Agenda and minutes

Audit and Risk Management Committee - Monday, 4th July, 2016 7.00 pm

Venue: Conference Room, Civic Centre, Silver Street, Enfield, EN1 3XA. View directions

Contact: Metin Halil 

Items
No. Item

76.

WELCOME AND APOLOGIES FOR ABSENCE

Minutes:

Councillor Mary Maguire (Chair) welcomed everyone to the meeting.

 

There were no apologies for absence.

 

Apologies for lateness were received from Councillor Terry Neville, James Rolfe (Director – Finance, Resources & Customer Services) and Chaitali Roy (Independent Member).

 

The Committee recorded its thanks and appreciation to Councillor Dino Lemonides, the Committee’s previous Chair, for all his hard work on the Committee over the years and wished him well in his new Cabinet position.

 

77.

DECLARATION OF INTERESTS

Members of the Audit & Risk Management Committee are invited to identify any dis-closable pecuniary, other pecuniary or non – pecuniary interests relevant to items on the agenda.

 

Minutes:

There were no declarations of interest.

78.

APPOINTMENT OF COMMITTEE VICE - CHAIR - 19:00 - 19:05

To elect a Vice Chair of the Committee for the 2016/17 municipal year

Minutes:

AGREED to appoint Councillor Guney Dogan as Vice Chair for the 2016/17 municipal year.

 

79.

ORDER OF THE AGENDA

Minutes:

AGREED that the order of the agenda be varied due to the absence of a number of officers who had attended an earlier meeting. The minutes follow the order of the meeting.

 

80.

CONTRACT WAIVER MONITORING AND PROCUREMENT SPEND 2015/16 - 19:30 - 19:40 pdf icon PDF 492 KB

To receive a report from the Director of Finance, Resources & Customer Services presenting a review of waivers update and Procurement spend, issued under the Contract Procedure Rules.

(Report No.44)

Minutes:

NOTED

 

1.    The review was presented by Lynn Ferguson (Head – Procurement & Commissioning Hub). This was a brief overview of the report that was presented to the committee on Contract Waiver Monitoring and Procurement Spend. The procurement and commissioning hub was a newly centralised function of the Council and commenced operations in February 2016. The report presented at the meeting included a few items from February 2016 onwards and the bulk of the report was related to the previous procurement function that was shared with the London Borough of Waltham Forest. The period of the report is 10 months rather than the year. Officers had just carried on reporting from the last time that this item had been reported to the committee.

 

2.    In summary the main points of the report were as follows:

a.    The number of waivers for this period was 17, which was a significant  decrease  from the previous period,  where there had been 40 waivers.

b.    The total value of spend associated with those waivers was £1.228m and that compared with the previous period, where the spend against waivers was £6.654m. There had been quite a significant decrease in the number and spend associated with waivers over the last 10 months.

c.    There were 4 waivers that were over £100k, the largest being £208k. Last year the largest waiver was for £2.4m. There was still a lot of work to be done to bring the number of waivers down further and officers would be continuing in a positive trend as they had done in the previous period.

d.    Appendix 4, Figure 1 (detailed at page 22 of the report) provides a graph in respect of procurement spend in 2015/16 for services, goods and works, showing spend by category, top 50 suppliers, small & medium enterprises (SME) and local spend. Unfortunately, the graph only shows labels for every other row. Officers will be circulating the corrected graph to Members of the Committee.

ACTION: Claire Reilly – Head – Procurement Systems & Information.

The graph showed a total spend of approx. £280m, with a 40% spend on small and medium enterprise. The local provision spend had gone up with an £81m spend for the period.

 

3.    The new procurement and commissioning hub, which came into operation in February 2016, replaced the old procurement board with a new board. The new hub would take a more strategic view of contracts in the pipeline to see if there was a need to buy. This would drive down spend with better value for money.

 

4.    The following issues raised by members in response to the report:

a.    The procurement process for the translation service was actioned through a framework contract and completed using best value through the procurement process.

b.    The Grange Homes Estate Agency had been used to manage the council’s rented property on behalf of Enfield. Councillor Savva requested if comparative figures from 2014/15 could be shown so as to compare with figures shown in the report. This would make it  ...  view the full minutes text for item 80.

81.

DEPRIVATION OF LIBERTY SAFEGUARDS (DoLS) - 6 MONTH UPDATE - 19:40 - 19:50 pdf icon PDF 160 KB

To receive from the Director of Health, Housing and Adult Social Care providing an update on the Council’s Deprivation of Liberty Safeguards (DoLS) - arising from the 19 January 2016 committee meeting.

(Report No.45)

Minutes:

NOTED

 

1.    The Deprivation of Liberty Safeguards (DoLS) report  was presented by Sharon Burgess, Head – Safeguarding Adults who highlighted the following issues and key areas:

a.    Last year there were just under 1000 DoLS referrals in Enfield. To date, this year 258 DoLS referrals had been received, almost double last year’s 132 referrals for the same period. The reason being that each DoLS referral needs to be updated each year.

b.    DoLS applications are increasing year on year and with an ageing population the need for assessments increases continuously.

c.    Each DoLS assessment  costs approximately £1000 and referrals continue to have a major financial impact on Local authorities.

d.    Due to efficiency savings DoLS cases are mainly being outsourced to ActionFirst agencies. Some cases are managed by London Borough of Enfield Best Interest Assessors who are mainly social workers. Funding had recently been agreed to recruit two Best Interest assessors, a Senior Safeguarding Mental Capacity Officer and a Safeguarding Mental Capacity Act Officer, to support the culture shift in Housing, Health and Adult Social Care.

e.    The Mental Capacity Act and DoLS Strategic Steering Group meet to manage performance of DoLS arrangements for Enfield residents. The Law Commission proposals confirmed in May 2016, that DoLS will be a far more streamlined scheme with more emphasis on the Mental Capacity Act  2005. The Local Authorities social workers to be trained to carry out more mental capacity assessments.

f.     From the audit taken last year (13 October 2015), an action plan has been put in place. All DoLS are now recorded on the Care First system. All DoLS cases had been allocated within the required timescales and the Council were now in a better position from this time last year.

2.    The following issues raised in response to the report:

a.    The DoLS referrals had doubled as everyone that had a DoLS before would require new assessments (renewals). With an aging population, more hospital admissions and DoLS being non-transferrable, assessment needs increase continuously.

b.    Councillor Jemal’s concern regarding the current DoLS system and its sustainability and what if anything are ADASS (Association of Directors of Adult Social Services) doing about it. Clarification by Sharon Burgess (Head – Safeguarding Adults) that the Law Commission review (May 2016) considered how the law should protect people who lack capacity to consent to their care and treatment and who need to be deprived of liberty to receive care or treatment. Complex and extreme DoLS cases are prioritised. Increased training for social workers.

c.    DoLS inspections are carried out on a monthly basis by social workers. DoLS cases can be referred to the Court of Protection if it has not been possible to resolve the matter with the managing authority/supervising authority. This can be done by asking for an assessment or a review of an existing DoLS authorisation. People who can bring a case to the Court of Protection include the person who is being deprived of liberty, an attorney under a Lasting  ...  view the full minutes text for item 81.

82.

2015/16 DRAFT ANNUAL STATEMENT OF ACCOUNTS - 19:05 - 19:20 pdf icon PDF 173 KB

To receive the report of the Director of Finance, Resources & Customer Services presenting the Draft Annual Statement of Accounts 2015/16.

(Report No.51)

 

·         Covering Report – Draft Statement of Accounts 2015/16

 

·        Draft Statement of Accounts 2015/16 – including Addendum (Draft AGS 2015-16)

Additional documents:

Minutes:

RECEIVED the report of the Director of Finance, Resources & Customer Services (No.51) presenting the unaudited Annual Statement of Accounts for the 2015/16 financial year and the draft 2015/16 Annual Governance Statement

 

NOTED

       

1.    The Chair clarified that the 2015/16 Draft Statement of Accounts follow CIPFA guidelines that the Audit & Risk Management meeting scheduled for 1 September 2016, is for members to discuss the draft statement of accounts in greater detail.

The Chair also pointed out that the Introduction (page 2 of the report) should be from both the previous Chair (Councillor Dino Lemonides) and James Rolfe (Director – Finance, Resources & Customer Services). This would be corrected.

ACTION: Isabel Brittain – Assistant Director – Corporate Finance.

2.    If members had any questions regarding the 2015/16 Draft Statement of Accounts, then these should be sent to Isabel Brittain and she would co-ordinate responses and report at the 1 September 2016 meeting.

3.    ACTION: Isabel Brittain – Assistant Director – Corporate Finance.

4.    The following issues raised by members in response to the report:

a.    Councillor Savva asked why monies spent on agency staff were not presented in the accounts. James Rolfe clarified that the whole structure of the Statement of Accounts are stipulated by CIPFA (Chartered Institute of Public Finance & Accountancy) and there was no requirement to publish these.

b.    Councillor Neville referred to 5.2 of the covering report (page 3) and the Southwark Council/Thames Water Ruling issue. James Rolfe clarified that the ruling was against Southwark Council whereby the council were recovering water and sewerage charges that were significantly higher than the amount Southwark Council were liable to pay to Thames Water. All Councils were now looking to see how the ruling applied to them.

c.    Capital expenditure for 2015/16 included £61.4m regarding the Meridian Water project and was for contamination and land acquisition costs.

d.    The Schools and Children’s Services overspend, as reported on page 8 of the Draft Statement of Accounts was due to demand led pressures in respect of Looked After Children and Residential Care Purchasing.

e.    Chaitali Roy (Independent Member) asked that in light of Brexit, had CIPFA asked for disclosures and implications. The Chair clarified that this was early days at present but that this item would be on a future Audit agenda. It was unlikely anything would be clear this year as regards Brexit but maybe by 2016/17 financial year.

f.     The maximum borrowing figure for the Council is £700m. Short term borrowing was currently under review with financial advisers, for longer term borrowing. The cost of borrowing £700m, should the Council go to this maximum, would be £42m per year in interest at 7-8% rate.

5.    The Chair concluded that there would be an Audit Committee meeting on 1 September 2016. It would be helpful if Members could send any questions/queries to Isabel Brittain prior to the early September meeting, so that answers are prepared. The Chair thanked the Finance Department for their report and hard work.

 

AGREED to note:

 

(1)  the draft unaudited  ...  view the full minutes text for item 82.

83.

INTERNAL AUDIT ANNUAL REPORT 2015/16 - 19:20 - 19:30 pdf icon PDF 772 KB

To receive the report of the Director of Finance Resources & Customer Services summarising the work that the Audit and Risk Management division had undertaken during the financial year 2015/16.

(Report No.49)

Minutes:

Received the report of the Director of Finance, Resources & Customer Services (No.49) presenting the 2015/16 Internal Audit Annual Report, including the Head of Internal Audit & Risk Management’s Annual Opinion on the system of internal control.

 

NOTED

 

1.    The report was introduced by Christine Webster (Head – Internal Audit & Risk Management).

2.    Christine drew Members attention to her Annual Opinion for 2015/16, as set out on page 13 of the ‘To Follow’ report. There had been a decrease in positive assurances and deterioration in the implementation of recommendations since 2014/15, which was expected due to significant staff reductions and service restructures during the year.

3.    This was Internal Audits annual report for 2015/16, which was a summary of all the work Internal Audit had done during the year, from which Christine Webster has been able to give an overall assurance on the adequacy of the Council’s governance, risk management and internal control processes. Based on the results of the work that Internal Audit have been doing, Christine concluded that there is reasonable assurance that material risks that can impact upon the Council achieving their objectives are being properly managed. That work is summarised within the report and includes:

·         85 Audits that were taken in total including 18 for schools.

·         Of the audits that had been assessed, 45 were high or reasonable assurance, 23 limited assurance and there were 3 ‘no assurance’ reports this year.

·         A review of housing rents provided High assurance over the collection of rental income.

·         Internal Audit also followed up on management implementation of recommendations and to clear recommendations dating back to 2012/13. 97 high priority recommendations and 231 medium priority recommendations had been followed up so as to confirm managers’ progress with their implementations.  69% of high priority recommendations and 68% of medium priority recommendations had been implemented.

·         The graph detailed on page 17 of the report, shows trends in assurance levels and summarises the number of reviews completed over the last 3 years and the assurance levels given. There had been a slight decrease in high assurance for 2015/16.  Tables 1 (as detailed on page 18 of the report) provides a summary of Assurance levels by department in more detail for 2015/16 and Table 2 (as detailed on page 18 of the report) provides an analysis of recommendations, which includes one to address a critical finding.

·         Section 3 (page 19 of the report) deals with Key themes identified and the table highlights audit reviews covering governance arrangements for Council’s business, transformation and other significant programmes. Internal Audit also undertook reviews  of:

a.    Meridian Water Project

b.    Schemes of delegation

c.    Enfield Residents’ Priority Fund close down

These reviews have all been summarised at page 20 of the report.

·         The table detailed at page 20 of the report, includes 3 audits  with no assurance, these are Private Sector Leasing, Business Resilience/Disaster Recovery and Payments to Families with no recourse to public funds.

·         Section 4 of the report (page 40 of the report) highlights management responses to implementing  ...  view the full minutes text for item 83.

84.

COUNTER FRAUD SERVICE 2015/16 - 19:50 - 20:00 pdf icon PDF 237 KB

To receive a report from the Director of Finance, Resources & Customer Services providing a report on the Counter Fraud Service 2015/16.

(Report No.48)

Additional documents:

Minutes:

RECEIVED a report from the Director of Finance, Resources & Customer Services (Report No.4) providing an update on the Counter Fraud Service.

 

NOTED

 

1.    The report was introduced by Christine Webster (Head – Internal Audit & Risk Management).

2.    The report includes the performance of the Counter Fraud Team during 2015/16 ending 31 March 2016 and the results of the European Institute for Combatting Corruption and Fraud (TEICCAF), which compares Enfield’s fraud detection performance against other participating London borough’s during 2014/15. The results of the survey are set out in the report at pages 50 - 52 (para 3.1 -3.14) along with Internal Audit responses and attached for the meeting - ‘Protecting the Public Purse Fraud Briefing 2015’ (pages 59 – 70 of the report).

3.    The TEICCAF’s survey showed Enfield had detected 149 cases valued at £1,149k. However, the survey results did not include the value of or the number of fraudulent claims discovered by the Revenues and Benefits team in respect of council tax single person discount, identified, as this information had not been recorded  on the Counter Fraud team’s information system. The Revenues and Benefits team recovered £358k from 1304 cases (single person discounts). If these statistics had been included this would have increased the number of detected cases to 1453, which exceeds the 604 average, although the total value of £1,507k would have been less than the average value of £1,876k.

4.    Other types of Fraud are detailed at page 52 of the report and the outcomes of the Counter Fraud Team 2015/16 are detailed at pages 52-54 of the report along with a summary of the Team’s work which is provided in Appendix 1 -  table 1 and table 2 (page 58 of the report).

5.    The following issues raised by Members in relation to the report:

a.    Councillor Neville showed concern with the TEICCAF’s findings for the Council Tax discount fraud, Enfield had only detected 16 cases compared against the London average of 402 cases and the Right to buy fraud where Enfield had detected nil cases against the London average of 9 cases. Chaitali Roy (Independent Member) also added that the team were not focussing on Right to Buy Fraud. Christine Webster clarified that some cases of Right to Buy fraud had now been detected and that all Council Tax fraud statistics had not been included in the benefit fraud statistics.

6.    The Chair thanked Christine Webster for her report.

 

AGREED that Members note the findings and responses to the European Institute For Combatting Corruption and Fraud (TEICCAF) survey 2014/15  and outcomes from the work of the Counter Fraud Service 2015/16.

 

85.

2015/16 INFORMATION GOVERNANCE UPDATE - 20:00 - 20:10 pdf icon PDF 216 KB

To receive a report from the Director of Finance, Resources & Customer Services providing an update on the Council’s progress in implementing its Information Governance work programme.

 

Minutes:

RECEIVED the report of the Director of Finance, Resources & Customer Services providing an update on the Council’s progress in implementing its Information Governance work programme.

 

NOTED

 

1.    The report was presented by Kate Robertson (Assistant Director – Customer Services) highlighting the following:

a.    The briefing note provided an update to the Committee on the work of the Information Governance Board, the Council’s performance on Freedom of Information Act and Data Protection Act requests, security incidents and complaints that have been referred to the Information Commissioners Office (ICO).

b.    Details of the update are presented at pages 71-77 of the report.

2.    The following issues raised in response to the report:

a.    The Chair asked how Enfield’s Freedom of Information requests compared with other London Borough’s. Kate Robertson’s reply that the Council were at the middle of the spectrum and that Enfield were not the highest.

b.    Councillor Jemal asked if the 90% compliance of online training was mandatory. Kate Robertson clarified that training was mandatory and that staff could access this online training using their e-mail addresses. James Rolfe further clarified that there is a new IT based learning system that is located in one place for all learning requirements that Members and officers can access. The new learning system would also cover training for children and safeguarding.

c.    Councillor Neville questioned the training statistics shown at 2.6.1 (page 73 of the report) and that they did not equate. Kate Robertson clarified that figures for starting/not starting the course were not added to the middle column of figures. Staff receive e-mail alerts to complete online training. Those not completing training were being reported to managers to escalate.

3.    The Chair thanked Kate Robertson for her report and all she had done over the years with Enfield Council. The Chair wished her well in her new role at Islington Council.

 

AGREED that Audit Committee note the progress being made on information governance and the risks facing the authority.

 

 

 

86.

BDO - AUDIT PROGRESS REPORT - 20:10 - 20:25 pdf icon PDF 78 KB

To receive from BDO (external auditors) a progress report on the external audit.

 

 

Additional documents:

Minutes:

RECEIVED from BDO a planning report on the External Audit  for the year ending 31 March 2016.

 

NOTED

 

1.    The Audit Progress report was introduced by Andrew Barnes (BDO) and the Enfield Pension Fund report was introduced by David Eagles (BDO).

2.    The report provided an outline of progress, to the Committee, against BDO’s proposed work for 2015/16.

3.    Audit work on internal controls and audit testing on transactions had been undertaken. All observations on internal controls would be reported in BDO’s final report to the Committee on 29 September 2016.

4.    BDO would report on the Council’s Whole of Government Accounts and if consistent with the Council’s financial statements, by providing an opinion by 21 October 2016. This will be issued, following the Audit & Risk Management Committee’s approval of the financial statements at the meeting to be held on 29 September 2016. The opinion deadline was originally set for 3 October 2016, but the Department of Communities and Local Government (DCLG) had delayed this now till the 21 October 2016.

5.    The review of the Housing Benefit claim was now in progress and would be submitted by 30 November 2016.

6.    The Pension Fund Report detailed at pages 79 – 98, highlights the key issues relevant to the audit of the financial statements of the Pension Fund for the year ending 31 March 2016.

7.    The two risks detailed on page 88 of the report are standard risks:

a.    Management Override – This is a management responsibility which controls fraud related risks.

b.    Revenue recognition ( contributions) – This is not a significant risk and relates to pension contribution areas of the Pension Fund.

8.    The last area of significant risk is detailed at page 89 of the report:

a.    Fair Value of Investments (Infrastructure and Private Equity)

b.    Fair value of Investments (Other)

9.    The following issues raised in response to the report:

a.    There are 2 Audit & Risk Management meetings scheduled for  September 2016.  The 1st September meeting is to allow Members to discuss the 2015/16 draft Statement of Accounts in more detail and the 29 September meeting is to agree and sign off  the 2015/16 Statement of Accounts. The 2015/16 Statement of Accounts must then be published on the Council web site by 30th September 2016.

b.    Councillor Neville requested what the Council were paying in management fees as regards the Pension Fund Accounts?

c.    Under Enfield 2017, as employees leave the Council, who were contributing to the Pension Fund, leaving remaining employees who are not contributing to the Pension Fund. Councillor Neville was concerned that Pension Fund contributions are therefore reducing and creating a deficit. He asked if BDO could look at this issue and report back on how the fund can be recovered and how any deficit is addressed.

d.    Chaitali Roy (Independent Member) asked what the top 3 risks were as regards the Pension Fund according to the previous auditors Grant Thornton. Anything Grant Thornton say about the 3 top risks should  ...  view the full minutes text for item 86.

87.

RIPA - UPDATE - 20:25 - 20:30

To receive a report from the Director of Finance, Resources & Customer Services providing a verbal update on the use of RIPA to ensure that it is being used in accordance with the law.

 

Minutes:

RECEIVED a report from the Director of Finance, Resources and Customer Services requiring the Audit Committee to receive an internal quarterly report  from the Monitoring Officer on the use of RIPA within the Council and to note that there have been no applications since the last report.

 

NOTED that

 

·         During the monitoring period covered by the report and since the last Audit Committee meeting, there had not been any new RIPA applications.

 

AGREED to note the requirements under the Audit Committee to receive quarterly reports from the Monitoring Officer on the use of RIPA within the Council and to note that there had been no further applications since the last report for Directed Surveillance and Cover Human Intelligence Source [CHIS].

 

88.

AUDIT COMMITTEE ANNUAL REPORT 2015/16 - 20:30 - 20:40 pdf icon PDF 660 KB

To receive and agree the Audit Committee Annual Report for 2015/16.

Minutes:

RECEIVED the Audit Committee Annual Report 2015/16.

 

NOTED

 

1.    The Audit Committee Annual Report 2015/16, is a summary of work the Audit Committee had achieved and oversaw the work of Internal Audit 2014/15.

2.    There will be an amendment to the report, prior to referral to Council on 21st September 2016, to include the appointment of Chaitali Roy as the Independent Member of the Audit & Risk Management Committee on the 23 September 2015.

 

AGREED that subject to consideration of any comments submitted by the members of the Committee, the Annual Report be approved for referral by the Chair onto Council at its meeting on the 21st September 2016.

 

89.

AUDIT & RISK MANAGEMENT COMMITTEE - WORK PROGRAMME 2016/17 - 20:40 - 20:50 pdf icon PDF 171 KB

The Committee is asked to agree the Work Programme put forward for the 2016/17 municipal year along with the timetabling of each issue on the Work Programme.

Minutes:

RECEIVED an outline work programme for the Committee covering the 2016/17 Municipal Year Committee.

 

 

 

1.    The impact of the Brexit vote to be included on the Work Programme and to be heard at the 29 September 2016 Committee meeting.

 

 

 

AGREED to approve the outline work programme for 2016/17.                                          

                                            

 

90.

MINUTES - 20:50 - 21:00 pdf icon PDF 318 KB

Audit & Risk Management Committee

 

a.         To receive and agree the minutes of the Audit Committee meeting held on Thursday 3 March 2016, as a correct record.

 

b.         To note the update on actions identified at the last meeting.

 

Additional documents:

Minutes:

NOTED the progress update on actions identified at previous meetings.

 

1.    Minute 451 should have been minuted as 2015/16 Draft Audit Planning Report and not 2016/17, as stated in the minutes.

2.    Councillor Neville’s reference to a lengthy committee discussion, at the last meeting, regarding Council borrowing and how the Council dealt with that. Councillor Neville requested that the committee would need to have any borrowing detail shown at the front of financial reports within the introduction. James Rolfe clarified that finance would build borrowing detail into the draft Statement of Accounts 2015/16 and would be mentioned in the minutes.

 

AGREED that the minutes of the Audit Committee held on Thursday 3 March 2016 be approved and signed as a correct record, subject to the above correction.

 

91.

ANY OTHER BUSINESS - 21:00 - 21:10

Minutes:

NOTED

 

1.    A private meeting between BDO and Members of the Audit Committee was held directly after the Committee meeting.

92.

DATES OF FUTURE MEETINGS

To note the dates agreed for future meetings of the Audit Committee:

 

Thursday 1 September 2016

Thursday 29 September 2016

Tuesday 1 November 2016

Thursday 12 January 2017

Tuesday 7 March 2017

 

 

(All meetings to commence at 7.30pm unless otherwise agreed.)

 

Minutes:

NOTED the dates of future meetings:

 

Thursday 1 September 2016

Thursday 29 September 2016

Tuesday 1 November 2016

Thursday 12 January 2017

Tuesday 7 March 2017

 

 

(All meetings to commence at 7.00pm unless otherwise agreed.)