Agenda and draft minutes

Apologies for absence were received from Councillor Justine Evans.

The Chair, Lay Member David Stewart declared a personal interest as he was a recipient of a Clwyd Pension fund pension and was a member on the Governance and Audit committee on Wrexham County Borough Council.

Councillor Ellie Chard declared a personal interest as she was a School Governor and had applied for a pension with Clwyd Pension fund.

Councillor Arwel Roberts declared a personal interest as he was a School Governor and he was a Rhuddlan Town Councillor.

Councillor Mark Young declared a personal interest as he was a School Governor.  

None.

To receive the minutes of the Governance and Audit Committee meeting held on 14 June 2023 (copy enclosed).

The minutes of the Governance and Audit Committee meeting held on the 14 June 2023 were presented for consideration.

Matters of accuracy –

Page 10 – Council Performance Self- Assessment 2022 to 2023 - Penultimate bullet point should read ‘Members thanked officers’.

Page 13 – Budget Process Update - Penultimate bullet point should refer to the impact on internal control if service was redesigned.

Page 16 – Internal Audit Charter and Strategy 2023-24 – The Chair confirmed it had been the Chief Executive of Denbighshire County Council who had requested further meetings with the Chair of Governance and Audit Committee.

Matters Arising -  

Page 8 – Minutes – The Chair informed members he had attended the Performance Scrutiny meeting in July. He stated he verbally made known the committees concerns about the impact of recruitment and retention. In his opinion there was nothing within the report which showed the concerns raised by Governance and Audit Committee. The concerns around Social Services and Children’s Services including the wider impact of recruitment and retention difficulties in other services was raised during the discussion. The Monitoring Officer confirmed he had been at the Performance Scrutiny meeting in July. The Performance Scrutiny Committee resolved to receive a further update report next year which would include representation form services that were experiencing the most difficulty in recruitment and retention.  

Page 8 – Minutes -Statement of Accounts – The Head of Finance stated the 2021/22 accounts were close to being signed off by Audit Wales. It was on track to be presented at the September Governance and Audit Committee. The 2022/23 draft accounts had started well and the draft accounts were near approval. It was hoped the draft accounts could be released to Audit Wales by the end of July 2023.

The Audit Wales representative Mike Whiteley confirmed the 2021/22 accounts was nearing completion. The draft 2022/23 accounts were expected. Initially in the forward work programme reflected the accounts to be presented to the Governance and Audit Committee in January 2024. All councils had been allocated into one of two tranches, Denbighshire County Council was in tranche 2 which meant a deadline of March 2024 for completion of Audit of the draft accounts.

Members agreed for the closedown of the Statement of Accounts be included in the forward work programme for the March 2024 Committee meeting.

Page 10 - Council Performance Self-Assessment 2022 to 2023 – Lay Member Nigel Rudd asked if feedback could be made available to members on the measure of success of each Leader Members on each theme was going to be reported in consultation with officers. He suggested a report be circulated outside of the meeting to members. Members heard the report had been presented to County Council and was approved.

Page 18 – Estyn Letter – Councillor Mark Young was pleased to report that Denbigh High School was out of special measures. He offered his thanks and support to the staff for the hard work that had been put into moving the school forward.

Page 16 – Internal Audit Charter & Strategy 2023/24 – The Chair stated he met with the Chief Internal Auditor. It had been suggested subject to resources to review the report for a smarter way of reporting to committee. The Chief Internal Auditor said he would contact neighbouring authorities asking to view their reports to look at a way of condensing the papers. Lay Member Nigel Rudd asked if there was a way of changing the guidance or rules on this reporting to streamline the report. The Chief Internal Auditor stated he would raise it with the other  ...  view the full minutes text for item 4.

The Head of Adult Social Care & Homelessness presented the Your Voice Complaints report for 2022/23 (previously circulated). The report captures any compliments, suggestions and complaints received by Denbighshire County Council under the council’s customer feedback policy. The report also included Social Services complaints received under its statutory complaints procedure.

The report was positive; a steady performance of meeting complaint targets was noted in the report.

The Statutory & Corporate Complaints Officer guided members through the detail of the report. It provided details of each complaint received and demonstrated how many of those complaints are dealt with within the approved timescales. Members were informed there was a statutory procedure and timescale for complaints made against social services along with guidelines set by the ombudsman for all other complaints.

It was unusual for officers to receive complaints late or outside of the timescales. 

The Statutory & Corporate Complaints Officer informed members the number of complaints received was broadly similar to the year before. The ombudsman was happy with the process in place for dealing with complaints. It was also noted any compliments or suggestions received are also recorded.

There was no issue regarding the way complaints are processed across the council.

Members heard the ombudsman set up the Complaints Standards Authority a couple of years ago. The Complaints Standards Authority had responsibility for monitoring all complaints received across the councils in Wales. The authority had recently received the ombudsman’s draft report for Denbighshire. it stated they had received 32 complaints in the previous year. They only intervened in 2 of those complaints both of which had an informal resolution was reached.

In the list of complaints received in 2022/23 the highest recorded complaint had been around the complaints process. It was thought this could be because the Statutory & Corporate Complaints Officer also referred complainants to the ombudsman if they were dissatisfied with his response to a complaint.

Is was noted the low number of stage 2 complaints which suggested the more informal stage 1 complaints are being resolved by officers.

The Chair thanked both the officers for the introduction and reminded members that the committee had a statutory duty to receive an annual summary of complaints. The terms of reference of the Governance and Audit Committee included the responsibility to review and assess the council’s ability to handle complaints effectively.

Further to the introduction the following areas were discussed in greater detail:

·         A complaint had been taken on by the Welsh Language commissioner, that sat outside the Corporate Complaints processes.

·         There was one complaint against the Welsh Language. It was confirmed that individuals could complain in Welsh or English at the start of the process.

·         Within the team there was a Welsh speaker who could assist with complaints through the medium of Welsh.

·         School complaints were separate to the Corporate complaints procedures. Schools have their own complaints procedure. It was unusual for the authority to intervene with complaints against schools.

·         360is the system that was commissioned by the council in 2019. The 360 system was council wide, it was used for a wide range of facilities including complaints and compliments. The ombudsman’s definition of a complaint was someone who is dissatisfied with an issue that wants a response from the council. However, if it is the first time an issue has been reported it would be classed as a request for service. If it was the first instance the authority was made aware of an issue; the ombudsman’s stance was the council should be given the opportunity to respond to that issue in the first instance. It would become a matter of complaint if  ...  view the full minutes text for item 5.

To receive a report by the Head of Finance (copy attaced) on the Annual Treasury Management and Treasury management (TM) update about the Council’s investment and borrowing activity during 2022/23. It also provides details of the economic climate during that time and shows how the Council complied with its Prudential Indicators, and the details of the Council’s TM activities during 2023/24 to date.

The Head of Finance introduced the Annual Treasury Management Strategy Statement (TMSS) 2022/23 Report (previously circulated) which showed how the Council would manage its investments and its borrowing for the coming year and sets out the Policies within which the Treasury Management function operate.

The Treasury Management Update Report provided details of the Council’s Treasury Management activities during 2023/24 to date.

The Head of Finance reminded members it had been agreed by Council on 27 October 2009 that the governance of Treasury Management be subjected to scrutiny by the Governance and Audit Committee. Part of this role was to receive an update on the Treasury Management activities twice a year. It was stressed the importance of Treasury Management in the finance department and the Council.

Members were reminded of the three priorities considered when investing funds:

·         keep money safe (security);

·         make sure that the money comes back when it is needed (liquidity);

·         make sure a decent rate of return is achieved (yield).

He stressed to members Denbighshire County Council did not have cash to invest to make yield to support budget gaps. The authority did have cash flow which was closely managed by the finance team. Often funds are borrowed in advance of need and are invested on a short term timeframe. The same with some grant funding the authority received. Thus meaning a small return would be made.

Security and Liquidity were the key factors for Denbighshire.

Members were guided to the table included in the covering report which detailed the frequency of updates presented to the committee.

Appendix 2 - Treasury Management Update Report set out the borrowing strategy of the authority. 3.2 of the appendix illustrated that the authority would likely be required to take out additional borrowing. The main reason for the increase in borrowing was due to the Rhyl Flooding scheme. The project would have to be funded by the authority to later reclaim the funds from Welsh Government.

Interest rates were currently high, this impacted gilts and borrowing costs. It is expensive to borrow at the present time. The authority did try to borrow short term and when possible from other authorities.

Work with Arlingtonclose Ltd as when best to borrow and for term lengths continued.

Further guidance and information was provided on the following:

·         Borrowing or investing by nature was risky. Denbighshire’s risks were around making sure investments were secure. A number of rules for investing have to be met. There was always a risk as when best to lock in borrowing. Continued close working with treasury advisors to advice when best to make monetary decisions supported the decisions of officers.  

·         Overspends were possible were avoided. Overspends were figures of overspends over the 12 month period. It was essential to keep in mind the amount of Council reserves was being used to fund the overspends.

·         Arlingtonclose Ltd were the Treasury Management consultants based in London. Every 3 years they have to go through the procurement process to be tendered the contract.

·         Welsh Government have provided the authority with a lot of help since 2019. Recently support regarding the waste depot in Denbigh and extra funding was gratefully received.

·         HRA Ratio percentage against the non HRA Ratio was quite a difference. The Head of Finance informed members finance Section 151officers across Wales were looking at the difference. It had become more of a focus was due to the pressure of HRA to increase capital spending. It was different to the Council fund borrowing as the income stream was 100% funded from the tenants. That funding stream had to be used for the  ...  view the full minutes text for item 6.

At this juncture (11.25 a.m.) there was a 10 minute comfort break.

The meeting reconvened at 11.35 a.m.

To consider a report by the Head of Internal Audit (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 work carried out by Internal Audit since the last committee meeting. It allowed the committee to monitor Internal Audit’s performance and progress as well as providing summaries of Internal Audit reports.

Confirmation that 7 Audits had been completed since the last committee meeting in April, none of which received a low assurance rating. Five of the

reviews had been awarded a high or medium assurance rating, one review an

assurance rating was not required as it was a process review and the last

review was completed for Rhuddlan Town Council. Summaries were included for information on 6 of the reviews completed, the review completed on behalf of Rhuddlan Town Council had not been included. The reason this audit had taken place was due to the Town Council being unable to recruit anyone to complete an audit of the accounts and requesting the authority’s assistance. It was stressed the importance of auditing City, Town and Community Accounts correctly in the event of any being called in by Audit Wales.

Members heard that since the last meeting he had met with the Chief Executive which concluded in the form changing slightly. A review of the information that was presented to CET, member briefing and SLT resulted in the change to the format of the form.  

Members were guided through the table which provided details of the reports completed from the external regulators. Members were provided with details of the report status and links to access any papers.

Details of Audit Wales reports due to take place in 2023/24 had been included for reference. The table was currently empty as those reviews were ongoing, they start at various times throughout the year. As the reports are presented to the Chief Internal Auditor that table would be populated with the relevant information.

The second table in the report provided members with information on the National Wales Audit Office reports that are due to be undertaken in 2023/24. These reports would be carried out across the 22 Local Authorities across Wales. Once each review was completed an overall opinion would be created and issued to each authority detailing the good and bad practices.

The third table Local Government national studies planned/in progress was slightly different, the review was conducted against the 22 Welsh Authorities but it would only look at a sample of data from certain authorities.

Details of Estyn reviews and outcomes had been provided for member’s information along with and CIW or other reviews. These would be updated when further information was received.

The Chief Internal Auditor was pleased to say the audit department was now at full capacity. The team was still in it’s infancy with 3 officers training and sitting audit examinations to become qualified.

The Internal Audit forward work programme had been provided for member’s information. It detailed work intended to be carried out and any outcomes of reviews completed.

The Chief Internal Auditor was pleased with the current level of performance of the team. Further work over the summer recess to look at the standards was hoped for.

The Chair thanked the Chief Internal Officer for the detailed introduction.

During the discussion – 

·        Members were pleased to note the number of staff on the career pathways had doubled. It was pleasing to hear the audit department was at full capacity.

·        Members suggested the audit due to commence shortly  ...  view the full minutes text for item 7.

To receive the Internal Audit Annual Governance Statement Report 202-23 (copy enclosed).

The Chief Internal Auditor presented the Annual Governance Statement 2022-2023 to the committee (previously circulated). He guided members through each section the Annual Governance Statement (Appendix1).  

The Council had a statutory duty to publish an Annual Governance Statement (AGS). It was explained that the AGS formed part of the Statement of Accounts. It was presented to members separately to allow members to discuss and review the AGS on its own merit.

The report was a thorough investigation on the governance functions within the council. Based on self-assessment and reports presented to committees throughout the year.

The Chief Internal Auditor confirmed reports and information was gathered and consolidated from a range of service areas. The statement had been prepared in accordance with the guidance produced by the Chartered Institute of Public Finance & Accountancy (CIPFA) and the Society of Local Authority Chief Executives and Senior Managers. Members were guided through the core principals which underpinned the framework.

The Governance Statement included areas around the key contributors to developing and developing the governance framework. Information on the different council bodies that support the development framework for good governance was included. Since covid, meetings were now held hybrid with members able to attend in person or online and was working well.

Information on key indicators had been included on key performance areas within the authority. He confirmed that over the 12 months no low or no assurance had been issued.

Members were guided through the actions taken in response to 2021/22 Governance Statement and Improvement Actions Arising from 2022/23 Annual Governance Statement.

The Chair thanked the Chief Internal Auditor for the presentation of the report.

Responding to members’ questions the Chief Internal Auditor and officers:

·         Confirmed levelling up grants and other grants received should contribute to funds replacing EU funding following the Exit from the EU.

·         Engagement with businesses had taken place during the period. The engagement had not been as productive as hoped. The aim had been to engage with all stakeholders within Denbighshire. Contact had attempted with all stakeholders. Members expressed concern that the number of engagement had not been what was hoped and stressed the importance of continued promotion of engagement with the authority. It was hoped more could be done to better engagement especially with businesses and umbrella businesses in Denbighshire. Part of the communication strategy, businesses were included in liaising with officers of the authority.

·         Members were aware of a number of actions rolled over.

·         The Chair suggested an amendment to the recommendation to the report to read ‘the committee reviews and recommends for approval the draft Annual Governance Statement 2022/23’.

·         The Chair stated in his opinion the importance of a Council commitment to good governance. In particular, making reference to the seven principals of public life plus the additional 3 for Wales. The Monitoring officer stated the Corporate Plan adopted by the Council, contains a commitment to governance. In particular, the theme for a well-run and high performing council it made reference to the seven core governance functions.  

·         The Chair suggested a training session on Risk Management be scheduled before the Corporate Risk Register is presented to the committee in November 2023.

·         Actions against Safeguarding risks had been included in Annual Internal Audit report. providing details of work being done to address each risk and what controls are in place around each risk.

·         The report identified some of the key areas of risk for the authority. Members stressed the importance of including any risks to governance of the council.

·         Members suggested an amendment to 2.6.4 of the Governance Statement to reflect some of the difficulties and delays faced  ...  view the full minutes text for item 8.

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

The Chair stressed the September, Committee meeting looked heavy with a number of agenda items listed on the forward work programme. He informed members the Scrutiny Chairs and Vice Chairs Committee had requested the Committee receive the Joint Inspection of Child Protection Arrangements Inspection Report and Action Plan report.

The Monitoring Officer confirmed the Panel Performance Assessment was due to be presented at the next meeting. The authority was required to perform a panel performance assessment once in every term of the council, the report would include details on the process and proposed changes to the constitution that would be required. Following the report to Governance and Audit committee in September a report would be presented at a future County Council meeting.

The Chair suggested that the Annual Corporate Health and Safety report and Annual Fire Safety report be deferred to November 2023. All members were in agreement.

Lay Member, Nigel Rudd asked if the future item – Net Carbon Zero could be reviewed and incorporated alongside a future meeting date.

The Chair asked if he and the Vice Chair could be consulted if any agenda item was running late or needed change in plenty of notice.       

RESOLVED that, the Governance and Audit Committee’s forward work programme be noted.

To receive for information, the Audit Wales report entitled ‘Are the council's corporate support functions effective?’ (copy enclosed).  

The Chair introduced the Audit Wales information report to members. The report looked at a number of support services including HR, Internal Audit, Digital Services and Community and Customer Services. It was felt best placed to be presented to Governance and Audit Committee as it made reference to Internal Audit and included action points for Internal Audit.

The Chair stated he had met with the Chief Internal Auditor and had been assured the actions had been agreed and included within the report.

The Chair thanked Audit Wales for the report and suggested it be referred back to Chairs and Vice Chairs for Scrutiny to debate the report in detail especially debating the areas around HR and future resourcing issues around Corporate Support functions.

The Chief Internal Auditor confirmed a recommendation had been included that all Internal Audit reviews conducted should consistently consider the sustainable development when reviewing services. Service area compliance with sustainable development principals needed to be systematically checked for all non-transactional audits by Internal Audit in their reviews.

The Chief Internal Auditor confirmed it was an area that had not been looked at in every audit conducted. To address the recommendation, two action points had been agreed:

Action 2. Ensure we update the review date when a policy is amended. The department have been updating policies in-line with legislative changes. In future, informal reviews will be recorded by way of updating the review date.

The Audit Wales representative Carwyn Rees echoed the statement from the Chief Internal Auditor. He welcomed the response from the Internal Auditor and his team.

RESOLVED that the committee note the Audit Wales information report and accept the recommendations and actions made in relation to the Internal Audit aspects. The committee recommended the report be presented to Scrutiny Chairs and Vice Chairs for consideration of the non-Internal Audit matters .