Agenda, decisions and minutes

Apologies for absence were received from Councillors Valerie Anslow, Anne Lee, Bert Jackson, Richard Levell and Jonathan Ekins.

It was noted that Councillor Keli Watts was present as a subsitute for Councillor Anne Lee.

No declarations were made.

RESOLVED that: The minutes of the meeting held on the 15^th April 2024 be approved as an accurate record. 

RESOLVED that: The minutes of the meeting held on the 12^th February 2024 be approved as an accurate record. 

Resolved:

that the Audit & Governance Committee noted the Annual Audit Report for 2022/23.

Mark Stock, External Auditor at Grant Thornton attended the meeting and provided members with a report which sought to update members with the Auditors Annual Report 2022/23 for North Northamptonshire Council which had been produced by the Council’s external auditors, Grant Thornton.

It was heard that with regards to financial sustainability The Council had appropriate financial planning arrangements in place and is comparatively secure financially over the medium term. It was noted that The Council recognised the need to make savings or generate additional income in order to avoid using reserves to support revenue expenditure. Members heard that the Northamptonshire children’s Trust continued to significantly overspend its agreed budget where The Council’s share of the overspend was forecast to be £13.1m in 2023/24. This represented a significant risk to the financial sustainability of the council and a weakness in budgetary control. It was noted that one key recommendation was made in relation to financial sustainability and four improvement recommendations to support the Council as it develops.

Members then heard that the Council continued t work with West Northamptonshire Council on the disaggregation of predecessor council balances. A key recommendation had been made in relation to governance and six improvement recommendations . One significant weakness in arrangements around housing services was identified and eight improvement recommendations made. It was also noted by members that all three prior year improvement recommendations had been addressed.

Following debate it was:

Resolved:

that the Audit & Governance Committee noted the Annual Audit Report for 2022/23.

Resolved

that the Audit & Governance Committee noted that the audit for 21/22 has been ceased and that no audit will be carried out for 22/23.

Members received a report which sought to provide an update to members of the Audit and Governance Committee on the progress of the financial statements for 21/22, 22/23 and 23/24 and recommendations to the approach adopted for the audit of the accounts for 21/22 and 22/23.

It was heard that local government authorities were required to publish audited accounts by 30th September or to provide explanations outlining the reason for non-publication. Nationally, at the publishing date of 31st May 2024 (draft accounts), only 41% of local authorities had published their draft accounts, which is 128 authorities out of 315 had published accounts by the deadline.  This was a significant improvement from 2022/23, when only 30% of authorities has published their accounts by the deadline. It was noted that there had been knock on implications due to delays in completion of audits for 2021/22 and 2022/23.  A recent survey showed that for 21/22 54% of audits had been signed off, 38% remained as draft and 8% yet to be published.  Similarly, for 2022/23 only 21% of the audits had been finalised, with 63% awaiting sign off and 16% unpublished.  Overall, this is around 390 audits for the last two financial years are yet to be finalised.

Currently NNC’s published 2021/22 and 2022/23 Statement of Accounts were outstanding, which were included in the total position of 390 above. However, a draft set of accounts had been provided to Grant Thornton for 21/22 and 22/23, subject to the opening balances being finalised.  The audit planning work had also been completed and work is ongoing to provide the draft accounts for 2023/24.

Members then noted that given the backlog of unaudited accounts across the Country, the National Audit Office (NAO) and DLUHC intend to set a statutory deadline for accounts preparers and auditors to clear the backlog of delayed audits for financial years 2015/16 to present, of 31 December 2024. This was subject to approval by the Minister, consultation and passing of the legislation.

It was heard that It was expected that all account audits (up to and including 2022/23) not completed prior to or on 31 December 2024 under the normal procedures would be subject to the backstop and a disclaimed audit opinion would need to be issued by this date.

Members heard that the deadline would result in qualifications and disclaimers of opinion in the short term for many local authorities, including NNC.

Following debate it was:

Resolved

that the Audit & Governance Committee noted that the audit for 21/22 has been ceased and that no audit will be carried out for 22/23.

Resolved

that the Audit & Governance Committee noted the main changes and implications arising from the Global Internal Audit Standards.

Members received a report which sought to inform the members of the Audit and Governance Committee of the new Global Internal Audit Standards, which were to become effective from January 2025, and key changes to the requirements.

It was noted that the new Standards represented a number of changes to the requirements for Internal Audit, senior management and the Audit and Governance Committee.  Having reviewed the requirements of the new Standards, it was considered that the Council’s internal audit services align with the intent of the Standards. As the service evolves, processes and templates will be refreshed as part of the ongoing quality assurance and improvement programme to ensure alignment with requirements of the latest Standards.

Members heard that the Standards provide a new structure with their arrangement under five domains. There was more emphasis on the working relationship of internal audit, the audit committee (referred to as the Board) and senior management.

The Standards were arranged into five domains:

·       I Purpose of Internal Auditing

·       II Ethics and Professionalism

·       III Governing the Internal Audit Function

·       IV Managing the Internal Audit Function

·       V Performing Internal Audit Services

Across the domains are 15 Principles and 52 Standards.  These included requirements, considerations for implementation, and examples of evidence of conformance. The new International Professional Practices Framework

(IPPF) includes the Standards, topical requirements and global guidance.

Following debate it was

Resolved

that the Audit & Governance Committee noted the main changes and implications arising from the Global Internal Audit Standards.

Resolved

That the Audit & Governance Committee noted the Annual Internal Audit Report and Opinion for 2023/24

Members received a report which sought to provide the Audit & Governance  Committee with the Chief Internal Auditor’s Annual Report and Opinion for 2023/24. It was noted that the annual reported informed the Council’s Annual Governance Statement and provided a key source of independent assurance for the Audit and Governance Committee.

The Chief Internal Auditor concluded their satisfaction that sufficient internal audit work has been undertaken to inform an opinion on the adequacy and effectiveness of governance, risk management and internal control for 2023/24. 

It was the opinion of the Chief Internal Auditor that Moderate Assurance was given over the adequacy and effectiveness of the Council’s control environment for 2023. This control environment comprised of the system of internal control, governance arrangements and risk management. 

Controls relating to the key financial systems which were reviewed during the year were concluded to be operating at a level of Moderate Assurance or above, with the exception of government procurement card compliance.  Of the opinions given for financial system controls, 90% receiving opinions of Good or Moderate Assurance.

It was noted that  this was caveated in that year end assurances had not yet been finalised in relation to the financial systems for payroll, accounts payable, accounts receivable, debt recovery, pensions and user access controls which operate under the shared service, lead authority model.   As such, assurance could not be given over those systems at the time of reporting and these were to be reported to the Audit and Governance Committee once finalised.

Members then heard that Council’s structures and processes for identifying, assessing and managing risk had been further developed during 2023/24.  Directorate level risk registers had been subject to regular review and the Strategic Risk Register had been regularly reported to the Audit and Governance Committee in June 2023, November 2023 and April 2024.  A new Risk Management Policy and Strategy was also approved by the Audit and Governance Committee in February 2024 which sought to further develop the Council’s risk maturity.

It was then noted that for the audits completed by the Internal Audit service in 2023/24 and finalised at the time of reporting, 95% of the opinions given in relation to the control environment and compliance had been of at least Moderate Assurance.  
The audit plan coverage had targeted areas of known risk and was informed through consultation with senior management and the Audit and Governance Committee.  Based on the audit findings, opinions of Limited Assurance were given by Internal Audit in relation to the control environment for special education needs and disabilities (SEND) services and external placements in adult social care. 

Based on the audit findings, opinions of Limited Assurance were given by Internal Audit in relation to compliance with controls in two areas: government procurement cards (GPCs) and agency staff and consultants.  In both cases, briefings had taken place with Corporate Leadership Network to reiterate policy requirements and highlight gaps in compliance, along with reviews of policies and supporting guidance.

Members heard that in a number of cases, weaknesses  ...  view the full minutes text for item 170.

Resolved

that the Audit & Governance Committee noted the Internal Audit progress report attached as Appendix 1 and considered the main issues arising.

Members received a report which sought to provide the committee with a progress update on the work of the Internal Audit team and the key findings from audits completed to date.

It was noted that work has commenced on delivery of the 2024/25 plan with fieldwork concluding on the first assignment and a number of other audits in planning or delivery stages.

One key finding related to discharge to assess (DTA) which included funding and supporting people to leave hospital, when safe and appropriate to do so, and continuing their care and assessment in an alternative location.

The review found that the DTA process involved several Council teams including Care Management, Financial Assessments and Debt Recovery. In these areas, generally well designed and embedded systems were found to be in operation. Arrangements included recent changes to how the Council communicated with clients / families to make them aware of their potential financial responsibilities for care costs when care needs had been assessed and a financial assessment completed. These changes resulted from six complaints received between the summer of 2022 and early 2023, but since the changes, only one complaint had been upheld by the Council around ineffective communication since May 2023. However, the following key areas had been identified, where further action is required to manage associated risks:

•                  Internal Audit had been advised that DTA procedures had been in the process of being developed for several months, but these had not been produced at the time of audit.

•                  As a result of upheld DTA complaints, the Council had cancelled invoices to the value of £14,111.53 since December 2022 as a result of the Council not effectively informing the individual receiving care or their family that they would be responsible for paying for care services. However, no record is maintained in Adult Social Care of all cases where invoices have been cancelled for such reasons. 

•                  The review found that key activity in this area, namely, care and financial assessments had not been routinely completed on a timely basis in line with expectations. However, recent information has indicated improvements in the timeliness of completing both type of assessments.

Based upon the fieldwork completed a moderate Internal Audit Assurance Opinion had been received for control environment and compliance with a medium organisational impact.

Another key finding was presented related to the Managing Effectiveness (ME).

The review found that guidance, communication and training available provided a robust framework to support the implementation and successful roll out of ME Time and was also reflected in a good understanding of Council managers around the requirements of ME Time. Additionally, there was evidence that all managers were having regular conversations either face to face or virtually with their staff to discuss work matters.

Of the 20 Council line managers who were interviewed (of a cohort currently of circa 500) and where 1-2-1 records were reviewed, the majority (13) were using ME Time documentation as intended; however some managers were only using ME Time documentation  ...  view the full minutes text for item 171.