Agenda and minutes

Audit and Governance Committee - Wednesday, 22 November 2023 10.00 am

Venue: 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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59/23

APOLOGIES FOR ABSENCE AND SUBSTITUTIONS

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    To receive any apologies for absence and substitutions.

    Additional documents:

    Minutes:

    Apologies were received from Joanne Sexton, Stephen Cooksey, Terry Price and Helyn Clack (remote).

     

    Steven McCormick acted as a substitute for Joanne Sexton. Paul Follows acted as a substitute for Stephen Cooksey.

     

60/23

MINUTES OF THE PREVIOUS MEETING - 13 SEPTEMBER 2023 pdf icon PDF 121 KB

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    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.

     

61/23

DECLARATIONS OF INTEREST

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    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.

62/23

QUESTIONS AND PETITIONS

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    To receive any questions or petitions.

     

    Notes:

    1.  The deadline for Member’s questions is 12.00pm four working days before the meeting (16 November 2023).

    2.  The deadline for public questions is seven days before the meeting (15 November 2023).

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

     

    Additional documents:

    Minutes:

    There were none.

63/23

RECOMMENDATIONS TRACKER AND WORK PLAN pdf icon PDF 76 KB

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    To review the Committee’s recommendations tracker and work plan.

    Additional documents:

    Minutes:

    Witnesses:

     

    Amelia Christopher, Committee Manager

     

    Key points raised in the discussion:

     

    1.      Referring to Annex B - Work Plan, 17 January 2024, item ‘2022/23 Audit Reports and Annual Statement of Accounts […]’ the Chairman queried the sentence ‘Dec 2016 Committee requested that annual accounts also be presented.’ The Committee Manager responded that it was an outdated sentence and would be deleted.

    2.      The Chairman referred to Annex A - Tracker requesting that timelines be added to the actions in progress.

     

     RESOLVED:

    1.    Monitored progress on the implementation of recommendations from previous meetings (Annex A).

    2.    Noted the work plan and the one change to it (Annex B).

     

    Actions/further information to be provided:

    1.    A28/23 - The Committee Manager will add timelines into the Tracker.

     

64/23

LGSCO ANNUAL LETTER AND COMPLAINTS HANDLING UPDATE pdf icon PDF 248 KB

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    To give the Audit & Governance Committee an overview of the Local Government and Social Care Ombudsman’s (LGSCO) annual letter for the year 2022/23 and an update on complaint handling across the council.

     

     

    Additional documents:

    Minutes:

    Witnesses:

    Jessica Brooke, Customer Relations Team Manager

    Susan Grizzelle, Head of Customer Services

     

    Key points raised in the discussion:

    1.    The Customer Relations Team Manager introduced the report and highlighted the paragraphs concerning: complaint handling training whereby the delivery of the five training courses would continue into the new year, the issuing of one public report about the Council during 2022/23 regarding the failure to deliver special educational provision set out in Education, Health and Care Plans (EHCPs), the volume of complaints recorded which was 215, the 193 decisions issued and whether those were upheld or discontinued, the increase in Education and Children's complaints compared to the previous year and the root cause of those complaints was perceived poor standards of communication, and the volume of financial remedies exceeded those in the previous year by almost £68,000 largely in Education Services reflecting the difficulties in progressing EHCPs.

    2.    The Customer Relations Team Manager noted the lessons learnt whereby: in Children's Social Care they had revised the Direct Payment Policy and families could access support before applying for funding, the Home to School Transport Policy had been revised and the team restructured improving communication and focusing on early resolution leading to the significant decrease in complaints, staffing had been increased to ensure Deprivation of Liberty Safeguards (DoLS) requests are completed in a timely way. The Local Government and Social Care Ombudsman (LGSCO) acknowledged the satisfactory remedy provided by the Council in 9% of the upheld cases and concerning benchmarking, 84% of the complaints investigated by the LGSCO were upheld; those figures were higher than other local authorities and the criteria used compared to previous years had been tightened. The Annual Letter was positive, highlighting the Council’s collaboration with the LGSCO and challenges faced nationally.

     

    Paul Follows joined the meeting at 10.09 am.

     

    3.    The Vice-Chairman noted concern regarding the 51% of complaints which were responded to within the timescale in Children’s Social Care, he asked whether there would be operational changes to reduce the timescales. The Customer Relations Team Manager recognised that the timeliness of responses across the Council was not good enough, the main issue rested with Children, Families and Lifelong Learning (CFLL) and she would liaise with the Head of Customer Engagement and System Development to provide a response to what was being done. The Head of Customer Services highlighted the improving trajectory. The Corporate team for example had filled its vacancies and response rates should improve by the end of the year. She explained that a Task and Finish Group had been established to look at the timeliness, consistency and quality of responses across all three teams; results to follow in the new year.

    4.    The Vice-Chairman asked whether the Council was using artificial intelligence (AI) to communicate with its customers. The Customer Relations Team Manager noted that chatbots were being used when communicating with residents and due to the complexity of complaints, chatbots were useful in providing generic as opposed to specific responses. Increasing the use of  ...  view the full minutes text for item 64/23

65/23

6 MONTH COMPLAINTS PERFORMANCE UPDATE REPORT 2023/24 pdf icon PDF 111 KB

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    To give the Audit & Governance Committee an overview of the volumes and themes of complaints for the first six months of the 2023/24 year.

     

    Additional documents:

    Minutes:

    Witnesses:

    Jessica Brooke, Customer Relations Team Manager

    Susan Grizzelle, Head of Customer Services

     

    Key points raised in the discussion:

    1.    The Customer Relations Team Manager introduced the report. Comparing quarter two to quarter one there was a decrease in complaints recorded, yet overall compared to the previous year the volume of complaints and complexity of complaints was increasing across the three areas and that was a challenge to those teams and the frontline services. In the first quarter there were 101 LGSCO decisions and of those the LGSCO found fault with 58. She noted the figures of complaints recorded across the three stages.

    2.    The Customer Relations Team Manager noted that another public report about the Council would be issued this year to be in the public domain in 2024, the fault identified by the LGSCO related to Education Services particularly Additional Needs and Disabilities regarding the delays in timely reports from Educational Psychologists. That had been recognised as a national problem and was being addressed jointly with other local authorities. Regarding the delays in EHCPs, over £35,000 in financial remedies had been paid by the Council, anticipated to increase. A general challenge was being looked at as the LGSCO was proposing payments of £100 monthly for every month an EHCP is overdue.

    3.    The Customer Relations Team Manager noted that in Adult Social Care (ASC) a new administrative support role had been recruited to. In CFLL reviews had been completed regarding access by children with medical or other challenges to education, there had been significant Cabinet investment in reducing delays in EHCPs, four leads appointed in Education Services to address the first stage of the complaints process, the CFLL Customer Relations Steering Group was developing proactive communications with families. Noted the continued focus on early resolution across all three teams and 18 months of restorative practice training in CFLL. The Customer Relations team had resources for new officers one of whom was working with Members regarding contacts outside of the formal complaints procedure. In Corporate the replacement team manager would start in January, she reiterated the recruitment of the senior practice lead.

    4.    The Customer Relations Team Manager noted that once she started her role she reviewed the recovery plan and the team had managed to reduce the volume of complaints awaiting investigation at stage two in that period from 26 to 5, expected to be up to date by 31 December. This year a training package had been developed for colleagues in operational services, looking at the timeliness, quality and consistency of responses. The team was exploring the joint code proposed by the two LGSCO services to further improve complaint handling mechanisms.

    5.    A Committee member referred to the £35,000 paid out this year in financial remedies, which would continue to increase and asked what that figure might be. The Customer Relations Team Manager noted that figure was reactive dependent on how the operational frontline delivers its services. The Council tended to look at previous decisions from the  ...  view the full minutes text for item 65/23

66/23

ANNUAL GOVERNANCE STATEMENT HALF YEAR UPDATE pdf icon PDF 83 KB

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    This report provides an update on progress on the improvement areas identified in the 2022/23 Annual Governance Statement for monitoring purposes.

     

    Additional documents:

    Minutes:

    Witnesses:

    Paul Evans, Director - Law and Governance

    Nikki O’Connor, Strategic Finance Business Partner

     

    Key points raised in the discussion:

    1.    The Director - Law and Governance introduced the report and annexes which outlined the activity that had taken place and was planned, and provided assurance that those areas of high risk picked up in the Annual Governance Statement (AGS) were being undertaken. He summarised the updates on activity regarding the several issues identified:

    -       DB&I programme – MySurrey: variety of panels and boards moving from an intense emergency response post go live towards business as usual by 2024.

    -       Special Educational Needs (SEN): due to the level of risk in relation to the delivery of the SEN service, the Children, Families, Lifelong Learning and Culture Select Committee received an update report in October.

    -       Home to School Travel Assistance: the Committee received a full update report in September.

    -       Subject Access Requests: the performance was picked up by the Information Commissioner’s Office (ICO) as a risk and since it was identified the performance rose from 72% to 94%; last month the ICO confirmed that it would not require Surrey to provide informal monitoring information to them.

    -       Planning Committee procedures: a full review was undertaken and a piece of work was reported to Council in October to improve the procedures. 

    -       Adult Social Care: whilst the risk was not particularly well-defined, the reshaping of the management structure had started; work was underway with external organisations to provide assurance identifying areas for improvement.

    2.    The Chairman referred to the section on health integration within the AGS on page 75 noting that he could not clearly see what the improvement was since last year and whether it required any improvement. The Director - Law and Governance noted that the AGS included a narrative about work being undertaken in a variety of areas, not all those areas were identified as significant risks needing to be focused on by the Committee. He would provide an update on health integration. He noted that officers next month would begin the process of next year’s AGS next month, a large amount of work would be underway in the spring.

    3.    A Committee member noted that according to the AGS Grant Thornton was going to do some additional testing for the Council’s Pension Fund valuations and she asked for an update. The Strategic Finance Business Partner noted that related to the sign-off of the 2021/22 Statement of Accounts at item 9, there was a national issue regarding unsigned accounts where there was a release for the triennial valuation of the pension fund and that review had been undertaken.

    4.    A Committee member referred to page 81 of the AGS, regarding the DB&I Programme under the remit of the Resources and Performance Select Committee which had a Task and Finish Group starting on that. The Intelligent Client Function (ICF) had been developed reporting into the Finance Directorate, he asked whether it remained the case that the  ...  view the full minutes text for item 66/23

67/23

STATEMENT OF ACCOUNTS 2021/22 pdf icon PDF 104 KB

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    To present the audited Statement of Accounts for the Council Group and Pension Fund for the financial year ended 31 March 2022 and the external auditor’s Final Audit Findings Report.

     

     

    Additional documents:

    Minutes:

    Witnesses:

    Barry Stratfull, Chief Accountant (Corporate)

    Key points raised in the discussion:

    1.    The Chief Accountant (Corporate) introduced the report which had been received by the Committee earlier in the year but was now the final audited and signed 2021/22 Statement of Accounts - published online. The audit had taken longer than anticipated due to several reasons such as: the triennial valuation of the pension fund, an issue with accounting for Infrastructure Assets, increased substantive testing in audits and working on the 2021/22 audit at the same time as the 2022/23 audit. Nationally, by the end of September there were 456 outstanding audits from 2021/22 and before. Lessons learned by the Council and Grant Thornton would be incorporated for the 2022/23 audit and onwards.

     

    RESOLVED:

    1.    Noted the unqualified opinion of both the Council’s and Pension Fund accounts.

    2.    Noted the contents of the Audit Findings Report (Annex A).

    3.    Noted the 2021/22 Statement of Accounts (Annex B) as published on the council’s website.

    4.    Noted the Executive Director of Resources’ letter of representation (Annex C).

    5.    Noted the Pension Fund letter of representation (Annex D).

     

    Actions/further information to be provided:

    None.

     

68/23

EXTERNAL AUDIT 2022/23 - PROGRESS REPORT pdf icon PDF 125 KB

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    To update the Audit and Governance Committee on the progress of the external audit of the Council’s Statement of Accounts for 2022/23.

     

    Additional documents:

    Minutes:

    Witnesses:

     

    Paul Dossett, Grant Thornton

    Nikki O’Connor, Strategic Finance Business Partner

    Ade Oyerinde, Grant Thornton

     

    Key points raised in the discussion:

    1.    The Grant Thornton representative introduced the report and noted that it provided assurance that the audit was progressing and it outlined the sampling approach. The ambition was to bring the audit findings report to January’s Committee. Noted the unprecedented delay in audits caused by national issues, as at 1 October, 900 audits had been delayed. Explained that a possible solution proposed by the Department for Levelling Up, Housing and Communities (DLUHC) and other players was a backstop; a possible cut-off date of 31 March 2024 whereby no audits from 2022/23 and earlier could continue after that. Those audits would be closed on a statutory basis to allow auditors to move on to 2023/24 audits, audits closed that way might be problematic regarding councils’ opening balances. Grant Thornton and the Council was clear that the ambition was to get the 2022/23 Statement of Accounts signed before the introduction of a backstop.

    2.    The Strategic Finance Business Partner reiterated that the backstop was unconfirmed and she believed it to be an option of last resort, work was underway to avoid the need for it. The current position was more positive regarding the 2022/23 Statement of Accounts compared to last year’s accounts, final queries were being addressed and technical reviews were underway. She noted that as of last week only seven local authority accounts for 2022/23 had been signed off.

    3.    The Chairman noted that the previous Grant Thornton representative stated at September’s Committee meeting that sign-off would happen within four weeks, however whilst it had not been he was pleased with the progress made and asked whether there were any major areas that still required auditing that might cause a delay. The Grant Thornton representative noted that valuations was a key area whereby engagement of the experts and conversations between them took time and that was being addressed through chasing queries weekly; Grant Thornton was working closely with the Finance team to resolve outstanding issues.

    4.    The Strategic Finance Business Partner noted that she would update the Committee if there was to be any change in the expectation to bring the final 2022/23 Statement of Accounts to the January Committee meeting.

     

    RESOLVED:

     

    Noted the progress update provided by Grant Thornton.

    Actions/further information to be provided:

    None.

     

     

69/23

TREASURY MANAGEMENT MID YEAR REPORT 2023/24 pdf icon PDF 239 KB

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    This report summarises the Council’s treasury management activity during the first half of 2023/24, as required to ensure compliance with CIPFA’s Code of Practice for Treasury Management.

     

     

    Additional documents:

    Minutes:

    Witnesses:

    Rishi Sharma, Strategic Capital Accountant

    Nikki O’Connor, Strategic Finance Business Partner

     

    Key points raised in the discussion:

     

    1.    The Strategic Capital Accountant introduced the report, outlining the Council's borrowing and investment activity and confirming compliance with agreed treasury management prudential indicators. The report also highlighted Arlingclose’s commentary and forecast that the Bank Rate was at its peak and was expected to steadily reduce from June 2024 up until mid-2026. Noted that as at the end of September the Council’s net borrowing was £591 million, there had been no further long-term borrowing taken out this financial year and internal borrowing was being maximised through using surplus cash balances. Noted that the Council’s investments were in short-term money market funds and the weighted average return was just over 5%. Regarding treasury performance, the overspend projected on interest payable was offset by increased returns from money market funds. The Committee in January would receive the 2024/25 strategy.

    2.    The Strategic Finance Business Partner highlighted that a joint training session for the Committee, and the Resources and Performance Select Committee would be provided in January on the 2024/25 strategy by Council officers and Arlingclose.

    3.    A Committee member asked for detail on the Council’s management of the Police and Crime Commissioner for Surrey’s (PCC) funds - the balance was £43 million. The Strategic Finance Business Partner explained that the Council carried out the daily treasury management activities on behalf of the PCC, managing their cash flow, this was treated as short term borrowing by the Council and interest was paid quarterly on the balances held on their behalf.

    4.    The Chairman asked whether the Council reviewed its investment returns via benchmarking to see whether the weighted average of return was reasonable. The Strategic Finance Business Partner noted that was the case, however she explained that the Council's investment strategy prioritised the liquidity and security of its investments over yield as exemplified by the investment in money market funds and keeping cash balances as low as possible.

     

    RESOLVED:

     

    Noted the content of the Treasury Management Mid-Year Report for 2023/24.

     

    Actions/further information to be provided:

    None.

     

70/23

INTERNAL AUDIT PROGRESS REPORT - QUARTER 2 pdf icon PDF 171 KB

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    The purpose of this progress report is to inform Members of the work completed by Internal Audit between 1 July 2023 and 30 September 2023.

     

    The current annual plan for Internal Audit is contained within the Internal Audit Strategy and Annual Plan 2023-24, which was approved by this Committee on 8 March 2023.

     

     

    Additional documents:

    Minutes:

    Witnesses:

    David John, Audit Manager

    Key points raised in the discussion:

    1.    The Audit Manager introduced the report which covered a breadth of areas, there was reasonably high assurance throughout. Noted that the Health and Safety Governance Arrangements had the only Partial Assurance opinion, Internal Audit had been asked to undertake that audit by the service itself which was in transition between directorates. Whilst it was a borderline opinion Internal Audit was confident that actions were underway to address weaknesses. A follow-up audit would be undertaken in quarter one next year. Noted the Home to School Travel Assistance follow-up audit with the improved opinion of Reasonable Assurance, as a result of the transformation programme the level of control and accountability had improved; it however remained an area of budgetary pressure driven by volume and market forces. Noted the updates to the Annual Plan as per its flexibility. Highlighted that the Key Performance Indicators were rated Green.

    2.    Referring to the School Audits, a Committee member sought confirmation that where opinions of Reasonable Assurance were given, there were no high priority actions that were assigned to those schools and asked how Internal Audit managed actions issued when Reasonable Assurance opinions were given. The Audit Manager noted that there could be a high priority action within a Reasonable Assurance opinion, as it was dependent on what the area was such as a control weakness and for example if it was safeguarding then the assurance would be lower. The Committee member requested a copy of Internal Audit’s methodology, the Audit Manager was happy for that to be circulated to the Committee.

    3.    The Chairman asked for an update on the Selecta Catering Contract. The Audit Manager noted that it was a strange time to let a contract, the building was occupied mid Covid-19 and the footfall was unknown and that inhibited potential bidders. With hindsight there would have been alternative ways of doing it, but at the time the processes were followed correctly; management took on board feedback from service users, it continued to evolve going forward.

    4.    A Committee member referred to the Support to the Digital Business & Insights (DB&I) Programme, seeking detail on paragraph about what the revised focus of Internal Audit’s activity was and the controls assurance. He asked what role Internal Audit had regarding the Transition to Business-As-Usual Steering Group. The Audit Manager explained that Internal Audit had agreed with management to undertake audits in three fundamental areas: accounts payable and accounts receivable in the current quarter, an audit of payroll in quarter four, and looking at the systems that integrate with MySurrey; other audits could be added depending on capacity and risk. The Audit Manager noted that Internal Audit’s role regarding that Steering Group was to be aware of the issues and risks being flagged - which informed their audit work - and triangulating that with issues they identified.

     

    RESOLVED:

     

    That the Committee noted the report.

    Actions/further information to be provided:

    1.    A39/23 - The Audit Manager  ...  view the full minutes text for item 70/23

71/23

DATE OF NEXT MEETING

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    The next meeting of the Audit and Governance Committee will be on 17 January 2024.

    Additional documents:

    Minutes:

    The date of the next meeting of the Committee was noted as 17 January 2024.

     

    The Chairman reminded Committee members that they had received an invite to attend Treasury Management Strategy Training on Wednesday 10 January, 11am-12.30pm.