Apologies for absence
Apologies for absence were submitted on behalf
of Cllr Christine Mills and Terry Day, Independent Member.
Declaration of interests
Cllr Mary Bateman and Mike Ager, Independent
Member both declared a non disclosable pecuniary interest in agenda
item 8 (Annual Internal Audit report) insofar as they are governors
of schools mentioned in the report.
Minutes of previous meetings - 14 March 2016 PDF 108 KB
That the resolution to Minute 7 (External Audit plan 2015/16) be
corrected by the substitution of ‘Grant Thornton’ for
the name ‘PwC’.
That subject to 1 above, the minutes of the previous meeting held
on 14 March 2016 be approved as a correct record and signed by the
[To consider any matters arising from the
With reference to Minute 9 (Strategic Risk
Register and Assurance Map), Cllr Phil Bateman requested an update
report on the extent to which Wolverhampton’s secondary
schools were now taking up the training opportunities afforded by
Jaguar Land Rover Education Centre. Cllr Craig Collingswood
(Chair), agreed and asked that the information be obtained from the
Director of Education and circulated to members of the
External Audit update report PDF 650 KB
[To receive the update from the External
Emma Coombe, Grant Thornton presented an
update report on progress in delivering their responsibilities as
the Council’s external auditor.
Mike Ager, Independent Member commented that
the savings from the ‘other areas of work’ referred to
in the report were significant and he requested more detail on the
audit work involved. Mark Stocks, Grant Thornton advised that it
related to work which looked back on all invoices the Council
received relating to its utility bills to determine whether the
Council had been mis-billed and if so to recover that money.
The Chair also asked whether Grant Thornton
had identified any other major issues from their interim fieldwork.
Grant Thornton advised that there was nothing of significance to
bring to the Committee’s attention.
That the report from the Grant Thornton, external auditors be
received and noted.
Draft Statement of Accounts 2015/16 PDF 60 KB
[To receive the draft Statement
of Accounts for 2015/16, which is subject to audit, and which has
been approved by the Director of Finance]
Mark Taylor, Director of
Finance presented for information, the draft Statement of Accounts
for 2015/16 which he had approved and which would be subject to
audit by the Council’s external auditors, Grant
Thornton. The West Midlands Pension
Fund statement of accounts was also included in the
Cllr Andrew Wynne commented
that the modelling for the draft statement of accounts had been
agreed pre Brexit. He asked whether following the Referendum there
was envisaged to be any change to the draft accounts and the
financial position of the Council. The Director of Finance reported
that the draft accounts related to a given period in time. Brexit
would increase uncertainty and was a risk in the Council’s
Medium Term Financial Strategy (MTFS). The Council would monitor
the situation carefully to see what the Government plans would be
and it would continue to operate prudently and make sure it was
well-placed to respond to the challenge.
The Chair added that Grant
Thornton had produced a leaflet on the mechanics of leaving the EU
which would be circulated to members at the end of the
Mike Ager, Independent Member
asked what the draft accounts would mean for Wolverhampton
residents. The Director of Finance informed the Committee that a
plain English report would be produced that would articulate more
clearly the Council’s financial position.
The Director of Finance also
responded to questions from the Committee regarding the Housing
Revenue Account and the freeze in managements costs to the Council’s housing
managing agents; the number of homes Wolverhampton Homes managed
for the Council; the reasons for the increase in the
Council’s reserves other than those held by
- That it be noted that
the Director of Finance approved the Draft Statement of Accounts
2015/16 on 30 June 2015, as required by the Accounts and Audit
(England) Regulations 2011.
- That it be noted that
the 2015/16 Draft Statement of Accounts is to be audited by Grant
Thornton from July through to September, and that any material
changes required as a result of the audit will be reported to the
Audit and Risk Committee.
- That it be noted that
formal approval by the Council and publication of the 2014/15
Statement of Accounts is required by 30 September 2015 (Accounts
and Audit (England) Regulations 2011).
- That it be noted that
the Statement of Accounts incorporates a copy of the Annual
Governance Statement as required by the Accounts and Audit
(England) Regulations 2011.
- That a report be
submitted to a future meeting on the risks to the Council arising
in respect of admitted bodies to the Pension Fund.
That an updated set of accounts be presented to the
next meeting of the Committee.
Summary-Place-Profile-Wolverhampton PDF 695 KB
[To receive a paper from the External Auditors
on the Place Profile for Wolverhampton]
In response to the request of the Committee on
14 March 2016, Grant Thornton presented a paper on an economic
social and environmental summary profile for Wolverhampton which
had been produced by their Place Analytics team. The paper was a
backward looking document, and was purely for information and as a
guide to help the Council shape its future.
Cllr Phil Bateman commented that the
information within the paper was nothing the Council was not
already aware of but the document was a useful reference which
compiled many sources of information in a single place. He also
commented that he felt that over the next two years the Council
would need to make further movements, particularly in terms
of measuring and delivering upon the
economic regeneration planned/ in progress and in making the public
Councillor Martin Waite commented that the
summary profile was an interesting piece of work but it presented a
bleaker picture of Wolverhampton economically than was the
reality. The profile did not include
the suburbs outside Wolverhampton that would impact on the city
economically. The Chair agreed, adding
that aspects such as the vibrancy and entrepreneurial nature of the
city were not mentioned.
Mike Ager, Independent Member enquired as to
how some of the lines within the paper would be taken forward by
the Council’s senior management team. Grant Thornton reported
that they would be discussing this point with the Council’s
Managing Director and Director of Finance over the next few months.
A report would be submitted to the Committee in a year’s
time to see if improvements had been
That the report from Grant Thornton be noted.
Annual Governance Statement - 2015/16 PDF 64 KB
[To review and comment upon the contents of
the Annual Governance Statement for 2015/16]
Peter Farrow, Head of Audit presented for
review and comment, the Council’s Annual Governance Statement
for 2015/16 which had been signed by the Leader of the Council and
the Managing Director.
Referring to the ‘FutureSpace’ key
area for improvement, Cllr Martin Waite asked about the benefits
realisation for the programme and when the Council would begin to
consider whether the programme was meeting its targets in terms of
savings and other benefits and whether at this stage there was a
flavour of what the benefits would be. The Head of Audit reported
that the Council’s Corporate Landlord would be working on
this aspect of the programme and that during 2017 there would be a
better picture of what it means. Mark Taylor, Director of Finance
assured the Committee that a strong programme management approach
to the FutureSpace programme was in place and daily alerts are
received if the programme is not on track in terms of its
The Chair also queried why some key areas for
improvement in the Annual Governance Statement during 2014/15 had
not been cleared. The Head of Audit advised that they were business
as usual items which the Council would continually have to look at
year-on-year, such as savings targets.
That the contents of the
Council’s Annual Governance Statement for 2015/16 be
Annual Internal Audit Report 2015/16 PDF 63 KB
[To note the content of the annual internal
Peter Farrow, Head of Audit summarised the key
points of the report which aimed to provide the
Committee with an annual Internal Audit opinion on the adequacy and
effectiveness of the Council’s governance, risk management
and internal control processes.
Cllr Andrew Wynne sought assurance that where
major risks are identified from the work of Internal Audit, they
are being acted upon by the Council’s senior management team.
The Head of Audit confirmed that service directors receive a copy
of the report on the audit of their service. The report would indicate what action they
proposed to take in response to the audit
recommendations. The Audit team would
undertake a follow-up visit to confirm that the action had been
Cllr Phil Bateman requested an update on the
ongoing work at Coppice Performing Arts
School. The Head of Audit informed the Committee that Council
employees were working with the School team to find solutions to
support them to make the desired improvements. The Education
Service was also working with the School regarding their finances.
In response to a call for further information, the Head of Audit
undertook to request the Director of Education provide an update on
the work taking place and progress being made.
Mike Ager, Independent Member commented that
the Governors at Coppice Performing Arts School were concerned that
a further audit report had been produced six months ago but had yet
to be released. The Head of Audit undertook to speak to the
Director for Education to accelerate the release of the report.
Mike Ager also commented that a quarter of the
audit reviews completed in 2015/16 had a ‘limited’
level of assurance and that he felt that this figure was too high.
The Head of Audit acknowledged the observation but indicated that a
large proportion of the limited assurance reports were related to
schools. If those reports were excluded it would give a fairer
picture of the Council.
The Chair also asked whether Audit Services
would hold follow up meetings on the reviews into the Black Country
Gold Project and the Bilston Urban Village Advanced Programme. The
Head of Audit advised that the final reports in respect of these
reviews had only recently been issued.
He would be reporting back on progress made in implementing the
recommendations to a future meeting.
The Chair also noted that only 60% of audit
reports had been issued within the target of two weeks after the
completion of the audit fieldwork. The
Head of Audit explained that a new protocol had been agreed by the
Strategic Executive Board in order to improve performance.
That the contents of the
Annual Internal Audit Report and the overall opinion that
“based on the work undertaken during the year,
the implementation by management of the recommendations made and
the assurance made available to the Council by other providers as
well as directly by Internal Audit, Internal Audit can provide
reasonable assurance that the Council has
adequate and effective governance, risk management and internal
view the full minutes text for item 9.
Strategic Risk Register and Strategic Assurance Map PDF 472 KB
[To keep the Committee aware of
the key risks the Council faces, and how it can gain assurance that
these risks are being mitigated]
Narinder Phagura, Strategic Risk Manager
outlined the salient points of the report on the key risks the
Council faced and how it could gain assurance that the risks are
being mitigated. In doing so the
Strategic Risk Manager also drew attention to information the
Committee had requested at its last meeting relating to strategic
risk 17- employee management. That report updated the Committee on
the progress made by the Council in this area and the further
actions required to manage the risk and the corporate performance
indicator in respect of the number of appraisals completed.
During the ensuing discussion the Chair
commented that he was pleased that there was currently only one
strategic risk that was rated red.
Mike Ager, Independent Member asked whether
the Council’s Strategic Executive Board would be considering
the upcoming risks associated with ‘Brexit’. The Strategic Risk Manager confirmed
that an exercise was being undertaken to consider the implications.
An update would be presented to the next meeting of the
Neil Rogerson, Resilience Manager was also in
attendance for this item and he gave a brief overview in respect of
the strategic risk 8 - business continuity management which the
Committee had requested at the last meeting.
At the end of the discussion on the report it
was agreed that an update report be submitted to the next meeting
on strategic risk 2 - skills for work.
- That the strategic risk register be
- That the reduction in the assessment
of risk 1-looked after children from red to amber as a result the
progress made in 2015-16 be noted.
- That the closure of risk 19 a in
respect of the Devolution Deal, following the consent given by the
Council on second of March 2016 noted.
- That the change in target date for
the reduction of risk 17-employee management (from July to
September 2016) and the reasons for this be noted.
- That the main sources of assurance
available to the Council against the strategic risks be noted.
That an update report on the strategic risk 2- skills for work be
submitted to the next meeting and the Director for Education be
invited to attend the meeting for that update report.
Audit and Risk Committee Annual Report - 2015/16 PDF 63 KB
[To endorse the annual report and refer it to
Full Council for approval]
The Chair presented
the report which summarised the main areas of work undertaken by
the Committee during 2015/16. He
proposed to take the annual report to full Council.
Peter Farrow, Head
of Audit commented that the training event for the Committee which
took place last week was well received.
The Chair added that he had ideas to raise the profile of the Audit
and Risk Committee further.
That the Audit Committee Annual Report for 2015/16 be endorsed and
referred to Full Council for approval.
Business Rates Appeals PDF 65 KB
[To note the current position with regard to
Valuation Office backlog of non-domestic valuation appeals]
In response to the request at the last
meeting, the Committee received prior to the meeting a report on
the Council’s current position with regards to the Valuation
Office backlog of non- domestic valuation appeals. A revised report
was tabled which elaborated on the background detail and the
financial implications sections of the report. Dereck Francis,
Democratic Support Officer apologised for the tabling of the
revised report and explained that the published version was a draft
and the error had only been detected a few hours before the
Cllr Philip Bateman commented that he had made
comments on the original report. He also expressed concern that it
appeared to be taking a year to process a business rates case. In
response the Committee was advised that this was an
average. Some appeals would be
processed within weeks and others would take longer. There had been
a spike in business rate valuation appeals and the Council would
expect the Valuation Office to have cleared the backlog within a
Cllr Bateman added that the Council was
holding reserves for valuation appeals which it could not use
elsewhere until the outcome of the valuation appeals. He asked
about the levels of Council engagement on the Local Government
Association or other associations and with the Combined Authority
on the current valuation appeals system. Mark Taylor, Director of
Finance reported that Wolverhampton’s position was not
untypical. The valuation appeals process was a national system and
in terms of the Metropolitan Councils they were experiencing
similar concerns and some were in a worse position. The Director
assured the Committee that the Council do take up opportunities to
raise its concerns with Government as well as with the Local
Government Association, SIGOMA and
other interested groups who the Council worked closely with.
Cllr Martin Waite added that the retail
landscape had changed. The value of
bricks and mortar was now worth less because of the move to online
retailing. The Council was doing what it could to bring retailers
into empty shop premises. Against this landscape it could be an
issue for the Council if it were lobbied for a reduction in
business rates for retail properties.
The Director of Finance acknowledged the points but added that the
Business rates scheme was nationally operated over which the
Council had no control.
That the level of
business rates appeals outstanding with the valuation office be
noted and that the Council had assessed the financial risk
associated with these appeals and made a suitable provision for
potential financial losses in its accounts
Audit Services - Counter Fraud Update PDF 1 MB
[To note the latest Audit Services Counter
Mark Wilkes, Clients Lead Auditor, outlined
the salient points of the latest update on counter fraud activities
undertaken by Audit Services. He particularly highlighted the
whistleblowing policy review and that information on the
Council’s website relating to fraud and corruption had been
The Chair asked that the Whistleblowing Policy
be publicised on City People to raise awareness of the policy
amongst council employees. He also suggested that it would be
useful if future updates on the CIPFA Annual Fraud and Corruption
survey included comparison figures on the key results for
That the contents
of the latest audit services counter fraud update noted.
Payment Transparency PDF 71 KB
[To note the Council’s current position
with regards to the publication of all its expenditure]
Peter Farrow, Head of Audit
updated the Committee with the current position on the
Council’s publication of all its expenditure activity since
the last meeting of the Committee. Since the last report to the
Committee in March 2016 there had been no request for information
from the public (as an ‘armchair auditor’).
the Council’s current position with regards to the
publication of all its expenditure be noted.
CIPFA Audit Committee Update - Issue 19 PDF 63 KB
[To note the contents of the
latest CIPFA Audit Committee Update,
Issue 19 – helping audit committees to be
The Committee received, for
information, the latest of regular briefings issued by the
Chartered Institute of Public Finance and Accountancy (CIPFA) for
audit committee members in public sector bodies.
That the contents of the latest CIPFA Audit Committee Update,
Issue 19 – helping audit committees to be effective be
received and noted.
Exclusion of the press and public
[To pass the following resolution:
That in accordance with Section 100A(4) of the Local Government Act 1972 the press
and public be excluded from the meeting for the following items of
business as they involve the likely disclosure of exempt
information on the grounds shown below]
That in accordance with Section 100A(4) of the Local Government Act
1972, the press and public be excluded from the meeting for the
following items of business as they involve the likely disclosure
of exempt information falling within the paragraph 3 of Schedule
12A of the Act.
Part 2 - exempt items, closed to press and public
Audit Investigations Update
[To note the current position with regards to
Mark Wilkes, Client Lead Auditor presented the
update report on current audit investigations.
Referring to the audit investigation update,
Cllr Martin Waite commented that restrictions could be placed on
the types of retailers where pre-paid debit cards could be used. He
asked whether the Council could lock down its pre-paid debit cards
in this way. The Client Lead Auditor confirmed that this was
possible and the extent to which it could be applied could be
That the current position with regard to audit investigations be