Agenda, decisions and minutes

Apologies for non-attendance were received from Councillors Ian Jelley, Russell Roberts and Paul Marks.

The chair asked members to declare any interests on items present on the agenda.

No declarations were registered.

RESOLVED            That the minutes of the meeting of the Audit & Governance Committee held on 17^th June 2024 be signed as a true record of the meeting.

The Section 151 officer attended the meeting and provided the committee with an update with regards to disaggregation. It was confirmed to members that an agreement had been reached between North Northamptonshire and West Northamptonshire Councils with regards to the former Northamptonshire County Council balance sheet. It as noted that the process of disaggregation followed key guidance to ensure that there was no financial distress to either authority through creating a cost neutral environment.

Members heard that North Northamptonshire Council had inherited 36% of the capital financing requirement. The asset base for North Northamptonshire Council stood at 41% to represented a significant reduction and was represented within the current budget envelope. It was further noted that a report was being presented to The Executive Committee on 15^th August 2024 which sought approval from the Executive to approve North Northamptonshire Council’s proportion of the former County Council’s balance sheet.

RESOLVED            That the minutes of the meeting of the Audit & Governance Committee held on 17^th June 2024 be signed as a true record of the meeting.

Following debate it was

RESOLVED                      That the Audit and Governance Committee noted the North Northamptonshire Council External Audit Plan for 2023/24

Members received a report which sought to provide members of the Audit & Governance Committee with an overview of North Northamptonshire Councils External scope and timing of the Audit plan for 2023/24. It was heard that external audit work had been delayed due to the completion of legacy council audits and the delay in completing these had an impact on the Council’s ability to prepare financial statement for 2021;22 and 2022/23. As previously highlighted it was noted that to address the current backlog of Local Government audits the Government was implementing a backstop of 30^th September 2024 by which financial statements audits should be completed. Where they were not the backstop would require auditors to issue a disclaimed opinion on all audits up to and including 2022/23. There was therefore to be no further work on the 2021/22 or 2022/23 audits.

It was heard that planning work for the 2023/24 audit had started in February 2024 work had commenced on the audit of the draft accounts in July 2024. The workplan for 2023/24 included an assessment of the Council’s control environment, journal control environment, it environment, business processes. Key metrics were also to be considered included aged debtor and creditor analysis, bad debt provisions and credit loss allowances, suspense accounts and bank reconciliation. And collection rates.

Members also heard that there was a number of risk factors that were impacting the audit including the lack of audited opening balances over the last two years which would have led to reduced assurance and required additional testing of in year and closing balances. Another risk factor was the operation of multiple ledgers where additional audit work was required. Disaggregation also represented a risk factor and further work would need to be undertaken to understand the impact of this with regards to the opening balances.

Members sought to clarify the timeline for amalgamating the legacy ledgers to one central sustainable North Northamptonshire system and amalgamated asset register for North Northamptonshire. It was confirmed that the Revenue and Benefits teams were currently working through the amalgamation process. The legacy Corby Borough Council ledger had already been migrated to the new system with the other legacy ledgers being migrated by the end of December 2024.

Following debate it was

RESOLVED                      That the Audit and Governance Committee noted the North Northamptonshire Council External Audit Plan for 2023/24

Members received a report which sought to  provide members of the Audit & Governance committee with a copy of Northamptonshire Children’s Trust’s (NCT) Annual Internal Audit Report and Opinion for 2023/24 and to provide levels of assurance with regards to the work undertaken by the Trust.

It was heard that the annual internal audit report and opinion provided the Council with a source of assurance over the Trust’s governance, risk and control framework, and informed the Council’s own assurances and annual governance statement. The Trust’s Internal Audit service was provided by West Northamptonshire Council.  West Northamptonshire Council’s Head of Audit & Risk Management has given an opinion that ‘Reasonable assurance can be given regarding the Trust’s governance, risk management and internal control for the year 2023/24’. 

It was noted that previously that NCT had concerns over the delivery of the audit service but are now pleased to present a full set of completed audits following in depth engagement with the Chief Internal Auditor. Dedicated audit capacity was now present within the Trust and the completion of outstanding audits had been prioritised. Members also heard that two further audits had been undertaken by OFSTED with regards to fostering and youth offending services. It was noted that the fostering service moved from a rating of inadequate to good and the youth offending service had also been rated as good. The next Inspecting local authority children's services (ILACS) inspection was due to take place at the end of 2025.

The chair noted the absence of the Chief Internal Auditor for West Northamptonshire Council and challenged the limited number of audits in delivering the levels of assurances due to the non-risk based nature of the audits for 2023-24. The chair further welcomed the improvements to the audit process for NCT and the risk based audit plan for 2024-25.

Following debate it was

RESOLVED                      That the Audit & Governance Committee noted the                                         Annual Internal Audit Report and Opinion for                                            Northamptonshire Children’s Trust for 2023/24.

Following debate it was

RESOLVED                                That the Audit & Governance Committee                                                  noted the Strategic Risk Register Update.

Members received a report which sought to provide members of the Audit & Governance Committee with a quarterly update on the Council’s Strategic Risk Register entries. The Council’s Risk Management Strategy defined the Council’s risk management approach and the practices required to make it work. Quarterly updates on the Strategic Risk Register are provided for the Audit and Governance Committee.   An updated register was provided for the Committee’s consideration.  The content had been reviewed by the Corporate Leadership Team, informed and supported by regular review of all directorate level risk registers.

Members heard that there had been updates to the risk register entries in relation to Special Educational Needs and Disability (SEND), demand and resources which reflected the risks posed by the high level of demand for SEND services and the pressures on resources.  A risk register update was also provided due to Inadequate organisational capacity as the Audit and Governance Committee had requested that Corporate Leadership Team consider whether ‘leadership risk and turnover of senior staff’ should be reflected on the risk register. This risk entry had been updated to include actions relating to filling key Corporate Leadership Network vacancies. The current risk score remained at 12.

Member sought clarification regarding the SEND diagnosis process and the delays associated within the internal audit. It was noted that the relevant officer would be invited to reflect the concerns raised by the committee.

Following debate it was

RESOLVED                                That the Audit & Governance Committee                                                   noted the Strategic Risk Register Update.

Following debate it was

RESOLVED                      That the Audit & Governance Committee to noted the Internal Audit Progress report and considered the main issues arising and, approved the proposed amendment to the Internal Audit Plan to remove the audit of Corporate Parenting and replace this with an audit of education support services.

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

Since the last meeting of the Audit and Governance Committee, finalised reports have been issued in respect of eight audit assignments. Members heard that one finalised audit related to agency workers and consultants. An internal audit report on Agency Staff and Consultants was issued in August 2023.  That audit had resulted in an assurance opinion of Limited Assurance for compliance with controls and this follow up audit was scheduled to provide assurance over progress made.  

Since the last audit, the policies and guidance on agency and interim staff, and consultants, had been updated with greater clarity on the engagement and extension of these temporary staff. These had been made readily available to officers and communicated via Corporate Leadership Network. The expected controls had been further strengthened in 2024 with the introduction of the staffing approval panel (for agency staff) and spending management panel (for consultants). Each directorate now also maintains records of agency staff and consultants which are shared with HR on a monthly basis. Sample testing has, however, identified a number of areas where compliance with expected controls could not be evidenced in practice for agency staff. Sample testing also raised some queries over the consistent, evidenced application of IR35 requirements for agency and consultant placements which require further investigation. Based upon the fieldwork completed a good assurance opinion had been provided with a limited opinion in relation to compliance with a high organisational impact.

Members noted the absence of invited officers in order to answer questions and provide assurance to members of the committee. Officers were to be invited to the next meeting of the Audit & Governance Committee in order to take questions and provide levels of assurance.

A good internal audit assurance opinion in relation to control environment and compliance was provided with regards to budgetary control and savings plans. Members then heard that regarding the Highways maintenance contract Highways Services were responsible for a range of activity including routine and reactive maintenance, capital improvements, road safety, winter service, management of traffic signals / intelligent traffic signs, CCTV, and public rights of way. The Council’s Highways Maintenance Contract with Kier Highways Limited commenced in September 2022 and was one of the Council’s highest value contracts, with spend up to the end of February 2024 of £25.6 million.  A comprehensive contract was in place which clearly defined the key aspects of the contract including the development of the annual plan, the payment process, performance management and the governance of the contract. Whilst working practices had taken time to embed, testing confirmed that arrangements were operating well in most areas including assessing and managing tactical performance against an agreed suite of performance indicators, payments of contract invoices and reports being submitted to the relevant boards / groups reflecting their roles and responsibilities in  ...  view the full minutes text for item 178.