Agenda and minutes
PDF 212 KBVenue: Surrey County Council, Woodhatch Place, 11 Cockshot Hill, Reigate, Surrey, RH2 8EF
Contact: Amelia Christopher Email: amelia.christopher@surreycc.gov.uk
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APOLOGIES FOR ABSENCE AND SUBSTITUTIONS
To receive any apologies for absence and substitutions. Additional documents: Minutes: There were none.
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MINUTES OF THE PREVIOUS MEETING - 5 JUNE 2024
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. The Chairman noted that the Committee raised several issues on the Annual Complaints Performance Report item and it had been agreed that the update on the action be provided at September’s Committee meeting with officers attending.
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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 (4 July 2024). 2. The deadline for public questions is seven days before the meeting (3 July 2024). 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 WORK PLAN
To review the Committee’s recommendations tracker and work plan. Additional documents: Minutes: Witnesses: Amelia Christopher, Committee Manager Nikki O’Connor, Strategic Finance Business Partner (Corporate)
Key points raised in the discussion: 1. A Committee member referred to A6/24 regarding the DB&I Task and Finish Group report going to July’s Cabinet meeting, noting the slight delay due to the General Election. The Committee Manager noted that it would be published online as part of the Cabinet agenda and she would circulate the report to the Committee for reference. 2. The Chairman reiterated his comment above under item 2 noting the target date of September for the Annual Complaints Performance Report item action A7/23. 3. The Chairman referred to A16/23 asking whether Public Sector Audit Appointments (PSAA) had approved the proposed audit fee for 2022/23. The Strategic Finance Business Partner (Corporate) noted that she continued to chase PSAA for a response on the sign-off. 4. A Committee member referred to A10/24 asking when there would be an update regarding officers’ Declaration of Interests as that was noted as to be confirmed (TBC). The Committee Manager would liaise with the officer for a response and would continue to chase officers to provide target dates for completion for TBC actions.
RESOLVED: 1. Monitored progress on the implementation of actions/recommendations from previous meetings (Annex A). 2. Noted the work plan and the changes to it (Annex B).
Actions/further information to be provided: 1. Regarding action A6/24, the Committee Manager will circulate the DB&I Task and Finish Group published in July’s Cabinet agenda. 2. Regarding action A10/24 and TBC actions, the Committee Manager will liaise with the officer for a response and would liaise with officers to provide target dates for completion.
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EXTERNAL AUDIT PLAN 2023/24
To provide the Audit & Governance Committee with oversight of the plan for the external audit of the 2023/24 statement of accounts.
Additional documents: Minutes: Witnesses: Janet Dawson, Partner, EY (remote via Teams) Nikki O’Connor, Strategic Finance Business Partner (Corporate)
Key points raised in the discussion: 1. The Partner - EY noted that the to be confirmed (TBC) fees that were omitted in June’s report had been included as requested by the Committee, the associated fees reflected the areas of work anticipated to be undertaken. She noted that EY based its expectation on similar work at other audited bodies and it was similar to what PSAA would typically determine. Progress was being made working with the Council’s Finance team. 2. The Chairman asked whether the work on the walkthrough testing was on track. The Partner - EY explained that EY was dividing its time between preparing for the execution phase and the walkthrough work. She noted that there had been some delays on the Council’s side in terms of the final preparation of the financial statements access to data for EY to complete that. Work was slightly behind schedule and with the Council’s Finance team she would be discussing how to retrieve some of that time at the end of the process. 3. The Chairman asked whether that delay would affect the scheduling of the substantive testing. The Partner - EY hoped that the revised data from the Council’s Finance team would be provided by next week following changes made. She noted a week’s delay in the sampling work which was scheduled to be undertaken by 22 July, the team would be in place then so would progress the work intensively. 4. A Committee member referred to paragraph 10 of the cover report noting that there were direct risk management implications. The Strategic Finance Business Partner (Corporate) noted that there were not any risks that were not already covered in Annex 1. 5. A Committee member referred to the ‘Audit risks and areas of focus section’ and column on ‘Risk identified’, querying whether risks were just categorised rather than being meaningfully assessed. The EY - Partner explained that it was EY’s assessment as to the risk that it provides an inappropriate opinion on the Council’s financial statements, as defined within the International Standards on Auditing (ISA). EY was required to look at the risk of fraud within the organisation that may lead to a material misstatement, missed when it provides an opinion. A significant risk was where EY thought that there was an issue with the way the numbers were derived due to their complexity or were estimated. Other risk areas related to where EY thought that the risk was less likely, but it undertakes work to ensure risk mitigation to provide an appropriate opinion. 6. A Committee member referred to the various number of specialists to be used and asked whether their estimated time would be factored in and what the additional cost would be. The Partner - EY explained that EY identified the specialists to be used and what specialist knowledge was needed to assess their judgements, those costs were factored into the ... view the full minutes text for item 39/24 |
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SURREY PENSION FUND EXTERNAL AUDIT PLAN 2023/24
To provide the Audit & Governance Committee with an update on the process for undertaking the external audit of the 2023/24 Surrey Pension Fund.
Additional documents: Minutes: Witnesses: Hassan Rohimun, Partner, EY Francis Llave, Audit Manager, EY Keevah Dumont, Deputy Head of Accounting and Governance Anna D’Alessandro, Interim Executive Director - Finance and Corporate Services
Key points raised in the discussion: 1. The Partner - EY in charge of the Surrey Pension Fund external audit outlined the ‘Audit risks and areas of focus’. He noted that EY set the overall planning materiality at 1% of the net assets which at the planning stage was £52.9 million, the performance materiality drives the testing strategy and was set at 50% of the planning materiality as it was EY’s first-year audit; that level would be reviewed upon completion of the audit. Audit differences materiality was set at £2.6 million. 2. A Committee member noted his disappointment and frustration regarding the incomplete plan which needed to be updated and resubmitted. He queried why that information had not been included given the Committee’s push back on the External Audit Plan 2023/24 deferred from June due to the missing fees. 3. The Chairman asked whether the walkthrough testing work was on track and when it would be finished. The Partner - EY explained that substantive testing had been undertaken this week after receiving the draft accounts and testing would start on year-end procedures. He noted a slight delay in the completion of walkthrough testing due to awaited information from management. The Audit Manager of Surrey Pension Fund audit - EY added that the aim was to finish the walkthrough testing by the end of next week. 4. A Committee member questioned the Committee’s purpose as it was being asked to approve the plan yet work on it was in progress, he asked whether EY was working at risk. The Deputy Head of Accounting and Governance explained that the plan should have been presented earlier to the Committee, however there were delays to EY’s independence checking. She noted that it had been agreed for the auditors to be on site and undertake their walkthrough testing, to be able to work towards the 26 July end date for the fieldwork audit. 5. The Chairman stressed that the plan could not be approved without the fees which were to be determined (TBD) and he asked when those could be provided. The Partner - EY noted that the Committee could be provided with the fee range by the end of the week. As proposed by the Vice-Chairman, the Committee agreed to delegate the approval of the fees to the Chairman in consultation with the Vice-Chairman following circulation to the Committee to review. 6. The Interim Executive Director - Finance and Corporate Services explained that this year the situation was unusual on both the Surrey Pension Fund and on the Council’s side because of Unit 4/MySurrey, it was the first set of external auditors with a new system. She noted that EY was working through lots of information and did not know what it would find, and so it was unsure about the fees. She noted that ... view the full minutes text for item 40/24 |
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2023/24 DRAFT ANNUAL GOVERNANCE STATEMENT
This report presents the draft Annual Governance Statement, which summarises the Council’s governance arrangements for the financial year ending 31 March 2024.
Note: annex to follow.
Additional documents: Minutes: Witnesses: Michael Coughlin, Interim Head of Paid Service Key points raised in the discussion: 1. The Interim Head of Paid Service explained that the draft Annual Governance Statement (AGS) collated key governance information gathered from across the Council. He noted that whilst the draft applied to 2023/24, it included a plan for the current year. Based on the discussion had around the previous item, he noted that the Committee may want to add in a section to the current year’s plan about the management of external audit and pension audits. He noted that for the first-time assurance statements had been sought from across the Corporate Leadership Team (CLT), providing a deeper dive into the directorates’ activities and services provided. He noted the year of change ahead nationally and locally. He outlined the Council's organisational governance sections and service-specific governance considerations. He outlined the ‘Governance Systems Assurance’ and Members’ involvement. He referred to the progress made outlined in the 2022/23 AGS follow up. He thanked the Finance Improvement Business Partner and team, and the Interim Director of Law and Governance; Monitoring Officer for their work. 2. A Committee member welcomed the inclusion of the assurance statements from CLT and asked what the benefit was of including those, whether those provided extra transparency into the Council and its functions. The Interim Head of Paid Service noted the importance of the awareness raising of the AGS generated by the assurance statements, furthermore every budget holder in the Council was required to sign a budget accountability statement clarifying their personal professional responsibility. The assurance statements highlighted Executive Directors’ personal accountability over their directorate and its activities. A greater level of detail had been discussed with directorate leadership teams cascading down across the organisation, positive areas identified and areas to improve gave CLT greater confidence that assurance given to the Committee was there in practice. The Committee member looked forward to that continuing and the benefits being realised. 3. The Chairman referred to Children's Services and Special Educational Needs and Disabilities (SEND) noting that those areas were constantly raised at the Committee as having issues, the AGS did not appear to reflect the development underway. The Interim Head of Paid Service explained that more detail could be provided if requested. That information was held elsewhere and in other reports, for example there was a transformation programme in the Children, Families and Lifelong Learning Directorate and the link between SEND provision and the capital programme was being explored. He noted that the AGS focused on the governance of the work underway rather than describing service issues.
RESOLVED: 1. Reviewed the contents of the draft Annual Governance Statement (Annex 1) to satisfy themselves that the governance arrangements are represented correctly; and 2. Commended the draft Annual Governance Statement for publication with the Council’s Statement of Accounts.
Actions/further information to be provided: None.
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DRAFT STATEMENT OF ACCOUNTS 2023/24
To provide Audit & Governance Committee with the Draft Statement of Accounts for 2023/24.
Note: cover report and annex to follow.
Additional documents: Minutes: Witnesses: Nikki O’Connor, Strategic Finance Business Partner (Corporate) Anna D’Alessandro, Interim Executive Director - Finance and Corporate Services
Key points raised in the discussion:
1. The Strategic Finance Business Partner (Corporate) explained that the draft Statement of Accounts was prescriptive based on the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on Local Authority Accounting 2023/24 to produce compliant accounts. The 2023/24 accounts were published last week, five weeks later than the 31 May deadline and 54% of local authorities met that target highlighting the national issues faced, several local authorities had multiple years of unsigned accounts. She noted that it had been a challenging year-end for her team: with the new Unit4/MySurrey system meaning that processes had to be redefined, the 2022/23 accounts were signed off in January 2024, there were team changes, delays in obtaining third party information and there was an immaterial amount missing from the draft accounts regarding the Collection Fund, due to information remaining outstanding from borough and district councils. She noted that due to the tight deadline, some of the validation checks had not been done, and several minor typos and required changes had been identified since publication. An updated draft would be issued to EY this week. The team was working closely with EY on the external audit and the final accounts would be received by the Committee in November. 2. A Committee member asked whether the risk had been considered of the publication of the draft accounts five weeks after the deadline and what was the impact. The Strategic Finance Business Partner (Corporate) noted that the delayed publication was not ideal and as noted earlier about half of all local authorities missed that deadline. The delay impacted on the ability to get the audit work done in time to be signed off for the next deadline, there were no immediate financial implications. The Committee member referred to paragraph 15 of the cover report noting that there were direct risk management implications, the Strategic Finance Business Partner (Corporate) agreed. 3. A Committee member noted that the draft accounts summarised the achievements and ambition of the Council, and areas requiring a greater focus such as SEND provision. Whilst there was a SEND strategy and dedicated money, she noted that it would be useful to understand more about investment in SEND and the Safety Valve Agreement, for the Committee and Members to have an update on that spend. She noted concern about potential policy changes by the new Government. The Strategic Finance Business Partner (Corporate) explained that the baseline for the accounts was the Council's outturn position as reported to the Cabinet, that included the SEND budgetary pressures and performance against budget. 4. The Strategic Finance Business Partner (Corporate) explained that within the balance sheet there were two significant figures linked to SEND: the accumulated deficit on the High Needs Block which was required to be accounted for as an unusable reserve and the Council’s offsetting reserve. The latter was part of ... view the full minutes text for item 42/24 |
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ANNUAL WHISTLEBLOWING REPORT 2023/24
This report presents the annual whistleblowing report of the Council to the Audit and Governance Committee to provide transparency and accountability.
The report summarises the whistleblowing activity over the last year and analyses the effectiveness of the Council’s process and system.
Additional documents: Minutes: Witnesses: Shella Smith, Director of People and Change Key points raised in the discussion: 1. The Director of People and Change explained that whistleblowing cases could be raised directly in writing to a Council senior officer or through the external independent organisation Navex Global. Whistleblowing cases received by the Council were triaged through the People and Change team, a decision was made about the appropriate route for those to be investigated. Any case involving the potential allegation of fraud was sent to the Internal Audit team to investigate. She noted that twenty whistleblowing cases were received in 2023/24 and the slight increase from the previous year showed the increased awareness of the policy by staff. 2. A Committee member referred to the benchmarking exercises undertaken with other authorities, noting that the Council’s figure was higher compared to others particular Hampshire County Council which had a low figure of whistleblowers; and she asked why that was the case. The Director of People and Change noted that making a like-for-like comparison was difficult, she noted that Hampshire County Council might be recording cases in a different way. She would investigate why their number of cases was so low given their higher headcount. 3. As a supplementary on the above, the Committee member asked whether there was no prescribed way to assess such cases. The Director of People and Change explained that there was a legal definition of whistleblowing and each local authority must have a whistleblowing policy, however there was no requirement to report externally in a set way. The Council was transparent in reporting every case it received even if not upheld. 4. The Chairman noted that the assessment of cases was referred to either the People and Change team, Internal Audit or the Monitoring Officer. Regarding the outstanding cases underway some were referred to a Human Resources (HR) People Consultant, he asked how independent that was regarding their handling. The Director of People and Change explained that the HR People and Change Consultants had expertise in investigating such issues through their work in supporting managers with grievances and sickness absence cases, they were not aligned with the service being investigated. Any complaints about the People and Change service were referred to the Monitoring Officer. 5. A Committee member sought clarity on whether the Officer Code of Conduct had been reviewed and updated and approved by the Council in May 2024, as incorporated into that the whistleblowing policy on the website was dated May 2021. The Director of People and Change confirmed that the Officer Code of Conduct was reviewed annually as in May 2024 to ensure it was up to date, it referenced policies such as the whistleblowing policy. She explained that the policies were reviewed at last every two years, the whistleblowing policy would have been reviewed since 2021 but no changes were made. Going forward, she would ensure that the date the policy was reviewed would be included on its front cover. 6. A Committee member referred to ... view the full minutes text for item 43/24 |
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OFFICERS AND EMPLOYEES ANNUAL GIFTS AND HOSPITALITY REPORT 2023/24
The report applies to officers and employees of the Council only, it does not apply to Members (councillors).
The report presents the annual gifts and hospitality report of the Council to the Audit and Governance Committee to provide transparency and accountability.
The report summarises the gifts and hospitality activity over the last year and analyses the effectiveness of the Council’s process and system.
Additional documents: Minutes: Witnesses: Shella Smith, Director of People and Change Michael Coughlin, Interim Head of Paid Service Asmat Hussain, Interim Director of Law and Governance; Monitoring Officer
Key points raised in the discussion: 1. The Director of People and Change noted that any small token of goodwill should be politely declined and generally offers of hospitality should be refused. Officers and employees must declare any offers of a gift or hospitality on the register and whether offers are refused, declined or donated to charity. In 2023/24 there were 73 declarations, and of those 45 were accepted, 23 declined and 5 donated; that followed a similar pattern over the last few years. She highlighted that a large amount of the hospitality offers received related to the Stars in Surrey Awards for staff, sponsored by various businesses. 2. A Committee member referred to the recommendations in the report around ‘Clear and concise guidelines around hospitality’, querying whether there were already guidelines in place but those needed to be enhanced or that there were no guidelines in place. The Director of People and Change noted that there were clear guidelines in place for officers, and she emphasised the need to continually communicate those to new and existing staff. 3. A Committee member referred to the register being maintained and reviewed monthly by the HR Governance team with ‘Declared, non-compliant gifts and hospitality […] escalated to HR Business Partners if deemed necessary’ and asked who deemed that necessary. The Director of People and Change explained that if a gift or hospitality offer had been accepted and there did not appear to be a clear manager approval trail in process then the HR Governance team would refer that to a HR Business Partner to liaise with the relevant senior manager to explore what happened; it was a judgement based on the policy. 4. The Chairman noted that there was a separate policy for Members to declare offers of gifts and hospitality as discussed by the Committee in March 2024, where Members’ declarations were listed, he recalled the declaration threshold was £50 and asked why that was not the case for officers too as it would be simpler. The Director of People and Change noted that reference to an amount was removed from the officer policy, examples were included instead as it was felt to be more relevant such as a small box of chocolates or a bunch of flowers. 5. A Committee member noted that the policy was pedantic, more work was being created as there was not a minimum amount to declare, that threshold needed to be set over which to declare. The Council is a large organisation and having to declare a bag of sweets worth £2 for example created unnecessary bureaucracy. She noted the need to review the guidelines to be clearer about what is really a gift or hospitality offer, the focus should be on where a gift or hospitality offer is perceived by a member of the public to skew an officer's ... view the full minutes text for item 44/24 |
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DATE OF NEXT MEETING
The next meeting of the Audit and Governance Committee will be on 11 September 2024. Additional documents: Minutes: The date of the next meeting of the Committee was noted as 11 September 2024.
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