Agenda and minutes

Venue: Bromley Civic Centre

Contact: Steve Wood  020 8313 4316

Items
No. Item

14.

APOLOGIES FOR ABSENCE AND NOTIFICATION OF SUBSTITUTE MEMBERS

Minutes:

Apologies were received from Councillor Will Harmer and from Councillor Alan Collins.

15.

DECLARATIONS OF INTEREST

Minutes:

There were no declarations of interest.

16.

CONFIRMATION OF THE MINUTES OF THE MEETING HELD ON 21st JUNE EXCLUDING THOSE CONTAINING EXEMPT INFORMATION pdf icon PDF 198 KB

Minutes:

The public minutes of the meeting that was held on 21st June 2017 were agreed, and signed as a correct record.

17.

QUESTIONS FROM MEMBERS OF THE PUBLIC ATTENDING THE MEETING

In accordance with the Council’s Constitution, questions to this Committee must be received in writing 4 working days before the date of the meeting.  Therefore please ensure questions are received by the Democratic Services Team by 5pm on 2nd November 2017.

 

Minutes:

No questions were received.

18.

QUESTIONS ON THE REDACTED REPORTS PUBLISHED ON THE WEB

The list of redacted audit reports published on the web is as follows:

 

1.  Review of Bromley Children’s Project Final Internal Audit Report—2016-2017.

2.  Review of Children with Disabilities Team Audit for 2016-2017

3.  Review of Community Infrastructure Levy Audit 2017/18

4.  Review of Contract Monitoring for 2017-18

5.  Review of Debtors-Income Audit for 2016-17

6.  Review of Early Years for 2017-18

7.  Review of Internet Usage Audit-2016-2017

8.  Follow up Review of Marjorie McClure School-2016-2017

9.  Review of Payroll Expenses Audit for 2016-2017

10.  Review of Pensions Audit for 2016-2017

11.  Review of Poverest Primary School 2016-2017

12.  Review of Street Works Permits and Defaults Audit for 2016-17

13.  Redacted LB Bromley Parking Enforcement Report by RB Greenwich 2015

 

Members have been provided with advance copies of the reports via email.

 

The reports have also been published on the Council’s Website at the following link:

 

http://cds.bromley.gov.uk/ieListDocuments.aspx?CId=559&MId=6281&Ver=4

 

Printed copies of the reports are available on request by contacting Steve Wood on 0208 313 4316 or by email at stephen.wood@bromley.gov.uk

 

 

 

 

 

 

 

 

 

 

Minutes:

No questions were received on the redacted reports published on the web.

19.

MATTERS OUTSTANDING FROM THE LAST MEETING NOT INCLUDING EXEMPT ITEMS pdf icon PDF 121 KB

Minutes:

CSD17157

 

The Committee noted matters arising (excluding exempt information) from previous meetings.

 

The Committee was notified that the matter of resource for Internal Audit had been looked at. This process would be completed in April 2018 as this would allow for training costs to benefit from Apprentice funding.

 

The Committee was advised that the proposed letter to Bromley MPs concerning the Single Fraud Investigation Service (SFIS) had been sent, and a response had been received. Both the letter and the response had been circulated. The Chairman stated that he would be drafting a reply to the response that he had received.

 

RESOLVED that the Matters Arising report be noted. 

20.

OVERVIEW BY ZURICH ON CORPORATE AND DEPARTMENTAL RISKS. pdf icon PDF 487 KB

Additional documents:

Minutes:

An update on the Corporate and Directorate Risk Registers was given by Adam Lickorish and Rupert Riall on behalf of Zurich Risk Engineering.

 

The following Risk Registers were presented:

 

·  Corporate Risk Register

·  CEX Risk Register

·  Finance Risk Register

·  ECHS Risk Register

·  ECS Risk Register

·  HR Risk Register

·  Commissioning Risk Register

 

The Risk Registers were divided into three main categories, which constituted a description of the risk, gross risk and net risk ratings.

 

‘Gross Risk’ is the Risk before any controls are taken into account and Net (or Residual Risk) is the score when current controls are taken into consideration.

The Committee noted that four of the five net red RAG rated risks were found within ECHS, and that an additional ten amber risks across the directorates could easily move into the red category.

 

 These areas of high risk within ECHS were:

 

·  Failure to deliver an effective ECHS financial strategy

·  Failure to deliver effective Learning Disability Services

·  Failure to deliver effective Children’s Services

·  Failure to deliver effective Temporary Accommodation Services

 

Zurich had also rated the Council’s ability to effectively govern and manage contracts as a net ‘red risk’ after controls had been put in place.

 

The Committee was informed that the Zurich report constituted a ‘Risk Overview’, as part of a ‘check and challenge’ process. 

 

The Committee was referred to page 5 of the Zurich report which was a table that mapped out Corporate Risks. The table outlined eight areas of Corporate Risk and organisational issues that were risk elements across all of the LBB Directorates. The remainder of the report from Zurich assessed risk elements in more detail across the individual Directorates.

 

The Chairman asked what LBB could do better as a result of the Zurich analysis. Mr Lickorish responded that the reporting of Risk would have greater visibility and depth as a result of Zurich’s gap analysis and the introduction of the auto populated risk matrix.

 

The Chairman asked if similar strategic financial risks were seen in other Local Authorities. Mr Lickorish replied that this was indeed the case, and that similar problems had been identified in other boroughs. The Chairman was keen that the analysis produced by Zurich should not just be an academic exercise, but that the data should be used to develop policy.

 

A Member referred to references in the report to the ‘existing controls that were in place’. He asked if this was something that had been evidenced, or was something that Zurich had accepted on trust. Mr Lickorish answered that the evidence had not been seen, but had been taken on trust. To have seen the evidence base would have lengthened the audit process. The Head of Internal Audit commented that ‘Risk’ had to be an integral aspect of the internal audit process.

 

A Member suggested that the focus should shift away from directly focusing on Risk, and rather focusing on controls. He asked why Zurich had not included a column in their matrices for fall-back plans. He felt that an additional column should  ...  view the full minutes text for item 20.

21.

INTERNAL AUDIT PROGRESS REPORT pdf icon PDF 256 KB

Additional documents:

Minutes:

FSD 17083

 

This report was presented to the Audit Sub Committee by David Hogan, Head of Audit.

 

The report was presented to inform Members of recent audit activity across the Council and to provide an update on matters that had arisen from the previous meeting of the Audit Sub Committee in June.

 

The Head of Audit outlined to Members the ‘The Three Lines of Defence Model’ that was applied by many commercial and public sector organisations and the role that Internal Audit played in the model. Internal Audit was the third line of defence that would report to the Audit Sub Committee, Senior Management and the Corporate Leadership Team.

 

An update on Audit resourcing was provided, and it was clarified that recruitment for the post of Trainee Auditor would commence in April 2018, making use of Apprentice Funding.

 

The Chairman welcomed Catriona Ellis to the Internal Audit Team.

 

A Member wondered if the Audit Plan had been drafted based primarily on resources rather than on what Internal Audit would actually do if there were no resource limitations. The Head of Audit stated that an Audit Needs Assessment was required. He expressed the view that in the current climate, it was only possible to plan ahead for one year, rather than five or six years which would have been preferable. This being the case, it was important to use the services of other departments in the Council, as outlined in the processes around the ‘three lines of defence’.

 

The Head of Audit wanted to include a high level review of Governance in next year’s plan, and to give priority to looking at the more risky issues. There was a need to prioritise and risk assess.

 

A Member stated that the Head of Audit should bring concerns to the Committee if needed, and that Internal Audit was a crucial part of the Council. A Member commented that in his experience, not much seemed to come to light in planned audits, but rather things came to light from self-referrals. The Head of Audit advised that not much in the way of fraud was picked up directly by Internal Audit, the emphasis was in ensuring that the correct systems and governance were in place; this in turn would reduce the scope for fraud. It was important to choose the right areas to investigate. 

 

The Committee noted Appendix A which detailed outstanding priority one recommendations. A comprehensive update on the Waste Services Audit was detailed in the part 2 report.  Other areas where priority one recommendations were outstanding were:

 

·  Document Storage and Retention

·  Temporary Accommodation

·  Review of Waivers

·  Review of Reablement Team

·  Street Works

·  Review of Contract Monitoring

 

Members noted that although four priority two recommendations had been raised with respect of Payroll Expenses, the assurance rating was Substantial.  Similarly, although there were two priority two recommendations with respect to the Pensions Audit, the overall rating was Substantial.

 

The Committee was briefed that three priority two recommendations had been made with respect of the Bromley  ...  view the full minutes text for item 21.

22.

LOCAL GOVERNMENT ACT 1972 AS AMENDED BY THE LOCAL GOVERNMENT (ACCESS TO INFORMATION) (VARIATION) ORDER 2006 AND THE FREEDOM OF INFORMATION ACT 2000

  The Chairman to move that the Press and public be excluded during consideration of the item of business listed below as it is likely in view of the nature of the business to be transacted or the nature of the proceedings that if members of the Press and public were present there would be disclosure to them of exempt information.

Minutes:

RESOLVED that the press and public be excluded during consideration of the items of business listed below as it was likely in view of the nature of the business to be transacted or the nature of the proceedings, that if members of the press and public were present, there would be disclosure to them of exempt information.

23.

EXEMPT MINUTES OF THE MEETING HELD ON 21ST JUNE 2017

Minutes:

The exempt minutes of the meeting held on 21st June 2017 were agreed as a correct record.

24.

MATTERS ARISING INCLUDING EXEMPT INFORMATION (Part 2) FROM THE MEETING ON 21ST JUNE 2017

Minutes:

The Matters Arising (including exempt information) from the meeting held on 21st June 2017 were noted.

 

The detailed minutes for this item are noted in the part 2 minutes.  

25.

INTERNAL AUDIT FRAUD & INVESTIGATION AND EXEMPT ITEMS REPORT

Minutes:

Members noted and discussed the Internal Audit Fraud & Investigation and Exempt Items Report.

 

The report informed Members of recent Internal Audit activity on fraud and investigations across the Council and provided updates on matters arising from previous Audit Sub Committee meetings. The report detailed updates on previously reported cases, expanded on new cases of interest, detailed cases on the fraud register and provided information on a pro-active exercise. It also provided information on reports which were exempt from publication.

 

 

 

 

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26.

DATE OF THE NEXT MEETING

The date of the next meeting is 7th March 2018

Minutes:

The date of the next meeting was confirmed as 7th March 2018.

 

Original Text: