Audit Panel - Wednesday, 30th September 2020 at 7:00pm - Lewisham Council Webcasting

Audit Panel
Wednesday, 30th September 2020 at 7:00pm 









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1 Declarations of Interest
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2 Minutes
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4 Annual Accounts Audit Report
3 Internal Audit Update
3 a) Annual Assurance Report
5 Counter Fraud Report
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6 Risk Register

1 Declarations of Interest

the Audit Panel please can you all to ensure that you're microphones muted so what we're not stirred by background noise please don't turn your microphone on unless you're asking a question had been called Isil chairs to make it clear for procedures verses a formal virtual public meeting and as such I'd expect everyone to behave themselves as we were in person meeting in the town hall but we are going to be sticking to agenda by and large but we gonna be ordered filtering the order slightly to take item 4 thirst are obviously beginning is to take a roll call we by everyone here is we don't need to do that was no apologies item 1 is declarations of interest as anyone have any interest which brings declare

2 Minutes

OK I'm seen shaking heads so he can bring forward often I can to is that we have got the minutes Sarah could you present the minutes for us formally
as the animal is taking
there are allowed to speak
An can still hear me or you dropped out
I wondered if you could give us an update on the on the progress and the internal control board has been disbanded
you'll need to change
My apologies I'm I'm not sure if that's really relevant to the minutes were looking to agree but these are the minutes as discussed and I think that it's also going to be touched on the Internal Audit report later on so we know arm I would refer back to later Alan unless anyone's got any changes in its own I know what Stevens got a variety of minor correction he wants to make and we agreed prior that he's going to send back to Sara the Clerk rather than going through all individually if unless anyone else's an issue of the minutes I'd like to raise could we please the Green them and move forward

4 Annual Accounts Audit Report

icac I'm not seeing any shaking heads so I'm going to take that has been its having been agreed for now so we are then going to move on through the agenda to item 4 which is cramped fortune's external Audit report so if you could join his place
I there
start whenever you already Paul Givan coming thank you know not all so this is it this is a practical one in the final report but we've we've set out a bit more information given the order does currently underway as you may be aware of the coronavirus the the statutory deadlines have moved significantly could to right so that the statutory deadline isn't until the 30th of November
20 20 20 but we anticipate finishing the audits significantly befallen we are through most of the work albeit not all of the work key things I just wanted to draw out first of all Members may may recall and and this is an issue for quite a while ago there were two historic objections that would be an outstanding few years which were looking at
both of those objections have now been concluded and reported to the Council in both cases there were no issues for the Council no actions for the council to taken and the objections were essentially for want of a better phrase ruled in the Council's favour in in that respect no no no no issues found with the council to take forward so we now consider those matters closed what that does mean is it when issues on it is concluded we will be able to certify his closed all of the audits that had been left open over the past four years including the coming years Audit when when when we finish later in the year and have been no objections and I received this year in respect of the Audit so far either to the audit itself similar level to the to the previous year the Council's as responded well to lockdown working we we've been we found we've been able to do everything we would need to do in a normal audit year but to do it remotely it takes longer which I think is inevitable but there's nothing we've not been able to do and the standard of assurance that we've sought to to achieve each year is is is the same this year as well so we've not know that this note there's been no impact in terms of the quality what evidence are and ultimately the quality assurance will be given you a Mutua I would it report the valuers the Council's values and also to pension funds valuers who issued their experts of issued what's is is being referred to as a material valuation uncertainty in the value of the assets as at the year end this is for at both at its that the council owns themselves and also assets that they've invested in I Saw the pension fund either as directors of property or through a pooled property funds are investment the valuation and certainty exists purely because of the uncertainty economy as at the Balance Sheet data the 31st of March was right at the front end of lockdown and it was very was a lot of uncertainty as to what what those but the the values of his assets were at that date we'd spoken me the council in the and the Kansas reflecting in their accounts the disclosures about those uncertainties and we will emphases emphasise these disclosures in our audit report when when we issue it later to put that into context it's not a qualification of the opinion it is just an emphasis of matter at the catalyst disclosing because I think it's important to draw to draw the readers attention to it and it is it is a disclosure in an emphasis which is being included in pretty much every single set of accounts in the country in every sector because of the these because of the issue affects pretty much every entity in in in NI in the UK
much of our testing is has gone well there's there's a few things where we've asked for more information one is in terms of surplus assets which are required to be revalued each year in and hadn't been through mass the council to obtain an updated valuation including the surplus assets and emissions refined in terms of of cut off where invoices hadn't been accrued into 19 20 receives after the year end but not not captured and so we just do a little bit or work there to confirm in there's no material issue
other than that the work is on track and going as planned and as I say we we anticipate finishing the Audit well ahead of the statutory deadline that's in place for for this year and the same applies to the VfM I think in both cases as well there's nothing of identified at the moment which would indicate that we'd be delivering anything other than unqualified opinions both for the the Council the pension Fund and also for the value for Money conclusion
we've included also in the progress report some additional information including some of the insights we we've had uncovered in terms of the economy they may be slightly out of date now given the we've just had some of those projections but there included for your information and if you so desire even kick the I think to to deeper into information behind us if if that's of interest happy to take any questions on on on the report or indeed any the wide work that we're doing at the moment
thank you very much for the update Paul armed to any Members have questions please if so make an effort in the chat I can call on you
I am not seeing anyone flying up better got questions I got a couple myself pole
1 BrightSource lever material valuation uncertainty you've reference arm has your work shown up any assets the Council holes which are particularly vulnerable to the uncertainty or discussing or are we in basically the same situation as anyone else
I would say
as you say in the same situation as everyone else actually I think in to some extent you in a slightly better situation and the reason I would say that is because many councils who had previously involved themselves cursing against extent investing in commercial and investment properties are now finding those are the sorts of assets which are giving the most uncertainty at the you end operational assets the incentive exists but it's not and it's not significantly unduly affected by
but by the impact in terms of rental income and so in that sense slutty slightly better I think marginally less impacted because of the commercial approach the Council had over the past year and in that respect there were no particular assets I think which had particularly worry some in terms of the valuation at the year end
I haven't heard how thank you very much we were question from Ian as well in would you like to speak
so soon he has unused just simply where the sourcing discretion for the officers that she bids as general question on the audit work on the financial statements it's just a questions to when we were going to see the financial statements saucy normally we would have seen them at this meeting but I appreciate as you say everything is moved to the right you I think I'm and without speaking on the part of officers of I believe the so there's another meeting in November way will be our final report to you and I believe you will also at that point have the final financial statements amended into the post audit state so you should see those along with our final more detailed report at the next meeting OK thank you
I thank you very much Steven do you want to come in
it was reinforcing its point I think it's good practice that an audit committee or panel actually the seeds the statements before final adoption so that they've got time for the view of the statements the accounting policies the disclosures the estimation techniques rather than everything being confessed to the end
and if we could note that for next year cycle it would be helpful
I kept on I thought David Austen's hand also popping up David do you want to come in here what data to compare me with them now and apologies that that was an oversight republish them were will make sure you open as soon as possible
and had
so I got a couple of other questions as well and falling poll on one really something I wanted to pick up out of your report so it's on page 7 of grant fortunes report Bats page 57 first of paper copies and page 59 for those on digital papers where your listing the essentially impact on accountants and order opinions something you pick up in there is the impact on reserves and financial health and the question of whether or not furs material uncertainty about being a going concern are you in any position yet to make her evaluation of that or is it still 0 Turley to say no we we've boneless going I work in respect of that both of the going concern assumption in the financial statements and also for the in terms of with the longer term financial picture for value for money
Lewisham's reserves position has always been a certain comparatively healthy compared to many and the BOA's and and an analysis year demonstrates that you remain above the above the marginally above the average in terms of level of reserves and so in that with respect combined with the actions the Council has taken in response to to to the Creamos and given that the the commercial strategy over the past few years means even marginally less exposed to some of the market risk from from the kind of EIAs we've at the moment have no concerns over the or no material concern certainly over the going concern status of the Council or the medium term financial plans in place
thank you very much my only of the question here really is weapon off you've got any input on the findings of a record review and how you think that's going to affect us here in Lewisham and a separate large year certainly so it's it's some we we input into the consultation and we've the firm as a whole welcomes the the findings from from the review pretty much supports all of them I think how it would affect you want one one of the findings was
independent member should sit on Audit Committees and clearly Lewisham has been leading the pack an injured practice for for many years by having independent members already of the calibre of individuals such as Mr. Walden and so in that sense you'd be relatively are relatively unaffected in in in in that sense the some of the recommendations include reporting to full Council to ensure that the the Council given their due and value for money conclusion is given its due prominence and I think that's that's that wouldn't necessary that doesn't devalue all of the committee that's in addition to the will of the Committee nothing and I mean in that sense would strengthen the role of the Committee within the wider Council because it's it's the Committee to through this committee that that reporting the then following discussion see within take place I think the value for Money work which is not necessarily part of Redman but certainly the spirit of Redmond links with the the new code on value for money which widens the work that we do and which also looks at
a wider scope than has been the case so far so as well as a flash resilience we already do that be a great or greater extent of economic resilience work plus great to work in terms of governance and greater work in terms of the essentially the three ease and performance of the Council on and how well it's it's using the visit you using resources in place so the be a wider scope of work and the nature of the report that you get as a committee or panel will also look difference next year compared to to what you see this year in his that as financial resilience be value for money work so I mean as a lot of stuff in there as one in terms of Audit regulation the the I think there's a general consensus that the the volume of work in terms of property plant and equipment and and pensions liabilities it the balance isn't quite right and but I think it's too soon to tell how that will go because the elements of regulation will be subsumed into the the single body which which Redmond is is recommending but I think he and I think the thing you mentioned was was fees and and I think that seems to be a general reflection and a recognition across the sector that feet fees fees and are now no longer commensurate with the volume of risk that's within councils particularly councils the size of Lewisham and the volume of work needed under the regulate the regulatory approach that that we currently operating under so I think that those are the key things adding but and and our general view it as a firm as we welcome the findings welcomes the nature of the funding I mean welcomed a holistic approach that was taken because it wasn't just looking at ordered it wasn't just looking at full council financing it wasn't just looking at governance but it was being an altogether to get that rounded profile I think for the importance of the stewardship of public funds in the importance of them being properly held to account at all the right levels
OK thank you very much Paul on a less any other questions I can let you get off the evening I'm not seeing any of questions but just double checking now in that case thank you very much becoming this evening and I look forward to seeing you next time Samuel thank you very much

3 Internal Audit Update

OK thank you very much everyone so we're going to move on to our next like now which is Item free which is the Internal Audit update on I think David starting off on this one is Catherine website not sure who is so whichever officer forced again you'll firm current EU I start and this is in two parts you got two reports one is a forward looking part and current invite Christine to join and talk to that and the other part is the backward looking summary of of last year which has been Koolaee as as we know
but actually both are impacted by both the COVID work we've been doing o over the last few months so if I can I'll ask Christine to outline how we booked plan together on what's in it and what we're covering and what we're not and then I'll come back and took the initial report Sundance I just also to say Christina's are Interim Head of Internal Audit's at one of the Panel's challenges has been the the dual role I was carrying with management responsibilities and as Head of Internal Audit which was not in line with best practice and much as we tried to recruit we'd failed so we've got Christine on circumvent from one of the one of the firm's at present and she's here with us through to 2 March at present while we we try again when markets settled down and recruit to that owes permanently
Christine with the introduction over to you for the planning
thank you thank you David and I hope you can all hear me my broadband isn't very good but an hopefully I'll get through this
without too much problem so this report really is to pull together an Internal Audit Plan which will be delivered join through the rest of 20 21 and the reports is at Annex appendix worn on page 13 of your papers it provides some detail as to how the plan was put together which is in accordance with best practice using a risk based approach so we are reviewed the risk registers of the council and also consulted with a senior management's and did and risk assessment as well of the key risk areas and the order just to summarise then the the plan is it going to deliver 504 audit days it which includes 20 days of a follow-up work and the remainder on corporates audits and the the plan is 39 audits which cover all the Departments are do actress and that summarised in the first chart in the
in the appendix so we'll see the proportion of the plan which is going to be delivered for each of the Directorates we've already allocated the majority of the audits across the remainder of the year and we have sufficient resource in the team to deliver those audits with the support of some bought-in services from both Peter B C and Azaz for specialist audits and so the detail of the Audit Plan is in the first annex and a little bit about how the plan will be delivered is provided it are summarised in the Audit Charter at which we are required by the Standards to publish and have approved and so I'm happy to take any questions if anybody's got any questions on the proposals show so courageous and two two things to Christine adduction
1 a partial response target those opening question about the internal control and I'll come on to that more fully and maybe get under shown to book
but this plan was circulated to the Executive Management Team to cover off the directorates view so we are keeping that Luke going and the other was just to touch on the reduced number of days probably easier to explain now what happened to the Internal Audit service through covert because it reads across both reports and apologies for not covering it in my introduction but clearly the 540 days is a reduction and what we would normally expect to do any year we'd normally be nearer 9 52 thousand depending on how much contract where we weren't we were using the the big loss for this but this year will be the school's audits because of the disruption they're going through it was felt that that wouldn't be helpful to add this on and also there isn't a specified time frame within which we have to do their audits so we've paused that for this year only and then some of the wider work we would have wanted to do outside of the core financial which is where we are primarily focused and a couple of areas of key rest light I T and contracts so the reason it's reduced isn't is not because we've got a smaller team or a smaller budget it's because simply and we forewarn this at our meeting with you in February from the middle of March through until the middle of June the team was fully redeployed effectively on other critical services work through the Covid response and we paused because the work when we came back we then of course had to finish last year's work which is what we've done in those in the report that follows and say only really means we've been able to pick up from September the work that will happen in full to this financial year so rather than trying plan of full year and hold it over and have a delay with bringing you this reduced condense plan to get us through to April next year and hopefully will be back on a more routine cycle but just to explain that that's not a cut in budget or anything it's just the nature of the way the service has been disrupted
I thank you very much for your time Christine and David on just any Members have questions I think I saw Stephen earlier on is that still the case or
the Simon Stevens
hello and thank you for the report and I think I've got three questions but firstly was about and taking no scored it
clearly recognised as being significant disruption to delivery but I wondered walks the assessed risk in the school sector was and how that had been taken into account in deciding not to undertake any scored it's in this period
could you it was all three had become individually Ahmad are doing all three me OK employee clearly and you had a five month period effectively
you've said where you were doing very little work when testing is undertaken to audit work later in the year does that we'll let cover that period as well and finally
moving to the appendix of the detailed plan I'm
I very much welcome the linked to the individual risks our ever a lot of the the views were linked to one risk which is the adequacy of an entire internal control I wondered if there's some available more granular explanation of exactly why items were included
you are in this year rather than not included
those are my three questions
and there are Artek the the first one the school risk and we we considered the risk was lower because individual schools have not been operating as normal over the the recent period so we wanted to give them an opportunity to reset their processes in in the new circumstances and then
sort of go back to them in the new in the new financial year
in addition they are under a lot of pressure at the moment in terms of new ways of working at so we felt that it was fair to get them a bit of a break plus we are doing some theme thematic reviews on schools for example the review of school websites will cover schools to a certain extent so we will be looking at school risk the second question was sorry on
I don't ramp
PFI Reserves about the gaps in with the periods covered
we testing cover back to the period when you weren't undertaking work
yeah man yes yes we will be because the Audit
the Audit will relate to 20 20 21
which began at the beginning of April so the Audit sampling will cover the period when we weren't actually doing any audit work at the time so it will cover the whole financial year and then you you asked about the choice of audits being linked to risks yes the lot of them are linked to the the contract internal controls issues
but we have got something in the Audit Plan that links to every strategic risk so some have got more things link to them than others but other things that influenced what went into the plan where were our knowledge of where the risk areas are and and what we have covered in recent years
hopefully that answers your question
I am thank you very much we got a question from Arnaby and venomous Carol but she's having small problems right now have you managed to get your audio working Carole or you still muted
now a guy so I can't hear from Nicole the next question if you can keep trying to get that working if you can't get it to work I'm just take your message in the chat box I can read it out for the public record for you and we go to Councillor Davis next when Stoke
thank you Chair I had a couple of questions and this is my first time on the Audit puddles apologies if their basic I see what it because this was already been covered by Stephen and related Leeds about I wanted to understand how the timelines are identified for the various audits because I noticed that some of them I thought it might be by kind of prioritisation is in terms of the cat that the colour-coding but some of them were kind of relates I just be interested in in in understanding how how they prioritise in terms of time I'm in my other question or worse under the AGM Annual Assurance report paragraphs what I have to point 13 and 2 point 15 is this the right time to ask questions about the short report here knows about can out of every section so you have got that gay leave that for not only for later than
in terms of the timelines Ditchburn did you mean the timing of the audits in the plan or whether we put the audits in the plan in the first place no the timings are noted in the Yak the format
so we will make a decision as to when to deliver the audits based on our conversations with the the heads of service or you know the manager's because we need to make sure that we're going into the services are time that's convenient for them or not inconvenient for them anyway plus we try to deliver the more financial audits towards the end of the year when we've got a almost a year's worth of transactions to test but it will also be we try to choose the more significant risk areas and you audit then first
wherever possible
OK thank you very much Carol you having any better luck with your audio Goetre you still unable to speak
now I can I'm in that case we go to cancel whole bed next question Councillor Hall who thank you Chair and just looking at the cancelled its and looking at the programme that you produced I just wondered if you could him elaborated little bit on and it's receipted VAT was deferred rogue landlords was cancelled schools Finance Teams deferred Lucian Gateway was cancelled and tendering and procuring a contract and supplier whose deferred a planning control framework was Council these particular ones are quite big substantial areas of council
work and I just obviously didn't see them reflected in you've explained partly why are they not reflected in the new order plan so I suppose I'm seeking an assurance that these areas will be returned to at some point
I know you are
Jana flow as they
the BHA the order is in the plan for a 20 21 the Thermos an audit of Lewisham buildings
also in the plan it might have been called something different but what we have done is a re evaluation of the risk so if if we have still evaluated the risks as being high than then it will feature in the Audit Plan
I'm a number of the audits were IT audits we are doing an IT needs assessment initially and and then we will I identify whatever IT related audits are required are coming out of that assessment
echo thank you very much crostini satisfied Alan or to answer your questions but it appears to the Christian aka arm so I've got the questions which have been sent through by Carol so Mariam out for the record to question 1 is whether there's any potential conflicts of interest with what the auditors have been working on temporarily when they were redeployed for Covid period
the second question is whether a second live on the second wave of Covid is likely to impact the new Audit timetable and the third question is be scope of debt recovery budget marketing the R and council tax audits could all be on included in some do of Covid impact I'm not entirely sure what Carol means about that third question and unafraid so if you can answer the first he was Carol Colin and powerful forming
in terms of the question about and potential conflicts of interest around the work that as some of the Internal Auditors have done whilst it was the cope is erm a pandemic I don't believe there will be any conflicts of interest because of the nature of the work they were doing but if if that were possible we would ensure that those auditors were not put on any audits that related to those areas they are required to declare that before they start an order but we are aware of where there could be potential impact in terms of going forward if there is another lockdown or or pandemic lockdown situation
well we are at risk of you know inter or of not being able to deliver the plan but I am assured that that we are we are like more or less likely to be pulled off the plan the going forward the the possible impacts on us will be that are auditees will be further impacted and therefore they won't be able to give us the time that they that that that we need to deliver
thank you very much and then we've got again Carol a question about the IT audits and whether they're looking at remote access and working from home practices if that's been included in the scope of the audit I think that's the interpretation I've got correct
her up there as I said before we have to do an IT audit needs assessment first and then the remainder of the IT allocation of days will be spread across what is identified as the most high risk areas
that could well be relating to working from home but are cause put my in I can't confirm that at the moment because we haven't done that needs assessment
OK thank you very much resting on I go to question myself and it's to do with the Internal Audit Charter you've put an axe to their Section 8 starts with a statement that the Chief Audit Executive or designate will prepare a written report and distributed as appropriate arm interest exactly in how what's appropriate being determined and whether or not that's expanding to the political end of the Council for example the Cabinet Members all be relevant scrutiny chairs who are overseeing areas of working whether or not there being made aware of the findings of Internal Audit's automatically
yes that does refer to update reports to the Audit Panel and and they will include a summary of any high-risk findings that we have it will be say I mean it's as as happens now you get regular update reports on activity as it happens and we report significant findings to you in addition if you if you wished we could and and if it was appropriate we would report outside of the Committee meetings the panel meetings Burgate so RV responsible Cabinet Members made aware of the findings of these audit reports so I'm imagining vote obviously the officer relevant officers would raise them with them on occasion but do they actually get cited reports from sales be political Leeds
I'd have to defer to David on that one I'm not sure what they current practice is not automatically it not we don't send them to them but there that that their management reports and it would be for the respective Director or in their liaison meeting the cabinet member to brief them are there any specific issues or challenges her in a given area
OK thank you very much about a question from enough the intial commit yourself
this is the perfect time for this question but I was kind reflecting on this they Strien whom Carroll's very personal questions in its and a lot of the reporting we seen today he's refocus on the 31st of March herein but it could only a small impact and bass with thinking about the plan it has got me thinking
given the next meeting is actually not that far away we haven't heard much about a really kind of high level sense of how Coburn has affected the council with a little bit in coming through now in in in the possible risks and the errors more impact but it would be useful for the next meeting if we could have just just the case officer's up high level sense of what the impact has been on the Council what the financial impact has been where we think there exposures and I know there been additional funds made available for some things but but not others
and I just like that
high level sands where here to talk about rest risk is a live issue these things unfolding now and it's very easy just to end up talking about historical periods or theoretical future plans of Swansea there something it kind of the here and now sorry a slightly rambling but I can think of a better place to ask question
David thank you got an answer what of and then take that the request absolutely we can do that but at other members will be aware because of their
other activities and are going through to the independent members we have taken a number of reports boat over the infant business Panel and Tamang Hanna on both the wider Cave it activities and the financial challenges that arise from them which would be the backdrop to to what where what you're asking us to do and when we can bring you the latest version in a summary form for the next meeting barrels have made sure we send you the links to those because at that will help with some bedtime reading the the other thing to mention is
was published this yesterday for Merrick have been next we we've got a financial stabilisation able going through and that also talks an overview as to to the challenges now and looking forward for the Medium Term financial Plan which I think you may also fine relevant so after Sunday's reports on and then we can to update them if you like for the panel discussion next time
thank you that will be very helpful setting as indifferent Members we are sometimes passed at risk of being behind the curve of this on some that's of which Shim which was obviously very Blythe and relevant to you
thank you

3 a) Annual Assurance Report

thank you very much Star are not seeing any other questions here so unless someone wants to indicate by but an waving at me arm I'll say thank you very much to classical Christine that section and we'll move on to report Freehay which is fee Audit update and Annual Assurance report which I believe is David
gareth bootloader possibly with and support from Christine coup for Otley showing quite disappear but there when I was holding the Head of Internal Affairs my my reports only feels right I should introduce it the headline to it is that this year the the opinion is satisfactory which is which is a positive opinion on all fours scale and that C
a second year in a row now having previously given limited reports so the direction of travel has has been sustained and that's in the context of complying with the Internal Audit Standards as we do with the Charter you just discussed however there is a bit of a caveat to that none around the rating but around the pick point that we've already talked to which is some limitation on the work that we're able to do as you know through the year we were struggling with resourcing as we reported to you that men we were running the programme lake anyway which means that although covert any hit in March which in theory with one month of the year we were already having to plan to finish that year's work in the the early spring period so that did get hit and delayed so that the the somewhat them and a limitation of work and what that's done is ensure that we focused on finishing the core work on returning from covert
the issues the that are in the in in the report are again as we reported to you primarily it's been around having proceed clear procedures in place up to date policies and then complying with them in terms of the Head of Internal Audit role that was a challenge you given us through a year and with Christian on board we were dressed up but it wasn't formally addressed in a timing expected for last year's that's that's relevant to note in terms of the call audits and over all there are few limits this year but is on a on a reduction of the number of orders we've done so it's
it's not as comfortable as I'd like it but hopefully we will get back to to that as soon as we can in respect also of the point that Councillor Hall raises it is worth noting that the Executive Management Team made the decision to disband the Internal control board which effectively was the executive management team that meeting under an independent Chair and take that work back onto itself directly again we had discussed that during the course of last year and I'm one reason of the were one consequence for that is that is why we got the risk register with the Panel this evening so you're seeing the consequence of that decision followed through so as well as the Executive Management Team taken that on back unto themselves
it also means we bring a bit more to to you and then just to note a couple of other things are one you've touched on already which is a Redman review that does also have a consequence Internal Audit because it is asking external Audit to take more account of again Internal Audit's work so the planning discussion we've had we will need to have with them and ensure that our work
mutually reinforce his rather than duplicates
we do also need to come back to the point around the fact that this is still an audit panel and in line with good practice which again is recommended in the red review you should become a full Committee and you should have that direct which I know we've put a sort of a temporary arrangement in that gives you that access to Mayor and Cabinet and Council but put that formally in
obviously all of the constitutional changes weren't got frozen when we put the emergency process in but between now and March that's that's one of the things I know I make now back in my role and to pick up and and and get through so that's on our agenda and then finally the other bit which is relevant to the one of the tonnage that also came out from the Internal control board was the timeliness of completion of recommendations and unfortunately that has
as you can see on the update that's attached the Annual Assurance report that that sort of gone out of the window just because of the disruption has been going through the council over the last six months but I'm very conscious that that that that there is as it is a challenge and so between now and December were going to have a structure programme of work to go back round everybody second wave distractions you know depending to get back on top of that and get back to having a clear structure and approach to doing that because we were struggling any way and we really need to have a big reset on on that going forward so those the points that I draw out of it and how it is either a few questions and happy to take any question
thank you David for the presentation and report arm I marched to be questions from lots of members but before I passed it round and get a couple of things clarified arm so obviously we've got the core financial reports and two of them are all it's not been contrition opinion on spout payment for childcare providers and its war banking arm
can you clarify exactly for the committee why it wasn't possible to issue an opinion and I suppose what way it was leaning before that termination was made
I wouldn't be official but it will help from myself if for example banking it was it was looking OK but we ran out of time to complete the work rather then it was looking problematic and we couldn't gather the evidence to come for the formal conclusion so he could give us any steer on those two attended causes for the no opinion and how it was looking as well so good the reason was that we couldn't lockdown the teams to do the work with in the period that we had to do it and that's why we couldn't conclude the work that we couldn't make a judgment whether that's what that's what we're saying in respect of the Children's one as you can imagine it was because they were focused
one other external matters on the banking one that's never been a problem order in the past I don't envisage that it should be there's nothing we had changed around our banking arrangements per se and actually we've got so in Heather on the call who lead on that service and you may you may wish to ask them as well for their perspective but there was some sickness in the team and and over the period and that meant that we were just simply unable despite a number of attempts to take to get in and do the work with the added complexity of needing to be able to remotely it just couldn't join up so that with the Children's 1 and Selwyn yeah I think as saying he can have a bit more common don't come in sound and clarify force
yes thank you very much Chair just to comment upon the year only on backing one as Davies rightly said I missed this would not normally can't produce any problems for us atoll in terms of our and sums of an Internal Audit we had a a number of issues going on obviously they you know the critical response was a big one for us the team were heavily involved in providing a number of refunds for services which residents had paid for so that was quite on a change from the normal colour volume of activity also at the same time as lower actually undergoing a major upgrade to our income system are insistent and a key member the team's heavily involved in aspects of it as well which basically gave us a bit less capacity than we otherwise ward and we did have a member of a of the team as well another key member of the team who is or has been come suffering from out from a long term illness so you know the whole combinations really kind recalls the an issue for us we have said to the in internal attain we'd like that you know that that already done as soon as is practically possible you know to again rear sure in other Members and members of the panel banks jam
thank you so in arm I'm seeing a lot of questions coming in song in the start we've Stephen and I'm in a go to so faith
the gates are simply short question given the inability to complete work on son key financial systems how were you satisfied that you were able to give a satisfactory opinion Ohale
it in part because of the caveats out I gave him my introduction and in parks further even on the banking one that
operationally we were aware that there had been a breakdown in the service as such there had been no obvious challenges and as you know you heard from the auditors they've not found anything in their sampling either and we were doing that can currently
but primarily it comes with a caution that the put their opinion has to allow for the fact that work wasn't completed so it's satisfactory with the caveat
only satisfied about Stephen
it's some it seems a little bit strange to me that if there is that caveat it's not expressed actually in the formal thing
OK we can I make sure that the minute and I make sure that it reflected in any future version of the report
I concur absolutely make sure that's minuted then Sarah and Sophie do you want to come in thank you Chair so my first question for those in relation to tracking of manages progress and follow up and which is paragraph 2 point 15 pic of the report I don't really have a benchmark but seemed like 54 percent not being implemented in almost 20 percent not action by the right time is quite low and so I just wondered a how much covert how much impact coded had on that and the what actions were being taken to improve performance in that area and future and then my second question is really succumbed it's
like highlighting the point that Carroll made in in the chat which is the I found kind of table 3 page 37 that Miss charging quite worrying and yet it would be really helpful to I don't know what the usual practice is in terms of Colin calling on management to kind of explain what progress is being made in particular because it seems like this is the second year of it that those comments have been made so I just be
I am grateful for the you know answer on that one thank you
thank you on the recommendation point that that was the point I was covering in my introduction is that that that fallen off and we need to completely reset that now that position
I don't suspect is the true position in the business but I can't say that because we start chasing and and following up on the reminders during the period of the team was redeployed said basic basically you know work paused and we haven't had time in September 2 preparing this report to get back on top of that are having finished last year's work so that's what I'm saying hands up to that that an urgent and priority issue for the Council and for the Internal Audit Service to get right for next time and give you a fuller report on your your point about recommendations reoccurring that's why we flagged them because it's concerning us if they're not addressed
in response to the first audit particularly around its around a core financial which which this is one your asking about and what we would normally do is invite the manager to the next meeting to explain how come about and what they were doing the next meeting is primarily gonna me on the external audit and the accounts but happy to put a slot in there and invite the relevant manager to come and explain an answer your your question
and carols as to what had wandered on about it so it doesn't reoccur again sat yet thank you David on that was something I was going to raise myself actually arm not just in relation to battle it really arm into several arm now we've now got to limited opinion on its in a row for both plaque ambitions residential Kindle the PSNI care and for the accounts Receivable we also got the no opinion on the payment for childcare providers and these are all aligning with areas of council operations where we know that there are real problems with managing standing and making sure that procedures are being followed so arm
there was a question I suppose about whether we will have time at the next meeting but I think all three of those audits we are going to need more detail as a panel to be satisfied simply be for the fact that we've got no recurring limited assurance opinions on key financial systems you said Ltd what next I'm got the external report from Grant fought in the accounts which is quite substantial arm
so I think we'll have to discuss it later on whether or not we can do it in the same meeting or whether it's going to have to be adding another meeting on the agenda but I I would personally want the responsible officers for those service areas with full reports to be coming to the Panel so that we can examine them in detail and find out why these problems are reoccurring why we are seeing the same you know
errors showing up in audit reports now for the second year in a row and why really this is happening and because it simply you know we know that we have problems in both service areas around finance and its second year in a row I would not be surprised if we see the same issue showing up again in the 20 20 21 Audit as well when we come round about next year based upon what I already know about performance
Joan I think I saw you with questions as well you want to come in at NUS not crest is shrilly comment and it was on the table 3 going back to the the pace those seven put 38 the comments on the banking and on the payments childcare providers and I completely understand what the officers of just told us but I don't think that's kind of reflected in the wording and the document when I read that I thought my goodness it looks like someone's does not mean a been prepared to provide the information so I am I just but just put that forward as an observation
I thank you Dr arm don't you to come back flow of overflow to accept that I mean that but the short-form for the fact that we had a number of other challenges around people be able to connect but yet you appointed with a bit more involved
I did also say just on your point about the limited questions about the accounts Pebble which wasn't but there was a question from Carál to do was to pick that up with while about the delegation rules apologies I met accounts Receivable David I focused so there was another question in the chat which was around
how can a paper be authorised without the authority and in the current world and the reason for that is the authorisation was given within a feeder system not not in the core financial systems as not a it's not a fault within the front the core the Oracle system as such it it and that's the bit that we have to make sure as the delegations as they flow from the scheme's delegation and financial controls into Oracle also than transparency operational practices in the theatre systems and that's where something is broken down and that that's how that came about and yes the point the cows making the delegation was made to be so start quickly as is absolutely right and we're about to revisit
the schemes of delegation to bring back to Council partly to address things like this but also because we restructured some of the directorate services and we need to make sure that all the delegations line-up effectively and said that work is in hand I thank you David armed numbers have any more questions
I'm seeing Council whole Angel to come in yeah you soon each really I think as you built into the detail of these reports it does link to the original question about the Internal controlled and having sufficient time and training as you've already I identified for the Panel because it you know the last minutes of the Internal control board and a previous comments that we received a do mention the fact that there is there there is a there is a sort of a problem with implementation of audit recommendations and this has been continuing for quite some time am and I welcome the fact that we are going to bring the managers are to the Panel and to account as I did when I chaired the panel and I can tell you is not necessarily an easy experience but I don't know whether we've got the the the the time are allocated and the capacity to do it to that level and I admire your I admire your confidence in us in that and also the fact that we probably do need to review our terms of reference in order to to be able to prioritise the work that we're not asked to do
On so yes
good then they forgot about recognises the reason they're out of place this time is slightly different but nonetheless it's it's it's the same issue and I can't say for sure it's not that because management had been implementing them had invited almost certainly because in some respects they haven't because of the way the Council's been focusing on other priorities over the last six months and then in terms of the terms of reference I think that's what I said in mind reduction one of the outstanding actions that we I've not managed to push through not least because Council wasn't meeting in the normal way is to take through the revised turned the referred to make this a committee and Annie's go through the constitutional working party on the council to be adopted and I'm hoping that we can do that before the end of this financial year so that it all being well we can start next year as a more normal and afresh year
I thank thank you I just as I do that this might be the sound a little better the I told you so but that's exactly what I suggested in the first year
the and it's been borne out by Redman not least if you look at some recommendations that all of that all of that debate that has been going on for the last two or three years it is culminating now not just illusion but more widely right
to give it to give us some credit we've been ahead of a lot of the Redmond things like having independent ended on the on the on the Committee and to ensure that we've got relevant expertise to support them the council members in this worker and another things so and we have been doing something right but there's always errors to Ingrebourne and one-offs in a thoughtful we get obviously have that his changes agreed on elsewhere in the Council before Christmas it simply but there we haven't been able to make them in terms of changing the terms of reference before Vij in Newman of CIL yet because the Crown virus obviously affected everything I'm I'm not seeing any other questions from them as on this section of the paper's so all I'd like to make sure we get down properly action I suppose agreed as an action is that we are going to have I think it needs to be a proper report on what's going on here in
a number of financial audits number one free and fought
so using the numbering in table 2 here
David can you give us an opinion on whether or not there would be scope within the next scheduled meeting to cover that with the relevant officers responsible FO service areas order would need to be in a separate meeting
Will both and Wotton Pool said this evening if there are no financial issues with the accounts and we send them round to you now to you the chance to read them if you're happy to put any queries or questions you may of in August and particularly dressing as to the independence prior to that if we can answer anything prior we will that will clear the decks to allow more time if if it happens the pool
raises something that takes up more time will then the until loader you'll have the paper if the officers had to sit and wait and then come back well that's what we'll do but I would envisage we can we can make it make it work in one one session because we've we've got the we've got the external Audit report with the full accounts and don't cut anything I've scheduled for that meeting but I'm aware of as we don't have a quarterly updates in additional meeting
so OK

5 Counter Fraud Report

were short paper with with with executive summaries and and the progress on the recommendations of data by the that the officers and no Tilton I care so thank you very much Dave event that's agreed as an action for the next meeting at herself we can go on then to the next item report so that's agenda item number 5 which is be risk Red Stripe and his the counter-fraud support
sorry so your queries of her with me again earn so this is the regular annual report we used to call me but you agree that we could do it annually on the current full work and we've been doing nothing has materially changed in the way we undertake that work or the areas that we focus on it helping HR with the
employment practices and any staffing matters whistle blowing grievances and require investigation and then we do
a significant amount of work on the housing agenda not just on our own but also with our ALMO Lewisham homes and then finally we pick up on the special investigations other work as an as and when it comes about including the more regular areas such as Blue badge because we do a number of data-matching activities with central government through the national fraud initiative I'm so that work is ongoing and happy to take any questions
I thank you David answering questions from Council ice Susan
thank you very much and thank you very much this report David it makes some some very interesting reading and I really or it might sound a bit sad but I enjoyed reading it thank you first of all I wanted to say obviously a lot of work goes into this so I'm very grateful wonder from I think older councillors should be grateful for the amount of money that's been saved in the long I wanted to ask you earn particularly about the blue badge misuse where your in paragraph 4 point full and we were talking about them because of the penalties imposed by cult some very weak it doesn't encourage future prosecutions that's not going to preclude future prosecutions is it because of they cooked been weak
Will the course General is to close at the moment which is one of the challenging account perceivable side and not not least an and how we've had to be sensitive around some of the debt collection work than we would normally have been running her recently
prosecution isn't where we tend to go with a blue badges with we'd be tend to prefer to buy them
evidently wrong and to withdraw them and and and and and get out penalty notices which we can do with their core in the use of as opposed to trying to formally at them prosecuted so it's more about taking them out of circulation and issuing penalty notices where we can so where we get regular reports of them being abused he we team up with the parking team I think and her that way thank you know I'd I do appreciate a concert close so Usher to said perhaps what they reopen no I'm very glad to see that use feedstocks
the other thing was
the amount of social our social housing that's been recovered is is really good and I like the fact that there is a lot of data sharing and I was going to congratulate you on
the references in 5 comma 2 and 5 point 3 on what's been recovered so
I was aware of the issue with the Lewisham homes employees as a notion homes board member and we will little surprise these people residing disappeared so I'm thank you for your vigilance with this thank you thank you
thank you gave a dumb to follow up on those returns as to 5 point 2 and 5 point 3 the are selling housing epic investigations do we have numbers in terms of how many properties we recovered for subletting
I don't have them to hand I will get an we're OK thank you very much and do any of the Members have questions in this section
Carol Morley and one about data-matching around business and tragus arm as it was yeah undeclared business interest data matching with that being used
I further you forgot businesses unable to respect her one
internally we also have a Register of interests and declarations of interest that we have to complete handily and whenever we doing any procurement in addition to the pre-employment checks we also ensure that those opening tenders and sure that nobody in their valuation has got any connection to to to bidders the other thing that we've been doing a lot of this year particularly with the covert money in the business community is running a number of she diligence checks on anyone would being given grounds to or discretions where you know business rates have been reduced and things like that so there was a particular regime that's come in and in addition to reporting on the monies paid out where an owl so monthly on a monthly basis reporting on the checks we've done using some data-matching tool of the wonder term
the Department recommends is consistently and we've been doing that on top of having a regular credit checks that we have through Equifax so we we we do a number of these things and we do match data and on within PFI work
and then three of the the the question about the increase in the budget would affect them
the budget has been around the early 300 thousand pounds but it came down because it was offset with a chunk of income that we recovered through recall case and that's why we spent last it wasn't the budget itself changed it was just funded differently so that that that's how that came about
thank you very much David arm nothing from couch we got some tree is whether this possibility to get more detail about the proceeds of Crime of health reason future as it's not really covered in that much high level information here candour we do report when they come out but we are we probably do one every two or three years we don't we no longer have the police officers to conduct we had one financial investigator who has the qualifications to do the proceeds of Crime work equally we don't have the legal capacity in our own internal services to do the prosecution so
unless there's a real case where the national outrage and we need the money back we we don't do so many of the proceeds of crime

6 Risk Register

work these days per web where we do manage on its reported I thank you very much so I'm not seeing any more questions on SME wants to raise their hand now army wonder item 6 so no escape so I'm agenda item 6 and bat speed Risk Management update so please feel free to start their you're thought of it already so to me for the SERC as the first time we've had also be good to hear from you what what what you make of it and what what you need from it this is the report as we take it to exact a motion team we we know we highlight what to moving we do horizons can forward his in the pestle analysis we track whether slippage on some of the mitigating actions that have been identified in terms of the overall strategy the corporate or strategic risk register
which is the one you've got here is built from the service plans which have their own western with they then and am are greater Director Risk Register which the exact director's control for each that are veterans and then we we do it the cut across which is this one for that that the whole Council we don't look to capture rest things that we don't controls they're not trying to sort them anticipate
I think I will ever be a political with a big P or where any of the other things that may come when these are the things that we can can influence at that's what that's the nature there is we're looking to which is why they often feel corporate in terms of corporate systems related and then the last thing to say is the executive management team with the falling down of the Internal control Board have asked that we look again at risk management reporting
at this level over and over the coming months and bring them some options to see how we might do it differently in that fits with the wider change agenda and that the Chief Executive is is is launching around the cultural change bees a change network peace and basically the accountability in grip agenda that that that that is being driven so there will likely be changes to the to this report is to so your your views and comments now I can helpfully taken to that process as well
OK thank you David on questions
so I'm not seeing anyone indicating currently on going questions on this section on so I was able to couple so we've got the deterioration in which five A 1 that's obviously entirely expected bearing in mind the broader financial situation and I'm aware of some of the detail about what's being done to manage it due to obviously discussions and public accounts Committee and Oswin Our scrutiny itself but I think to the benefit of the Independent Members it might be helpful if you could go into some detail about that David
the Member for his own come in question around view was the impact of Coburn on the phone account the council finances
and I can remember my introduction to the stabilisation report Minister associate facing fortunes challenges at the moment we've got some services that are persistently overspending and and that's a deep deep challenge that we've been working on for a couple of years now and even where we're growing budgets near the it seemed near the scene managed to grow faster than we can do that so there's work going on in that space clearly we've got the impact of Covid and the recovery which is taking longer
we've we've also got the wider economic uncertainty in the Borough particularly through employment and businesses and how that may impact us and are you one employment in terms of those who may be entitled to benefits and we have to pay an and budget and especially those in need that we have to support and also in terms of the businesses if they start trading and then start paying business rates and we lose some of that money as well so there's that aspect in terms of the economy and and you had into that the Brexit peace as well I suppose and the fourth one is combination of those tremendous uncertainty which is making our forward planning very tricky at the minute because the government is holding off making any commitments while it works out
in what it what it can afford and what it wants to prioritise spend on so we still don't have a settlement for next year we still have no indication you know what what regime will be following so those are all the big financial context challenges to that's why it should be read on that basis and then to the specifics the the challenge around covert broadly split equally we reckon this year will lose at the moment about 60 million pounds and when I say lose I mean it's going to cost us or will not collect
and actually the balance of that is slightly more towards income lost rather than costs are expended
we retain a monthly return on this we're reporting on it regularly to date we've been given 20 just under 20 21 million pounds from the government we've been given some other specific grants with particular activities like track and trace testing and infection control in homes and p p in the like we've also been promised and we're doing a return to they actually around some compensation for loss of income not our commercial risk but are parking in common and normal traded activities which have been reasonable thing for the council to to rely on and there are still discussions on going around the collection fund and how that will be treated for business rates and council tax upshot of all of that we think it's gonna hit the reserves probably up to about 20 million pounds and terms of a global impact and that you know is are general and earmarked reserve and then we've got the future challenge because one with the income pressure the recovery taking longer and to taking a view that government is unlikely to prioritise local government services over some of his other challenges such as health or police or education you know we can expect further cuts and so were having to prepare for that now as well and in that context that that's why we have a redress on on money
thank you David on the back explain everything satisfactory Firth of independent is Ian Stephen Carroll of question from Alan so Councillor whole shortcoming and thank you Chair and with all those attaches ahead and them at the knee to restructure and transform our services and when I looked at the risk for three A1 not constructive employee relations I can't see the colour of believe it might be Amber but it says it's the same is that realistic
bearing in mind with it's a very highly unionised her organisation
well I think at the moment currently numerous that it should be green or realistic it might be right had put with it and I think our experience of managing change to date and this includes the last 10 years when I think there have been some years you know when we've been knocking the 30 million pounds
level of cuts and significant numbers of staff redundancies
whether that was in year when we did it through a voluntary scheme were years when we did it through restructures and actually the bigger years were restructures we have always managed to through yogurt the doctrine can talk to Committees engage appropriately with all unions and brief them in advance and work through no of course had been specific issues some of those and they've been worked through but
we have to date not had anything by way of I suppose a breakdown in industrial relations if that old language for it that has led to a financial reputational other in disruption to service that would make it a red risk and in the way we categorise or in the strategy or see some of the guidance around how we rate the likely had an impact and to go round we be talking Yeadon in the millions of lost money or lost service delivery equivalent are or national press issue from the reputational perspective and we haven't been then and yet that doesn't mean we can be complacent and we have to take it very seriously but officers and not least with the Members who lead a lot and strongly on this if not all of you do manage to keep our employee relations positive generally
thank you thank you Convener I just raise the as I received a letter from Unite today and which is unusual for a Council of any illusion
there are another matter though obviously the details of the Member and I neither and their son some contracts and other restructures going through where there there is on their ongoing discussions about land implications of of that on the workforce
thank you David Sutton talking in terms of the various Christmas with dark-haired so I'm 7 of the showing up with current are I read scores in terms of our Radfall them so two of them arm so about 22 clay 5 so for members who aren't an
you've done hasn't point of view that's failure in child safeguarding and that's also serious adult safeguarding concerns those are red and will always be read just use the nature of social care it's be of a five 1 A 1 2 A1 to A3 to Baby 2 and 5 A 1 2 already mentioned which are obviously most worrying they're red then we were observed the got the ones which
our high level and they should be we've talked previously of arm having the Panel interrogate these risks in more detail than we've got here obviously that's not something that we're going to be able to do at our next meeting just because of the ground we already have to cut out an agenda I was wondering up your professional opinion David would be in terms of which ones of these risks we as a Panel NEET most concerned about and where you think would be most helpful to get a more detailed report on what's being done to manage from down well coach recurring corroded required the report the ones your highlighting of the red red ones which is yet the replicas are significant now and their red because there are way off where we would like them to be yes you cuckoo Mirza's of those for I think you already all over the Internal control one thing that is the brief of that and of the Panel anyway so I think you and the reason is read as it is not least because some of the unit
the should we just been discussing about progress nothing made where we would expect it to be in some gaps in the Core financial it has we've does discussing your calling people ends I think we've got that one covered I think we will start the unbalanced Budget 1 cupboard because the extra load it comments on that and you know we'll give you the wider context as well
and also all the call for old most of the audience this year are going to be the core financial ones which again cover the financial controls around the budget that I think those two to a 1 5 A 01 are covered if we were going to have someone in and it might be the meeting after next and with the next level 8 I would invite Murray's the Director for IT and digital who's also got the information governance brief now who could talk to the social security information governance controls and risks and and their bed particularly and I am what information governance just because we're changing the ways we work and when we've had a couple of issues where their papers have been left with it shouldn't have been and you know we need to be really alert to that it had been passing information has now become much more of an issue everyone's aware of and we hold a lot of very sensitive data and we have to be careful with it the cyber security one comes about because of the experiences we've seen in a number of councils where they've been effectively hacked and then locked down the ransom
and it had been to Oxford happened to Redcar happened to Copeland and there have been a number of sustained foreign current foreign country attacks on councils over the last year 18 months and we have to be vigilant to that I I believe we are not least because we were engaging with the National Crime Centre early on it but and to hear a bit more on that I could invite Murray to cover cover both of those at a future meeting yes I can not be a good idea data to get a report on those risks and get married here to talk obviously not for the next meeting on just the time reasons but to the meeting afterwards fizzing with early in the new year I think as a Panel with the more assured with that part of report on that and if Murray can come in to explain the work which is being done to manage backwards down does anyone have any questions on reception
a care and not seeing the others to comment as just agreement from KAL I'll pack so I'm not seeing any other questions coming in so it looks to me like we are done for the evening unless is the Risk Management Strategy itself which the might be anything additional to comment about that or is everyone happy that I'm looking like the cabinet was happy so thank you very much for your time everyone thank you for coming David officers and members and so if we can end webcast here now arm