Agenda and draft minutes

To appoint a Chair of the Governance and Audit Committee for the ensuing year.

Nominations were sought for a Member to serve as the Committee’s Chair for the ensuing year.  Lay Member, Nigel Rudd nominated Lay Member Dave Stewart, seconded by Councillor Carol Holliday.  No other nominations were received and it was therefore :

RESOLVED that Lay Member Dave Stewart be appointed as the Governance and Audit Committee’s Chair for the ensuing year.

To appoint a Vice Chair of the Governance and Audit Committee for the ensuing year.

Nominations were sought for a Member to serve as the Committee’s Vice-Chair for the ensuing year.  Councillor Ellie Chard nominated Councillor Mark Young, seconded by Councillor Arwel Roberts.  No other nominations were received and it was therefore :

RESOLVED that Councillor Mark Young be appointed as the Governance and Audit Committee’s Vice-Chair for the ensuing year.

At this juncture, the Chair welcomed Councillor James Elson to the Committee for his first Governance and Audit Committee meeting.

Good Luck was offered to Iolo McGregor, Strategic Planning and Performance Team Leader, as this was his last day working for Denbighshire County Council.  The Committee offered their thanks for all his work whilst in post.

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

Lay Member, Paul Whitham, declared a personal interest as he was a recipient of a Clwyd Pension fund pension.

The Chair, Lay Member, David Stewart, declared a personal interest as he was a recipient of a Clwyd Pension fund pension.

Councillor Ellie Chard declared a personal interest as she was an LEA Governor at Ysgol Tir Morfa, Rhyl, and was also a recipient of a Clwyd Pension fund pension.

Councillor Arwel Roberts declared a personal interest as he was a Governor at Ysgol Y Castell, Rhuddlan.

Councillor Carol Holliday declared a personal interest as she was a Governor at Ysgol Penmorfa, Prestatyn

None.

To receive the minutes of the Corporate Governance Committee meeting held on 24 April 2024 (copy attached).

The minutes of the Governance and Audit Committee meeting held on 24 April 2024 were presented for consideration.

Matters of accuracy –

Page 7 – Councillor Arwel Roberts was in attendance at the meeting

The Chair, Dave Stewart’s name was incorrect in the attendees of the minutes.

Page 8 – Matters Arising – Local Government Code should be Local Governance Code.

Page 8 – Arlingclose – should read confirmation in writing would be sent immediately.

Page 11 – Second bullet point – should read ….. failure of their Governance and Audit Committees ….

Page 14 – under Appendix 4, should read – Member Allowances – could members agree to not take the increase ……..

Matters Arising –

Page 8 – Arlingclose – Head of Finance, Liz Thomas has responded in writing to the Chair informing him she had been in contact with Arlingclose informing them of alternative contact points in the Council should they have any concerns regarding who was the S151 officer.

Page 10 – Terms of Reference had been agreed at the last GAC meeting and was approved at Annual Council on 14 May.

The Chair of GAC was not a member of Council or Cabinet and therefore, championing issues and debates at the electoral/political level was something the Committee might wish to consider further.  The role of the Vice-Chair of GAC to be discussed further in relation to how advocacy was pursued. 

Nigel Rudd raised the point of not having Cabinet members on GAC and suggested this needed to be addressed.

Reference to Section 114 – part of the role of GAC to act as a shield of protection around the decision making of the council to avoid ending up in the situation where a Section 114 was needed to be served.  Required to be more open and transparent about the implications.  Agreement that the wording talked about the appropriate financial management and measures in place but should not be averse to referencing Section 114 where it was felt it was helpful to do so. 

The Monitoring Officer agreed to respond outside the meeting on this point put forward by Nigel Rudd.

Page 10 – Performance Self Assessment – confirmed if Council did not accept recommendations a report would be brought back to GAC.  If Council accepted recommendations then the final version would be provided to GAC for information.

Page 10 – new Terms of Reference would cover agenda items, for completeness Paul Whitham requested it also include to see if there were any apparent misdirection with other Committees ie: was there anything GAC had carried out over the previous 3 years which it should not have done. 

The Internal Audit Team were carrying out a piece of work which would look at the last 4 years of GAC Forward Work Programmes and the Forward Work Programme would then be populated. 

Page 11 and 12 – Nigel Rudd raised the point regarding the Medium Term Financial strategy an update had been received from Liz Thomas and it would be useful for the information to be circulated to all members of the GAC.

RESOLVED that, subject to the above, the minutes of the Governance and Audit Committee held on 12 June 2024, be received and approved as a correct record.

At this juncture, there was a change of order of items on the Agenda.

To consider a report by the Chief Internal Auditor (copy attached).

The Chief Internal Auditor, Bob Chowdhury, introduced the Internal Audit External Audit Assessment 15 April 2024 report. 

The Lead Member for Finance, Performance and Strategic Assets, Councillor Gwyneth Ellis and the Corporate Manager, Internal Audit, Ceredigion County Council, Alex Jenkins, were in attendance for the item.

The external assessment could be completed either by a full external assessment, or an internal self-assessment which was validated by an external assessment reviewer.  As a member of the Welsh Chief Auditor Group (WCAG) it was agreed to adopt the self-assessment approach with another member of the WCAG undertaking the independent validation.   On completing the self-assessment, the information was shared with the Corporate Manager, Internal Audit at Ceredigion County Council who had completed the external assessment and provided a report.

The Corporate Manager, Internal Audit, Ceredigion County Council gave a summary of the assessment (previously circulated). 

The Chair thanked Alex Jenkins, Bob Chowdhury and the Internal Audit team together with Councillor Gwyneth Ellis for all their hard work.

Within the report it stated that Internal Audit generally conforms with the requirements and generally conforms reflects the highest level of performance following an external assessment. 

The assessment was set for standards for all Local Authorities within the United Kingdom which derived from international internal audit standards ultimately set by the Global Institute of Internal Audit. 

During discussions, the following points were raised and discussed –

·         Within the report, it was noted effective partnership working with other auditors and other local authorities. 

·         Capacity  issues were raised not only within Denbighshire County Council (DCC) but across other areas.  Where did DCC sit when benchmarking its performance against others in Wales.  Secondly whether consistent challenges faced those Authorities regarding the ability to recruit and retain staff in key roles in this area.  Part of the report reflected those challenges which DCC Internal Audit had faced.   The Chief Internal Auditor, Bob Chowdhury, responded that when a benchmarking exercise had been carried out approximately 18 months previously, the 22 local authorities had been looked at together with the make-up of the teams.  It was confirmed that across Wales it had been very difficult to recruit internal audit staff.  There was a shortage of staff available within Wales and DCC sat midway of all areas.  DCC Internal Audit comprised of a team of 6 members.  Salary payment was midway of all  22 local authorities.  Qualification wise, DCC were lower than a lot of the Welsh local authorities due to 3 career path auditors being recruited during the last 18 months.  The Principal Auditor was on a career pathway. 

Alex Jenkins supported the statement given by Bob Chowdhury and explained that Ceredigion was similar to DCC.   It was a common question around staffing.  In Ceredigion they were staffed to full complement but it was the qualifications, as they currently had 2 people studying for the certified internal audit qualification. 

Regarding the recruitment of staff, since the pandemic, staff were continuing to work from home and, therefore, were able to, for example, live in North Wales but work for one of the London Councils because staff were only required to attend in the office for 1 or 2 days per week and that had affected recruitment.

The way forward for DCC had been to recruit at the lower level and over the course of 4-5 years they could become fully qualified internal auditors. 

Within the North Wales Audit Group and the All Wales Group common themes were discussed and working papers were shared which did speed up the work carried out in North Wales.

It was confirmed that Audit Wales ran an apprenticeship  ...  view the full minutes text for item 7.

To consider a report by the Strategic Planning and Performance Officer (copy attached) to provide end of year analysis of progress and challenges with key performance objectives.

The Lead Member for Finance, Performance and Strategic Assets, Councillor Gwyneth Ellis, introduced the report (previously circulated).

Regular monitoring of performance had been monitored and quarterly reports were taken to Scrutiny and Cabinet meetings. 

The Executive summary together with the covering report provided an evaluative statement of progress.

Feedback was sought on the content of the draft reports attached at Appendix I and II prior to the report being submitted to Council in July for approval.

For clarification - the report had been submitted to GAC as good practice and enabled GAC to recommend any changes to the report prior to Council in July 2024.  If any of the recommendations from GAC were not incorporated then the reasoning why would need to be included within the final Performance Self-Assessment report. 

The Panel Pier Assessment which happens once every political terms, was the report that GAC would receive which included the response from Cabinet.  GAC’s role in the Self-Assessment was to review the report and make any recommendations upon it where necessary.  GAC had the same powers with the Panel Pier Assessment report.

Nigel Rudd asked officers if the methodology of reporting like this a requirement of the legislation or was it a practiced approach which had been adopted by performance staff across various authorities.  How much scope was there as to how these type of matters were reported?   There had been an issue of repetition throughout parts of the report.  As a public body the report needs to be available in a way that members and members of the public can easily understand the information provided.

Officers responded that it had been an evolving report and had been developing the reports over many years as a team.  An effort was made to reduce the narrative within the report but at the same time a balanced picture needed to be presented so were responding to expectations from the regulators both internal and external,  The Well-being Future Generations Office looks at the report, the Equality Human Rights Commission also looks at the report.  Because of the legislation, the report needed to satisfy at least three Acts. 

The Chair requested that the comments regarding the report be taken back as a comment from GAC.

Officers clarified that additional improvement activity which had been added which was to keep Corporate Plan commitments and performance expectations under continual review.    In February, the Corporate Plan was revised to try and address this issue which it had to a certain extent.   What the Corporate Plan attempts to do is huge in scope, so it is challenging. 

The Monitoring Officer informed GAC that there was a large amount of work which went into the report and officers worked very hard on it.  The feedback will be taken on board.

Appendix 1 –

Page 29 of the Agenda Pack – Equality and Diversity –Had the training taken place and had it been included in the Annual Governance Statement which was to be presented at the next meeting?

Members were surveyed to seek their views on mandatory and non-mandatory training and the results were presented at Democratic Services Committee and as part of that it was recommended to make Equality and other training mandatory.  The paper would then be presented to Council  containing those recommendations. 

It was confirmed that members of the Strategic Equalities and Diversity Group had all received training from the WLGA in April.    The report eluded to all members and lay members receiving the mandatory training.

Page 31 – How Well Are We Doing.  Clarification was sought as to the Well Run High Performing Council Board, and  ...  view the full minutes text for item 8.

AT THIS JUNCTURE (11.55 AM) THERE WAS A 10 MINUTE BREAK.

THE MEETING RECONVENED AT 12.05 PM

To consider a report by the Chief Internal Auditor (copy attached).

The Chief Internal Auditor, Bob Chowdhury, introduced the report (previously circulated).

The Public Sector Internal Audit Standards (PSIAS) required the chief audit executive to deliver an annual internal audit opinion and a report that the organisation could use to inform its annual governance statement.  This Committee’s terms of reference required it to consider the annual report of the Chief Internal Auditor.

Page 177 – Agreed Audit Actions -  Percentage of audit agreed actions that have been implemented by schools.  Disappointed it was only 59%.

Officers confirmed that part of the reason for only 59% was schools were not on VERTO.  All services on were on VERTO so Internal Audit could track on a quarterly basis and meet with the performance and strategy team and ask them to give prompts to certain services who had recommendations outstanding.  Two approaches had taken place this year, firstly wrote to all schools requesting responses where they were up to and secondly emailed actions completed and actions still outstanding.  Hopefully, in the next month, before the summer break, will email all schools with actions outstanding and give them until middle of September to respond. 

Members agreed that GAC assist the Chief Internal Auditor by suggesting he included a statement on the email that the item had been discussed at GAC.   It was also agreed to copy in the Chair and Vice-Chair on the email to be sent out to all schools. 

Page 182 -  Only one Town Council visited by Internal Audit.  Was there a reason why only one Town Council was visited.   Town Councils could be audited by private companies or they could come to local government.  It was confirmed Rhuddlan Town Council were the only Town Council who had requested Internal Audit to do their accounts.

Advisory reviews – was it necessary for Internal Audit to carry out these reviews?  The Chief Internal Auditor confirmed it was necessary for Internal Audit to carry out the Advisory reviews.  The reviews had been agreed with CET and Cabinet.  A lot of the reviews were around budget pressures over the next 12 months. 

Page 168, paragraph 2.8 – this opinion would go forward to the AGS.  The Chair queried whether the statement which stated due to staff issues needed to be included in the AGS.  The Chief Internal Auditor responded he could rephrase the statement due to certain constraints. 

Page 176 – 15.1 – Internal Audit annual assurance mapping exercise, it was suggested it could be carried out with GAC as a training workshop to understand what goes into the plan and why it goes into the plan.  It also linked in to the external audit assessment previously discussed.

The Chief Internal Auditor agreed that the workshop should explain what Internal Audit was about and what it delivered with a 12 month journey of the team.

RESOLVED that the Governance and Audit Committee considered and commented on the Chief Internal Auditor’s annual report and overall opinion.

To consider a report by the Chief Internal Auditor (copy attached).

The Chief Internal Auditor introduced the Internal Audit Charter, Strategy & Quality Assurance Improvement Programme 2024/25 (previously circulated).

Local Authorities subject to the Account and Audit (Wales) Regulations had to maintain an adequate and effective system of internal audit of its accounting records and of its system of internal controls.  In accordance with the Public Sector Internal Audit Standards (PSIAS), safeguards would continue for a period of time to maintain Internal Auditors’ independence and objectivity.

The Chief Internal Auditor would review the Charter each year and present it to the Governance and Audit Committee for final approval.

Nigel Rudd commented that in his opinion it was a waste of the Chief Internal Auditors time and GAC’s time to review on an annual basis a charter which hardly changes.  He asked if representations could be made in the future for the necessity of this.  If a Charter was to run for several years, a report containing the amendments made to it as and when required. 

Concern was raised there were the sufficient resources to carry out work required. 

Were expectations realistic and were they reflected in terms of what was in the Charter. 

The Chief Internal Auditor took on board the comments made regarding the Charter.  He had to adhere to global standards and PSIAS standards together with standards set by the Institute of Internal Auditors. 

Approximately two weeks’ work is carried out to produce the plan.  Meetings take place with the Heads of Service, CET, SLT and Cabinet.  How long each review would take place is stated and time was then allocated for the team and then annual leave, bank holidays are taken out of that time together with a proportion for sickness.  This year the figure was 1100 days for the whole team and then it is costed all the different reviews which were taking place in to the days.  Technically, if there were no special investigations 100% of the reviews would be carried out but there is a contingency and 50 days had been included for investigations.

This year there were 56 on 31 March and were at 65% coverage at the present time.  This year were aiming to complete 75% which was realistic but, cannot foresee what could occur in the next 8-9 months. 

Standards were changing and CIPFA had until January 2025 as to whether accept all the changes or a muted form of changes.

As a North Wales and Welsh Chief Internal Auditor Groups, we fed in to the new global standards.  They had been agreed and now await the UK CIPFA to decide on what the public sector standards would be. 

The Chair recommended that GAC receive the new standards as an information report in spring 2025.  The Chief Internal Auditor stated that November would be a good time to present GAC with the standards and then receive the standards adopted by CIPFA in 2025.

Page 222 – Finance and Audit – General Ledger and Bank Reconciliation.  The new financial system would be taken into account for this.  A review was also to take place of the new financial system (T1).  T1 implementation would be reviewed and various details of the T1 system was included within the general ledger, accounts payable, and sundry debtors.

Page 222 – Partnerships.  The report brought to GAC would provide a definitive list at the time the report was written on all partnership arrangements.  Not just looking at pure partnerships, looking at different agreements in place, alternative delivery models, arrangements which may be in place.  GAC would be provided with an array of agreements in place and the information would  ...  view the full minutes text for item 10.

To consider the committee’s forward work programme (copy attached).

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

Members were informed that a piece of work was being undertaken by Internal Audit which including mapping all the items which had been presented to GAC since 2020 so now had the frequency of when reports were put forward to GAC. 

Second piece of work would be once council had agreed the cycle of meetings for all Committees they would map certain areas, for example, when the budget had been approved, it would come to GAC prior to it being presented at full Council.  Once the cycle of meetings had been approved, and the Internal Audit work had been completed, a copy of the Forward Work Programme would be provided to the Chair and Vice-Chair and if requested, to all other members of GAC.  This would then be added to the September Forward Work Programme.

Third piece of work would be looking at the Terms of Reference of the GAC. 

24 July 2024 –

Annual Governance Statement – this will be signed off over the summer by the Chief Executive and the Leader and would be ready for September.

Corporate Risk Register – this would be an information report but it was needed for consistency with the Annual Governance Statement.  This would be useful to be received in advance and the Chief Internal Auditor confirmed he would liaise with Helen Vaughan-Evans, Head of Service.

Conwy and Denbighshire Youth Justice Service / Little Acorns at Christ the Word / Care Inspectorate Wales – Inspection Report on Dolwen, Denbigh – the Corporate Director would be contacted to ascertain whether these would be substantive or information reports.

25 September 2024 –

Audit report of Statement of Accounts 2022/23 and draft Statement of Accounts 2023/24. 

Performance Panel Assessment Report to be included

20 November 2024 –

Corporate Risk Review – this should be a substantive report not an information report.

Training – dates to be provided.  The Chief Internal Auditor to liaise with Democratic Services and get three dates in the diary for training sessions.

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

THE MEETING CONCLUDED AT 1.00 PM