Agenda and draft minutes

The Chair informed Members and Officers it was Lay Member Paul Whitham’s last meeting.  On behalf of the Committee he expressed his gratitude and thanks to Lay Member Paul Witham for his dedication and contributions to Governance and Audit committee and Denbighshire County Council. He congratulated Paul for his input in making changes to policies and procedures during his time on the committee. He offered his thanks on behalf of Lay Member Nigel Rudd and himself on the welcome they received when they joined the committee. He stressed his knowledge, and contributions would be greatly missed and wished him all the best.

Lay Member Nigel Rudd echoed the comments of the Chair and offered his thanks and best wishes.

Apologies were received from Councillor Arwel Roberts.

Councillor Ellie Chard apologised she would have to leave the meeting early.

Lay Member, Nigel Rudd declared a personal interest as he was a member of the Conwy County Borough Council Governance and Audit Committee.

The Chair, Lay Member David Stewart declared a personal interest in relation to all items on the agenda as he was a recipient of a Clwyd Pension Fund Pension.

Lay Member, Paul Whitham declared a personal interest in relation to all items on the agenda as he was a recipient of a Clwyd Pension Fund Pension.

Councillor Ellie Chard declared a personal interest in relation to all items on the

agenda as she was a recipient of a Clwyd Pension Fund Pension.

The Chair informed Members, he had an urgent item regarding Denbighshire Leisure Limited. He explained due to the potential for the discussion to be confidential with the need to be in Part 2 that discussion would take place following the business on the agenda.

To receive the minutes of the Governance and Audit Committee meeting held on 19 March 2025 (copy enclosed).

The minutes of the Governance and Audit Committee meeting held on the 19 March 2025 were submitted.

Matters of accuracy –

Page 13 – For information - Audit Wales report: cracks in the Foundations - building safety in Wales – The Chair confirmed that assurance had been provided later in the meeting to assure members that companies named in connection with Grenfell Tower disaster had not been engaged with the council. 

Matters arising –

Page 8 – Minutes – The Section 151 Officer confirmed she was aware of the request for Governance and Audit to receive the Capital Plan and was reviewing a number of aspects of the Capital Plan. A full response would be provided for Members.

Page 14 - For Information - Audit Wales report: Cracks in the foundations - building safety in Wales – The Chair confirmed that the report and an additional report on contaminated land had been presented to Scrutiny Chairs and Vice Chairs for discussion and both topics had been accepted and included in the relevant Scrutiny forward work programmes.

Page 16 - Governance and Audit committee work programme – The Monitoring Officer confirmed he had been in contact with the Democratic Services Manager. Who was in the process of drafting a response. The issue was around the mechanism in place to ensure all Lay Members had a method of contributing to the response to the consultation. Further work was required to establish a mechanism to ensure Lay Members had the opportunity to respond prior to the discussion taking place by the Democratic Services Committee.

Page 16 - Internal audit charter, strategy and quality assurance improvement programme 2025-2026 – The Chief Internal Auditor confirmed the report of fees and charges would include work on mapping out all fees and charges within Denbighshire County Council and when they were all last reviewed.

Page 16 - Governance and Audit committee work programme – The Monitoring Officer confirmed the recruitment pack for a Lay Member of the Governance and Audit was being finalised and it was hoped the advert would be published next week. Alongside advertisement it would be circulated to neighbouring authorities and potential interested parties.

The Monitoring Officer conveyed his thanks and gratitude to the sterling work Lay Member Paul Whitham had contributed to the Governance and Audit Committee. He stressed his contributions, and challenge had always been fair and constructive. He wished him all the best in future ventures.

RESOLVED: that subject to the above, the minutes of the meeting held on the 19 March 2025 be received and approved as a true and correct record of the proceedings.

To consider a report by the Head of Finance and Audit (copy enclosed) updating Governance and Audit on outstanding matters relating to 2025/26 budget, sets the scene for budget setting in the medium term (2026/27 – 2028/29), and updates the self-assessment of the Council’s level of financial resilience and sustainability.

The Chair introduced the report (previously circulated). He welcomed the Head of Finance and Audit to guide members through the papers. Members heard the report had been presented to Cabinet on 29^th April before Governance and Audit Members.

Members were guided to appendix 1 which detailed the final version of the savings tracker for the financial year 2024/25. When the budget was set for 2024/25, savings proposed were categorised including major savings proposals which totalled £2.7m of which £2.2m (82%). Some of the saving proposals detailed were still being worked upon. Some savings were delayed hence not reaching the potential saving for a full financial year this would be reflected in the 2025/26 savings. Details also included the smaller non-strategic saving category which totalled £5.3m with having achieved £4.9m of that total. Emphasis was given to the hard work and considerable changes the authority had made to achieve those savings.

A review of savings that had not been achieved was conducted when setting the 2025/26 budget to consider the impact on the 2025/26. A review of each budget and actions had been noted with details included in appendix 1.

Members were guided to appendix 2 which was the updated medium term financial plan covering the period 2026/27 to 2028/29 financial years. It was a high-level estimate of known pressures, including a range of assumptions providing a low, medium and high estimate of costs for each pressure. It illustrated the uncertainty of the figures and the amount of work still required to refine the projections. It was stressed there remained a great deal of uncertainty around the figures.

The 2026/27 financial year illustrated a low indication of pressure of £14m, medium pressure of £21m and a high level of £26m. Similar figures had been projected for 2027/28 and 2028/29 financial years. Members heard the importance of noting the financial challenge the authority faced remained for the forthcoming years.

The impact on the estimated increases in Council Tax and funding from Welsh Government were included in the report. Included were working assumptions with no decisions having been made on Council Tax. Members were informed an error was made in appendix 2 stating it had come from the Wales Fiscal Analysis which it had not the figures were the working assumptions officers based on the absence of other data.

The balance to bridge the gap for financial year 2026/27 would be £8m at the low, £11m middle and £12m high.

Appendix 3 provided details of the medium term financial strategy. Which provided details of the authority’s strategic approach to the management of finances and outlined some of the financial issues which may be faced over the next 3 years. The paper was an early version and would be refined over the financial yar 2025/26. It provided details of workstreams that required progression to achieve balanced budget in 2026/27 and future years.

Appendix 4 was the annual self assessment of financial resilience and sustainability. As a request of the committee a stress test of the council’s budget processes was conducted.

The Chair thanked the Head of Finance and Audit for the detailed run through the appendices to the report.

Following the introduction the Chair opened the discussion; the following points were discussed in greater detail:

·       One of the difficulties with the savings tracker was several of the savings were related to individuals. Thus, making it difficult to provide too much detail to ensure the identity of the individuals remained anonymous. The Head of Finance confirmed she could provide further detail to members outside of the meeting.

·       The forecast for the increase in car  ...  view the full minutes text for item 5.

To consider a report by the Chief Internal Auditor (copy enclosed) updating members on Internal Audit progress.

The Chief Internal Auditor (CIA) introduced the report (previously circulated). Members were updated on the Internal Audit Team’s progress in terms of its service delivery, assurance provision, reviews completed, performance and effectiveness in driving improvement.

The report provided information on the end of year work carried out by Internal Audit since the last committee meeting. The report provided the committee the end of year update on Internal Audits performance for the previous 12 months. A table detailed the performance level for the year had been included in the agenda papers. The CIA praised the work carried out  by his team. From the start of the year being short staffed to achieving the level of audits completed was commendable. The report also included summaries of Internal Audit reports completed since the last update.

Confirmation that 10 Audits had been completed since the last committee meeting in January 2025, six being awarded a high assurance rating and four received a medium assurance rating.

Members were guided through the details of the completed Audit Wales reports. Along with details of reports completed by Estyn, CIW and other external regulator reports.

Members were reminded that the audit team was relatively young. Training was essential for the development and knowledge of the team. The Career Pathway Principal Internal Auditor had enrolled with the Institute of Internal Auditors and was due to start studying towards the certified qualification. One of the Career Pathway – Senior Auditors had enrolled with the Institute of Internal Auditors and was about to start the Practitioner level qualification in May 2025.

As stated within the report the last year had been a challenging year for Internal Audit with a number of factors outside the control of the team which included: six whistleblowing complaints during the financial year; between the middle of June through to the middle of August, three members of the Internal Audit Team provided support to the Waste project; the team experienced an unusually high amount of sickness from 1 April to 31 March amounting to 219 days being lost, and one of the Career Pathway - Senior Auditors resigned on the 25 November

which influenced the delivery of the plan.

It was confirmed the NFI piece of work had been completed. All matches had been investigated and a total of £48,620.99 in overpayments has been identified and the team were in the process of recovering those over payments.

Members were guided through the progress made against  the 2024-2025 plan, details included audits that had been completed, put on hold and deferred to 2025-2026.

The Chair thanked the CIA for the detailed report and introduction. He stated in his opinion Internal Audit was the ears and eyes for the committee as to the workings of the authority and beyond. 

On behalf of the committee the Chair was grateful for the full audit reports being sent to members and officers responding to any questions. Members echoed the Chairs comments and commented how valuable the audit team were in the authority.

In response to members comments the CIA confirmed in response to any whistleblowing reports, the Monitoring Officer and Section 151 officer were informed, to review and assess the best way to proceed with the report. There were different options to proceed with whistleblowing reports, including inhouse reviews completed by services, external consultants or the Internal Audit team carrying out an investigation. Members were made aware of an agreement in place with the other North Wales authorities to support when with investigations.

It was stressed to Members the Audi work plan was constantly reviewed and work was moved to accommodate audits  ...  view the full minutes text for item 6.

To consider the Internal Audit Annual Report for 2024-25 by the Chief Internal Auditor (copy enclosed).

The Chief Internal Auditor, introduced the report (previously circulated). He explained the report covered the work done during the year 2024-25. He suggested in the future that the Annual Audit report was presented on a separate occasion to any internal audit update reports to reduce duplication.

The new Global Internal Audit Standards (GIAS) together with the GIAS in the UK Public Sector require the ‘chief audit executive’ to deliver an annual internal audit opinion and a report that the organisation can use to inform its annual governance statement. This Committee’s terms of reference require it to consider the annual report of the Chief Internal Auditor. The Chief Internal Auditor stated when forming an overall opinion a number of areas are considered including the scope of the outcome of internal work throughout the year, follow up actions from the previous years audits, the effectiveness of management to any risks and issues internal audit had raised, work completed around special investigations and assurance received from external regulators.  

The Chair stressed the importance and risks associated with fraud and the potential for it to grow. He informed Members, Audit Wales were due to conduct a report on fraud. He suggested to the committee that an annual report on counter fraud and all that goes in to the work involved with investigations and preventing fraud was presented to the Governance and Audit committee. The Chief Internal Auditor confirmed that was a report that could be included to the work programme.

Members heard access to the Strategy for the Prevention and Detection of Fraud, Corruption & Bribery and response plan was on the Denbighshire County Council web page. Links would be sent to Members following the meeting. The Chair stressed the importance of officers and Members being able to access the information or having knowledge of where to look.

The Chief Internal Auditor confirmed that an update of the strategy was due last October but had unfortunately been delayed. He confirmed an e-learning module was due to be introduced in May for all employees to complete. It was hoped the module would be made mandatory for all staff. All polices and procedures would be updated in the summer months.

The Chair asked in future reports, Members had sight of the mapping of risks to internal audit work. It would allow Members to align risks to audit work. The Chief Internal Auditor stated the document would sit better as an attachment to the Internal Audit Annual Plan which was due to be presented at the June committee meeting.

An observation was made with regards to the drop in audit agreed actions

that had been implemented by services recorded on the performance

management system Verto. The Chief Internal Auditor informed members, audit officers had always asked for the relevant audit number to be included on entries on Verto. Unfortunately, this had not always been included so it made it difficult for audit officers to pull all information from the system.

Going forward the Chief Internal Officer stated he would try and state when the last time a particular audit was previously undertaken. Data was only held by the authority for 7 years so if an audit  had taken place over that time frame the exact date would not be available. Which may be the case given the flexible plan within the audit work.

Members raised concern that several audit officers were involved in the roll-out of the new waste service, taking time away from completing audits.

It was confirmed that a discussion between the Head of Service and Chief Internal Auditor had taken place and a  ...  view the full minutes text for item 7.

AT THIS JUNCTURE (12.18 PM) THERE WAS A 10 MINUTE BREAK.

THE MEETING RECONVENED AT 12.28 PM

The Governance and Audit Committee’s Forward Work Programme (previously circulated) was presented for consideration.

The Chair thanked the Chief Internal Auditor for arranging a separate meeting for the Chair and Vice Chair to discuss the forward work plan outside of the meeting. He felt it was beneficial as Chair to discuss future agendas outside of the meeting. He suggested it may be beneficial that the meeting was attended by democratic services.

The Chair stressed that the June Governance and Audit Committee agenda was heavy with a number of reports required due to timescales.

Members heard an information report entitled ‘The Performance Management Guide’ had been deferred and would be presented at the next meeting.

The Chair stressed the importance that the committee receive the Corporate Governance Code agenda item. The Monitoring Officer confirmed it would be included at the next Committee meeting.

With regards to the Statement of Accounts the Chair suggested a short formal report be presented to Committee at the next meeting to update Members on the status and the reasons behind the delay. The Chair reminded Members the issues had been around the valuation of assets.

The Head of Finance and Audit agreed, she suggested the title be amended to ‘an update on where Denbighshire is with regard to the statement of accounts.’

The importance was stressed to Members as in the July meeting the draft Governance and Audit Committee annual report that was presented to Council was due to be drafted and potentially would have to note the difficulties around the statement of accounts.

Members were reminded of the scheduled training events. The training for the self-assessment had been brought forward to accommodate its inclusion in the Annual Governance Statement. The Chair encouraged Members to attend if they could.

RESOLVED: that subject to the above, the Governance and Audit Committee Forward Work Programme be noted.

To receive for information the Treasury Management Update Report which provides details of the Council’s Treasury Management activities during 2024/25 (copy enclosed).

The Chair briefly introduced the report (previously circulated) and informed the Committee that the report was for information only.

The Head of Finance and Audit confirmed there was no significant changes or anything unexpected within the report. Members were also assured that the staffing issues previously discussed had been resolved.

RESOLVED: that the Treasury Management 2024/25 update Report be noted.

To receive for information an update on the Corporate Risk Register Summary (copy enclosed).

The Chair introduced the Corporate Risk Register review information report (previously circulated).

It was noted that Risk 31 around corporate fraud might need to consider Audit Wales reports when next reviewed.

Members were guided to Risk 48 – recruitment and retention which was due to be removed from the register and relayed out to individual service risk registers to manage. The Chair raised concerns on this move suggesting that it may in certain instances still require a corporate overview.

The Head of Corporate Support Service - Performance, Digital & Assets confirmed a number of risks were managed by Heads of Services and covered within individual service risk registers. The de-escalation of Risk 48 showed the active role the Corporate Executive Team (CET) were doing when reviewing the risk register.

Members heard that each service had completed a workforce plan which had been collated into a corporate workforce plan for the whole authority. Which would allow CET to use when completing the review of the Corporate Risk register.

It was agreed to raise the governance functions concerns would be discussed at the next review meeting.

Members welcomed the involvement of Senior Leadership Team (SLT) in aiding ‘deep dives’ into certain risks. It was felt SLT were in closer contact to employees in the service. The Monitoring Officer confirmed Heads of Service were in closer proximity to those risks but also it would be beneficial having more involved in those deep dives to achieve a positive outcome.

The Monitoring Officer confirmed the Risk Appetite Statement was included on the Budget and Transformational board forward work programme for the May meeting.

The Head of Corporate Support Service - Performance, Digital & Assets informed members confirmed the Corporate Risk Register would be tabled as an item at the November Governance and Audit Committee meeting and if needed an information report would be provided to Members at the July meeting. The Chair felt one information report in the Spring was beneficial prior to the Corporate Performance assessment report but a further information report was not required, all Members agreed.

RESOLVED: that the Corporate Risk Register Review information report be noted.

To receive for information the Committees Terms of Reference (copy enclosed).

The Chair briefly introduced the report (previously circulated) and informed the Committee that the report was for information only. He explained that changes had been made to the terms of reference last year and although not included in the published constitution, those changes had been agreed by County Council.

The Monitoring Officer stated there had been a delay in updating the website version of the constitution due to translation. The Terms of Reference were approved by County Council, so they were in effect. The information report was requested to allow members to raise any issues or concerns for officers to conduct any further work required.   

He suggested meeting with officers to ensure there was no issues on an annual basis. The Chief Internal Auditor stated if the Terms of Reference note the ‘Public Sector Internal Audit Standards’ they would need to be amended to read Global Internal Audit Standards. Further work into the new standards and what was required would take place.

Lay Member Nigel Rudd asked if a review of Treasury Management and Capital strategy inline with the Terms of refence could also be considered.

The Monitoring Officer suggested a light touch review be conducted and a further update be presented to committee at a future meeting.

RESOLVED: that the information report on the Terms and Reference of the Governance and Audit Committee be noted.

The Chair informed Members he had wished to raise an urgent item regarding the transfer of Denbighshire Leisure Limited to Denbighshire Leisure group, following the County Council meeting on the 26^th March 2025. He informed Members during the course of the meeting an update had been issued.

The Monitoring Officer confirmed an update had been provided and released to the press, stating the investor had withdrawn the offer. Therefore, the proposal which had been the subject of the in principle decision by Council was no longer progressing.  

The authority and the company will work together to review and deliver the intended intention of the proposal to safeguard the leisure service we currently have for the future.

Councillor Bobby Feeley expressed her disappointment that the proposal had been withdrawn. She felt the change would have been transformational and would have protected the excellent service currently offered across Denbighshire.

The Monitoring Officer confirmed that there would be lessons to be learnt and areas to reflect upon. He stressed that issued that had been raised by Performance Scrutiny had been noted and taken into account. It was now the time for the Council to review and consider the next stages.

The Chair thanked officers and Members for their contributions and concluded the meeting.