 grants could also be included as the work progressed.

There were also details in the report about changes to the value for money approach. In the future a narrative description of the council’s value for money arrangements would be included rather than a qualified or non-qualified binary conclusion. There were no identified significant risks of undetected weaknesses in the council’s value for money arrangements at this stage.

The plan outlined how Mazars would communicate with the Committee and also independence factors. Ms Harold indicated that there had been increased work in 2019/20 which would likely be at a similar level to complete the 2020/21 plan therefore the fees for the audit services would also increase.

RESOLVED (UNANIMOUSLY):

That the Committee note the content of the report.

(5.38 pm – 5.46 pm)

(D)

The Senior Manager (Mazars) to submit a written report.

The Chair welcomed Diane Harold the Senior Manager of Mazars LLP, the Council’s external auditor, to present the 2020/21 Audit Progress Report. This contained details of the progress of 2020/21 audit work and a summary of recent publications. Audit progress included:

•           Liaising with officers to plan the 2020/21 audit

•           Consideration of the latest agendas and papers

•           Begun annual IT general controls work

The report also included details of recent publications by the National Audit Office, one related to the state of Local Government finance during the pandemic. It was noted that Harrogate Borough Council had robust arrangements within the Medium Term Financial Strategy. The second report was on the timeliness of local auditor reporting which indicated that the majority of local authorities had failed to publish their 2019/20 accounts by the end of November 2020.

RESOLVED (UNANIMOUSLY):

That the Committee note the content of the report.

(5.46 pm – 5.49 pm)

(D)

The Audit Services and Fraud Manager to submit a written report.

The Audit Services and Fraud Manager (ASFM) submitted a written report that outlined internal activity for the period April 2020 to the end of February 2021. The report contained details of work undertaken and a summary of all completed reviews. The ASFM explained that the first six months of the year had been focussed solely on COVID-19 business grant work and associated investigations. This meant some planned work from the 2020/21 year would be deferred to the 2021/22 year. Policy management, procurement, risk management, data security, disaster recovery and refuse audits had been in progress at the time of publication however all were now complete or nearly complete. Health and safety - personal protective equipment had been awarded a significant level of assurance. Treasury Management audit work had been deferred to the 2021/22 plan.

The ASFM explained that the changes to the planned work in 2020/21 would not have an effect on the issuing of an overall opinion in June 2021.

It was also noted that ad hoc service advice had significantly increased during the pandemic.

Councillor Alex Raubitschek enquired about the breakdown of the current position at paragraph 5.2 of report. It was agreed to circulate details of this after the meeting.

Councillor Victoria Oldham asked about whether Harrogate Borough Council’s Audit Services team would have responsibility for audit work for the Local Authority Controlled Company (LACC) that was being set up to deliver the sport and leisure services. It was confirmed that, at present the audit team were providing support and advice and in the future would be responsible for the audit function at the LACC.

RESOLVED (UNANIMOUSLY):

That the Committee note the content of the report.

(5.49 pm – 6.00 pm)

(D)

The Audit Services and Fraud Manager to submit a written report.

The Audit Services and Fraud Manager (ASFM) submitted a written report providing an update on the implementation of recommendations. Appendix 1 contained information about the outstanding priority one internal audit recommendations and was considered exempt, this appendix was not referred to and the meeting remained in open session. Appendix 2 summarised the movements within the period and Appendix 3 was a summary of other outstanding audit recommendations. The ASFM explained that all recommendations had been agreed and closed and there were no instances where management had accepted the risks identified.

RESOLVED (UNANIMOUSLY):

That the Committee note the content of the report.

(6.00 pm – 6.04 pm)

(D)

The Audit Services and Fraud Manager to submit a written report.

The Audit Services and Fraud Manager (ASFM) submitted the Draft Internal Audit Plan for 2021/22 for consideration and approval by the Committee. The ASFM provided details of the number of days allocated to different audit plans. This was 742 available audit days in total, excluding 70 days which were allocated for ongoing advice and project support. The draft plan included 180 days of work for Craven District Council as per the Shared Internal Audit Service Agreement, this agreement had recently been extended to 31 March 2023.

Risk management was integrated within the plan and it was noted that audit work complemented current risk management processes. Work within the plan was based on risks that had been identified during the pandemic. 40 days had been allocated to business support grant fraud work and 30 days had been allocated to fraud awareness training. Progress against the plan would be monitored regularly and reported on a quarterly basis. Any key issues and findings would be reported to Management Board and the Audit and Governance Committee. The ASFM provided a breakdown of the programme of work including the days allocated to each area.

Councillor Victoria Oldham enquired as to whether staffing levels and resources were adequate to complete the work as planned and it was confirmed that barring any significant urgent work arising the team was well-resourced and in a position to complete the work as proposed in the plan.

RESOLVED (UNANIMOUSLY):

That Management Board and Audit and Governance Committee consider and approve the Internal Audit Plan for 2021/22.

(6.04 pm – 6.23 pm)

(D)

The Audit Services and Fraud Manager to submit a written report.

The Chair welcomed the Audit Services and Fraud Manager (ASFM) to the meeting to present the report. The ASFM explained that there had been a requirement for internal audit to comply with PSIAS since 2013, a component of this was that an external quality assessment should be performed at least every five years. The report submitted presented the results of the 2019/20 assessment that had been undertaken by a separate team at Mazars. Overall the review was positive, around ten recommendations relating to best practice were highlighted and these would be included in an improvement action plan. There was one area of non-compliance with the standards, the lack of a formal audit quality improvement programme. It was noted that the internal audit service effectively maintained this information as part of business as usual and it would be formalised. The lack of compliance had been included in the 2019/20 Annual Governance Statement.

The ASFM explained that discussion of the compliance review would help formulate an improvement action plan. This action plan would then be brought to the June committee.

Councillor Matthew Webber asked about the status of the leisure maintenance report which had received a partial assurance. The ASFM confirmed the Committee should have received updated information on this and the report was made available on request.

The Chair thanked the ASFM for presenting this and the other reports.

RESOLVED (UNANIMOUSLY):

That the Committee note the content of the report.

(6.23 pm – 6.33 pm)

(D)

The Scrutiny, Governance and Risk Manager to submit a written report.

The Scrutiny, Governance and Risk Manager (SGRM) submitted the Code of Corporate Governance for 2021 that had been agreed by Management Board. The Code is usually updated each year however it was not updated in 2020 due to the pandemic. The Code of Corporate Governance forms a significant part of the council’s internal control environment and enables to preparation of the Annual Governance Statement. The Code of Corporate Governance consists of seven principles with sub-principles that apply across the council and demonstrate good governance. The SGRM highlighted to Members that that the principles translated to a range of specific behaviours and actions (policies, procedures and processes) and details of these were within the updated Code submitted.

RESOLVED (UNANIMOUSLY):

That the Committee note the content of the report.

(6.33 pm – 6.36 pm)

(D)