Agenda and minutes

Governance and Audit Committee
Friday, 21st June, 2019 2.00 pm

Venue: Belton Room, Jubilee Church Life Centre, London Road, Grantham, NG31 6EY

Items
No. Item

1.

Apologies

2.

Disclosure of interests

3.

Minutes of the meeting held on 21 March 2019 pdf icon PDF 187 KB

4.

Updates from previous meeting

    Minutes:

     

    At previous meetings the committee had received updates with respect to ongoing issues with a small number of boilers that had been fitted in some council properties. The boilers, which had been installed in approximately 215 properties, had a fault that had led to pipes freezing.

     

    The Assistant Director, Housing provided committee members with an update on the current position. Council had resolved that a report should be presented to the Communities Overview and Scrutiny Committee. Following Council’s resolution, the Cabinet Member for Housing had changed, as had the Overview and Scrutiny Committees. To allow sufficient time to ensure that the new Cabinet Member was comfortable with the proposed action and budget implications, a report was scheduled to be presented to the Rural and Communities Overview and Scrutiny Committee’s September meeting.

     

    Members were appraised of the actions that had been taken to date. The Cabinet Member wanted to look at all boilers, not just those that had been affected by the fault. This review was being carried out in conjunction with the annual service of gas boilers and to date 4,500 had been assessed. Further assessments would be carried out during the summer of 2019 and those properties where mitigation was needed would be prioritised and action taken. All new boilers that were fitted included an internal condensate discharge.

     

    While there were no reports of frozen pipes in the winter of 2018/19, members were mindful that temperatures had been mild.

     

    In response to questions put by committee members, the Assistant Director, Housing explained that the Council achieved 99.8% of all annual gas services. The numbers with which the committee had been provided referred to those visits that had been made after the issues had been reported.

     

    One Member referred to a specific property that had experienced frozen pipes, stating that the occupant had not been visited nor received any contact from the Council. As the matter had been reported 18-months prior, disappointment was expressed about the lack of contact. Another member also expressed concern about the amount of time that had passed since the issue had first been raised. Members were advised that the Council was visiting all properties with gas boilers. The Assistant Director, Housing stated that he was not aware of the specific address and so unable to comment. He offered members the opportunity to have early sight of the report that would be presented to the Rural and Communities Overview and Scrutiny Committee to ensure that it addressed the concerns that they had raised.

5.

Internal Audit Annual Report 2018-19 and Follow Up Report pdf icon PDF 191 KB

    Reports of the Internal Auditors

     

    Appendix A: Internal Audit Report 2018-19

    Appendix B:  Internal Audit Follow Up Report

    Additional documents:

    Minutes:

     

    Internal Audit Annual Report 2018-19

     

    The Senior Manager from RSM, the Council’s internal auditor presented the Internal Audit Annual Report 2018-19. In presenting the report he explained that RSM met with the Council’s management team on an annual basis to draw up an audit plan for that year and put together a 3-year strategy. Once agreed with the senior management team, the plan would be brought to committee for approval. During the year the committee would receive reports on each of the audits that had been completed, the recommendations that had been raised and the level of assurance given. At the end of each year the findings of those audits were brought together and an opinion provided on the Council’s governance, risk management and internal control framework.

     

    Members were advised that for 2018/19 internal audit had found that the organisation had an adequate and effective framework for risk management, governance and internal control, which was a positive opinion. Of the 14 audits that were undertaken, eight were given a substantial opinion, five were given reasonable assurance and one audit received partial assurance. Given the number of recommendations that had been raised and the number of positive opinions, members expressed disappointment that the level of assurance was not more positive. The committee was reassured that it was highly unlikely for any client to receive an absolute positive level of assurance. The recommendations that had been raised indicated that there are improvements that could be made. It was also noted that in drawing up the annual audit plan, officers directed audit to those areas where they considered improvement was needed, which increased the likelihood of recommendations being raised.

     

    The Senior Manager also advised members about the other aspect of internal audit’s work, which was following up on the implementation of the recommendations that had been made.

     

    One member asked whether internal audit had been involved in the change to the council’s risk strategy as it moved from being risk averse to risk aware. In response, the Senior Manager explained that internal audit carried out an audit of risk and governance in alternate years and 2018/19 had seen a review of the council’s governance arrangements. Audit would review risk as part of the 2019/20 audit plan. The scope of the audit would include reviewing the council’s risk registers, its risk strategy and an assessment of other key work. Separate work was also undertaken by RSM’s consulting team to support the council with its risk management framework and risk register.

     

    Internal Audit Follow-up Report

     

    The RSM Senior Manager referred to the Internal Audit follow-up report, which explained that 8 audit reports had been followed-up. Of the 34 actions across those audits, 17 recommendations were medium risk and the remaining 17 were low risk. The audit opinion was positive, finding that reasonable progress had been made in implementing audit’s recommendations. 21 recommendations had been implemented and 6 were in the process of being implemented while implementation of the final 7 recommendations had yet to begin.  ...  view the full minutes text for item 5.

6.

Outturn Report for 2018-2019 pdf icon PDF 290 KB

    Report from the Cabinet Member for Finance.

    Additional documents:

    Minutes:

     

    The Cabinet Member for Finance presented his report which informed members of the outturn position at the end of 2018/19. He drew Members’ attention to the revised version of the covering report, which had been circulated after the publication of the agenda pack. Members noted that the only change was an amendment to the text at paragraph 4.1.

     

    The report included in-year changes to the budget framework, the total costs of provision of service for each directorate, narrative on variances between the budgeted and outturn positions, carry forwards where the budget had not been fully utilised, the HRA position which showed a reduced surplus for 2018/19 and the year end position of the Capital Programme.

     

    Members were given an explanation of accounting adjustments that were made to remove non-cash items form the balance sheet and the impact of valuation of the council’s assets and depreciation.

     

    Table 5 of the report set out by directorate variances of £20,000 and greater against the budgeted position . Members suggested that it would be helpful to include an additional column showing the percentage variance to assist them in determining whether the variance against budgeted levels was significant. Members asked whether the length of the list of variances was normal or whether the volume was exceptional. Members were advised that variances had previously been grouped together, so there would not have been the same level of visibility. Members also noted that the level of variance that was reported was lower than that used by other local authorities. Members were grateful for the increased detail, together with the commentary, and the transparency this brought.

     

    Reference was made to the variance in car parking income and a question raised about the variance associated with One SK. One SK was the Council’s modernisation and transformation programme, moving towards the organisation becoming more agile; it included the rollout of equipment to staff. Unspent funds for 2018/19 associated with the project would be rolled forward into the 2019/20 financial year.

     

    Members’ attention turned to the Capital Programme and the in-year adjustment that had been made to fund the purchase of the Cummins site in Stamford. This purchase had been undertaken utilising temporary internal borrowing.  External borrowing would be necessary in the future to replace the displaced funding.

     

    Some concern was expressed about the level of the underspend on disabled facilities grants. Work was underway with colleagues from Lincolnshire County Council to identify the reasons for this, including whether the delays were caused by the lack of occupational therapists’ assessments coming forward. It was hoped that a pilot ‘step up, step down’ project which would support patients coming out of hospital would reduce the level of the balance together with the relaxation of some requirements that would have historically been required to release the funding.

     

    Before members considered the recommendations set out in the report, the committee was given an overview of the carry forwards it was being asked to authorise and changes to the Regeneration Reserve policy to include feasibility  ...  view the full minutes text for item 6.

7.

Counter Fraud Annual Report 2018-19 pdf icon PDF 229 KB

    Report from the Cabinet Member for Finance.

    Minutes:

     

    The Assistant Director, Resources gave an overview of the Counter Fraud Annual Report for 2018-19. He explained that South Kesteven District Council was part of the Lincolnshire Fraud Partnership, which worked across Lincolnshire to promote good practice, instigate counter fraud activity and provide resilience across the partnership. It was noted that in 2018/19 the Partnership had received recognition for its fraud training across schools.

     

    The Committee noted that during the summer of 2019, officers and members would be required to complete a fraud e-learning module.

     

    Members were given an overview of data-matching exercises through the National Fraud Initiative that were used to identify the risk of fraud and fraudulent activity. It had proved particularly successful in identifying fraudulent activity in respect of the single person council tax discount but was also used to identify potential fraud in areas including housing benefit, pensions, payroll, creditors and housing tenancy.

     

    Committee Members’ attention was drawn to the increase in whistleblowing activity. This service was primarily marketed externally. Whilst it was hoped that staff with any concerns would go through internal channels, the whistle blowing hotline provided them with a service that they could access where they would be guaranteed anonymity. Members were reassured that all whistle blowing allegations were investigated as far as possible, but this could prove difficult; because information was provided anonymously it was not possible to go back to the individual to capture any missing information. Members were interested in whether the increase in whistle blowing was a spike or the start of a trend.

     

    Members asked about counter fraud measures that the council had in place. Members were advised that there were a high number of detective and preventative controls across the authority including separation of duties, reconciliation, authorisation limits and counter checks. Any new suppliers were also subject to checks to ensure their validity.  The checks of the internal control framework provided by internal audit were considered a valuable tool to prevent fraud.

     

    It was proposed, seconded and AGREED:

     

    1. That the Governance and Audit Committee approved the contents of the report of the Cabinet Member for Finance including the proposed workplan for 2019/20

8.

Health and Safety Annual Report 2018-19 pdf icon PDF 196 KB

    Report from the Cabinet Member Commercial and Operational.

    Additional documents:

    Minutes:

     

    The Assistant Director, Commercial and Operational introduced the report of the Cabinet Member for Commercial and Operations on the Health and Safety Annual Report 2018/19. He stated that there were no serious issues that officers wished to draw to the committee’s attention and that the level of accidents did not cause concern. It was noted that there were parts of organisation where there was a higher risk of accidents, notably repairs, the works department and refuse.

     

    It was noted that there had been some increases to the accident rates at some leisure centres within the district. These corresponded with increased footfall and new ways of recording incidents. Work had been carried out in previous years to try and benchmark the level of accidents in the district’s leisure centres but the variety of activities taking place at each leisure centre meant that it was not possible to draw comparisons.

     

    Members noted that in previous years there had been concerns that the low number of accidents was due to under-reporting. Officers stated that those levels had been stable for a number of years, indicating that the low accident rate was normal for the authority. Measures had also been put in place to try and increase reporting of ‘near misses’.

     

    Members asked why 46% of the total incidents recorded in the council’s figures for 2018/19 were listed as ‘other’. Officers explained that these fell into a wide variety of different categories and ranged from someone getting dust in their eye to a scald. If there was a trend in incidents placed in the ‘other’ category, it would have been highlighted for Members’ attention.

     

    The Committee was advised that officers did not get details of the incidents that occurred at the leisure centres but a majority of the 50 accidents on council premises were considered minor. Three of those accidents were required to be reported under RIDDOR Regulations.

     

    Questions were asked about the frequency of accidents leading to claims against the Council. Officers stated that the level of claims for accidents on Council premises were lower than might be expected. Any claim made against the Council would either be defended or settled on the best terms. It was noted, however, that the 2018/19 insurance year had been a significant year for claims both in numerical and financial terms when compared to the previous ten years.

     

    It was proposed, seconded and AGREED:

     

    1. That the Governance and Audit Committee noted the key areas of focus in the Health and Safety Annual Report 2018/19

9.

Close of meeting