Agenda and minutes

Audit & Governance Committee
Monday, 26 September 2016 10.00 am

Venue: Members Conference Room, County Hall, Kingston upon Thames, Surrey KT1 2DN

Contact: Andrew Baird  Email: andrew.baird@surreycc.gov.uk

Items
No. Item

48/16

APOLOGIES FOR ABSENCE AND SUBSTITUTIONS

49/16

MINUTES OF THE PREVIOUS MEETING [25 July 2016] pdf icon PDF 352 KB

    To agree the minutes as a true record of the meeting.

    Minutes:

    Concerns were raised regarding the action recorded in relation to item 41/16 in the minutes. Members stated that actions should be recorded in such a way that enabled the Committee to monitor their progress and avoided any ambiguity regarding when they had been completed.

     

    The Minutes were approved as an accurate record of the previous meeting.

50/16

DECLARATIONS OF INTEREST

    To receive any declarations of disclosable pecuniary interests from Members in respect of any item to be considered at the meeting.

     

    Notes:

    ·         In line with the Relevant Authorities (Disclosable Pecuniary Interests) Regulations 2012, declarations may relate to the interest of the member, or the member’s spouse or civil partner, or a person with whom the member is living as husband or wife, or a person with whom the member is living as if they were civil partners and the member is aware they have the interest.

    ·         Members need only disclose interests not currently listed on the Register of Disclosable Pecuniary Interests.

    ·         Members must notify the Monitoring Officer of any interests disclosed at the meeting so they may be added to the Register.

    ·         Members are reminded that they must not participate in any item where they have a disclosable pecuniary interest.

    Minutes:

    There were none.

51/16

QUESTIONS AND PETITIONS

    To receive any questions or petitions.

     

    Notes:

    1.  The deadline for Member’s questions is 12.00pm four working days before the meeting (20 September 2016).

    2.  The deadline for public questions is seven days before the meeting (19 September 2016).

    3.  The deadline for petitions was 14 days before the meeting, and no petitions have been received.

     

    Minutes:

    There were none.

52/16

RECOMMENDATIONS TRACKER AND INFORMATION BULLETIN pdf icon PDF 75 KB

    To review the Committee’s recommendations tracker.

    Additional documents:

    Minutes:

    Declarations of interest:

    None

     

    Witnesses:

    Denise Le Gal, Cabinet Member for Business Services and Resident Experience

    Kevin Kilburn, Deputy Chief Finance Officer

    Sue Lewry-Jones, Head of Internal Audit

     

    Key points raised during the discussion:

    1.    Discussions took place regarding A20/15 on the Recommendations Tracker and Members were reminded that they had been invited to the Social Care Services Board meeting on 26 October 2016. This was to contribute to the discussion arising from the item on Social Care Debt, specifically relating to the Adult Social Care Directorate’s collection of long term outstanding balances from service users.

    2.    In relation to Action A45/15, Members were informed that arrangements were being made to provide the Committee with a private briefing on the outcomes of the review into the security of County Hall.

    3.    Members inquired about the progress that had been made in compiling the Surrey Choices Business Plan, highlighted in the recommendations tracker as A1/16. The Committee asked whether the Business Plan had been submitted for consideration by the Shareholder Board. Members were informed that it was the role of the Council Overview Board (COB) to scrutinise Surrey Choices’ Business Plan and that this would take place at the COB meeting scheduled for 14 December 2016. The Shareholder Board had, however, received an update on the Business Plan

    4.    The Committee was advised that the previous Managing Director had departed Surrey Choices in July 2016 and that it had been necessary to appoint an interim Managing Director. It was highlighted that the interim Managing Director has had experience of creating and developing a ltd company and, as a result, there was an expectation that they would be able to deliver a strong Business Plan and take the Surrey Choices forward.

     

    Will Forster arrived at the meeting at 10.10am during the discussions on this item.

     

    The Committee discussed recommendations A1/16 and A2/16 after item 12 on the agenda due to the availability of the relevant officer.

     

    Action/Further information to note:

    None.

     

    RESOLVED:

    The committee noted the report.

     

53/16

External Audit: Annual Audit Letter pdf icon PDF 101 KB

    The Council’s external auditors, Grant Thornton, are presenting their Annual Audit Letter in respect of the audit year 2015/16 (Annex 1).  This report summarises the key messages detailed in the Grant Thornton Audit Findings report presented to the Audit & Governance Committee on 25 July 2016.

     

    Additional documents:

    Minutes:

    Declarations of interest:

    None

     

    Witnesses:

    Geoffrey Banister, Grant Thornton

    Nikki O’Connor, Finance Manager (Assets & Accounting)

     

    Key points raised during the discussion:

    1.    Geoffrey Banister introduced the report that was required to be brought to the Committee.

    2.    In response to a query as to why the report showed that Children’s Services was inadequate Mr Banister reported that Grant Thornton have to show that Children’s’ Services are inadequate and continue to do so until there is a revised Ofsted opinion.  Ofsted had been in but a report would not be expected until January 2017.  Grant Thornton acknowledged that it had been a long journey for the council and recognised that improvements had been made.

    3.    In response to a member query it was stated that Audit & Governance Committee would see Surrey Choices audit accounts report in December after it had been to Surrey Choices Board.

    4.    The Chief Internal Auditor, in response to a query, explained that the council’s internal audit team had right of access to the council’s private companies and a number of audits had been undertaken around the governance in place for those businesses.  Recommendations from internal audit had been taken on board.

    5.    With regards to the Highways Network Asset, Grant Thornton would look at arrangements to ensure sound valuations were done properly.  The committee expressed concern that this may cause a few issues around what the council actually own and therefore make it difficult to know if the valuation was correct.  Grant Thornton would be happy to share the client briefings with members with the caveat that they were primarily operational detail and may not be that valuable to committee members.

    6.    The Committee were informed that Grant Thornton could not give an audit opinion on whether the pension fund was well invested but did provide advice on whether the pension accounts were a true and fair value.

    7.    There was some discussion about council’s forecasting their budget spend correctly which was endemic across local authorities.  Overall SCC had underspend in 2015/16 but with social services there was always an overspend and a member queried whether there was a will to deliberately under-budget in certain cases.  Control was provided through review of variances every year and relevant committees were informed if there was to be an over or under spend.

     

    Actions/ further information to be provided:

    None.

     

    Resolved:

    The committee noted the report.

     

54/16

External Audit Performance pdf icon PDF 97 KB

    This report provides the Audit & Governance Committee with details of Grant

    Thornton’s performance during the last 12 months against the Key Performance Indicators (KPIs) previously agreed and approved by this Committee on 7 December 2015.

     

    Additional documents:

    Minutes:

    Declarations of interest:

    None

     

    Witnesses:

    Geoffrey Banister, Grant Thornton

    Nikki O’Connor, Finance Manager (Assets & Accounting)

     

    Key points raised during the discussion:

    1.    Geoffrey Banister introduced this report and stated that audit was a partnership and figures reflected joint performance of the council and Grant Thornton during the process.

    2.    It was reported that the number of requests and the performance in responding to requests rapidly had improved over the last few years.

     

    Actions/ further information to be provided:

    None.

     

    Resolved:

    The committee noted the report.

     

55/16

Statutory Responsibilities Network pdf icon PDF 168 KB

    To update the Audit & Governance Committee on the activity of the Statutory Responsibilities Network.

    Minutes:

    Declarations of interest:

    None

     

    Witnesses:

    David McNulty, Chief Executive

     

    Key points raised during the discussion:

    In response to member questions it was reported that:

    1.    There had been huge savings in adult social care despite increasing demand pressures.  There had been a 7-8% increase in demand this year and there were other parts of the council where spending was also difficult to predict. There were a series of uncertainties in the budget and the S151 Officer had highlighted that the budget was unsustainable which seemed likely to remain the case in February 2017.

    2.    It is forecast that there will be a council overspend in 2016/17 – the first time in many years.

    3.    The Statutory Responsibilities Network did not strictly look at finance but more the implications of finance on the organisation.

    4.    Asylum seekers had put pressure on the Children’s Services budget but the council were dealing well with it.

    5.    Whether the Improvement Board was to be permanent following the Ofsted report was a decision for the council.

     

    Actions/ further information to be provided:

    The Ofsted report to be sent to all councillors once published.

     

    Resolved:

    That the Audit & Governance Committee Chairman continues to meet with the Network chairman, the Chief Executive, in order to keep up-to-date with network activity.

     

     

56/16

Highways Network Asset pdf icon PDF 198 KB

    To inform the Committee about progress on the implementation of the Highways Network Asset for the Statement of Accounts for 2016/17. This is a fundamental change in the accounting treatment of infrastructure assets which will see the value of infrastructure assets held on the balance sheet increase from £364m as at 31 March 2016 to an estimated £30bn as at 31 March 2017.

     

    Additional documents:

    Minutes:

    Declarations of interest:

    None

     

    Witnesses:

    Jonathan Evans, Principal Accountant, and

    Amanda Richards, Network and Asset Management Group Manager

     

    Key points raised during the discussion:

    1.    The Principal Accountant introduced the Highways Network Asset (HNA) report who outlined the changes required as a result of the report introduction. 

    2.    It was reported that no highway authority knows the value of its drainage and a set figure from Government was used to assess all drainage across the council areas.

    3.    The committee expressed concern around the practicalities of the introduction of HNA and whether there were sufficient resources within the highways team to ensure that HNA’s can be input correctly.

    4.    It was explained that data inputting would be relatively straightforward.  The IT system used would need a few tweaks but no new software of major changes would be needed.  Toolkits were also provided by CIPFA to ensure the calculations were done correctly.  HNA reporting had been on the cards for a while so resources had been allocated in advance and the project worked on over time.  Grant Thornton felt that the council were ahead of the game and could be used as a pilot.

    5.    In response to a member query regarding differentiation of footways and footpaths it was reported that highways and environment teams were working closely together to share knowledge and expertise.

     

    Actions/ further information to be provided:

    None.

     

    Resolved:

    The Committee noted that Surrey County Council was on target to implement the Highways Network Asset valuation requirements for the financial year 2016/17 in line with the required timetable.

     

57/16

Leadership Risk Register pdf icon PDF 107 KB

    To present the Leadership risk register as at 31 August 2016 and update the Committee on any changes made since the last meeting to enable the Committee to keep the Council’s strategic risks under review.

    Additional documents:

    Minutes:

    Declarations of interest:

    None

     

    Witnesses:

    Cath Edwards, Risk and Governance Manager

     

    Key points raised during the discussion:

    1. The Risk and Governance Manager introduced the report and reported that there were no significant changes to the risk register.  Devolution was being updated as discussions with Government progressed. 
    2. Information Governance has been flagged as an emerging risk and discussions were taking place on whether it should have its own entry on the Leadership risk register.
    3. The Committee were uncomfortable with the wording of L4 – Devolution and also thought this should be a medium risk, rather than a high risk, as devolution was an opportunity as opposed to a threat.

     

    Actions/ further information to be provided:

    None.

     

    Resolved:

    1.    The Director of Finance and Chief Internal Auditor to take back the committee’s comments on L4 – Devolution to the next SRN meeting.

    2.    The committee noted the report.

     

58/16

Completed Internal Audit Reports pdf icon PDF 83 KB

    The purpose of this report is to inform Members of the Internal Audit reports that have been completed since this Committee last considered a Completed Internal Audit Reports item in May 2016 - as attached at Annex 1. 

    .

    Additional documents:

    Minutes:

    Declarations of interest:

    None

     

    Witnesses:

    Sue Lewry-Jones, Chief Internal Auditor

    Charlotte Langridge, Business Intelligence Lead, Adult Social Services

     

    Key points raised during the discussion:

    1.    A verbal update was provided on what adult social services had done following the audit report.  The Business Intelligence Lead explained that the e-brokerage system went live in May and that there had been positive feedback from the market for the system on initial testing.  Engaging providers with e-brokerage needed to be done in stages as the system was rolled out.  There was no more development required as the software was created and managed externally.  The e-brokerage system was necessary to provide savings and to deliver home based care efficiently. Staff and providers were being taught how to use the system.  The management team were aware of the challenge of staff turnover and were ensuring that all were aware of how to use new systems.  It was expected that the roll out would be completed by the end of the year.  There would be a further follow up report from Audit when there were enough providers on board.  At that point a discussion would take place as to what to bring back to committee.

    2.    The Chief Internal Auditor gave an overview of audit reports issued since the last meeting of the committee.  Council Overview Board (COB) had discussed the Youth Centres audit report and were keen to see another report as soon as possible.  There would be a follow-up audit in six months time.

    3.    Members expressed concern about monitoring of the Hillcrest contract to which is was reported that a Management Action Plan had been agreed and audit were looking to ensure that recommendations were addressed through progress updates which would, in turn, be reported to the committee.

    4.    The committee sought assurance that staff were not on zero hours contracts.  The Chief Internal Auditor to provide a response on what assurances the council sought on provider staff management and employment conditions.

    5.    Members expressed concern about the appearance of an extended delay with Property Asset Management System (PAMS) income module and were told that it could take up to a year before PAMS was operational enough to be audited.  The Council Overview Board had been given assurances that no income had been lost due to it not being operational but equally not realising the savings that were expected from the system.  PAMS was being implemented in modules so some were operational and others not.  Members queried if there was still a partnership with Hampshire County Council.

    6.    The committee asked if there was someone dedicated to overseeing PAMS and was told that this was the case but there had been an issue due to capacity constraints created by Orbis.  Denise Le Gal undertook to provide an informal update to the committee.

     

    Actions/ further information to be provided:

    1.    The Chief Internal Auditor to provide a response on what assurances the council sought on provider staff management and employment  ...  view the full minutes text for item 58/16

59/16

Annual Complaints Performance Report pdf icon PDF 505 KB

    To give the Audit & Governance Committee an overview of the Council’s performance in relation to complaint handling in 2015/16 and how feedback from customers has been used to improve services.

    Additional documents:

    Minutes:

    Declarations of interest:

    None

     

    Witnesses:

    Mark Irons, Head of Customer Services, and

    Sarah Bogunovic, Corporate Customer Relations Manager

     

    Key points raised during the discussion:

    1. The Head of Customer Services introduced the report and stated that good complaint management is very important for the Council’s reputation.  It was reported that complaints offer the opportunity to correct mistakes for complainants, as well as an opportunity to learn and improve service delivery.
    2. Members were advised that the percentage of complaints escalating through the complaints procedure was a good indication of how complaints were being dealt with.  
    3. It was reported that monthly complaint reports were created and sent to service areas. Improvement actions undertaken as a result of complaints received were also recorded.  
    4. In response to a member comment regarding non-response by operational managers to some customer correspondence, it was agreed that customer complaints needed to be prioritised alongside operational duties. The Customer Relations Team would look into any specific examples received of non-response to customer correspondence. Customers who had used the corporate complaints procedure were also being surveyed to gather insight on their experience.
    5. Members were advised that a high-level corporate customer service training package was being designed for managers which would include a section on complaints. 
    6. It was noted that a small proportion of customers were persistent complainants. It was reported that there was a policy in place for dealing with people whose behaviour was considered to have become unreasonable, impacting the ability of officers to deliver services or respond to other customers.  Work was needed by the customer services team to increase awareness of this policy and the circumstances in which it should be applied.
    7. It was said that it would be helpful for members to be informed about problems at an early stage as they may be able to play a part in helping to resolve and prevent escalation of customer complaints.

     

    Actions/ further information to be provided:

    The Head of Customer Services to look at informing members of problems at an early stage and using them to assist with helping resolve and prevent escalation of complaints where appropriate.

     

    Resolved:

    The Council’s complaint handling performance in 2015/16 and how feedback from customers has been used to improve services was noted.

     

60/16

DATE OF NEXT MEETING