Apologies for absence
Apologies for absence were submitted on behalf
of Cllrs Mary Bateman and Phil Bateman and Terry Day (Independent
Declaration of interests
Mike Ager, Independent Member declared a
non-pecuniary personal interest in item 9 (Internal Audit Update
– Quarter 1) in so far as it relates to Coppice Performing
Arts School where he is a Governor.
Cllr Christine Mills also declared a
non-pecuniary personal interest in item 9 in so far as it relates
to a secondary pupil referral unit where she is a member.
Minutes of the previous meeting - 4 July 2016 PDF 257 KB
- That Minute 5 (External Audit
Update) be corrected by the substitution
of the name ‘Nicola’ for the name
- That subject to 1 above, the minutes
of the previous meeting held on 4 July 2016 be approved as a
correct record and signed by the Chair.
[To consider any matters arising from the
Referring to Minute 9 (Annual Internal Audit
Report 2015/16), and in response to a request for an update Peter
Farrow, Head of Audit reported that they would be undertaking a new
audit at Coppice Performing Arts School commencing on 1 October
With reference to Minute 17 (Audit
Investigations Update) Cllr Martin Waite, requested an update at the next meeting on whether
the council could lock down prepaid debit cards issued to employees
in order to restrict where they could be used.
Annual report to those charged with Governance (ISA 260) PDF 56 KB
[To note the report][Report to
Mark Stock from Grant Thornton, the
Council’s External Auditor presented their annual report to
the Committee on the key audit findings from the Council for the
year ended 31 March 2016. In doing so he informed the Committee
that audit was substantially complete although they were finalising
procedures in respect of a small number of areas. He anticipated
that an unqualified audit opinion would be provided in respect of
the Council’s financial statements. He advised that a number of adjustments had been
made to the Council’s accounts through the audit but they did
not impact on the level of resources available to the Council.
Based on their value for money review, they were satisfied that, in
all significant respects, the Council had proper arrangements in
place to secure economy, efficiency and effectiveness in its use of
resources. It therefore intended to issue an unqualified value for
Cllr Andrew Wynne asked the External Auditors
whether they were sufficiently comfortable with the robustness of
the processes and plans the Council had in place to address its
budget deficit. In response Grant Thornton reported that it had
looked at the Council’s track record and how it had performed
during 2015/16, the processes for setting the 2016/17 budget and if
the Council had processes in place to produce plans for future
years. It would not be without challenge but with the
Council’s track record and the plans in place the Auditors
Mike Ager, Independent Member requested an
update on the Auditors recommendation that going forward ‘the
Council consider the capacity of its finance
team’. He also commented that he
would have expected to have seen the management response to the
Auditors recommendations which the Committee could monitor. Mark
Taylor, Director of Finance reported that the Council had
recognised the issue of staff resources within its Finance Team and
it had been actively recruiting to posts. The Council had recruited
to one of the vacant posts within the team and would be looking to
review its resources to provide additional capacity within the team
to deal with the Council’s competing demands on the
team. He assured the Committee that
there would be full staff resources in place for the audit of next
year’s accounts. Claire Nye, Chief Accountant added that the
action plan to the audit findings and recommendations would be
completed within the month. She undertook to circulate the
completed action plan to the Committee.
The Chair asked that the Committee receive an update report on the
implementation of the action plan to a meeting in the new year.
Referring to the Auditors recommendation that
‘the Director of Governance reiterate to members the
importance of keeping their register of interests up to
date….’, the Chair also stressed the importance for
all Councillors to keep their register of interests up-to-date and
to update them as and when circumstances change. Robert Baldwin,
Lead Lawyer, Delivery reported all members had received an e-mail
to remind them of their responsibilities in his area. He
view the full minutes text for item 5.
Audited Statement of Accounts 2015/16 PDF 63 KB
[To approve the formal publication of the
accounts][Report to follow]
Mark Taylor, Director of
Finance presented the report on the audit of the 2015/16 Statement
The Chair asked whether the provision for
Equal Pay within the statement of accounts was sufficient and
whether the Council was getting nearer to concluding the process.
Mark Taylor, Director of Finance reported that he hoped that by the
2016/17 audited statement of accounts that the Council would be
able to be more clearer about the provision and include a nearer
figure in the accounts. He added that the Council was monitoring
and managing the issue tightly and that the provision was
Responding to the Chair’s question on
the level of reserves the Council held and whether they were
sufficient given the savings the Council needed to deliver, Claire
Nye, Chief Accountant assured the Committee that the provision for
reserves were sufficient. The Council had looked at all reserves to
determine whether they are appropriate. She outlined the sums set
aside within each of the reserves and reported that they were
continually reviewed throughout the year. She also confirmed that
the Council’s Confident, Capable Council Scrutiny Panel would
continue to scrutinise the reserves and their appropriateness.
- That the formal
publication of the 2015/16 Statement of Accounts, as required by
the Accounts and Audit Regulations 2011, which require publication
by 30 September be approved.
That authority be delegated to the Chair of the
Audit and Risk Committee to agree subsequent changes to the
Statement of Accounts in consultation with the Director of Finance
should there be any audit adjustments.
That it be noted that the Council’s External
Auditors intend to issue an unqualified opinion on the Statement of
Accounts 2015/16, subject to the outcomes of remaining elements of
That it be noted that the External Auditors have
identified no material errors which are expected to remain
unadjusted in the amended Statement of Accounts.
Internal Audit Charter - Annual Review PDF 1 MB
[To review and approve the Internal Audit
Peter Farrow Head of Audit, presented for review and approval the
internal audit Charter. The charter was first introduced and
approved by the Audit Committee in September 2013.
Cllr Martin Waite commented that with
council’s outsourcing more services, he suspected that the
external service providers might not be as forthcoming as internal
services when receiving demands for information and explanations as
Audit Committees consider necessary to fulfil their
responsibilities. He asked how Audit Services would reflect this
new world where services are outsourced and how the local authority
could ensure it obtained value for money and ensure that fraud was
not taking place. The Head of Audit reported that this was an
additional layer of complexity. For some new arrangements, the
Council would seek to negotiate that the Local Authority had
certain levels of information and access to the internal audit
teams of the providers of the outsourced services. Internal Audit was managing this at the moment.
With the long-established arrangements with providers Wolverhampton
Homes and the West Midlands Pensions Fund the arrangements were
reasonably straight forward.
Cllr Martin Waite also asked how the local
authority would be able to detect fraudulent activity or manage the
fallout of any fraud relating to any of its outsourced services.
The Head of Audit reported that the Council would make sure that it
had a strong assurance framework in place to manage the area the
council was responsible for.
The Chair referred to the recent training
session for Audit and Risk Committee members with External
Auditors, Grant Thornton. He suggested
that it would be good for the Committee to meet with the Auditors
in private once a year to discuss any. The Head of Audit commented
that it was good practice to meet with them in private at least
once a year and subject to the wishes of the Committee a meeting
would be scheduled. The Chair agreed and suggested that the private
meeting with the Auditors be scheduled alongside a programmed
meeting of the Committee.
- That the Internal Audit Charter as
approved by the Audit Committee in September 2013 and as now
amended to reflect the introduction of a Mission of Internal Audit
and Core Principles for the Professional Practice of Internal
Auditing be approved.
That a private meeting with Grant Thornton be scheduled alongside a
programmed meeting of the Committee.
Strategic risk register and strategic assurance map PDF 68 KB
[To receive the latest summary of the risk
Peter Farrow Head of Audit 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. Angela McKeever, Head of
Skills and Isobel Woods, Head of Enterprise were also in attendance
at the meeting for this item and they gave a brief overview in
respect of strategic risk 2 - skills for work and how the risk was
Members of the Committee welcomed the report
particularly the proposals aimed at skilling young people; the
involvement of schools and plans to make them more aware of what
apprenticeships can offer young people; the Council acting as a
broker with commercial organisations and people seeking work,
particularly older people who might not have the skills or are
struggling to make the changes from the old economy to the new
economy; action to target young people who might need extra
supports with their English and mathematics and in conveying the
messages to schools regarding attainment in English and mathematics
being critical to their future to future life chances.
The Head of Skills and Head of Enterprise
responded to the Committee’s questions and observations on
the above points and also respond to the Committee’s
questions on whether funding for this particular area of activity
was time-limited; the percentage of funding that was targeted
through the voluntary sector; engagement with business; the strong
emphasis on interview skills/employability progress; the risk;
whether all the 1500 jobs were filled at the jobs fair; and on the
marketing of the Jobsbox.
The Chair reported that given the recent Local
Government Association Finance Peer Review recommendations
regarding the medium term financial strategy (MTFS) he requested a presentation on the
MTFS to a future meeting.
- That the strategic risk register at
Appendix A to the report be noted.
- That the reduction in
the assessment of the following risks be noted:
Risk 14 – School Improvement.
Risk 15 – Emergency Planning.
- That the amendment to
the risk descriptor for risk 4 – Medium Term Financial
Strategy in order to reflect the findings of the recent
LGA Finance Peer Review be
- That it be noted that
the Council is considering the implications of Brexit. Grant Thornton would be facilitating a
session with the senior leadership team to discuss any risks,
opportunities and mitigations arising from Brexit. Any new risks that require inclusion in the
strategic risk register or any changes to the assessment of the
current risks would be reported to a future Audit and Risk
- That the main sources
of assurance available to the Council against its strategic risks
That a more detailed report on how the Council is managing the
risks around the Medium Term Financial Strategy be brought to the
Internal Audit update - quarter one PDF 704 KB
[To note the contents of the latest
Peter Farrow, Head of Audit presented the
update report on progress made against the 2016/17 audit plan and
on recent audit work that had been completed.
The Chair questioned the number of
‘substantial’ level of assurance reports that had been
issued and how this compared to previous years. The Head of Audit
reported that the results from the schools the Audit team visited
were better than in previous years.
That the contents of the report be noted.
Audit Services - Counter Fraud update PDF 1 MB
[To note the latest Audit Services Counter
Mark Wilkes, Client Lead Auditor, outlined the
salient points of the latest update on current counter fraud
activities undertaken by Audit Services. He particularly
highlighted that information related to fraud and corruption being
extensively revised on the Council’s website and also
reported on the whistleblowing policy review.
The Committee discussed the results from the
latest National Fraud Initiative data matching exercise.
The Chair asked whether there had been an
increase in the number of concerns raised since the article on the
Council’s whistleblowing policy in City People (published on
13 July 2016). The Client Lead Auditor
advised that he had not seen a marked increase in issues raised and
it was consistent with the usual steady flow.
Cllr Martin Waite asked whether the Audit team
monitored the continued employment status of employees who raised
issues through the whistleblowing policy so they and others could
be assured that there would be no repercussions in job prospects as
a result to reporting an issue. The
Head of Audit reported that he was unaware of any such issues
arising and reported that the service will look to receive feedback
from whistleblowers on how they felt the issue they reported had
been dealt with. He undertook to
present that information to the Committee.
That the contents
of the latest Audit Services Counter Fraud Services update be
Payment Transparency PDF 71 KB
[To note the Council’s current position
with regards to the publication of all the Council’s
Peter Farrow, Head of Audit
updated the Committee with the current position regarding the
Council’s publication of all its expenditure activity since
the last meeting of the Committee. Since the last report to the
Committee in July 2016 there had been no requests for information
from the public (as an ‘armchair auditor’).
That the Council’s current position with regards to the
publication of all its expenditure be noted.
CIPFA Audit Committee update - issue 20 PDF 63 KB
[To note the contents on the latest CIPFA
Audit Committee update, 20 – CIPFA survey on Audit Committees
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 20 – CIPFA survey on Audit Committees 2016 be received
Audit and Risk Committee - Knowledge and skills framework PDF 72 KB
[To undertake a self-assessment of good
practice and effectiveness exercise]
Peter Farrow, Head of Audit asked members of
the Committee to complete a self-assessment exercise form on
knowledge and skills as part of stage two of the Committee’s
That a report on
the results of the self assessment exercise be submitted to the
next meeting of the Committee.
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.
Audit investigations update
[To note the current position on audit
Mark Wilkes, Client Lead Auditor presented the
update report on current audit investigations.
During the ensuing discussion and in response
to questions raised the Client Lead Auditor reported that there
were currently 6/7 on-going audit investigations and that the
p-cards referred to in the p-card audit investigation were not
contactless enabled but required a pin number.
- That the update on the audit
investigations be noted.
That an update on any action taken in relation to the findings from
the p-card audit investigation be submitted to the next