Agenda and minutes
PDF 400 KBVenue: Surrey County Council, Woodhatch Place, 11 Cockshot Hill, Reigate, Surrey, RH2 8EF
Contact: Angela Guest Email: angela.guest@surreycc.gov.uk
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APOLOGIES FOR ABSENCE AND SUBSTITUTIONS
Additional documents: Minutes: There were none. |
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MINUTES OF THE PREVIOUS MEETING [28 March 2022]
To agree the minutes as a true record of the meeting. Additional documents: Minutes: The Minutes were approved as an accurate record of the previous meeting. |
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DECLARATIONS OF INTEREST
All Members present are required to declare, at this point in the meeting or as soon as possible thereafter (i) Any disclosable pecuniary interests and / or (ii) Other interests arising under the Code of Conduct in respect of any item(s) of business being considered at this meeting NOTES: · Members are reminded that they must not participate in any item where they have a disclosable pecuniary interest · As well as an interest of the Member, this includes any interest, of which the Member is aware, that relates to the Member’s spouse or civil partner (or any person with whom the Member is living as a spouse or civil partner) · Members with a significant personal interest may participate in the discussion and vote on that matter unless that interest could be reasonably regarded as prejudicial. Additional documents: Minutes: There were none. |
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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 (7 June 2022). 2. The deadline for public questions is seven days before the meeting (6 June 2022). 3. The deadline for petitions was 14 days before the meeting, and no petitions have been received.
Additional documents: Minutes: There were none. |
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RECOMMENDATIONS TRACKER AND WORKPLAN
To review the Committee’s recommendations tracker and note the workplan. Additional documents: Minutes: Speakers: Chairman
Key points raised during the discussion: 1. It was understood that report templates were being reviewed as part of a wider package and was expected that the new templates would be ready in time for the September meeting of this committee. 2. It was noted that an informal discussion would be arranged near the September meeting to discuss counter fraud work.
Action/Further information to note: None.
RESOLVED: That the report be noted.
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INTERNAL AUDIT ANNUAL REPORT AND OPINION 2021/22
This report summarises the work of Internal Audit, identifying the main themes arising from the audit reviews and the implications for the County Council.
Additional documents: Minutes: Speakers: Russell Banks, Chief Internal Auditor David John, Audit Manager (SCC) Simon White, Audit Manager (Counter Fraud) Mark Winton, Audit Manager (ESCC)
Key points raised during the discussion: 1. The Chief Internal Auditor introduced a report that summarised all the audit work delivered and presented the overall opinion on the Councils internal control, risk and governance arrangements. Internal Audit we're able to provide reasonable assurance based on that work. The opinion itself will contribute directly to the Council's annual governance statement, which forms part of the Council's accounts.
2. The Audit Manager gave a detailed precis of the submitted report and highlighted several points including: · the elements considered to form the opinion · 118 completed assignments covering both key Financial Systems and service reviews
3. In response to Members questions the Audit Manager responded that: a) He would let Members know how much was in the pension fund suspense account as he didn’t have that figure to hand. b) Staffing was a challenge for internal audit nationally. Orbis Internal Audit had been successful in recent years in recruiting at entry level so there had been heavy investment in professional training for the team which led to promotions from within the service. It was acknowledged that there were still some gaps and there would be a pressure this year on the team’s ability to deliver plans. However, he was confident that enough work would be done to be able to provide the overall opinion. c) Audit plans needed to be as flexible as possible and that items are deferred but are kept under constant review. It is a risk-based plan. In some cases items are deferred because they need to fit in with other timetables but when changes are made they are reported to this committee. d) That a full list of schools be circulated to Members. e) He explained that reasonable assurance tended to be most common opinion and gave some context as to what substantial assurance may look like and described the one substantial assurance he had given in his career. It was confirmed that Surrey was on the right trajectory and did have the ambition to reach a substantial assurance opinion.
Action/Further information to note: None.
RESOLVED:
1. That the work undertaken and the performance of Internal Audit in 2021/22 and the resultant annual opinion of the Chief Internal Auditor be noted. 2. That there were no further matters that the Committee wishes to consider for inclusion in the Council’s Annual Governance Statement; and 3. That the Council’s arrangements for internal audit have proved effective during 2021/22.
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COUNTER FRAUD ANNUAL REPORT 2021/22
The report covers the counter fraud work completed in the year from 1 April 2021 to 31 March 2022 in accordance with the Counter Fraud Strategy and Framework. Additional documents: Minutes: Speakers: Russell Banks, Chief Internal Auditor David John, Audit Manager (SCC) Simon White, Audit Manager (Counter Fraud) Mark Winton, Audit Manager (ESCC)
Key points raised during the discussion: 1. The Audit Manager (Counter Fraud) introduced a report that provided a summary of the work completed in the last year. Highlights included:
2. A Member asked about whether there was an emerging theme or weakness that the council should focus on. The Audit Manager (Counter Fraud) responded that Covid had produced a change in the threat landscape with changes in ways of working and moving to an agile organisation, and with that more risks. He described the two irregularities around employment whereby individuals were working for Surrey whilst working in a substantive full-time position in another organisation. Awareness among managers was increasing. Also, for each investigation an internal control report would be produced which would focus on the organisational lessons associated with that investigation and feed into audit planning.
3. In response to a Member query it was explained how the national fraud initiative (NFI) worked in practice and what this meant for the team and how they prioritised matches.
4. A Member queried whether or not the council should be doing something outside of the national fraud initiative to review concessionary travel passes and maybe save some money. The Audit Manager (Counter Fraud) explained that the saving was a national saving and just because an individual was deceased did not necessarily mean that the pass was still being used as a cost to Surrey. However, it was acknowledged that the council could look at the cost of doing more frequent concessionary travel checks and will consider additional matches following the next NFI exercise.
Action/Further information to note: None.
RESOLVED: That the fraud activity completed during 1 April 2021 to 31 March 2022 be noted.
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EXTERNAL ASSESSMENT PROPOSAL
To give approval to put a bid to the Institute of Internal Auditors for them to conduct our External Quality Assessment for the purpose of compliance with professional standards. Additional documents: Minutes: Speakers: Russell Banks, Chief Internal Auditor David John, Audit Manager (SCC) Simon White, Counter Fraud Manager Mark Winton, Audit Manager (ESCC)
Key points raised during the discussion: 1. The Chief Internal Auditor introduced a report that requested approval for a bid to the Institute of Internal Auditors for them to conduct the external quality assessment. He explained that as a public sector internal audit provider, the Orbis Internal Audit was required to comply with a very strict set of professional standards which were set jointly between the Chartered Institute of Internal Auditors and CIPFA and included a requirement for the service to be independently assessed against them at least once every five years. The same report was being presented to all three partner audit committees and it was a request of one of those committees that the review be carried out by one of the two professional bodies themselves, just to add more credibility to the review. The Chartered Institute were approached and had provided the proposal at Annex A to the report.
2. In response to a Member question about why the charge for the review was commercially sensitive and why there was only a single quotation, it was explained that the market for conducting these assessments was a national market and many different providers who could deliver these reviews. The Chartered Institute had asked for the cost not to be included within the formal committee report, but it was agreed that the committee could be told the cost if asked. Also, the reason for a single quotation was because under procurement standing orders it fell below the threshold for which there was a need to get a competitive quotation.
Action/Further information to note: None.
RESOLVED: That the appointment of the Chartered Institute of Internal Auditors to carry out the independent external assessment of Orbis Internal Audit in accordance with Public Sector Internal Audit Standards be agreed.
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2021/22 TREASURY MANAGEMENT OUTTURN REPORT
This report summarises the council’s treasury management activity, as required to ensure compliance with CIPFA. The report will include the latest risk register for Treasury Management.
Additional documents: Minutes: Speakers: Nikki O’Connor, Strategic Finance Business Partner
Key points raised during the discussion: 1. The Strategic Finance Business Partner introduced a report that set out the treasury management activity for 2021/22 financial year, outlining the management of cash flows, borrowing investment and associated. Some of the highlights included: a) The Council was typically ‘cash rich’ in the short term as government grants and council tax typically were received before spent, b) However, the Council was ‘cash poor’ in the longer term, as capital expenditure was incurred before it was financed, therefore, treasury management activities balance that on a daily basis, with surplus cash invested short term until it was required, looking to avoid both excessive credit balances and overdraft in the current account c) work closely with treasury advisors to ensure that the approach represents the best balance between managing cost and minimising the interest rate risk d) no limits or prudential indicators were breached during the course of the financial year and confirmed that the Council's fulfilled its obligations as part of the Treasury management code of practice. e) at the end of the financial year, the council took out a PWLB loan of £50m to maintain the balance of long-term borrowing where there was certainty over interest rates and cheaper short-term borrowing. f) The report set out the impact on the budget for last year and the capital financing requirement.
2. In response to a Member question, it was confirmed that Surrey Pension Fund cash was held separately and that the treasury management strategy was reported to the Surrey Pension Fund Committee and Local Pension Board as part of their governance.
3. In response to a Member question about where the Your Fund Surrey budget of £100m sits, it was explained that this forms part of the overall capital programme. Borrowing was not specifically taken out for individual projects or programmes in the capital budget. Borrowing was taken looking at cash flow forecasts across the period and into the medium term, looking at forecasts on capital spend both in terms of what's built into capital programme, but also what was in the pipeline. The Your Fund Surrey budget was considered as part of this overall view, but there was not a specific loan directly linked to it.
4. A Member asked whether the Arlingclose interest rate forecast was still realistic given what was happening with inflation and was there likely to be an even worse situation with bigger impact on the council’s finances? The Strategic Finance Business Partner responded that the team regularly meet with Arlingclose to discuss the forecast, including immediately after each MPC meeting. Current forecasts remain as included in the report but may change as the Bank of England balance the need to respond to high inflation and the risk of recession.
Action/Further information to note: None.
RESOLVED: That the Treasury Management Outturn Report for 2021/22 and compliance with all Prudential Indicators be noted.
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COUNCIL COMPLAINTS - ANNUAL REPORT
To give the Audit & Governance Committee an overview of the Council’s complaint handling performance in 2021/22 and to demonstrate how feedback from customers has been used to improve services. Additional documents: Minutes: Speakers: Sarah Bogunovic, Head of Customer Strategy Jo Lang, Head of Customer Engagement
Key points raised during the discussion: 1. The Head of Customer Strategy presented the annual performance report for the Council's complaint procedure. It was agreed at a previous committee meeting to bring forward the annual report in the committee cycle so there was less of a time gap, but this would be followed up with a separate benchmarking report at the mid-year. The submitted report was a high-level report looking at the top line figures in terms of contacts from residents. She reminded Members of the different complaints procedures available and that the ombudsman was the last stage of each procedure. She highlighted the increase in numbers going through the formal complaints process for adult social care and children’s education and that there was a decrease for all other areas. The escalation rate was higher than would be liked.
2. In response to Member questions Head of Customer Strategy reported that: · It was recognised that the system of communicating with residents was complicated and in order to simplify that there was, over the next 12 to 24 months, a big systems project being undertaken that would allow link up to say social media: it will make it easier for residents to have their voice heard and for the council to capture it. With regards to mystery shopping this was something that could be revisited in the future. · She would ask the complaints teams for their input into how Members could provide help and value
3. In response to Member questions around children and education, the Head of Customer Engagement reported that: · Future reports would contain information about the complaints that were not settled within the timescale. It was explained that children’s and education could be very complex cases and may only miss the deadline by a few days, but it was accepted that this information would help members consider the performance data.
4. The Chairman spoke of the high rise in numbers of education and children’s service complaints and the information he receives on ombudsman cases which often result in result of maladministration. Whilst not underestimating the complexity of some cases he asked what was being done in terms of feeding back the lessons into the organisation? This level of finding was not sustainable.
5. The Head of Customer Strategy explained that case reviews and reflective practice with practitioners was undertaken as well as regular reports that go into senior management teams.
6. The Head of Customer Engagement explained that:
a) Procedures had been made more accessible which had led to more complaints as well as improving recording b) as a result of discussions had with the Children's Education leadership team, a customer engagement review would be undertaken. A steering group would be set up to look at how to improve customer experience, particularly in education because that was the area which has seen the significant rise. c) more training was being undertaken directly within operational staff ... view the full minutes text for item 35/22 |
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GOVERNANCE - HIGHWAYS BUDGETS
To give Audit & Governance Committee an overview of the governance and details of the various highways budgets. To include revenue & capital expenditure and governance arrangements. Additional documents: Minutes: Speakers: Lucie Monie, Director, Highways & Transport Katie Stewart, Executive Director Environment, Transport & Infrastructure Richard Bolton, Highways Operations & Inf Group Manager Amanda Richards, Ad Highways - Network & Asset Management Paul Millin, Strategic Transport Group Manager
Key points raised during the discussion: 1. The Executive Director ETI gave a brief introduction to the submitted report about highways budgets and the governance arrangements around those budgets. She reported that there had been many changes in the highway service over the last 12 months. These included changes to decision-making changes and to maintenance contracts with the aspiration of providing a better service for residents and providing better outcomes because of those changes. Much of what Highways do and the budgets was complex, and much was driven by legislation and regulation. There was an aspiration to engage better with Members and residents and ultimately provide a more transparent service. The report set out a few next steps that officers would like to undertake with this committee after the discussion today.
2. The Director for Highways and Transport continued to present an overview of the report which outlined some of the different approaches and requirements in terms of delivering the highways service. She gave a very detailed overview of governance including policies and strategies, strategic and local decision making and budget setting. The capital budget was largely investment focused and there were some specific rules around some of the capital in terms of the grants. Some of the decision making was more straightforward in places than others and there was a need to think about how that was explained to Members and others. As part of the recent restructure an engagement and stakeholder team had been set up to help facilitate and provide a better response in terms of queries or requests that were received from Members and residents.
3. In response to a Member concern about the low budget for enforcement, the role of the two enforcement teams was described and it was explained that the report did not show staff costs, only work costs.
4. There were comments made about Member perceptions of the new procedures which appeared to reduce member influence in decisions. It was reported that the A-Z guidance would be issued within the next few weeks and would help provide clarity to members.
5. The Chairman reiterated the role of the Committee in relation to this report in that they should not get into the scrutiny role but focus on the following elements around governance:
6. The Executive Director ETI explained that this was valuable feedback and would feed into the A-Z which she was committed to getting right.
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DRAFT ANNUAL GOVERNANCE STATEMENT
This report presents the draft Annual Governance Statement, which summarises the council’s governance arrangements for the financial year. Additional documents: Minutes: Speakers: Paul Evans, Director Law & Governance
Key points raised during the discussion: 1. The Director Law & Governance introduced the draft annual governance statement, which summarised the Council's governance arrangements for the financial year. He explained that this was an annual report which the committee recommends an annual governance statement that is set out in three main sections.
2. There was a query about the Surrey Forum and with it being a new forum, the Chairman asked for more information. The Director Law & Governance explained that the forum was something established through the leader and the Council in 2021. The intention was that it had much more of a profile in terms of transparency and interaction with public and residents. The meetings were quarterly both for the overarching forum and for the strategic boards that sat below it. He described the Forum as being similar to a strategic partnership between the County Council and the key partners in the county and that it was a developing process.
3. That Chairman stated that it might be something for the future work program to look at the governance around the forum and the strategic boards once they had matured.
Action/Further information to note: To include in the Committee workplan.
RESOLVED:
1. That the draft Annual Governance Statement was represented correctly; and
2. That the draft Annual Governance Statement be commended for publication with the council’s Statement of Accounts.
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EXTERNAL AUDIT PLAN AND DRAFT STATEMENT OF ACCOUNTS 2021/22 (TO FOLLOW)
The purpose of this report is to receive the Council’s Statement of Accounts, as well as to inform the Committee of the result of the external audit of the council’s Statement of Accounts, to receive the external auditor’s Audit Findings Report and to approve the council’s letter of representation.
Annex 2 – Draft Statement of Accounts – To Follow
Additional documents: Minutes: Speakers: Barry Stratfull, Chief Accountant (Corporate) Ciaran McLaughlin, Grant Thornton
Key points raised during the discussion: 1. The Chief Accountant gave a brief introduction to a report that demonstrated how Grant Thornton were going to ensure the accounts were audited and signed off by the end of November which was the deadline. He stated that the deadline for the draft statement of accounts was 31 July 2022. A draft set out accounts had been produced but could not be presented to Committee as the Council were still awaiting the valuations of some of their assets. Without these the draft accounts were not materially accurate. Valuations were promised by the end of the week which would enable the draft accounts to be completed.
2. Grant Thornton gave a precis of the report and highlighted several key matters including:
3. There was some discussion and explanations of why the accounts were delayed and the actions taken by officers to try to get the information required on valuations.
Action/Further information to note: None.
RESOLVED:
That the process for undertaking the audit be noted.
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DATE OF NEXT MEETING
The next meeting of Audit & Governance Committee will be on 12 September 2022. Additional documents: Minutes: The date of the meeting was NOTED as 18 July 2022. |