Agenda and minutes

To elect the Chair for the 2017/18 municipal year.

Councillor Jos Clark was elected Chair for the 2017/18 municipal year.

To elect the Vice-Chair for the 2017/18 municipal year.

Councillor Clive Stevens was elected Vice Chair for the 2017/18 municipal year.

Apologies were received from Councillors Barry Clark and Steve Pearce. Councillor Steve Pearce was substituted by Councillor Donald Alexander, Councillor Liz Radford stated that she would have to leave the meeting at approximately 3.10 pm due to another appointment. Councillor Afzal Shah on arrival gave apologies for attending the meeting slightly late due to other commitments.

Members noted the resignation of Ken Guy Independent Member and gave their thanks and gratitude for Ken’s contribution whilst serving on the Committee.

To note the members appointed to serve on the Committee for the 2017/18 municipal year, as detailed on the agenda.

The Membership of the Audit Committee was noted as –

Councillor Barry Clark; Councillor Jos Clark; Councillor Olly Mead; Councillor Steve Pearce; Councillor Liz Radford; Councillor Afzal Shah; Councillor Clive Stevens.

Independent Member(s): 2 x vacancy  

With regard to the Independent Member vacancies, the Committee was informed that the process for appointments had been suspended pending the outcome of the review of the Council’s Constitution.

AUDIT COMMITTEE - Terms of Reference

Overview

The Audit Committee is a non-statutory committee independent of the council’s executive and scrutiny and it reports to full council. Its purpose is to provide independent assurance to the council in relation to:-

1. The effectiveness of the council’s governance arrangements, risk management framework and internal control environment including overseeing:

- risk management strategies

- anti-fraud arrangements

- whistle-blowing strategies

- internal and external audit activity;

2. The effectiveness of the council’s financial and non-financial

performance to the extent it affects exposure to risk and poor internal

control;

3. The annual governance statement;

4. The review and approval of the annual statement of accounts,

confirming the appropriate accounting policies have been followed,

including the external auditor’s report to those charged with governance

on issues arising from the audit of the accounts.

Functions

Full Council has delegated the following functions to the Audit Committee:

- Duty to review and consider the effectiveness of the council’s system

of internal control and approve the annual governance statement;

review and consider the effectiveness of the Council’s internal audit;

consider and approve the statement of accounts (Accounts and Audit

(England) Regulations 2011 S.I. 2011/817).

- Assist the council in its statutory duty to promote and maintain high

standards of conduct by members and co-opted members.

- Advise the council on the adoption or revision of the Code of Conduct

for Members and any associated codes or protocols and monitoring

their operation.

- Advise and training members on the Code of Conduct.

- Consider and determine any allegations of misconduct by a member of

council (which could be a breach of the code of conduct) if the

Monitoring Officer requests assistance.

- Consider nominations made by Group Whips for the conferring of the

title “Honorary Alderman” and “Honorary Alderwoman” and making

recommendations to Full Council thereon.

- To monitor the register of members interests.

- To advise and assist as required in the selection of the Lord Mayor.

- To grant dispensations pursuant to section 33(2) of the Localism Act

2011 where:

(i) without the dispensation, the representation of different political groups on the body transacting the business would be so upset as to alter the outcome of any vote on the matter.

(ii) that the authority considers that the dispensation is in the

interests of persons living in its area; or

(iii) where the Committee considers that it is otherwise

appropriate to grant a dispensation.

- Responsibility for ensuring effective scrutiny of the Councils’ Treasury Management Strategy and policies.

- Involvement in the appointment/dismissal of the Chief Internal Auditor.

- Involvement in monitoring the performance of the Chief Internal Auditor.

The Terms of Reference as approved at Full Council on 23 May, 2017, were noted. Members were informed that the ToR’s might be subject to change pending the review of the Council’s Constitution.

Below are the provisional dates of meetings for 2017/18 based on the same sequence last year -

These dates are not fixed as it is for the Audit Committee to determine what dates are most suitable. Although the Audit Committee has historically met on a Friday morning at 9.30 am, the Committee may wish to consider if this remains the favoured option for 2017/18.

A proposal has been received from Councillor Jos Clark for future meetings of the Audit Committee to be held at 2 pm on Thursday afternoons.

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.

Councillor Radford declared an interest in agenda item 14 draft Statement of Accounts 2016/17citing that her husband worked for the Bristol Port Company.

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 19 June 2017.

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 22 June 2017.

None received.

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

The Minutes of the 24 March 2017were agreed as a correct record.

To note actions taken.

The Action sheet was noted. The Committee was also advised –

1.         That training for new audit committee members was ongoing;

2.         That the report about the Disclosure and Barring Service would be submitted       to the July Audit Committee. 

To note the work programme.

The Work Programme was noted. The Committee was also advised –

1.         That Governance issues would be reported to the Committee at its September together with the final 2016/17 Annual Governance Statement and Action Plan, with updates on the progress of the Action Plan to come to every meeting thereafter;

2.         Risk registers – frequency of reporting would be considered as part of the review of the Risk Management policy and strategy. 

The Committee considered a report providing details of the work completed by Internal Audit during 2016/17 which included the Head of Internal Audit’s opinion on the control, risk and governance

environment.

The Committee received a presentation which explained the need and timing of the Internal Audit Annual report as -

•      Meeting the Public Sector Internal Audit Standards (PSIAS)

•      Annual report timed to support the Annual Governance Statement and included:

–     Annual opinion on the overall adequacy and effectiveness of governance, risk and control;

–     Summary of the work done from which the opinion is derived;

–     Disclosure of qualifications to the opinion;

–     Performance of IA;

During subsequent debate the following points were made or clarified –

1.      Contract monitoring would continue to be closely monitored and feedback would be provided;

2.      Areas of concern had been and would continue to be closely monitored with openness and transparency being a core theme;

3.      Savings, both notional and recoverable arising from counter fraud activity in 2016/17 exceeded £4.5m. It was acknowledged that it was likely that such a level of savings could be enhanced dependent upon the level and utilisation of resources..;

4.      Each directorate had risk registers which were regularly monitored and reported to the relevant scrutiny commissions quarterly. Future reports would be subject to a strategy review which would look at the escalation process, and give information on trends in risks e.g., where there were red flags;

5.      Regarding red flags indicated for ‘Assurance Opinion Work’, members were informed that service ‘owners’ had given assurances that these areas would improve, this would be backed up by a ‘follow up’ process and further report back to the Committee to ensure improvement;

6.      Benchmarking with other council’s was discussed to determine if there was parity, in the provision of services/work;

7.      A council wide issue regarding efficiency of financial savings from redundancy was queried. and it was agreed that the Human Resources Committee be asked to look into this matter.n

Resolved – that the Internal Audit Annual report 2016/17 be noted.

The Committee considered a report on the draft Annual Governance Statement and accompanying Action Plan, which sought to ensure the Committee that it was a fair reflection of the internal control and governance environment during 2016/17 and to date. Once finalised the Statement would be signed by the Mayor and the Chief Executive.

The Committee also considered an associated supplementary report regarding the first “Significant Governance Issue” within the Annual Governance Statement which related to the findings from the Bundred report with associated recommendations and the Council’s response.

The Council’s Deputy Monitoring officer made the following statement in respect of the Bundred report -

‘A report relating to the Bundred review will be taken to full Council next Tuesday.

The annual governance statement provided to Audit Committee gives Members an assessment of the governance issues the authority has had and is dealing with and is consistent with the Bundred review.

The action plan attached to the report to Audit Committee and Full Council provides Members with the current and future steps being taken to improve governance, financial regulation and leadership within the authority.

The focus of the debate at Audit Committee and full Council should therefore be whether the action plan provides Members with sufficient assurance of on-going improvements in this regard.

During the debate itself, care must be taken not to bring the Council into disrepute (see Code of Conduct for Members and the Officer/Member protocol attached) and, in particular, defamatory comments must not be made as these may affect the reputation of Members and Officers.

This could put the Council at risk of a legal claim and potentially Councillors at risk of a claim against them personally.

By way of information, the further review previously announced by the Mayor is being dealt with by the Chief Executive as Head of Paid Service.

The resulting report is likely to contain personal data or relate to employee matters that the Head of Paid Service is responsible for so will not be disclosable but dealt with in accordance with employment law and the Council’s own policies and procedures.’

The Committee received a presentation on the Annual Governance Statement which emphasised that the City Council was required by the Accounts and Audit Regulations 2015 to prepare an Annual Governance Statement to accompany its published financial statements. A review of the internal control, risk management and governance arrangements had taken place. Significant issues emphasised were -

- the requirement for the Annual Governance Statement;

- the more robust review process undertaken to enable the Statement to be made;

- the draft Annual Governance Statement together with an action plan which detailed the most significant control and governance issues identified during 2016/17 and the actions for improvement in those areas.

During subsequent debate the following points were made or clarified –

1.      A summary check sheet in respect of Governance performance to be submitted to every Audit Committee meeting from September 2017;

2.      Regarding improvements made in 2016/17 reference to the posts of  ...  view the full minutes text for item 89.

The Committee considered a report about the Statement of Accounts which set out the Council’s financial position as at 31 March 2017 and a summary of its income and expenditure for the year to 31 March 2017. Members were advised that the financial statements demonstrated the financial accountability and stewardship of the Council’s financial position.

After Q&A session and during subsequent debate the following points were made or clarified –

1.      A narrative would be included in the Statement to clarify the position relating to the surplus money arising from council housing revaluation;

2.      Accounts were becoming increasingly difficult to understand so it was agreed that a simplified template be produced that would enable greater clarity. The external auditor along with officer and councillor involvement would pursue this.

Resolved – that the draft Statement of Accountsbe noted.

The Committee considered a report in respect of the External Auditors (BDO) progress report for 2016/17. This updated the Audit Planning report presented to the Audit Committee on 24 March 2017. The report set out a revised assessment of the key risks identified in the previous report including an update of the estimated dates for completion of the Audit of the financial statements.

Resolved – that the External Audit update be noted.

The Committee considered a report regarding the Committee’s activities during the year and its oversight of the Assurance and Risk Management, and Governance Frameworks within which the Council operated.

During consideration of this report, attention focussed on the issue of how the committee added value and independent members for the Audit Committee, particularly the proposal to have an independent member as Chair of the Audit Committee. Members were informed that the process for appointments had been suspended pending the outcome of the review of the Council’s Constitutionwhich would be submitted to the full Council meeting on 18 July. Members of the Audit Committee expressed their desire to comment on this and asked that sufficient time be allowed for their views to be included.

The Deputy Monitoring Officer and Section 151 officer agreed to circulate relevant information to members to enable their full participation.

Resolved – that, subject to the above, the Audit Committee Annual report 2016/17 be approved.