Agenda and minutes

Audit Committee - Tuesday, 26th July, 2022 3.30 pm

Venue: The Council Chamber - City Hall, College Green, Bristol, BS1 5TR. View directions

Contact: Allison Taylor  0117 92 22237

Items
No. Item

1.

Welcome, Introductions and Safety Information pdf icon PDF 406 KB

Minutes:

The Chair welcomed all parties to the meeting and introductions were made.

2.

Apologies for absence.

Minutes:

Apologies for absence were received from Councillors Breckels and Grant and Simon Cookson – Independent Member.

3.

Declarations of Interest

To note any declarations of interest from the Councillors.  They are asked to indicate the relevant agenda item, the nature of the interest and in particular whether it is a disclosable pecuniary interest.

 

Any declarations of interest made at the meeting which is not on the register of interests should be notified to the Monitoring Officer for inclusion.

 

Minutes:

There were no Declarations of Interest made.

4.

Minutes of Previous Meeting pdf icon PDF 582 KB

To agree the minutes of the previous meeting as a correct record.

Minutes:

Councillor Hucker’s sought clarification regarding Item 14, para 3 where Grant Thornton (GT) had not been able to establish the reason why the majority of capital expenditure occurred in the final quarter of the financial year and questioned whether this could be attributed to the use of accruals.  GT advised that although accruals may be a contributory factor, this was a practice seen at other councils and was likely a management issue. It was advisory to Councils that the flow of spend be evened out throughout the course of the year.   

 

The Chair noted that there was a minor typographical error which would be picked up with the clerk after the meeting and this was agreed.

 

RESOLVED: that the minutes of 27 June be approved as a correct record and signed by the Chair subject to the amendments noted above.

5.

Action sheet pdf icon PDF 406 KB

Minutes:

The Chair noted that Action 5 relating to Single Sign On protocols was outstanding and he was liaising with the Officer concerned.

 

The Action Sheet was noted.

6.

Public Forum pdf icon PDF 897 KB

Up to 30 minutes is allowed for this item.

 

Any member of the public or Councillor may participate in Public Forum.  The detailed arrangements for so doing are set out in the Public Information Sheet at the back of this agenda.  Public Forum items should be emailed to democratic.services@bristol.gov.uk and please note that the following deadlines will apply in relation to this meeting:-

 

Questions - Written questions must be received 3 clear working days prior to the meeting.  For this meeting, this means that your question(s) must be received in this office at the latest by 5 pm on 20 July 2022.

 

Petitions and Statements - Petitions and statements must be received on the working day prior to the meeting.  For this meeting this means that your submission must be received in this office at the latest by 12.00 noon on 25 July 2022

 

Minutes:

The following public forum questions were received, and responses published on the Council’s website in advance of the meeting. Participants were invited to ask a supplementary question.

 

 Questions:

 

Number

Agenda Item no.

Name

Title

1

12

Jen Smith

SEND Service

2

8

Councillor Wilcox

Significant Governance Issues

3

12

Suzanne Audrey

SEND Service

 

1.      Jen Smith asked if the Council’s Social Media Protocol permitted the sharing of personal data with third parties.  Officers referred Jen Smith to the published response which had answered this question.

 

2.      Cllr Wilcox had no further questions at that time

 

3.      Suzanne Audrey asked if there was a timetable for dealing with the queries raised.  Officers confirmed that there was no specific timetable and referred the questioner to the published response provided.

 

The following public forum statements were received and published on the Council’s website in advance of the meeting and participants were invited to speak to their statements.

 

 Statements:

 

Number

Agenda Item no.

Name

Title

1

12

Jen Smith

SEND Service

2

12

Catherine Vallejo Veiga

SEND Service

 

Members noted the public forum questions and statements received.

7.

Work Programme pdf icon PDF 101 KB

To note the work programme.

Minutes:

Independent Member Adebola Adebayo sought clarification regarding the timing of the external auditor’s audit plan which had been due to be presented at the June meeting. GT confirmed that there was a national issue causing delays in the sector which had altered the timescales for outturns. Work remained outstanding in the area of Value for Money and there were plans to hold a Value for Money workshop for Members, however they were working to meet agreed timetables as far as possible.

 

Digital Infrastructure

 

It was confirmed that this item would be brought to the September meeting to ensure the relevant matters could be covered comprehensively.

 

The Work Programme was noted.

8.

Draft Financial Statements 2021/22 pdf icon PDF 664 KB

Additional documents:

Minutes:

The Interim Head of Corporate Finance and the Director of Finance were in attendance for this item.  The key findings of the report were summarised and the Audit Committee was asked to note, and comment on the draft, unaudited, Statement of Accounts for 2021/22.

 

In response to Members questions the following points were raised:

 

1.      Bristol Beacon had received over £30m investment. In line with the valuation for the previous year and requirements of the CIPHA code, the Beacon was valued at zero within the accounts. Concern was raised that the further capital commitment planned with Wilmott Dixon would also need to be written off.

 

2.      The Annual Governance statement had shown a significant increase in procurement breaches in the year, the approach taken to remedy this had been covered in depth at the last meeting and included a number of recommendations such as training and e-learning. Bristol was unique to other authorities in that it was being open and transparent in its reporting and action was being taken to deliver improvements.  It was possible for Committee Members to request a separate session where more detail could be provided regarding the context and rationale for action planned to improve performance.

 

3.      There had been a significant increase in the number of Non-Schools employees receiving more than £50k remuneration for the year. It was confirmed that the number of employees had increased year on year and that the remuneration bands hadn’t been changed  and were subject to incremental progression.

 

4.      The total cost of exit packages had significantly increased to a million pounds compared £159k last year.  It was confirmed that this was in recognition of the succession planning policy of 21/22 where a number of colleagues planning an exit develop colleagues at lower grades.  Although not yet paid, provision was required to be made in the accounts from the point at which the decision to agree an exit was made.

 

5.      It was confirmed that the Interim Director Homes and Landlord Services remuneration of circa £281k included agency fees and in the first year of appointment a third party cost had applied.  The post was now a fixed term or permanent arrangement so a change would be reported in remuneration costs for future years.

 

6.      The Director of Adults Transformation had received circa £31k from February to March 2022.  It was confirmed that this had been an interim director level role to develop capacity and expedite transformational activity across the range of services in the adult social services department.

 

7.      Usable Reserves of £134k had been transferred out of the Risk Management Reserve.  Action: Officers to confirm the rationale for this.

8.      Indicators of Financial Stress show the Children Social Care Ratio at a lower risk.  It was confirmed that this was an indicator of a risk resilience index from a 19/20 data set which recorded a stable budget position in terms of the spend being able to be contained within budget and the percentage of overall budget committed.

 

9.  ...  view the full minutes text for item 8.

9.

Estimated External Audit Fees 2020/21 pdf icon PDF 639 KB

Additional documents:

Minutes:

Jon Roberts, Grant Thornton, was in attendance for this item. The key findings of the report were summarised for the benefit of the Committee.

 

In response to Members questions the following points were raised:

 

1.      Additional Audit fees included the additional cost of PPE experts and specific work over the impairment value of Bristol Beacon.

 

Resolved – That Grant Thornton’s report updating their estimated fees for 2020/21 be noted.

11.

Q1 - Strategic Risk Report pdf icon PDF 538 KB

Additional documents:

Minutes:

The Director of Finance and the Risk and Insurance Officer summarised the key areas of the report and the Audit Committee was asked to review and comment on the Q1 2022/23 Corporate Risk Report (CRR).

 

In response to Members questions the following points were raised:-

 

1.      It was confirmed that Bristol’s future change in governance model from Mayoral system to Committee System had not yet been allocated as a risk as it had not met the risk escalation threshold.  Given the establishment of a Committee Working Group and the timescales involved it was unlikely to present a material risk at present but would be escalated if required.

 

2.      Cllr Wilcox sought written responses to the risks related to Information Technology:

 

a.      CRR25 – Suitability of Line of Business (LOB) Systems – It was confirmed that the progress on Actions of 100% related to that one action listed

b.      CRR7 - Cyber Security – it was noted that implementation had been due in June 2022 and it was of significant concern that this had slipped.

c.       CRR29 – Information Security Management System – it was important to understand why only 25% progress had been made against actions.

d.      CRR26 – ICT Resilience – it was important to understand why progress was only at 50%

 

3.      Officers confirmed that an exempt session would be arranged and full detail provided to give further assurance.

 

4.      In respect of risk CRR15 - In-year Financial Deficit, Cllr Hucker questioned whether this was due to external macroeconomic factors, internal factors or a combination of both.  It was confirmed that the Council’s current financial meant there was a material risk of deficit at the end of year.

 

5.      It was noted the Managing Director  of Bristol Waste had left and it was questioned whether this should have been included in the service risk register.  It was confirmed that the Bristol Waste succession plan had identified this as a risk and had been able to mitigate the risk with immediate effect

 

6.      It was questioned why CRR48 - Failure to meet the affordable housing needs of the City by failing to meet the Project 1000 Delivery target had replaced the previous risk CRR38 -  Failure to deliver enough affordable Homes to meet the City’s needs. It was confirmed that there had been a slight change of emphasis from the aim ‘to meet the City’s needs’  with the ambition to reframe the risk directly within the Council’s influence.  There were a number of sub risks below this and Officers took away an action to ask the risk owner to respond with more detail. Action: The risk owner to contact the Councillor with further information.

 

7.      Independent Member Adeobola Adebayo observed that some of the risk scores had remained unchanged for a significant amount of time and whilst it was understood that tolerance scores had been agreed, it was unclear at which point tolerance levels were exceeded.  It was confirmed that the risk management framework continued to be developed and  ...  view the full minutes text for item 11.

10.

Bristol Holding Limited Audit & Risk Committee Annual Assurance Report pdf icon PDF 659 KB

Additional documents:

Minutes:

The Chair apologised that Item 10 had been missed.

 

Chris Holme, Group Finance Director was in attendance for this item and summarised the key areas of the report and the Committee was asked to note the annual assurance report of the Bristol Holding Group Audit and Risk Committee. 

 

In response to Members questions the following points were raised:-

 

1.      The Bristol Holding Company Audit and Risk Committee (ARC) operates in accordance with the UK Code of Corporate Governance.  Following on from the last annual assurance report the independent non-executive directors were reviewing risk management and compliance arrangements to ensure effective governance arrangements were in place for each company.

 

2.      Councillor Wilcox asked whether the risks themselves could be shared with the Audit Committee.  It was confirmed that this could be shared aligned to council’s reporting cycle and subject to commercial sensitivity.

 

3.      Councillor Dyer thanked the Group Finance Director and noted that it was important that assumptions were not made about the availability of internal expertise and a strengthening of the arrangements to bring in additional expertise from an assurance perspective and provide independent scrutiny was welcomed.

 

Resolved: - That the annual assurance report of the Bristol Holding Group Audit and Risk Committee be noted.

12.

Internal Audit Exception Reporting including Management Action Tracking pdf icon PDF 666 KB

Additional documents:

Minutes:

The Director of Adult Social Care, Head of Service for Adult Social Care and the Risk and Insurance Officer were in attendance for this item.  The Chief Internal Auditor summarised that internal reviews had been carried out in Special Educational Needs and Disability (SEND), Adult Social Care Direct Payments and Risk Management. 

 

In response to Members questions the following points were raised:

 

SEND

 

1.      It was noted that the findings of the internal review should be read in conjunction with the SEND statement, increased SEND team capacity and the implementation of clearer systems and new standard operating procedures.

2.      It was confirmed that the mechanism for further updates on the exception reports were scheduled in following year via an annual update or exception report.

3.      It was commented that a number of issues with SEND had been an ongoing problem for some time and had required a corporate restructure to deliver greater focus within the People Directorate including SEND.  There was recognition of great breadth of statutory responsibilities within the People Directorate which was responsible for 75% of the Council’s financial expenditure.  In line with the direction of travel other Councils the decision had been made to split the Director roles of Adult and Children to enable significantly more capacity to focus on this important work.

4.      It was questioned whether the hiring freeze would have an adverse impact on some of these existing problems.  It was confirmed that frontline critical staff were necessarily exempt from the freeze as vacancies in this area could create additional problems over and above the financial impact.

 

Direct Payments

 

5.      The progress that had been made to review partnership working to deliver increased capacity had been noted.

6.      It was questioned whether there had been a percentage drop in the take up of Direct payments due to the impact of the pandemic.  It was confirmed that there had been a 2-3% drop in 22/23 and take up was 1% below the national average.

 

Risk Management Review

 

7.      A concern was raised regarding the rationale for the small number of risks that had been internally reviewed with the rating of ‘limited assurance’ status.  It was confirmed that the reviews were carried out at roughly the same time each year and regularly monitored through the Pentana Risk system and the CIA was satisfied with level of progress made.

8.      It was noted that this could be a feature of the infancy of the new Pentana system.  It was agreed that things had significantly improved since the audit review and were now further forward.  There had been a roll out across the council with processes and training being embedded. Risk Officers now attended Department Management Team Meetings and meetings with all risk owners going forward would include a review of tolerances and measurable specific actions.

9.      It was suggested that Members would benefit from greater detail regarding the process for delivering a service level review.  Action: Officers to arrange a session for Committee Members to review the  ...  view the full minutes text for item 12.

13.

External Review of Bristol City Council Internal Audit Service pdf icon PDF 703 KB

Additional documents:

Minutes:

The Chief Internal Auditor summarised the key areas of the report and in response to Members questions, the following points were raised:

 

1.      The Terms of Reference for an external review of Bristol City Council’s Internal Audit Service, sets out an assessment process which is planned for 5 days in total.  It was noted that the time allocated could flex dependent on the size of the organisation but 5 days had been considered sufficient to deliver a robust professional assessment.

 

2.      It was observed that the proposed timing of the pre assessment interview was not ideal as the current Chief Executive would have moved on. It was confirmed that the process allowed for another senior leader to step in during this phase. 

 

Resolved:

 

That the approach and the terms of reference for the required external

review of compliance with the Public Sector Internal Audit Standards by Bristol City Council’s Internal Audit Team is endorsed and noted.

 

That the Chair of the Audit Committee as the sponsor for the review is agreed.

 

That the results of the review are reported to Audit Committee for the Committee to monitor implementation of improvements identified as necessary as part of their ongoing role in  determining the effectiveness of internal audit.