Agenda and minutes

Audit Committee
Thursday, 30th June, 2016 7.00 pm

Venue: Civic Offices, St Nicholas way, Sutton, SM1 1EA

Contact: Fiona Bywaters, Committee Services Team Leader, Tel: 020 8770 5122, Email:  fiona.bywaters@sutton.gov.uk 

Items
No. Item

1.

Apologies for absence and notification of substitutes

Minutes:

Apologies were given on behalf of Councillor Adrian Davey.

2.

Declaration of interests

Minutes:

No declarations of interest were made.

3.

Minutes of the last meeting pdf icon PDF 216 KB

To approve as a correct record the Minutes of the meeting held on 24 March 2016.

Minutes:

Subject to the minor amendment of Minute 48, from “The Strategic Director of Resources confirmed that the same number of audit days will be delivered at the same cost levels of 14/15 due to savings achieved within the service” to “15/16,” the minutes were approved.

 

RESOLVED: That the minutes of the meeting held on 24 March 2016 are agreed as an accurate record.

4.

Treasury Management Update - Annual Report 2015/16 pdf icon PDF 197 KB

The Council is required through regulations issued under the Local Government Act 2003 to produce an annual treasury management report reviewing treasury management activities and the actual prudential and treasury indicators for 2015/16.

Additional documents:

Minutes:

The Executive Head of Finance presented the Treasury Management Update – Annual Report 2015/16.

 

Questions from Members focussed on the temporary borrowing, the definition of ‘reasonable yield’ (Paragraph 4.27), the operations of the Municipal Bond Agency, the assessment of future risk and the Housing Revenue Account debt (Paragraph 4.7).

 

The Chair requested that a trendline on balances be presented to the Committee with the Executive Head of Finance agreeing to do so.

 

The following amendments to the report were highlighted:

·         Appendix C, Temporary borrowing limit, Actual at 31/03/2016 to be corrected to reflect the figure given under Paragraph 4.1.

·         Appendix C, Notes, Point (4) to refer to 2015/16, not 2014/15.

  

RESOLVED:

 

1.    That the treasury management activity undertaken during 2015/16 be noted.

 

2.  That the Treasury Management Annual Report 2015/16 be recommended for adoption by Full Council.

 

5.

Annual Governance Statement 2015/16 pdf icon PDF 155 KB

This report presents the Annual Governance Statement 2015/16 (Appendix A) and the Corporate Risk Register (Appendix B).

 

Appendix B is available in the Supplemental Agenda

 

Additional documents:

Minutes:

The Executive Head of Finance presented the Annual Governance Statement 2015/16.

 

Questions from Members focussed on:

 

  • Which members were being referred to under Paragraph 4.1;
  • The availability to Members of the action plans mentioned under Paragraph 3.3 of Appendix A;
  • The risk of slippage in the delivery of savings plans and how that risk would be managed;
  • The amount held in the risk reserve; and
  • The medium term financial plan.

 

The Audit Committee then discussed the Corporate Risk Register (Appendix B).

 

Questions from Members focussed on:

  • Risks CRR 02, CRR 04, CRR 05, CRR 08;
  • The frequency of update;
  • The risk registers and mitigation plans of individual directorates; and
  • How risks are managed and monitored.

 

It was also suggested that the word ‘excluding’ be removed from CRR 02 as superfluous and that CRR 08 be updated.

 

The Chair requested that the Corporate Risk Register be brought before the Committee periodically, to which the Executive Head of Finance agreed.

 

The Chair also requested that feedback on risk management be discussed at the December meeting of the Audit Committee. The Executive Head of Finance agreed.

 

RESOLVED:

 

1.   That the 2015/16 Annual Governance Statement be endorsed.

 

2.  That the Corporate Risk Register was reviewed.

 

6.

Extension of the Shared Internal Audit Partnership pdf icon PDF 161 KB

This report provides an update to the Audit Committee on the extension of the South West London Audit Partnership (SWLAP) from a 4 to a 5 Borough shared service. The proposals are that the London Borough of Wandsworth will join the shared service on 1 October 2016.

Minutes:

The Head of the South West London Audit Partnership (SWLAP) presented the report on the extension of the SWLAP from a 4 to 5 borough shared service.

 

Questions from Members focussed on:

·         Whether TUPE applied under Paragraph 5.3;

·         The potential benefits of expanding the partnership;

·         Adherence to the internal audit charter; and

·         The collaboration agreement.

 

RESOLVED:

 

1.    That the proposals outlined in this report are considered and the approach:

·      To extend the South West London Audit Partnership to include the London Borough of Wandsworth Internal Audit from the 1 October 2016; and

·      To merge the Fraud Partnership (SWLFP) and the SWLAP from the 1 October 2016, establishing a five borough audit and fraud investigation service, be noted.

 

7.

Internal Audit - Annual Report 2015/16 pdf icon PDF 158 KB

This report summarises the work undertaken by Internal Audit during 2015/16, including details of audit assurance opinions and counter-fraud/investigation work. It includes the Head of Internal Audit’s Annual Opinion on the Control Environment and the Annual Review of Effectiveness of Internal Audit.

Additional documents:

Minutes:

The Head of the South West London Audit Partnership (SWLAP) presented the Internal Audit – Annual Report 2015/16.

 

Questions from Members focussed on:

·         Action taken with regards to the issues highlighted in Appendix B of the Annual Report 2015/16;

·         The declaration of interests of Officers and the availability of the management  action plans;

·         The use of procurement cards and the improvement of compliance;

·         Actions proposed with regards to grants to voluntary groups.

 

In response to Member discussion, the Head of the SWLAP agreed to provide reports on points 6, 7 and 8 of the Summary of Limited/Low Assurance Audit Opinions: 2015/16 (Appendix B to the Annual Report).

 

RESOLVED:

 

1.    That the Internal Audit Annual Report for 2015/16 (Appendix A) be noted and the Head of Internal Audit’s Opinions on the Council’s internal control environment and the Annual Review of Effectiveness of Internal Audit be endorsed.

 

2.    That the confirmation of Internal Audit as to compliance with the Public Sector Audit Standards during 2015/16 be noted.

 

8.

Annual report of the Audit Committee 2015/16 pdf icon PDF 135 KB

This report comprises the Annual Report of the Audit Committee for 2015/16. The purpose of this Annual Report is to demonstrate to stakeholders the work undertaken by the Audit Committee over the previous 12 months in promoting good governance and fulfilling its terms of reference.

Additional documents:

Minutes:

The Executive Head of Finance presented the Audit Committee Annual Report for 2015/16, highlighting in particular Appendix C of the Annual Report, ‘Assessment of the Audit Committee.’

 

Discussion ensued with regards to organising a separate informal meeting to examine the role and effectiveness of the Audit Committee. The availability of a CIPFA Better Governance Training on the role of an audit committee was also raised, with the Head of the South West London Audit Partnership committing to look into this.

 

Questions from Members focussed on:

·         What was meant by stakeholders under Recommendation 2.2; and

·         Means of self-assessment.

 

The following amendments were also noted:

·       Appendix A: Introduction from the Chair of the Audit Committee: to be changed as a report over the twelve month period of the municipal year.

·       Appendix A: Introduction from the Chair of the Audit Committee: Third paragraph to mention auditors rather than Audit functions.

·       Appendix D of Appendix A: Meeting of the 16, not 23, March 2016.

 

RESOLVED:

 

1.    That the content of the Annual Report is finalised.

 

2.    That distribution of the Annual Report to stakeholders is agreed.

 

3.    That areas where the self-assessment has identified less than full compliance with best practice be discussed and an approach to address this be agreed.

 

 

9.

External Audit Progress Report pdf icon PDF 1 MB

Attached for information, the external auditors Grant Thornton UK LLP present a progress report to the Audit Committee in delivering their responsibilities.

 

Reports for information are in the Supplemental Agenda

 

.

Additional documents:

Minutes:

The external auditors Grant Thornton UK LLP presented a progress report to the Audit Committee in delivering their responsibilities, for information only.

 

Questions from Members focussed on:

·         Progress at 10 June 2016;

·         The availability of draft accounts online;

·         The open and transparent nature of the inspection of accounts;

·         The three year plan.

 

10.

Review of work plan pdf icon PDF 181 KB

The Committee’s Work Plan is attached.

Minutes:

The work programme was updated to include:

·         22 September 2016: “Review of Committee Terms of Reference and the Role and Effectiveness of the Audit Committee”

·         16 March 2017: “External Audit: Grant Certification Report 2015/16”

 

11.

Any urgent items brought forward at the discretion of the Chair

The Chair must approve the reason for urgency.

Minutes:

No items were raised.

12.

Date of next meeting

The next meeting will take place on 22 September 2016.

Minutes:

The next meeting of the Audit Committee will take place on 22 September 2016.