Apologies for absence
Apologies for absence were submitted on behalf
of Cllr Martin Waite.
Declaration of interests
The following declarations were made:
Cllr Christine Mills
Member of a secondary pupil referral unit
Cllr Mary Bateman
School Governor - Ashmore Park St Albans
Cllr Phi Bateman
School Governor -
Ashmore Park St Albans
Mike Ager, Independent Member
9 and 11
Governor - Coppice Performing Arts School and
Minutes of the previous meeting - 12 December 2016 PDF 111 KB
That the minutes
of the previous meeting held on 12 December 2016 be approved as a
correct record and signed by the Chair.
[To consider any matters arising from the
With reference to Minute 4 (Matters arising)
and in response to Cllr Andrew Wynne, Mark Stocks from the
Council’s external auditors, Grant Thornton reiterated the
response given at the last meeting. The external auditor remained
comfortable with the assumptions the Council was making on its
plans to address the budget deficit.
The assumptions were kept under review and the Council’s
audit plans and risk register were consulted. There were no issues that they needed to bring to
the Committee’s attention.
With reference to Minute 6 (Strategic Risk
Register and Strategic Assurance Map), it was confirmed that the
owner of risk 21 (Transforming Adult Social Care
Programme) would be attending the next meeting to provide a
detailed update on how the risk was being managed.
Audit and Risk Committee - Terms of Reference PDF 93 KB
[To review the Committee’s terms of
The Committee was invited to
undertake the annual review of its terms of reference, based on the
Chartered Institute of Public Finance and Accountancy (CIPFA) model.
That the terms of
reference for the Audit and Risk Committee, that
were last reviewed and approved in March 2016 and which continue to
be in line with recognised best practice be approved for
External Audit Plan PDF 56 KB
[To receive an update on the
Audit Plan from the Council’s external auditors, Grant
Thornton, for the year ended 31 March 2017]
Mark Stocks from the Council’s external
auditors, Grant Thornton highlighted the key points from the report
on their audit plans for the Council for the year ended 31 March
Referring to the Chancellor’s comment in
his Spring Statement about social care funding, Mike Ager,
Independent Member said he anticipated that the Chancellor’s
statement would be taken into account in the external audit plans.
He also asked the external auditors whether they were in contact
with external auditors for other local authorities regarding the
West Midlands Combined Authority (CA) risk. Mark Stock reported that Grant Thornton was the
external auditor for the CA. There were
only two West Midlands Councils for whom they were not the external
auditors. They would only share as much information with other
external auditors as the Council allowed.
Mark Taylor, Director of Finance added that
the seven West Midlands District Councils and the CA had asked
Public Sector Audit Appointments (PSAP) Limited (the body
appointing auditors as set out in section 3 of the Audit Commission
Act 1998), that they all have the same external auditor
given that they all work closely together.
Responding to Cllr Jasbir Jaspal on the
progress with Integrated Health Care, Grant Thornton reported that
nationally it was poor. However, there
was a will within the West Midlands area for organisations and care
professionals to work together and the Better Care Fund as an
example of this integrated approach.
The Chair reported that he looked forward to
the issue ‘related party transactions’, which had been
highlighted in previous audit plans being fully addressed this
year. The Chair also reported that it was good to see that the
value for money (VFM) risk areas identified in the external audit
plan, i.e. Medium Term Financial Strategy, OFSTED inspection of
children’s services, and the Combined Authority, were also
included in the Council’s strategic risk
register. He asked that the results
from the external audit work be fed into the reports to the
Committee on the strategic risks through the Assurance
Map. Peter Farrow, Head of Audit
confirmed that would happen.
That the external audit plan be received and noted.
Grant Certification Work PDF 56 KB
[To receive an update on the
outcome of grant certification work undertaken by the
Council’s external auditors, Grant Thornton]
Mark Stocks from
the Council’s external auditors, Grant Thornton presented the
outcome of their work to certify the Council’s
Housing Benefit Subsidy Claim on behalf of the Department for Work
and Pensions; on Homes and Communities Agency compliance work; and
to certify the Pooling of Housing Receipts Return.
The Council had been issued an
unqualified opinion by the external auditor. Mark Stock reported that this year was the only
year when he had issued an unqualified opinion in a certification
letter. Only three minor points had
been picked up in the external auditors report and they did not
result in any amendments being made to the claim. The external
auditor commended the Council for its work in this area.
The Committee placed on record its
congratulations to the Council employees involved in the submission
of the claim for their efforts in achieving the pleasing result of
an unqualified opinion from the external auditor.
Certification Work Letter from the Council’s external
auditors Grant Thornton be noted.
External Audit Communication PDF 58 KB
[To consider the report from
the external auditors Grant Thornton]
Mark Stocks from the council’s external
auditors, Grant Thornton presented a paper
‘Informing the Audit Risk Assessment’. It set out some of the potential areas of risk for
the external audit together with a management response to a number
of questions posed by the auditor. The views of the Committee were
invited on the management responses.
The Chair observed that reports on Counter
Fraud Activities, Fraud Related Policies and Procedures and the
publication from TEICCAF (The European Institute for Combating
Corruption and Fraud) were all included on the agenda for the
meeting. This supported the
Council’s management response to the external auditor’s
question on the processes the Council had in place to identify and
respond to the risks of fraud. The Chair also welcomed that the
council had systems in place to identify, account for and disclose,
related third party transactions and relationships.
That the report from the external auditors, Grant Thornton be
Strategic Risk Register and Strategic Assurance Map PDF 68 KB
[To note the latest summary of the
Council’s strategic risk register and the main sources of
assurance available to show that the risks are being mitigated]
Mike Ager declared a personal interest in the
report in so far as it referred to Highfields School where he is a
Alex Jones, Assistant Director School
Standards was in attendance for this item. She updated the Committee on the action taking
place to manage risk 14 - School Improvement as well
as the achievements arising from those actions. The Committee had called in the risk area for
detailed consideration at the last meeting.
Cllr Phil Bateman welcomed the report and
action the Local Authority (LA) had taken through the Managing
Director of the Council to write to the Regional Schools
Commissioner requesting that they re-broker Wednesfield School as
soon as possible in order to achieve rapid improvement in the
performance of the academy. Cllr
Bateman went on to asked whether contacting the Regional Schools
Commissioner was the only tool available to the LA to intervene
where it had concerns about the standards of education at an
academy. The Assistant Director School
Standards advised that practically it was the only recourse
available to a LA. However, the Council’s Schools Standards
Service Improvement Plan (SIP) made clear how the LA would hold
academies to account for their performance. An annual desk top data analysis was completed in
respect of all academies and they received a letter on where the LA
viewed the school’s position. The letter would include an
offer of support where the LA had concerns about an academies
performance. Where the LA felt that an academy was not engaging or
if the Service felt it necessary it would write to the Regional
Schools Commission about its concerns.
In response to a further question, the Assistant Director School
Standards undertook to make enquiries as to whether a copy of the
letter to the Regional Schools Commission and any response received
could be shared with the Committee via a briefing note.
Mike Ager, Independent Member queried the
direction of travel on risk 14 – School
Improvement. The Assistant Director School Standards
informed the Committee that the score had been adjusted to 8 by the
Strategic Executive Board (SEB) but was still lower than previously
recorded. The Director of Finance confirmed that SEB had challenged
the score as it felt it was too low and did not reflect the ongoing
challenges in this area.
Mike Ager also stated that in his view the big
problem facing schools in the coming year would be financial and
this would not help with school improvement. He also suggested that
there was little contact between the School Improvement Service and
school governors. In response the Committee was informed of the
engagement that took place with governors and schools. This included half termly governors’ forums;
policy meetings with Head Teachers and Chair of Governors to
discuss best practice and where schools are in terms of
performance; the production of monthly newsletters; and an
invitation to Governors to attend Service Improvement Board (SIB)
Cllr Mary Bateman requested an update on the
position at St ...
view the full minutes text for item 9.
Progress Update on the Action Plan Arising from the Local Government Association Peer Review PDF 622 KB
[To review the progress on the
action plan from the recommendations within the Local Government
Association Finance Peer Review final report of June
Mark Taylor, Director of Finance presented the
report on progress made against the action plan from
the Local Government Association (LGA) Finance Peer Review carried
out in June 2016.
The Chair welcomed that the Council was on
track with the implementation of the agreed actions. Responding to
the Chair the Director of Finance reported that the Financial
Strategy working group was a sub group of the Confident, Capable
Council (3Cs) Scrutiny Panel. It had
held one meeting to agree the scope for the planned work and the
outcomes were reported to the 3Cs Scrutiny Panel. The first piece of work on the Financial Strategy
was complete and Keren Jones, Service Director Economy was now
working on the next phase, the Strategic Economic Plan for the
City. The Director of Finance undertook
to provide details of the membership of the Financial Strategy
working group to the Chair.
Peter Farrow, Head of Audit reported that the
Audit and Risk Committee received a good mention from the Peer
Assessors for its work in calling in strategic risk areas for
That the progress
and actions arising from the recommendations within the Local
Government Association Finance Peer Review final report of June
2016 be noted.
Internal Audit Update - Quarter Three PDF 1 MB
[To note the contents of the latest internal
Peter Farrow, Head of Audit presented the
update report on progress made against the 2016/17 audit plan and
on recently completed audit work.
Responding to questions on the
limited assurance reports for three schools, the Head of Audit
reported that the audit reviews at the schools had taken place
during the last 12 months as part of the rolling programme of
visits to schools and that key issues raised would be followed up
as appropriate within the agreed timescales. A member of the Audit team was working closely
with the schools to address the issues highlighted in the audit
reports. He also advised the Committee
that, excluding where schools convert to academies, his team had a
strong presence in maintained schools across the city and visited
them on a regular cycle. The School
Improvement Service also made recommendations to Audit Services for
his team to investigate.
That the contents of the latest internal audit update as at the end
of quarter three be noted.
Internal Audit Plan 2017/18 PDF 64 KB
[To approve the risk based internal audit plan
Peter Farrow, Head of Audit
presented the proposed internal audit plan for 2017/18.
Cllr Christine Mills noted the
volume of work included within the plan and asked the Head of Audit
if he had the resources to complete the work. The Head of Audit reported that he had enough
resources to deliver the audit plan and was confident that the
reviews would be undertaken and the outcomes reported to
Committee. If he felt that he did not
have sufficient resources to complete the work he would speak to
the Director of Finance and inform the Committee
Referring to the auditable area
‘Use of Pharmacy outcomes (a review of the new electronic
system for the payment of prescriptions to pharmacies), Cllr Phil
Bateman asked whether the work would consider the national loss of
payments made to our pharmacies and encourage pharmacies in the
city to deliver on the Council’s key public health
performance management indicators. The Head of Audit reported that
the audit review would where appropriate consider that.
Referring to the list of
organisations the Council’s Audit Service’s support,
the Chair asked whether audit reports are submitted to the
Committee on the support delivered to the
organisations. The Head of Audit
advised that the West Midlands Combined Authority and Wolverhampton
Homes both received Audit Service reports at their own Audit
Committee, and that the Pensions Committee received the Audit
reports on the West Midlands Pension Fund. On the latter, if anything significant came out of
the audit work it would be reported to the Audit and Risk
Committee. The other organisations on the list were relatively new
in their existence. The Head of Audit
added that the outcomes of the audit work on the activities for the
other organisations could be reported to the Committee.
That the risk based internal audit plan for 2017/18 be
Audit Services - Counter Fraud Update PDF 3 MB
[To note the contents of the latest Audit
Service’s counter fraud update]
Mark Wilkes, Client Lead Auditor, outlined the
salient points of the latest update on current counter fraud
activities undertaken by Audit Services.
Responding to questions the Client Lead
Auditor advised that further results from the latest National Fraud
Initiative data matching exercise would be included in the report
to the next meeting of the Committee. He confirmed that the Council
was compliant with all that was asked of it from the
recommendations check list in the TEICCAF (The European Institute
for Combatting Corruption and Fraud) report. Feedback on how the
recommendations were being addressed would be included in the
report to a later meeting.
Cllr Phil Bateman commented that the TEICCAF
report was valuable source of information for the work of
councillors and members of the Audit and Risk Committee.
Peter Farrow, Head of Audit also reported that
last year TEICCAF had produced a local level report comparing the
Council’s local data with the national picture. If a similar report is produced for the current
year he undertook to forward a copy to the Committee.
That the contents of the latest Audit Services Counter Fraud
Update be noted.
Review of Fraud Related Policies and Procedures PDF 71 KB
[To review and approve updated fraud related
policies and procedures]
Peter Farrow, Head of Audit
presented for review and approval the Council’s fraud related
policies and procedures. No major changes were being
proposed to the policies as approved in 2016.
In response to questions from the Chair, it
was reported that:
The fraud related policies and procedures were promoted to all
council employees via the Council’s website, on the Intranet
and through City People.
The suspected cases of money laundering reported to the Council
tended to relate to land and property transactions. Checks were
carried out by the Counter Fraud Team.
In certain parts of the Council employees with interests in private
enterprises, land or property had to declare the
interest. Rules on officer declarations
were in place but it was unclear how widely they were
known. The Head of Audit undertook to
check and report back in a later Counter Fraud report.
Any issues arising or activity undertaken relating to the fraud
related policies and procedures had been reported piecemeal to the
Committee throughout the year within the Counter Fraud
That the following
Council fraud related policies and procedures be approved:
Anti-fraud and corruption policy and procedure
Whistleblowing policy and procedure
Anti-money laundering policy and procedure
Raising fraud awareness guide
Payment Transparency PDF 70 KB
[To note the current position with regards to
the publication of the Council’s expenditure]
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 in September 2016. No requests
for information from the public (as an ‘armchair
auditor’) had been received since the last report.
That the Council’s current position with regards to the
publication of all its expenditure be noted.
EU Funding PDF 94 KB
[To note projects currently
being funded by European Structural and Investment Funds, those in
the pipeline and the potential impact of Brexit][Report to follow]
Further to the request at the last meeting
(see Minute 9 of meeting on 12 December 2016), Heather Clarke,
Service Development Manager presented a report on projects currently being funded by the European Structural and
Investment Fund (ESIF), those in the pipeline and the potential
impact of Brexit on projects.
Responding to questions the Service
Development Manager explained the rationale for the delay on the
Black Country Blue Network EU funded project. The project had been approved by the Department
for Communities and Local Government.
The Chair stated that it was reassuring that a
lot of the EU funding had been secured. He asked whether the
Council had a plan post Brexit if the funding position were to
change. The Service Development Manager
reported that it had been suggested that EU funded projects should
be made up by national resources but no detail had been issued.
That projects currently
being funded by European Structural and Investment Funds, those in
the pipeline and the potential impact of Brexit be
Exclusion of 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 item of business as it involves the likely disclosure of
exempt information falling within paragraph 3 of Schedule 12A of
Part 2 - exempt items, closed to press and public
Audit Investigations Update
[To review the current position on audit
Mark Wilkes, Client Lead Auditor presented the
update report on current audit investigations.
Members of the Committee expressed concern at
the financial practices of the organisation referred to in the
report and on the effects the organisation was having on local
That the update on
the internal audit investigation be noted and a further update on
the investigation be submitted to the next meeting.