Agenda and draft minutes

Audit and Standards Committee - Monday 22nd June 2020 6.30 pm

Venue: Remote Meeting

Contact: Louise Hollingsworth Email: louise.hollingsworth@rother.gov.uk  Tel: 01424 787815

Media

Items
No. Item

AS20/1.

Election of Chairman

The Head of Paid Service to seek nominations for election of Chairman for the municipal year.  On election, Chairman of Committee to take the Chair.

 

Minutes:

RESOLVED: That Councillor A.K. Jeeawon be elected Chairman of the Committee for the ensuing municipal year.

AS20/2.

Minutes

To authorise the Chairman to sign the Minutes of the meeting of the Audit and Standards Committee held remotely on the 18 May 2020 at a later date, as a correct record of the proceedings.

Minutes:

The Chairman was authorised to sign the Minutes, at a later date, of the meeting of the Audit and Standards Committee held on 18 May 2020 as a correct record of the proceedings.

AS20/3.

Apologies for Absence

Minutes:

Apologies for absence were received from Dr Anthony Leonard, Executive Director and Mrs Sue Fellows, Independent Person.

AS20/4.

Disclosure of Interests

To receive any disclosure by Members of personal and disclosable pecuniary interests in matters on the agenda, the nature of any interest and whether the Member regards the personal interest as prejudicial under the terms of the Code of Conduct.  Members are reminded of the need to repeat their declaration immediately prior to the commencement of the item in question.

Minutes:

There were no disclosures of interest.

AS20/5.

Code of Conduct Complaints Monitoring and Other Standards Matters pdf icon PDF 127 KB

Minutes:

The Committee received the report of the Monitoring Officer (MO) which set out brief details of the Code of Conduct complaints received since the last meeting  and advised the Committee of other standards related matters that had been dealt with since the Committee’s last meeting.

 

Since the last meeting there had been four valid Code of Conduct complaints made against three Parish Councillors and one District Councillor.    The view of the Council’s Independent Persons was sought and concurred with the MO’s proposed action in each case; details of each case were provided at Appendix 1 to the report.  Two non-valid complaints against two District Councillors had also been received, one was concerning a disclosure of interest, the other a genuine case of mistaken identity.

 

It was advised that the number of complaints received compared to the previous two years (three received in each) showed an increase in complaints for 2019/20.  However, seven of those complaints had been dismissed, therefore the increase was not an indicator of poor conduct.  

 

The MO had met with all three Independent Persons (IPs) in January to undertake a case review of all the cases considered since May 2019, to look at the nature of the complaints and whether any emerging themes indicated a specific training need.  Whilst it was concluded that there were no common themes as such, it was suggested that a training session be put together for all Members on the type of complaints received and the outcomes as learning for all. It was recommended that the training session be put together at the end of the current civic year 2020/21 to enable two years’ worth of cases to have come forward and make the session more worthwhile. 

 

Members suggested and it was agreed that complaints received by neighbouring authorities be used for the proposed Member training, rather than those received by this Council.  The MO agreed to contact her counterparts in neighbouring authorities to see whether anonymised cases could be swopped for training purposes.

 

Due to the Covid-19 pandemic and the delay to the Annual Council meeting which took place on 1 June 2020, the Members’ annual review of their existing register of disclosable pecuniary and other interests had not been completed but was underway, with a deadline for responses to be received by 26 June 2020.  An audit of outstanding Parish and Town Councillors’ registers of interests was due to be undertaken and would be reported to the next meeting.

 

RESOLVED: That:

 

1)         the report be noted; and

 

2)         a training session be put together for all Members on the type of complaints received and the outcomes from neighbouring authorities, if possible, as learning for all at the end of the civic year 2020/21.

AS20/6.

Ombudsman Complaints Monitoring pdf icon PDF 127 KB

Minutes:

Members considered the report of the Executive Director that set out the details and outcome of two complaints made to the Local Government Ombudsman since the last meeting of the Committee, covering the period 14 November 2019 to 27 May 2020.  On the 26 March 2020, the Local Government and Social Care Ombudsman suspended all complaint casework due to the Covid-19 pandemic, therefore only a limited number of complaints were reported to the Committee.

 

The complaints related to two Council services, housing and planning.  One case was investigated and upheld, and the Customer Services Manager confirmed that remedial measures had been put in place where fault was found. The Ombudsman had determined in the remaining case that it would not investigate as the complaint fell outside their jurisdiction as there had been an appeal to the Planning Inspectorate. 

 

For the same period, Rother received 139 non-ombudsman complaints; 89 were non-complaints, 17 were resolved at initial stage, three were a stage one complaint, two were a stage two and 28 were reported to be currently awaiting determination/under investigation, however since publication of the report, this number had been reduced to 15.

 

Rother had also decided to temporarily suspend all complaint investigations where there was no risk to public health or safety, following the Covid-19 pandemic and the Ombudsman’s announcement, whilst departments adjusted to a new way of working.  This was the reason why there were 28 complaints awaiting determination.  The Council commenced a review of all outstanding complaints from 1 June 2020 to prioritise those that had been waiting the longest.  The response time for new complaints had also been temporarily changed to 40 working days to reduce pressure on departments and allow officers more time to conduct investigations.

 

Members requested and it was agreed that in future complaints monitoring reports, further details would be provided on the trends and outcomes of non-ombudsman complaints.

 

RESOLVED: That the report be noted.

AS20/7.

Member Complaints - Public Interest Test pdf icon PDF 134 KB

Minutes:

The Committee received the report of the Monitoring Officer (MO) which set out the results of research undertaken with other local authorities and Hoey Ainscough Associates Limited (the recognised national experts on local government conduct issues), into local authorities’ public interest tests, to see whether this aspect of the Council’s complaint processes / documentation could be improved.

 

The research with neighbouring authorities showed that the public interest test was incorporated within the general arrangements’ documents, as with this Council’s, and were broadly the same; there were no separate clear public interest tests. The public interest tests tended to be built around factors which were set out in guidance produced by the then-Standards Board for England, to help standards committees make an initial assessment.  These were in the form of questions to be asked and lines to take should a complaint be rejected on those grounds.

 

An assessment criteria for complaints against councillors provided by Hoey Ainscough Associates Limited from Gateshead Council was appended to the report, which appeared to reflect the Standards Board old criteria.  Members  supported  the development of a similar detailed public interest test for Rother District Council and agreed that delegated authority be granted to the MO, in consultation with the Chairman of the Committee and the Independent Persons (IPs), to devise a revised public interest test to be incorporated into the Council’s complaints documents.  This would enable the amendment to be made as soon as practical and not be subject to a delay until the Committee’s next meeting at which standards matters were considered.

 

RESOLVED: That delegated authority be granted to the Monitoring Officer, in consultation with the Chairman of the Committee and the Independent Persons, to devise and agree a revised public interest test to be incorporated into the Council’s complaint documentation and all Members advised accordingly.

AS20/8.

Internal Audit Report to 31 March 2020 pdf icon PDF 485 KB

Minutes:

The Audit Manager led Members through the internal audit report to 31 March 2020.  The Council was required to ensure that it had reliable and effective internal control systems in place and the adequacy of these systems was tested by both Internal and External Audit.

 

The report included an annual report on the performance of the Internal Audit Service.  In the year up to 31 March 2020, Internal Audit had operated in accordance with the Public Sector Internal Audit Standards (hereafter referred to as ‘the Standards’). It was a requirement of the Standards that a report was made to the Audit and Standards Committee on audit matters and any emerging issues, not only in relation to audit but risk management and corporate governance.

 

2019/20 had proved to be a challenging year for Internal Audit.  Work had been behind schedule about halfway through the year owing to audit overruns and other circumstances beyond its control. Progress had been made, as indicated by the number of audits completed in the final quarter, but due to the Covid-19 pandemic the Internal Audit team was severely depleted during the last few weeks of the financial year, resulting in fewer audits being completed during the year than would otherwise have been the case.

 

The report gave details of the eight audit reviews that had been completed in the final quarter of 2019/20 (Business Rates, Property Investment, Benefits, Software Licensing, Payroll, Treasury Management, Cash and Banking and Creditors), a summary of all audit reports completed in 2019/20 and progress made on implementing audit recommendations. Seven of these provided good or substantial assurance on the overall governance arrangements, however one audit (Property Investment) only provided limited assurance.  This was due to a number of areas where record keeping needed to be strengthened and/or transparency improved. The Head of Service Acquisitions, Transformation and Regeneration had confirmed that appropriate action had been taken. Progress on the recommendations would be reported back to the Committee at the next quarterly review in September.

 

Appendix B to the report provided a summary of all audit reports completed in 2019/20, the level of compliance and assurance rating for each review, and the overall performance of the Internal Audit team against the plan. It was noted that the details of all audit reports issued in the first three quarters of 2019/20 had already been reported to the Committee at previous meetings.

 

The summary showed that 82.1% of the 2019/20 Audit Plan was completed, however six planned audits were still outstanding at the end of the financial year. One of these (ICT Governance) was already at an advanced stage when the Government lockdown began but could not then be completed because the ICT Infrastructure team had to devote all its resources to the many logistical and technical support challenges posed by the sudden need to enable all officers to work from home.

 

Another audit (Transformation Projects Implementation) had also commenced but had been delayed due to other priorities. The four remaining audits were all postponed  ...  view the full minutes text for item AS20/8.

AS20/9.

Internal Audit Plan Update pdf icon PDF 315 KB

Minutes:

Members received the report of the Executive Director which gave details of a new audit plan, as the audit planning process had been disrupted by the Covid-19 pandemic and the work plan originally proposed for 2020/21 had had to be abandoned.

 

A new plan necessitated a radical new approach, some aspects of which would differ from the one documented in the Internal Audit Charter. The new approach would however still need to provide sufficient coverage to enable the Audit Manager to produce an annual Internal Audit opinion on the Council’s control environment.

 

The Standards required that the Audit Manager communicated the plan and resource requirements, including significant interim changes, to senior management and the Audit and Standards Committee for review and approval. For the current year, this would be done via quarterly Internal Audit Plan updates.  A new, more flexible approach was required to cope with the current unprecedented circumstances and to encourage greater management engagement.

 

The Audit Manager had given a verbal update at the last meeting outlining his proposals for a new approach to Internal Audit work in 2020/21 and more detail was provided in the report for Members with progress made.

 

It had only been possible for the Audit Manager to provide an outline of the audit work that would be undertaken during the year as information on the key risk areas that had emerged from the Covid-19 pandemic, and the pressure points and challenges facing the Council over the next three to six months was still being gathered.  Three-monthly plans would therefore be presented to the Committee each quarter until the effects of the crisis had abated.

 

No distinction would be made between priority audits and consultancy audits, as it was unclear how much work each task would involve.  Also, none of the items listed in the Priority Audits/Consultancy Work section were given individual time allocations for the same reason.  The total time available for all work in this section was however shown in the plan.

 

An Indicative Plan for the next six month period was attached at Appendix B to the report, providing Members with a preview of the proposed work programme for later in the year.  Both the Indicative Plan and the Quarterly Plan would be kept under review by the Audit Manager and may need to change at short notice if new risks emerged.

 

It had not been possible for the Audit Manager to properly quantify the audit needs at that time and it had to be assumed that the existing staff resources would be sufficient.  This would be kept under review.

 

Progress against the plan would be monitored by the Audit Manager and reported to the Audit and Standards Committee at the next meeting.

 

The Chairman thanked the Audit Manager for his work in the current difficult circumstances.

 

RESOLVED:  That

 

1)         the new approach to Internal Audit work (as set out in the report) be approved and adopted until such time as the impact of the Covid-19 pandemic on normal Council  ...  view the full minutes text for item AS20/9.

AS20/10.

Impartiality of Internal Audit pdf icon PDF 108 KB

Minutes:

Members received the report of Councillor Dixon, the former Chairman of the Audit and Standards Committee, which outlined his opinion on the impartiality of the Council’s Internal Audit department.

 

Councillor Dixon had attended the Local Audit Quality Forum in June 2019 where attention had been drawn to a Chartered Institute of Public Finance and Accountancy Ethics Survey in 2018, where 57% of respondents of their Members and public sector accountants said they had been put under pressure or felt under pressure to act in a professionally unethical way.

 

It was recommended at the Forum that Chairmen of Audit Committees should have individual and confidential conversations with their Internal Audit teams to verify their impartiality, and their ability to express their Audit opinions freely and without influence by others.         It was also recommended that Internal Audit had free and open access to the Committee and its Chairman.

 

Councillor Dixon advised Members that he had had conversations with all three members of the Internal Audit Department, who confirmed their impartiality and ability to express audit opinions freely. Councillor Dixon also confirmed that the Head of Audit had free and open access to him as Chairman of the Committee and had regular conversations outside the Committee setting throughout the year.  The Chairman also agreed to consider whether to include other Members of the Committee in the next exercise.

 

RESOLVED: That:

 

1)         the report on the Rother District Council Internal Auditors’ impartiality and ability to express their opinions freely be noted; and

           

2)         that the Chairman of the Audit and Standards Committee be required to carry out this impartiality exercise on an annual basis.

AS20/11.

Work Programme pdf icon PDF 203 KB

Additional documents:

Minutes:

Consideration was given to the Work Programme which contained details of the reports to be considered by the Audit and Standards Committee meetings until March 2021. 

 

The following additions to the Work Programme were noted:

 

           LGA Consultation on New Code of Conduct – 29 July 2020; and

           Risk Management Update confirmed for 28 September 2020.

 

RESOLVED: That the Work Programme, attached at Appendix A, be agreed as amended.