Agenda and draft minutes
PDF 211 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: Apologies were received from Stephen Cooksey.
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MINUTES OF THE PREVIOUS MEETING - 13 MARCH 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. |
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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: Regarding the changes from SAP to Unit 4/MySurrey and counter fraud concerning Epsom and Ewell Borough Council, Steven McCormick declared a non-pecuniary interest noting that he is the </AI3><AI4>Chair of the Digital Business & Insights (DB&I) Task and Finish Group, and he is a borough councillor at Epsom and Ewell Borough Council.
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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 (30 May 2024). 2. The deadline for public questions is seven days before the meeting (29 May 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: Jessica Brooke, Customer Relations Manager Nikki O’Connor, Strategic Finance Business Partner (Corporate)
Key points raised in the discussion: 1. A Committee member noted that it would be useful for the longstanding actions on the tracker to be completed and to explore the reasons for their delay. The Chairman referred to the outstanding action A7/23 and sub-actions a) to i), the target date being June 2024, he noted the progress on that action made included in Appendix 1 ‘Complaints Task and Finish Group update’ regarding completed action A33/23. He asked when the issues would be resolved. The Customer Relations Manager noted that she did not have a specific timeline, that was being reviewed under the Customer Service Transformation Programme; the Chairman requested that definitive responses be provided for the September Committee. 2. 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 PSAA had signed off the Pension Fund fee but not the Council fee. She was not aware of a reason for the delay but noted that the audit was only signed off in March 2024, she would follow that up for July. 3. The Chairman referred to A6/24 noting that the 10 June Resources and Performance Select Committee private online meeting to confirm the Digital Business & Insights (DB&I) report would be pushed back to late June or early July, as the final report was being delayed to July’s Cabinet. 4. The Chairman referred to the 11 September 2024 Work Plan item, noting that two new items had been added to the agenda: Audit & Governance Committee Effectiveness Review 2024: a self-assessment exercise by officers and Committee members against the latest Chartered Institute of Public Finance and Accountancy(CIPFA) Position Statement; reviewing good practice, knowledge and training; and the Annual Report of the Committee: highlighting the Committee’s activity, to then be reported to a Council meeting for information.
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 A7/23, the Customer Relations Manager will provide definitive responses for the September Committee. 2. Regarding action A16/23, the Strategic Finance Business Partner (Corporate) would follow up an update for the July Committee.
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ANNUAL COMPLAINTS PERFORMANCE REPORT
To give the Audit & Governance Committee an overview of the nature of complaints received by the Council and complaint handling performance in 2023/24 and to demonstrate how feedback from customers has been used to improve services.
Additional documents: Minutes: Witnesses: Jessica Brooke, Customer Relations Manager Tracey Sanders, Assistant Director - Inclusion and Additional Needs Luke Entwistle, Assistant Director - Quality Relationships Sue Grizzelle, Head of Customer Services
Key points raised in the discussion: 1. The Customer Relations Manager introduced the report and noted that across the three teams there was a 5% increase in complaints from the previous year. There was a 68% decrease in Home to School Transport complaints which reflected the changed approach and structure, a 26% increase in Adults, Wellbeing and Health Partnerships (AWHP) complaints which reflected the changes in how care was funded with families having to contribute, a 6% decrease in Children, Families and Lifelong Learning (CFLL) complaints, and a 38% increase in all other corporate services which reflected the Council taking over the accountability for parking enforcement and verge cutting from the district and borough councils. 2. The Customer Relations Manager noted that the increased volume of complaints highlighted the accessible complaints procedure and commitment to consider feedback received both positive and negative to improve the services delivered. Each customer relations team recorded and monitored the actions arising from customer feedback. The root cause of many of the complaints was the inadequate level of communication, it must be proactive for example through website updates. 3. The Customer Relations Manager explained that complaints about Education Services reflected the ongoing national challenges around provision, the service sought to ensure the right level of support for families at the right time. The Learners' Single Point of Access (L-SPA) was vital. 4. The Customer Relations Manager noted that the financial remedies more than doubled when compared to the previous year, AWHP increased to £15,400 from £1,550 and CFLL increased to £525,211 from £258,730. A significant amount of the remedies reflected the changes by the Local Government and Social Care Ombudsman in financial redress, for example £100 was paid monthly until an agreed Education, Health and Care Plan (EHCP) or assessed provision was in place. The delays were attributed to the shortage of Educational Psychologists (EPs), an increase in the cohort of children undergoing EHC Needs Assessment and backdated payments for missed provision. 5. The Customer Relations Manager referred to the recommendation noting that inclusion of complaints within the Risk Register followed the review which recognised that whilst the potential for complaints was integral to customer facing roles, there was a high number of complaints received in CFLL and the associated remediation payments was a risk, there were actions to address the root cause. 6. The Customer Relations Manager noted that the focus over the next year was to work with the services to deliver training and for them to obtain feedback and learn from that, to continue to embed an early resolution programme, to continue to avoid an increase in unnecessary complaints and to work with senior leaders in the delivery of the Customer Service Transformation Programme. 7. A Committee member asked what level of root cause analysis was undertaken to understand how large a part in ... view the full minutes text for item 28/24 |
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2023/24 TREASURY MANAGEMENT OUTTURN REPORT
This report summarises the Council’s treasury management activities during 2023/24, as required, to ensure compliance with the Chartered Institute of Public Finance and Accountancy’s Treasury Management in the Public Services: Code of Practice (the CIPFA Code) which requires the Authority to approve a treasury management annual report after the end of each financial year.
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) introduced the report which outlined the management of the Council's cash, including its borrowing and investment decisions. The Council complied with the Prudential Indicators throughout the 2023/24 financial year. Due to capital programme spend during the year the Council's underlying need to borrow increased. The Council did not undertake any long-term borrowing but utilised its short-term and internal borrowing to avoid locking in higher interest rates for longer periods. She explained that short-term borrowing was often at its peak at the end of March across local government and as a result rates were unusually high over financial year end, the short-term market rates had reduced in April. 2. The Strategic Finance Business Partner (Corporate) noted that the Council’s investments of short-term cash balances during the year were wholly invested in Money Market Funds, spreading the risk and ensuring liquidity. The higher than budgeted interest payable costs on short-term borrowing due to high interest rates, was offset by increased interest receivable from investments. She confirmed that the Council was compliant with the Department for Levelling Up, Housing and Communities (DLUHC) revised regulations regarding Minimum Revenue Provision (MRP), the Council changed its MRP policy in 2021/22 in anticipation of that. 3. A Committee member asked how many times the Council would have to breach the operational boundary for it to be an issue and if the Council had not gone near it or breached it in the last year was it a useful management tool. The Strategic Finance Business Partner (Corporate) confirmed that it remained a useful management tool, the operational boundary was an early warning sign and sat below the authorised limit which the Council must not breach. The operational boundary could be breached multiple times and its level was reset annually. 4. A Committee member asked what an ‘appropriately low risk balance’ was. The Strategic Finance Business Partner (Corporate) explained that it was a judgement call, various factors were considered such as the future cash flow forecasts, length of borrowing required and prevailing interest rates. Based on the current capital commitments the Council’s underlying need to borrow would increase, the Council would have to engage in more long-term borrowing in the next few years. Ideally this was awaiting forecast reductions in interest rates and prior to that the Council was managing through the utilisation of short term and internal borrowing. The Council regularly engages with its Treasury advisors, Arlingclose, with meetings occurring at least monthly, after the Bank of England’s Monetary Policy Committee. 5. A Committee member asked why there was such a high variance of £3.6 million for Interest Paid. He noted that the variance of Interest Received was due to the increase in interest rates and MRP was £2.5 million under budget due to a capital underspend in 2022/23. He asked why there was an underspend if ... view the full minutes text for item 29/24 |
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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 Nikki O’Connor, Strategic Finance Business Partner (Corporate)
Key points raised in the discussion:
1. The Partner - EY introduced the report noting that EY was the Council’s appointed auditor from the 2023/24 audit cycle under the new PSAA contract for the next five years, she was being supported by the Senior Manager - EY. The report outlined the situation in the wider market and the consultation processes were paused due to the calling of a general election, EY was undertaking its full reporting scope against the existing CIPFA Code. EY clearly stated its roles alongside the roles of the Committee and the Council’s Finance team, setting expectations. 2. The Partner - EY noted that the key areas of risk outlined could change as EY gets to know the Council, any changes would be reported. Whilst the level of performance materiality was set at £21 million, any differences over £2.1 million would be reported to the Committee; she asked whether the Committee was satisfied with that level. She highlighted the value for money responsibilities and focus on financial sustainability, that had not been identified as a significant weakness, although the whole sector faced uncertainty over future funding arrangements. EY would be undertaking its own work on the scoping for the Group accounts, particularly around investment properties that sit within the subsidiaries. 3. The Partner - EY noted that EY was committed to working to the timeline set out, with a report scheduled for November’s Committee. She confirmed EY’s independence from the Council. She noted that the fees were set at £384,130 by PSAA, those fees represented a significant increase for all organisations. She highlighted the section about non-compliance of laws and regulations for example in the case of fraud and the responsibilities for external auditors had been tightened by the regulator, any additional work would have an associated fee. 4. A Committee member referred to the data migration onto a new Enterprise Resource Planning (ERP) system, asking whether the proposed work by EY would duplicate the work underway by Internal Audit. The Partner - EY explained that EY was reviewing the operation of the control environment across two different systems in the financial year for their own reporting purposes. She noted that must be documented to satisfy the audit requirements and EY must review the migration of data between the systems to ensure that it was complete, accurate and unamended. EY would work in a streamlined way using Internal Audit’s work. 5. A Committee member sought clarification that the scope for EY’s work would be on the data migration from SAP to Unit 4/MySurrey for financial data only or whether it would cover all data migrated such as payroll data. The Partner - EY clarified that the focus was on the financial reporting data but EY would also test down into a year-end number which relied on non-financial information. 6. A Committee member noted that the report was incomplete as there were several items regarding the ... view the full minutes text for item 30/24 |
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INTERNAL AUDIT ANNUAL REPORT AND OPINION 2023-24
The purpose of this report is to give an opinion on the adequacy of Surrey County Council’s control environment as a contribution to the proper, economic, efficient and effective use of resources. The report covers the audit work completed in the year from 1 April 2023 to 31 March 2024 in accordance with the Internal Audit Strategy for 2023/24. A separate report on Counter Fraud work undertaken in 2023/24 forms part of this Committee agenda.
Additional documents: Minutes: Witnesses: David John, Audit Manager
Key points raised in the discussion:
1. The Audit Manager introduced the report and explained that the annual opinion was a professional judgement he made with the Chief Internal Auditor, which considered where the lower areas of assurance were and how significant they were regarding the overall control environment. He noted that the distribution of the opinions over a four-year period looked consistent each year, there were more Reasonable Assurance opinions in 2023-24. The opinion of Reasonable Assurance had caveats as significant areas of concern had been flagged. 2. The Audit Manager noted that in collaboration with the Interim Executive Director - Finance and Corporate Services, a limited package of audits on key financial systems regarding Unit4/MySurrey was agreed so as not to impede the implementation and for the situation to stabilise. The full set of audits to be undertaken in the 2024/25 plan, as well as follow-up audits. The several Partial Assurance opinions in the key financial systems was not surprising given the complexity of the new ERP system, that had been considered as had management's response to the positive direction of travel. 3. The Audit Manager explained that another factor that influenced the overall opinion was the dilution in officer knowledge around key governance processes. Internal Audit undertook annual sampling of the key areas to ascertain officers’ understanding of those, it was found that officers were not as aware of key policies as they should be and that would be addressed going forward. 4. The Audit Manager noted that five of the eight Partial Assurance opinions issued were in the CFLL Directorate. That had been accounted for in the 2024/25 plan and had been discussed with the Executive Director and her leadership team, follow-up audits would be undertaken. 5. The Audit Manager highlighted the significant amounts of positive assurance given across the year, both Substantial and Reasonable Assurance; for example, Accounts Receivable - part of Unit4/MySurrey - received Reasonable Assurance. 6. The Audit Manager highlighted that at the end of the year, there were 22 audits in progress from the 2023/24 plan, 11 were at draft report stage with management. At the end of May, 13 of those 22 were issued as finals, 5 of those 22 were in draft report stage and 4 were in field work but were well progressed. 7. The Audit Manager noted that there was a breadth of audit coverage in the year outside of the key financial systems and additional requests for audit work were incorporated into the plan and any deferred work would be carried forward. He concluded that the green performance indicators were positive, the 90% target of ‘Audit Plan – completion to draft report stage’ had been exceeded. He highlighted the positive customer satisfaction feedback and was proud of his Team’s work. 8. The Chairman noted the Partial Assurance opinion given to the Fuel Cards and asked whether it was a recurring problem. The Audit Manager noted that he did not believe it was ... view the full minutes text for item 31/24 |
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COUNTER FRAUD ANNUAL REPORT 2023/24
The report covers the counter fraud work completed in the year from 1 April 2023 to 31 March 2024 in accordance with the Counter Fraud Strategy and Framework.
Additional documents: Minutes: Witnesses: Simon White, Audit Manager - Counter Fraud Anna D’Alessandro, Interim Executive Director - Finance and Corporate Services
Key points raised in the discussion:
1. The Audit Manager - Counter Fraud introduced the report noting that the Counter Fraud Partnership Team undertook both reactive work concerning investigations in response to specific allegations and proactive work through data analytics to look for anomalies as well as fraud risk assessments and awareness training. He noted that the Team worked closely with Surrey’s borough and district councils and councils across the southeast, sharing intelligence. 2. The Audit Manager - Counter Fraud noted that last year, 162 days were used over the allocated 150 days and there were 38 allegations compared to 33 the previous year. That increase was not a concern as it showed organisational awareness of fraud risk, many allegations came from directorates with large officer numbers and transactions. A summary of the last set of National Fraud Initiative results was included and data would be submitted in the autumn again for the biennial exercise. 3. The Chairman asked whether Blue Badge fraud was increasing annually or remained the same. The Audit Manager - Counter Fraud noted that it was not a growth area, there was better oversight now as the Council was responsible for street parking enforcement. It was more of an issue in urban areas and work was underway with the Blue Badge team and the parking enforcement team. 4. The Chairman praised the Single Person Discount (SPD) review and noted that Reigate and Banstead Borough Council (RBBC) had the highest increased collection. The Audit Manager - Counter Fraud explained that RBBC was proactive in fraud, encouraging other borough and district council to participate. The Council funded new contract managed by the provider included Empty Homes Reviews, the borough and district councils were encouraged to take up the offer and grants. 5. A Committee member asked why Epsom and Ewell Borough Council was not an SPD participant. The Audit Manager - Counter Fraud explained that the reasons varied and the Council could not compel participation, borough and district councils were required to provide data but that should not be a big resource commitment. The Interim Executive Director - Finance and Corporate Services noted that the matter could be discussed outside of the meeting with the Member, the matter was discussed at the Surrey Treasurers meetings. The Audit Manager - Counter Fraud noted that the Council wanted to work with the borough and district councils on all areas of fraud, however not all those councils had internal fraud resource. 6. A Committee member noted concern regarding the allegation that a Member was planning to unduly influence a planning decision, she asked why that was dealt with internally and was not brought to the attention of the Member Development Steering Group so appropriate training could be facilitated. The Audit Manager - Counter Fraud noted that the allegation was reviewed by the Monitoring Officer who asked the Team to investigate it. It related ... view the full minutes text for item 32/24 |
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DATE OF NEXT MEETING
The next meeting of the Audit and Governance Committee will be on 10 July 2024. Additional documents: Minutes: The date of the next meeting of the Committee was noted as 10 July 2024.
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