Agenda and draft minutes

Virtual Meeting, Governance Committee - Tuesday, 16th June, 2020 6.00 pm

Venue: Microsoft Teams

Contact: Coral Astbury, Democratic and Member Services Officer  Email: castbury@southribble.gov.uk

Media

Items
No. Item

28.

Apologies for absence

Minutes:

There were none.

29.

Declarations of Interest

Members are requested to indicate at this stage in the proceedings any items on the agenda in which they intend to declare an interest. Members are reminded that if the interest is a Disclosable Pecuniary Interest (as defined in the Members’ Code of Conduct) they must leave the room for the whole of that item. If the interest is not a Disclosable Pecuniary Interest, but is such that a member of the public could reasonably regard it as being so significant that it is likely that it would prejudice their judgment of the public interest (as explained in the Code of Conduct) then they may make representations, but then must leave the meeting for the remainder of the item.

 

Minutes:

There were none.

30.

Minutes of meeting Tuesday, 28 January 2020 of Governance Committee pdf icon PDF 211 KB

Minutes:

The minutes of the last meeting held on Tuesday, 28 January 2020 were agreed.

31.

Suspension of Standing Order 33

Members are asked to approve the suspension of Standing Order 33.

 

33. Participation by the Public at Meetings of Cabinet, Committees and  Sub Committees

33.1 Members of the Public may ask questions and make statements or comments during Cabinet, Scrutiny, and Governance meetings which are relevant to items on the agenda. Special rules apply to Planning Committee (see rule 34)

33.2 Members of the Public will normally only be allowed to speak after elected members have been given the opportunity to do so, but this is at the discretion of the Chairman. Questions, comments or statements which, in the opinion of the Chairman, are inappropriate may be disallowed.

33.3 Individual members of the public will be restricted to speaking for a total of five minutes during the whole meeting.

Minutes:

Members were asked to approve the suspension of standing order number 33 in the Council’s constitution relating to public participation due to the current restrictions in place due to the COVID-19 pandemic.

 

RESOLVED:  (Unanimously)

 

That standing order number 33 of the Council’s constitution be suspended for the duration of the meeting.

32.

Draft Annual Governance Statement 2018/2019 and 2019/2020 pdf icon PDF 324 KB

Report of the Deputy Chief Executive to follow.

Additional documents:

Minutes:

The Director of Governance/Monitoring Officer presented the draft Annual Governance Statement covering the financial years 2018/2019 and 2019/2020.

The Council is required to ensure it has in place a sound system of governance, that it regularly reviews the effectiveness of that system and that it continuously seeks to achieve best value in service delivery.  As part of that, the Council is required to publish an Annual Governance Statement.  The Annual Governance Statement is developed alongside the Statement of Accounts but assesses the governance framework for the whole council and all of its activities.  The form of the Annual Governance Statement and approach taken to its development is based on guidance produced by CIPFA and SOLACE.

The Annual Governance Statement for 2018/2019 was not signed off as significant governance failings that predated the submission of the Annual Governance Committee in May 2019 were identified.  As a result, it was clear that the statements within the Annual Governance Statement as presented were incorrect and did not accurately reflect the position of the Council as regards the maintenance of and compliance with a robust governance framework.  Following discussions with the Council’s external auditor and because the Annual Governance Statement is supposed to reflect the point at which it is agreed, the statement covers the 2018/2019 and 2019/2020 financial years.

The Director of Governance/Monitoring Officer took the meeting through the five key sections of the Annual Governance Statement:

u  Section one – the Council’s responsibility in producing an annual governance statement

u  Section two – the purpose of the annual governance statement

u  Section three – the governance statement and how the Council complies with its local code

u  Section four – how the Council reviews the effectiveness of the governance framework

u  Section five – the steps that have been taken to test and enhance the Council’s governance framework and the actions needing to be taken in the coming period

A number of significant governance failings were identified and follow the statutory section 24 report issued by the external auditors in 2018.  The key issues were grouped around the themes of:  leadership, culture, process and monitoring and review.

The Director of Governance/Monitoring Officer highlighted the importance of learning and implementing the remaining actions to embed effective governance across the Council.

The external auditor reported that their audit work would be ongoing over the summer period.

The Leader of the Council commented on the disappointing Annual Governance Statement and pattern of behaviour in failing to follow governance procedures.  The Leader provided assurance that since 2019 there had been a change in culture and there was now full compliance and transparency.

Committee Members raised the following queries with regards the report:

u  In response to an enquiry about achieving value for money with regards the McKenzie Arms site project, the Committee was advised that Members had been provided with all the necessary information to make an informed judgement when making their decision on this project.  Statutory officers act as a check and balance to ensure  ...  view the full minutes text for item 32.

33.

Internal Audit Progress Report - Audit Reports with Limited Assurance Opinion pdf icon PDF 139 KB

Report of the Interim Head of Shared Assurance to follow.

 

Additional documents:

Minutes:

The Interim Head of Shared Assurance Services presented the Internal Audit Progress Report, including internal audit reports with limited assurance opinion.

It was reported that there had been 5 audit reviews where the opinion of the control environment had determined that only limited assurance could be placed on the controls in place and substantive control weaknesses existed in those areas.  The reviews with limited assurance were:

u  Environmental Health – Food Safety

u  Car Park Management and Enforcement

u  Tree Inspection and Maintenance

u  Commercial Properties Follow up

u  Shared Services – Creditors


In addition to reviews with limited assurance, a further 2 reviews in the opinion of internal audit no assurance could be placed on the effectiveness of controls in place and the extent to which risks are mitigated.  The reviews with no assurance were:

u  Procurement of Utilities and 2 other contracts

u  Health and Wellbeing Campus – review of procurement of provider and project governance arrangements.

Committee Members raised the following queries with regards the report:

u  Clarification was provided that the limited assurance provided to tree inspection and maintenance was separate to the corporate plan project of planting 110,000 trees as the audit was ensuring the necessary policies were in place to help deal with insurance claims.  The newly planted trees would be classified in line with the proposed new policy.

u  Confirmation was provided that the consultant’s report on the Asset Management Strategy concluded in May had considered all of the Council’s assets.

u  The purpose of reporting on the internal audit reports was to allow the Committee to consider and note the reports, not to debate the contents.  The reports feed into the Annual Governance Statement, which will be presented to Council and that would be the opportunity for Members debate any issues, such as the Health and Wellbeing Campus.

u  The quality assurance approach taken to ensure that internal audit reviews were rigorous and robust was explained, which includes a manager checking the evidence file, discussion with the client/service lead, presentation to the director and a final sign off. 

u  Where internal audit reviews have looked at elements where relevant officers are no longer with the Council, the evidence available has been considered.

The following two questions were received from members of the public:

Question 1

“I have just read the internal audit that has been presented at Governance meeting tonight written by Janice Bamber.  The report is very comprehensive and paints a damming state of the running of SRBC by senior management.  But the ultimate responsibility lies with the councillors who enable the poor practise and not holding senior management to account.  I cannot comprehend how much ratepayers money has been wasted by this council as it states in the report major failure to demonstrate value for money in the procurement.

I have 2 questions that I require answering:

1. How many managers have been disciplined or dismissed?

2. Why have councillors allowed this happen?”

Question 2

“On the basis of the  ...  view the full minutes text for item 33.

34.

Internal Audit - Head of Audit Annual Report pdf icon PDF 148 KB

Report of the Interim Head of Shared Assurance to follow.

Additional documents:

Minutes:

The Interim Head of Shared Assurance Services presented the Head of Internal Audit Annual report from 1 April 2019 to 31 March 2020.  The report also provided the Head of Internal Audit’s overall opinion on the adequacy and effectiveness of the Council’s framework of governance, risk and control.  

During the year 92.54% of the planned internal audit work had been completed (based on the original audit plan for 2019/2020).  Internal Audit achieved a 100% acceptance rate for its recommendations/agreed management actions relating to the reports completed and management actions agreed.

Overall the Council has a sound governance framework in place and in general has appropriate policies, rules, regulations and procedures in place.  However, there have been failings in regards to management controls, fundamental failures and weakness of internal controls and the disregarding of existing policies in some circumstances.  This has led the Interim Head of Shared Assurance Services to reach the conclusion that the internal control environment only provides limited assurance.

The external auditor confirmed that this report is one of the documents considered as part of their audit work.

Following a Committee Member enquiry about the internal audit plan for the current year, the meeting was advised that this had been delayed due to the COVID-19 pandemic.  It is envisaged that the thrust of this year’s plan would be reviewing progress with the actions from those internal audit reports with limited assurance.  A report would be provided to a future meeting of the Committee.

RESOLVED:  (Unanimously)

That the Internal Audit Annual Report 2019/2020, progress of work against the Annual Plan and Head of Internal Audit’s opinion on the adequacy and effectiveness of the Council’s framework of governance, risk and control be noted.

 

35.

Update of Closure of Accounts 2019.20 pdf icon PDF 223 KB

Report of the Deputy Director of Finance attached.

Minutes:

The Deputy Director of Finance (Section 151 Officer) presented a report updating on the closure of accounts for 2019/2020. 

The deadlines for the closure of the Council’s accounts have been amended by the Government in response to the COVID-19 pandemic.  The audited financial statements for 2019/2020 are to be published by 30 November 2020.  A meeting of the Governance Committee will be arranged prior to the 31 August 2020 to consider the draft financial statements.

It was reported that the Council was on track to deliver the financial statements in accordance with the revised timescales.

RESOLVED:  (Unanimously)

That the progress on the closure of accounts for 2019/2020 included the revised deadlines for submission of the draft accounts and sign off of the final accounts be noted.