Agenda and minutes

Venue: Norfolk Room, Conference Suite, Elizabeth House, Dereham

Contact: Committee Services  01362 656870

No. Item

Mark Finch

The Chairman announced that this was the last meeting that Mark Finch would be attending as the S151 Officer.  He said that it had been a real pleasure working with Mark over the years, both had seen many changes and there was most probably many more to come.  Councillor Jolly echoed the Chairman’s comments and she thanked Mark for helping her through as the new Portfolio Holder, he had been a great support which had been much appreciated.


Julie Kennealy, Executive Director for Place and the replacement S151 Officer, was welcomed to the meeting.


Minutes (Agenda item 1) pdf icon PDF 128 KB

To confirm the minutes of the meeting held on 27 June 2014.


a)     Status of Internal Audit Recommendations (Year End) (Minute No. 43/14)


The Chairman said that he had spoken to the Chief Executive and the Leader on the issue of performance.


Referring to Agenda item 11, Risk Based Internal Audit Approach, the Executive Director had been delighted with the work carried out by Emma Hodds, the Internal Audit Consortium Manager, as all previous concerns were being addressed. 


b)     Minutes


The Minutes of the meeting held on 27 June 2014 were agreed as a correct record and signed by the Chairman.


Apologies (Agenda item 2)

To receive apologies for absence.


Apologies for absence were received from Councillor Childerhouse and Mr Keith Stevens.


Non-members wishing to address the meeting (Agenda item 5)

To note the names of any non-members wishing to address the meeting.


Councillor E Jolly, the Executive Member for Finance & Democratic Services.


Training (Standing item) (Agenda item 6)

To note if there are any training issues/ requests.


Nothing to report.


Governance and Performance Qtr 1 Risk Report (Agenda item 7) pdf icon PDF 4 MB

Report by Kim Parks, Senior Performance Analyst.


The Senior Performance Analyst presented the Quarterly Risk report on behalf of the Performance Team.  She explained that James Edwards, the previous presenter of these reports, who had taken over the reporting role from Chris Brooks, was about to leave the Council and as it was his last day she had been asked to take his place but was unsure how to present the information.  The Performance Team was currently under review and someone else would be appointed to report risks in future but she was more than happy to take questions or comments and report back.


Mr Ludlow had been surprised to note that all strategic risks that used to be scored as a 9 were now not above a score level of 6.  He also mentioned the operational risk on page 22 of the report, H-OR 05 Failure of Key Partners, and asked what steps were being taken to gauge what these failures could be particularly in relation to Flagship if the organisation happened to go bust.  The Executive Director thought that the word partner was one of those over used phrases.  She explained that the risk was where there was a financial commitment (inputs and outputs) such as the Anglia Revenues Partnership and suggested that the Council did have a mechanism in place for any potential failure.  She pointed out that Rob Walker, the Assistant Director for Community, was currently undertaking a strategic review of the Council’s key partnerships. 


The Vice-Chairman asked if the quarter under review was the previous or the current quarter.  The Senior Performance Analyst explained that the quarter being reported was for April, May and June and unfortunately, due to the timing of the Audit Committee meetings, Members were always going to be a quarter behind; however, she would put a suggestion forward to collect all risks the month before.  The Internal Audit Consortium Manager said that she would try and do this too to fit in with the Audit Committee timetable.  The Executive Member for Finance & Democratic Services said that Members would prefer to know as soon as possible when a risk increased and not three months later.  It was noted that this reporting methodology had always been presented at quarter end but would be reviewed going forward.  The Executive Director asked Members to be careful not to confuse risk reporting with risk management as the management side had been embedded well into the organisation and was reported on a regular basis, whereas the risk reporting system was a relatively flat collation of data.  From the conversation being had she believed that it was the former that the Committee wanted to see. The Chairman pointed out that it was the responsibility of the Portfolio Holders to be aware of when risks changed not the Audit Committee’s and he felt that the Committee should just receive the reporting stage of the process.


The Vice-Chairman queried the risk under Asset Management in relation to the failure of income from industrial properties particularly when he  ...  view the full minutes text for item 54/14


Audit Results Report (Agenda item 8) pdf icon PDF 3 MB

Report by the External Auditors, Rob Murray & Alison Riglar (Ernst & Young).


Rob Murray, the Director for Ernst & Young presented the Audit Results report for the year ending 31 March 2014.  The report was fairly short and self explanatory and summarised the key findings from the 2013/14 audit which was substantially complete.


·        Financial Statements: As of 11 September 2014, it was expected that an unqualified opinion would be issued on the financial statements.  The audit results demonstrated, through the few matters that had had to be communicated, that the Council had prepared its financial statements adequately.

·        Value for Money: It was expected to conclude that the Council had made appropriate arrangements to secure economy, efficiency and effectiveness in its use of resources.

·        Whole of Government Accounts:  It was expected that an unqualified confirmation to the National Audit Office (NAO) would be issued regarding the Whole of Government Accounts submission.

·        Audit Certificate: The audit certificate would be issued to demonstrate that the full requirements of the Audit Commission’s Code of Audit Practice had been discharged for the relevant audit year.  It was expected that the audit certificate would be issued at the same time as the audit opinion.


Additionally, the Assistant Director (Community) provided assurance to Members that Ernst & Young’s involvement in project audit, for example, the LABV, proved no threat to audit independence.  The Executive Director explained that as a principle of good practice the Auditors had been invited to review the project in relation to three areas:


  1. procurement process
  2. project objectives; and
  3. Value for Money


Members were informed of their involvement in the decision making process on 25 November 2014.


The Audit Results Report was otherwise noted.



Statement of Accounts - Formal Approval (Agenda item 9) pdf icon PDF 73 KB

Report by Mark Finch, Finance Manager.


Due to its size, the Statement of Accounts is attached as a supplementary agenda item.

Additional documents:


The S151 Officer presented the Annual Statement of Accounts for formal approval.  Some minor changes to the disclosure notes had been made as a result of the audit which had been highlighted in the report.  He conveyed his thanks to the Accountancy Manager and to the Finance Team for a sterling job again this year particularly in relation to the significant changes to the way the Council had to account for changes in the collection fund resulting from the retention of business rates.  The S151 Officer pointed out that Mr Ludlow had gone through the accounts with a fine tooth comb and his questions had already been answered. 


The Committee was being asked to approve the recommendations so that the Chairman could sign the relevant documentation to enable the Auditors, Ernst & Young to issue their certificate.




1)     the audited Statement of Accounts for 2013-14 be approved;


2)     the Annual Governance Statement (AGS) for 2013-14 be approved; and


3)     the letter of representation for 2013-14 at Appendix B of the agenda be approved.


The Chairman signed the Statement of Accounts for 2013-14.



Audit Committee Self Assessment Exercise (Results) and Action Plan (Agenda item 10) pdf icon PDF 57 KB

Report by Emma Hodds, Internal Audit Consortium Manager.

Additional documents:


The Audit Committee had been undertaking self assessments since 2008 and the CIPFA Audit Committee Self Assessment Checklist had been circulated to Members prior to the meeting and the final version had been attached to the report incorporating Members comments.


The previous Self Assessment checklist was in 2013 where it had been concluded that full compliance had been achieved subject to appropriate induction training being provided to the new Members of the Committee which had been carried out in February 2014.  The Internal Audit Consortium Manager informed the Committee that there were no actions required for this year.  Members’ attention was drawn to the comments received at appendix 1 of the report.


Mr Ludlow commented on number 4.4 of the Self Assessment checklist under Internal Audit where it stated that the Audit Committee did all it can within it Terms of Reference to hold officers to account but there were still concerns that not enough was being done and he asked how other authorities were managing this concern.  The Internal Audit Consortium Manager explained that as an Audit Committee, Members were doing everything as required and the report at agenda item 11 would highlight, as officers, how these issues were being taken on board.  


Mr Ludlow also referred to number 6.8 under Issues Arising on page 58 of the agenda.  Members were informed that any matters arising were fed into the Minutes of the Audit Committee.


RESOLVED that the completed checklist at Appendix 1 of the report be noted and that full compliance had been recognised in relation to each of the six key areas subject to scrutiny.



Risk Based Internal Audit Approach (Agenda item 11) pdf icon PDF 59 KB

Report by Emma Hodds, Internal Audit Consortium Manager.


This briefing note provided the Committee with an update on a Risk Based Internal Audit approach.  The proposed approach would add value, ensure that best practice was being followed and would also inform the Annual Governance Statement.


The advantages of a true risk based approach included:


  • better and earlier identification of risks and increased ability to control them;
  • greater coherence with the Council’s priorities;
  • an opportunity to engage with stakeholders across the Council;
  • provided a better understanding to the Audit Committee and Senior Management of how the Internal Audit Service helped the organisation accomplish its objectives; and
  • ensured that best practice was being followed.


Breckland Council was being used as a trial site and if successful this new approach would be rolled out to other authorities within the Consortium.  In order for the above approach to be successful the Council needed to have a robust and mature risk management framework in place.  This framework needed to include a ‘live’ and regularly reviewed and updated Risk Register that linked to the Council’s priorities.  Once this had been enabled and the risk management framework had been embedded, Internal Audit planning could then be driven from this risk register, resulting in a true Risk Based approach to Internal Audit.


The Council’s Risk Management Framework and Risk Register would require a review, and a meeting with the Senior Management Team, led by the Executive Director (S151 Officer) and the Internal Audit Consortium Manager had been arranged for November 2014; thus enabling the Risk Based Internal Audit Planning approach to be taken for the forthcoming financial year 2015-16. This would also ensure that the Council was following best practice and would ensure that it was receiving a much better service from Internal Audit.  This meeting would also address the issue of outstanding recommendations, to gain final resolution on a number of issues.


Councillor Kybird asked when a risk was ‘closed’ did this mean that it was being managed.  The Internal Audit Consortium Manager advised that her aim was to look at the real big risks, looking back at closed risks that had been managed well would not add any value; this was about keeping the Risk Register live.  The Executive Member for Finance & Democratic Services thanked the Internal Audit Consortium Manager for taking this forward, in her opinion, this was like a breath of fresh air.  Mr Ludlow felt that closing down the existing actions would be a hard piece of work.  The Chairman reminded Members that this was not about the Audit Committee failing in its duties it was about Officers not managing to get these issues resolved.  The Executive Director agreed.  The Audit Committee had done its job effectively and the Senior Management Team had been made aware of the outstanding recommendations to which it was their responsibility to respond. 


The Chairman and Members felt that this approach would be a great step forward.


RESOLVED that the contents of the report be noted and the action being taken be approved.



Work Programme (Agenda item 12) pdf icon PDF 53 KB

A copy of the Committee’s work programme is attached.  The Committee is asked to consider whether any additions, deletions or amendments to the programme are required.


·                    Councillor Kybird pointed out that the date of the Audit Committee meeting in February 2015 was incorrect as it was a Saturday.  The Senior Democratic Services Officer said that she would amend the Work Programme accordingly.


·                    The Executive Director asked what level of involvement Members had had in relation to the procurement process for Internal Audit as the appointment of the auditors was a very important issue that the Committee should fully understand.  The Internal Audit Consortium Manager explained that the decision of who the supplier would be was just about finalised and the name of the successful supplier would be public knowledge mid November 2014.  She pointed out that the Norfolk Internal Audit Consortium had been in place for a number of years and with this in mind, Chief Officers at each Authority had felt that both the delivery of the audit plan and the role of the Head of Internal Audit should be market tested.  The supplier itself would be chosen as a whole, it was then for each authority within the Consortium to decide if they wanted to retain the management service provided by South Norfolk Council or whether they wanted to go down a completely outsourced route.  The Executive Director felt that the basis of how Internal Audit had been appointed and provided in the past should be continued and she asked if the Council/Audit Committee could put forward a recommendation.    The S151 Officer advised that the delegation for the decision was with Breckland Council’s Chief Financial Officer.  The Chairman felt that the current arrangement worked very well and he did not want it to change.  The Internal Audit Consortium Manager pointed out that if it was decided to outsource the service councils would not be able to revert to the current arrangement for the remainder of the contract.


In response to a proposal from the Chairman, it was agreed that the Audit Committee was content with the current Internal Audit arrangements taking into account that the term of the current contract would continue for a number of years.


It was agreed that the views of the Audit Committee would be pursued.


It was further agreed that an update on the Internal Audit procurement be added to the Work Programme for the December meeting.


·                    Mr Ludlow asked why the Economic Development updates had been removed from the Work Programme. The Executive Director said that she had not been content with the figures and had challenged the implications to the Medium Term Financial Strategy.  The proposals were being revisited which would take time but since the figures had been re-worked the impact to the Council was already much more positive.


The Audit Committee Work Programme was otherwise noted; subject to the Internal Audit procurement process being added to the 12 December meeting and the date of the February meeting being changed to Friday, 13 February 2015.



Next Meeting (Agenda item 13)

To note the arrangements for the next meeting to be held on Friday, 12 December 2014 at 10.00am in the Norfolk Room.


The arrangements for the next meeting on Friday, 12 December at 10.00am in the Norfolk Room were noted.