None received.

Members are reminded that they must declare their disclosable pecuniary interests and other registrable or non-registrable interests in any matter being considered at the meeting as set out in Appendix B of the Members’ Code of Conduct and consider if they should leave the room prior to the item being considered. Further advice can be sought from the Monitoring Officer in advance of the meeting.

Members were reminded that they must not participate in the discussion or voting on any matter in which they have a Disclosable Pecuniary Interest and should leave the room prior to the commencement of the debate.

The Minutes of the meeting held on the 17 July 2024 are attached for confirmation. 

Contact Michelle Dulson (01743) 257719

Minute 25 – Internal Audit Performance Report

It was confirmed that the Head Teacher of Bishops Castle Community College would attend the November meeting of the Audit Committee to provide an update.

RESOLVED:

That the Minutes of the meeting of the Audit Committee held on the 17 July 2024 be approved as a true record and signed by the Chairman.

To receive any questions from the public, notice of which has been given in accordance with Procedure Rule 14.  The deadline for this meeting is 12noon on Monday 23 September 2024.

A public question had been received from Mr Frank Oldaker.  The Executive Director of Resources (Section 151 Officer) read out the question and the Executive Director of Place provided the response.

A full copy of the question and response provided are attached to the web page for the meeting.

To receive any questions from the public, notice of which has been given in accordance with Procedure Rule 14.  The deadline for this meeting is 12noon on Monday 23 September 2024.

There were no questions from members.

The report of the Director of Place is to follow.

Contact: Mark Barrow (01743) 258919

The Committee received the report of the Executive Director of Place which provided an update on continuing actions made to address the recommendations contained in the Audit report, previously submitted to the Audit Committee on 22 February 2024.

The Executive Director of Place introduced and amplified his report.  He explained that the audit had identified a range of opportunities to tighten the approach and make improvements to various aspects of the project and its governance, which have been taken on board and he thanked the audit team for their support in setting up the project for success.  He drew attention to the two fundamental recommendations set out in paragraph 2.2 of the report and confirmed that they had both been addressed as far as they could be.  The first related to governance and the clarification of certain roles and responsibilities and had been completed.  The second related in part to updating Council delegations and current levels of financial approvals, which had been approved at Council on 29 February 2024.

Turning to the confirmation of the potential cost and confirmation of government funding, the Executive Director of Place confirmed that they were on track to report to a special meeting of Full Council to consider the Full Business Case, hopefully in November.  In relation to any higher-level financial risks to the Council, he confirmed that they had met with the Department for Transport (DFT) on numerous occasions, including since the General Election, and he had no reason from any of those conversations to give Members any sense that this was a project at risk in their programme. The DFT were saying that this continued to be a large local major funded project within their programme which was not affected by any of the reviews heard about in the press.

The Executive Director of Place confirmed that the governance and financial reporting had been strengthened and the project was operating well within its financial headroom as agreed by full Council.  The oversight of financial commitments had been reviewed and an authorisation and monitoring process was in place giving full openness to those issues raised in relation to the ‘Confirm’ system.  He went on to clarify that management responsibility for the project now sat with Andy Wilde as the lead Assistant Director and who was taking on new levels of oversight including Manager of the Confirm system.  Any orders of a significant size that were above Matt Johnson’s (Strategic Project Executive Manager) level would be committed by Andy Wilde (Assistant Director for Growth and Infrastructure) with the support of the commercial manager within the project.  So, there were multiple layers of governance within the Confirm system.

In terms of the firewall between planning and those promoting the project, Andy was positioned in the promoter/delivery side of things whilst the planning / development control function sat with Rachel Robinson, the Executive Director for Health and Wellbeing, further strengthening the governance arrangements.  Andy Wilde was also the lead officer in conversations with WSP in terms  ...  view the full minutes text for item 44.

The report of the Assistant Director – Workforce & Improvement is attached.

Contact: Sam Williams (01743) 252817

The Committee received the report of the Assistant Director – Workforce & Improvement which set out the current strategic risk exposure following the June 2024 bi-annual review and subsequent discussions/amendments.

The Executive Director for Finance (Section 151 Officer) introduced and amplified the report.  He drew attention to the 11 strategic risks that had been reviewed (set out at paragraph 7.4 of the report) along with their direction of travel.  The score for most had remained the same although some titles had been redefined to more clearly state what the actual risk was and what specifically was being mitigated and three new risks had been added.  Any changes to the risk score or assurance levels were included within paragraph 7.7 of the report. 

The Executive Director for Finance (Section 151 Officer) confirmed that the Executive team reviewed the strategic risks on a regular basis and the cycle was due to begin again the following week when Executive Directors would look at individual strategic risks every two weeks which allowed a cross-organisational view.  The risk framework would then be updated as necessary.  He reiterated that the Audit Committee could, at any time, ask any of the risk owners to attend a meeting to discuss their risks.

The Executive Director for Finance (Section 151 Officer) addressed concerns around the scoring for the ‘Failure to proactively manage and mitigate the health and wellbeing of staff’ risk, explaining that stress and associated conditions were among the highest causes of staff sickness. He emphasized the importance of managing staff well-being to mitigate this risk.

In response to a query, the Executive Director for Finance (Section 151 Officer) discussed the ‘Safeguarding children’ risk, explaining that it had been reintroduced to the strategic risk register following a targeted Ofsted report and the establishment of a Children's Improvement Board. He noted that the risk was now managed at a strategic level.

Referring to the ‘Inability to contain overall committed expenditure within the current available resources within this financial year’ risk, concern was raised that the wage increase for staff may be above the projection (2.5%) and as it was understood that every 1% would equal an additional £1m cost to the Council, it was queried whether the likelihood score of three was reasonable, or whether it should it be higher.  In response, the Executive Director of Finance (Section 151 Officer) explained that the scoring set out in the report had been based on the review undertaken in June which was prior to the period 3 monitoring report, so was very early in the year and he explained the rationale for the likelihood score of 3 and the impact score of 5.  He confirmed that until the budget had been set, the likelihood had been higher.

He discussed the seven themes that sat underneath and fed into this strategic risk which was assessed on a regular basis and formed the basis of Period 3 and 4 reporting and shortly the Period 5 report which was being presented to Cabinet on 16  ...  view the full minutes text for item 45.

The report of the Head of Policy and Governance is attached.

Contact: Barry Hanson 07990 086409

The Committee received the report of the Head of Policy and Governance which provided Members with an update of work undertaken by Internal Audit in the first four and half months of the approved internal audit plan for 2024/25.

The Head of Policy and Governance informed the meeting that delivery was in line with previous years however given the limited data available no strong patterns of lower levels of assurance were emerging.  He reported that in the period up to 25 August 2024, 20 reports had been issued providing good or reasonable assurances (83%) which represented an increase in the higher levels of assurance than the previous year (60%), offset by a corresponding decrease in the number of limited and unsatisfactory assurance levels (17%) (40% last year).  However, this could change significantly throughout the year. 

He also informed Members that there were nine draft reports awaiting management responses and these would be included within the next performance report.  Of these, six were limited and two were unsatisfactory.  A total of 131 recommendations were made within 24 final reports (detailed at paragraph 8.9 of the report and broken down by service area).  It was confirmed that no fundamental recommendations had been made.

The Head of Policy and Governance explained that revisions had been made to the 2024/25 Internal Audit Plan, as set out in the report, resulting in an increase of 211 days to 1,347 days following the successful recruitment of two new internal auditors who had now taken up post.  The revisions were however targeted to provide enough activity to inform his year-end opinion and would be held in an unplanned contingency and allocated on a needs basis throughout the year to allow for flexibility to respond to the changing risk environment that the Council was currently operating in.

The Head of Policy and Governance drew Members’ attention to the pressures within the organisation to address the financial sustainability of the Council (set out at paragraph 8.4) which had resulted in competing priorities for service areas, however, the impact on Internal Audit was not yet clear.  Concern was raised that the audit function was not taken seriously enough by certain managers and the Chairman requested that any concerns be raised with him and the Committee, as they would take failure to cooperate very seriously.

In response to a query about reasons behind the improvement in assurance levels, the Head of Policy and Governance explained that given the small number of audits that had been issued to date, it was very difficult to draw any conclusions, plus, the draft reports were of lower-level assurances and so would skew the results.  It was therefore important to look at the opinions coming through but obviously the picture would change throughout the year.

Members were please to note the improved direction of travel and congratulated the Internal Audit team for getting back on track as previously Members had been concerned that there were not enough audit days to ensure that internal audit functioned properly.  ...  view the full minutes text for item 46.

The report of the Engagement Lead is attached.

Contact: Avtar S Sohal (0121) 232 6420

The Committee received the report of the Engagement Lead which provided the Members with an update on progress and a series of sector updates in respect of emerging issues which the Committee may wish to consider.

The Senior Audit Manager introduced the report and provided a summary of progress.  In relation to the financial statements, she confirmed that there had been positive movement where the receipt of evidence had become overdue, and they were working through those areas and following up with any queries as quickly as possible with the Council’s finance team.  She explained the escalation procedure to senior officers should any matter arise.

Turning to the Value for Money planning, as well as the usual broader spectrum testing undertaken by External Audit, there were three areas where a more detailed review of arrangements would be undertaken, and these were set out in the report.  The Senior Audit Manager confirmed that the Value for Money findings would be reported within the Auditors Annual Report.

Members were pleased to see that Audit reporting was back on time following the post-pandemic delays.

RESOLVED:

To note the contents of the report.

The report of the Engagement Lead is attached.

Contact: Avtar S Sohal (0121) 232 6420

The Committee received the report of the Engagement Lead which provided an update on the Audit findings for Shropshire County Pension Fund for 31 March 2024, for information.  The Engagement Lead confirmed that all areas had been substantially completed and the report had been presented to the Pensions Committee at its last meeting.

RESOLVED:

To note the contents of the report.

The next meeting of the Audit Committee will be held on the 28 November 2024  at 10.00 am.

The next meeting of the Audit Committee would be held on the 28 November 2024 at 10.00am.

To RESOLVE that in accordance with the provision of Schedule 12A of the Local Government Act 1972, Section 5 of the Local Authorities (Executive Arrangements)(Meetings and Access to Information)(England) Regulations and Paragraphs 2, 3 and 7 of the Council’s Access to Information Rules, the public and press be excluded during consideration of the following items.

RESOLVED:

That in accordance with the provision of Schedule 12A of the Local Government Act 1972, Section 5 of the Local Authorities (Executive Arrangements)(Meetings and Access to Information)(England) Regulations and Paragraphs 2, 3 and 7 of the Council’s Access to Information Rules, the public and press be excluded during consideration of the following items.

The Exempt Minutes of the meeting held on the 17 July 2024 are attached for confirmation. 

Contact Michelle Dulson (01743) 257719

RESOLVED:

That the Exempt Minutes of the meeting of the Audit Committee held on the 17 July 2024 be approved as a true record and signed by the Chairman.

The exempt report of the Internal Audit Manager is attached.

Contact: Katie Williams 07584 217067

The Committee received the report of the Internal Audit Manager which provided a brief update on current fraud and special investigations undertaken by Internal Audit and the impact these have on the internal control environment, together with an update on current Regulation of Investigatory Powers Act (RIPA) activity.

RESOLVED:  To note the contents of the report.