Agenda and minutes

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RESOLVED:  That Councillor S Everett be appointed Vice-Chair for the Municipal Year 2023/2024.

Apologies for absence were received from Councillors S Dark and D Sayers.

To approve the minutes from the Audit Committee held on 17 April 2023.

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The minutes from the meeting held on 17 April 2023 were agreed as a correct record and signed by the Chair.

Members wishing to speak pursuant to Standing Order 34 should inform the Chairman of their intention to do so and on what items they wish to be heard before a decision on that item is taken.

There were no declarations of interest.

To consider any business which, by reason of special circumstances, the Chairman proposed to accept as urgent under Section 100(b)(4)(b) of the Local Government Act 1972.

There was no urgent business.

Members wishing to speak pursuant to Standing Order 34 should inform the Chair of their intention to do so and on what items they wish to be heard before a decision on that item is taken.

There were no Councillors present under Standing Order 34.

There was no Chair’s correspondence.

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The Corporate Performance Manager provided a brief overview of the Council’s risk management framework and approach.  Members were reminded that a briefing session had been held on 4 August 2020 for the Committee which had also been recorded and available to view on Mod Gov.

In presenting the report it was explained that the Corporate Risk Register reflected the significant risks and the delivery of the Corporate Business Plan. The Committee was informed that the Corporate Risk Register was reviewed on a 4 monthly cycle.  The latest version was reviewed in May 2023.  The Corporate Performance Manager advised that during August 2023 a full review would be undertaken by the Senior Management Team.

It was noted that the new Corporate Business Plan would be finalised in late Autumn 2023 and at the same time an in-depth review of the Corporate Risk Register would be undertaken.  The Committee’s attention was drawn to the appendices attached to the report which had been developed over a number of years.  The current Committee may wish to revise these to accommodate their requirements.

The Corporate Performance Manager explained that one to one meetings had been held with Service Managers to develop the Corporate Risk Register, a composite report was then considered and moderated by the Council’s Senior Leadership Team prior to a final version being received by the Audit Committee.

With regard to the report being presented, the Corporate Performance Manager explained that there were no new risks, no deletions and no changes to the scores.

The Corporate Performance Manager explained that given the strategic nature of the risks there was a significant amount of mitigation work required to have an impact on some of the risk scores and a number of the risks were heavily influenced by external factors beyond the direct control of the local authority. It may be that the Council will see the risk scores maintained for a number of months, possibly years under the circumstances.

In conclusion, the Corporate Performance Manager explained that the updates to the risk register was for information only.

The Chair thanked the Corporate Performance Manager for the report and invited questions and comments from the Committee, a summary of which is set out below.

Councillor Bearshaw commented that the format of the risk register was difficult to read and referred to pages 39, 40 – 41 which sets out the current position for each risk, there were quite a lot risks in place for a long time, a lot of mitigation in place and wondered if the format may include the following - unmitigated, current and target score which would make it easier to see the up to date position.  Councillor Bearshaw asked if a bowtie analysis would give a picture of the current position and be easier to understand.

In response, the Corporate Performance Manager stated that the comments were useful and referred to Appendix 5 – New Risk Summary Report which  ...  view the full minutes text for item A98

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The Internal Audit Manager presented the report and explained that it summarised the work undertaken by the Internal Audit Team.

The Committee’s attention was drawn to Section 2.2 of the report and explained that the overall opinion in relation to the framework of governance, risk management and control at the Borough Council was reasonable which was a positive message.  It was highlighted that one audit on Procurement and Contract Management had resulted in a Limited assurance grade.  Five audits had received the high assurance grading of Substantial.

The Internal Audit Manager provided an overview of the work undertaken by the Internal Audit Team as set out in section 3.3 and the Follow up management actions set out in section 3.4 and Issues for inclusion in the Annual Governance Statement set out at section 3.5 of the report.

The Committee’s attention was also drawn to section 5 of the report and the performance indicators set out on page 51 and the Appendices.

The Chair thanked the Internal Audit Manager for the report and invited comments and questions from the Committee, a summary of which is set out below.

In response to a question from Councillor Bearshaw, the Internal Audit Manager confirmed that the three year programme was currently on track and provided an overview on how the annual work programme was put together and that reports would be presented during the year.  The Committee was advised that the annual work programme could be amended if required and that the main areas were covered on a three yearly basis.

In response to questions from the Chair, Councillor Ryves on the performance indicator outcomes set out at 5.2.1 – performance indicator outcomes and the percentage of Internal Audit recommendations adopted by Management was 90% and was the 10% being side stepped, the Internal Audit Manager explained that the reason for the target of 90% as a service was suggested  controlled improvements for management  The Internal Audit Manager added that on the whole, Internal Audit would want to suggest improvements to management which were  pragmatic and that management would be happy to take forward  However, it was noted that there would be an occasions when Internal Audit would be unwilling to accept a risk and the service area would be more willing to accept risk and this was the professional judgement of Internal Audit.  Members were advised that were those situations occurred any rejected recommendations would come back to the Audit Committee for discussion.

The Senior Internal Auditor explained that the result of 99.17% there were 129 recommendations in the last financial year and one recommendation was not accepted.

Following a question from Councillor de Winton on what happened if a recommendation was not accepted, the Internal Audit Manager explained that this would be discussed with the Audit Committee and advised that there were none to report in the current progress report.  However, any rejections would be highlighted to the Audit Committee  ...  view the full minutes text for item A99

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The Internal Audit Manager explained that the Committee received a six monthly update report. 

The report provided an Executive Summary which covered the period 11 November 2022 to 24 July 2023 and provided the opportunity to illustrate the work undertaken and to highlight the significant risks.  A further reported would be presented to the Committee at the November 2023 meeting.

The Committee’s attention was drawn to the following sections of the report:

•           2.1 – Significant changes to the approved Internal Audit Plan.

•           4.3 – Period covered by the report – 101 reports finalised from the 2023/2023 Internal Audit Plan and assurances given.

•           4.6 – Position Statement:  KLWN2203 Project Management Framework, KLWN2216 Climate Sustainability.

•           Appendix 1 – Progress in completing the Agreed Audit Plan.

•           Appendix 2 – Audit Report Executive Summaries 2022/23.

In conclusion, the Internal Audit Manager suggested that if the Committee wished to focus one on area it could be procurement.

The Chair, Councillor Ryves thanked the Internal Audit Manager for the report and invited comments and questions from the Committee, a summary of which is set out below.

The Internal Audit Manager responded to questions from the Chair on the position statement and advised that only the Audit Committee was aware of the position statement but if there was a suggestion for all Councillors to have access to the position statements this could be considered.

At the invitation of the Chair, the Portfolio Holder for Finance asked for clarification on what the position statement meant and what were the next steps.  The Internal Audit Manager outlined the purpose of a position statement and was used within Internal Audit as it demonstrates good practice as used elsewhere.  It was noted that deadlines were given to accepted recommendations but there was no formality for the Internal Audit Team to provide the Audit Committee with the outstanding recommendations list and added that the Internal Audit Team would need time to develop this process and come back and provide an assurance piece of work that gave assurance for that grading over the process.  In conclusion, the Internal Audit Manager explained that it was the decision of the Audit Committee if it wished to put more governance around the process.

Following a question from Councillor de Winton on the current position with audit following Covid and what may be needed to catch up, the Internal Audit Manager explained that that the approach had been changed to look at recommendations in other Councils and explained that if a concern was raised it should be considered in the work plan then adjustments could be made but added that in her opinion she was confident that a strategic approach was being taken at the Borough Council.

RESOLVED:  The Audit Committee received the Progress Report on Internal Audit Activity.

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The Internal Audit Manager explained that the report sought to provide an update on the status of all internal audit recommendations highlighting management responses where any were over the agreed deadline for completion and not yet implemented.

The Internal Audit Manager explained that this was a fairly new report for the Committee and explained that before a report was presented on high level audit recommendations not completed, but not to this degree and that the report represented an improvement and enhancement of the process.  The Audit Committee now saw everything that was significant and open at the Council.  It was explained that where Internal Audit had started to list the recommendations, there was a higher number and was now pleased to report that 83 had been closed down since the process started which represented a good improvement but needed to keep the pressure on to reduce the number further.

The Internal Audit Manager explained that relevant officers would be requested to submit evidence to the Internal Audit Team to sign off an outstanding recommendation.  The report would be presented to the Committee on a twice yearly basis, but the Internal Audit Manager added that it may need to be presented on a more regular basis but this would have a resource implication.

The Chair invited questions and comments from the Committee, a summary of which is set out below.

In response to questions from Councillor Bearshaw on resolving recommendations, the Internal Audit Manager drew the Committee’s attention to Appendix 1 – Status of Agreed Internal Audit Recommendation which could relate to software, developments in service areas, resource, etc.  It was explained that the manager’s comments provided an idea of what the delays were about. The recommendations would start a discussion for improvement and provide an enhanced control framework.

In response to a question from Councillor Devulapalli on the Service Level Agreement not being signed for Alive West Norfolk, governance, etc, the Internal Audit Manager explained that there were a number of reports and gave an example, of outstanding  recommendations were done and a different review to be carried out in a different year some were still open.  The Committee’s attention was drawn to page 101 any recommendations raised by the Internal Audit Team and details were provided on appendices relating to the 2 high, 1 medium and 3 low risks. It was noted that the low risks were not reported to the Committee.

The Chair, Councillor Ryves commented that a representative from Alive West Norfolk be invited to attend the Audit Committee.  The Internal Audit Manager suggested that the Committee tackled the older recommendations first.  Councillor de Winton added that these comments and questions should be directed to the Portfolio Holder to address the issues to resolve the recommendations.  Councillor Bearshaw concurred with the comments made by Councillor de Winton.

Following a further comment from the Chair, Councillor Ryves on the frequency the report was presented to the  ...  view the full minutes text for item A101

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The Senior Internal Audit explained that the report was aimed to provide the following in respect of the period April 2022 to March 2023 for areas such as Council Tax, Council Tax Reduction Scheme, Business Rates, Housing Waiting List, Duplicate invoices, False payments, Debtor Tracing activities and Internal Fraud where it arose:

•           Progress towards the Anti-Fraud and Anti-Corruption Key Performance Indicators assigned to the Internal Audit Department.

•           Statistical information in respect of fraud and error detection for applications and claims received by the Council deemed to have been false, incorrect, or where a relevant change in circumstances has failed to be declared resulting in a financial gain or where an error has been identified and amended.

•           Statistical information in respect of traced debts where the Internal Audit Team have been contacted for assistance.

•           Statistical information in respect of fraud and error detection for grants retrospectively identified as having been paid to customers/businesses who were not eligible.

•           Statistical information in respect of data matching activities undertaken through the National Fraud Initiative (NFI) and Norfolk Fraud Hub.

•           A look forward to 2023/24 anti-fraud and anti-corruption related activities.

The Committee’s attention was drawn to the following sections of the report:

•           Figure 1:  Fraud and Error Comparison.

•           Figure 2:  KPI Total Investigations 2022/2023

•           Figure 3:  Detailed overview of Fraud and Error detected 2022/2023.

•           Figure 4:  2022/2023 Identified Fraud/Errors.

•           Figure 5:  2022/2023 Debtor/Absconders.

•           Figure 6:  Project Return on Investment for First 3 Years.

•           Figure 7:  2022/2023 Overall Data Matching Processing Progress.

•           Section 3:  KPI – Financial Investigation Provision.

The Senior Internal Auditor outlined the joint working cases undertaken with other organisations.  

The Committee’s attention was then drawn to the following sections of the report:

•           Section 5:  Overview of Fraud/Error Detection.

•           Section 8: Comparison Data to Previous Years and other Local Authorities.

•           Section 11:  Single Person Discount Project.

•           Section 12:  Overall Data Matching Activities.

•           Section 13:  Covid-19 Business Grants.

•           Section 14:  Other Schemes.

•           Section 15:  Anti-Fraud and Anti-Corruption Culture

•           Section 16:  Projects/Future Pipeline of Activities.

The Chair thanked the Senior Internal Auditor for the report and invited questions and comments from the Committee, a summary of which is set out below.

The Senior Internal Auditor responded to questions from Councillor Jones on the different types of data matching exercises undertaken by the Council which went through the National Fraud Initiative which was Cabinet Office led and undertaken on an annual and bi-annual basis which was fed into 300 million figures nationally based on set data specifications.

Councillor Bearshaw asked if there was a reason for the increase in fraud over the last 3 years.  In response, the Senior Internal Auditor explained that compared to the 2021/2022 the results for 2022/2023 had seen a significant increase in volume detection which was largely due to the backlog of data matches which accrued during 2020/2021  ...  view the full minutes text for item A102

To discuss the start time for future Audit Committee meetings.

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The Chair invited the Committee to consider the start time of future meetings.

RESOLVED:  Future meetings of the Committee to commence at 4.30 pm.

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The Committee noted the Cabinet Forward Decisions List.

The Chair, Councillor Ryves invited the Committee to forward any items for consideration.

To note the Committee’s Work Programme.

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The Chair, Councillor Ryves invited the Committee for forward any items for consideration.

To note that the date of the next meeting of the Audit Committee will take place on 18 September 2023 in the Council Chamber, Town Hall, Saturday Market Place, King’s Lynn.  Time to be confirmed.

The next meeting of the Audit Committee will take place on 18 September 2023 at 4.30 pm in the Council Chamber, Town Hall, King’s Lynn.

To consider passing the following resolution:

“That under Section 100(A)(4) of the Local Government Act, 1972, the press and public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in paragraph 3 of Part 1 of Schedule 12A to the Act”.

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RESOLVED:  That under Section 100(A)(4) of the Local Government Act, 1972, the press and public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in paragraph 3 of Part 1 of Schedule 12A to the Act.

The Revenues and Benefits Manager presented the report and responded to questions and comments from the Committee.

RESOLVED:  The Audit Committee noted the contents of the report.