Agenda and minutes

The Chair announced that, in accordance with Standing Order 20 (2), he was withdrawing agenda item 13 (SEND Passenger Transport Contract) from the agenda. The matter would be reported on at a future meeting, once external auditors had presented their findings to the Council.

To receive any apologies for absence from members of the Committee.

An apology for absence was received from Councillor Allen.

Members to declare any interests in matters to be discussed at the meeting.

There were no declarations of interest.

To confirm the minutes of the meeting held on 16 September 2021 as a correct record.

Resolved that the minutes of the meeting held on 16 September 2021 are approved as a correct record.

To determine whethere there are any additional items of business to be considered as a matter of urgency.

There were no additional items of business to consider. 

To conduct the annual review of, and agree, the terms of reference for the Committee.

The Committee reviewed its terms of reference for 2021-22.

No changes were proposed to the terms of reference since the last review.

In response to a query about the role of the Committee in reviewing reports from other external assurance providers, the Head of Audit Services highlighted that, where appropriate, other reports of interest that may provide the Committee with additional tiers of assurance, would also be presented at future meetings of the Committee. This would be reflected in the Terms of Reference at the time of their next review.

In relation to the Treasury Management Code of Practice, it was current policy for this to be considered directly by the Cabinet. This was being reviewed, as part of the wider finance review.

Resolved that the revised terms of reference for the Audit and Risk Assurance Committee be approved for submission to the Council.

To note the updated work programme of the Committee for the remainder of 2021/22 municipal year.

The Committee noted its work programme for this municipal year.

To consider and comment on the update regarding the 2019/20 Audit Findings Report Action Plan.

The Committee received an update on the progress the Council had made against the action plan which the external auditor, Grant Thornton, had produced as part of its Audit Findings Report for 2019/20.

It was noted that since the meeting in September, the majority of actions were being progressed or had been implemented. Several actions still had an amber RAG rating due to the following concerns:

·      Progress on procuring a new asset management system had been delayed due to a lack of capacity within the procurement team. The team was in the process of appointing temporary staff which was to be concluded in the next couple of weeks.

·      Progress on a number of actions, particularly the recommendations concerning IT controls, was dependent on the implementation of Oracle Fusion, which had been delayed. Alternative actions were being investigated and next steps were being agreed with Grant Thornton.

It was requested that the Committee be updated on the progress in addressing the unresolved issues on the action plan at the next meeting.

Members were assured that Grant Thornton was being informed of the progress made in addressing the action plan.

It was clarified that the issue identified around IT controls was specific to the implementation of Oracle Fusion finance system.

Regarding council property records, it was clarified this was an ongoing piece of work and part of Grant Thornton’s audit review. Members were assured that implementation of the new asset management system together with the work commissioned from an external supplier to review council’s records would contribute to an improved robustness and accuracy of council’s asset records.

The external auditors, Grant Thornton, provided their update on the Audit Findings Report Action Plan in connection with the 2019/20 Statement of Accounts and the 2020/21 Statement of Accounts.

Grant Thornton had not issued an opinion on the 2019/20 Statement of Accounts yet, due to ongoing work on the internal consistency of the accounts and the capital financing limit.

Auditors stated assurance had been given by the council’s finance team that a revised 2019/20 Statement of Accounts, together with a record of all adjustments that had been made, would be received by the end of the week. Auditors received an update on the capital financing requirement from the council. Auditors needed to examine these documents before they could issue an opinion.

In relation to 2020/21 Statement of Accounts, auditors had received a draft set of accounts. Auditors stated assurances had been given that the final draft of 2020/21 accounts would be available within the next couple of weeks. The receipt of final draft would enable auditors’ work on 2020/21 to be concluded.

Grant Thornton was to produce a value for money conclusion once work on 2020/21 statement of accounts had been finalised. A draft of the Governance Review was to be issued once details were agreed with council officers.

The following was noted in response to comments and questions:

·      Finance team was currently undertaking extra quality assurance checks on 2020/21 accounts before the final draft  ...  view the full minutes text for item 6121.

To consider and comment on the update regarding how the Council plans to maintain an appropriate oversight and management of grant funding to the voluntary and community sector in future.

The Committee received an update on the latest arrangements regarding how the council planned to maintain an appropriate oversight and management of grant funding to the voluntary and community sector and how it would ensure that a strategic relationship with the sector continued to deliver the aspirations of the Corporate Plan.

Key documents issued by the council, particularly the Sandwell Compact and the Voluntary and Community Sector Funding Protocol, outlined how the relationship between the council and the voluntary organisations and the provision of grants was governed.

A voluntary sector grants working group led by the former Executive Director of Neighbourhoods in 2018/19 had recommended establishing a centralised budget for grants paid to the voluntary and community sector and implementing more robust monitoring to create a collective overview of activity. This approach was agreed by leadership team of the council in February 2020 and led to the establishment of the Investing in the Voluntary and Community Sector Strategic Group (IITVCS group).

Limited progress had been made due to factors including changes in the council’s senior leadership team and a focus on the Covid-19 pandemic.

The main challenge in terms of oversight was that commissioners from different directorates had been using different approaches to how they awarded and monitored grant funding. There was also a lack of information sharing across directorates to enable an organisational understanding of what activity was being funded across the sector and the outcomes derived from such funding. This fragmented approach resulted in lack of strategic ownership and direction at leadership level.

In October 2021, the leadership team agreed to centralise the voluntary sector support grant budget but retain commissioning responsibility within directorates. This would result in the overall budget for grant funding being centralised into the Business Strategy and Change directorate, along with the administration of issuing grants and the Director for Business Strategy and Change would formally take the lead on developing and managing the organisation’s relationship with the sector, whilst decision making on the allocation of grants would be retained by the IITVCS group.

The Director of Business Strategy and Change was to lead on developing and maintaining the council’s relationship with the voluntary and community sector. Decision making on the allocation of grants would be retained by the strategic group consisting of directors who funded voluntary sector activity within their areas.

Directorates would retain responsibility for identifying where grants would add to/support the delivery of desired outcomes and retain knowledge of and relationships with relevant local organisations. Any changes to grant arrangements or new grants, however, would now need to be agreed corporately via the Voluntary & Community Sector Strategic Group (IITVCS group).

These arrangements necessitated a more robust financial reporting on grants and activity, along with a good working relationship between commissioners and the IITVCS group. It would also provide clear governance arrangements for decision making and provide stronger foundations for beginning to build an effective strategic relationship with the sector.

The following was noted in response to comments and questions:

·      It  ...  view the full minutes text for item 6221.

To inform the Committee of the contents of the latest CIPFA Audit Committee Update.

The Committee noted the latest edition of the Chartered Institute for Public Finance and Accountancy’s (CIPFA) Audit Committee Update.

To note and comment on the strategic risks.

The Committee noted an update on the Strategic Risk Register.

The Committee was updated on the profile of the key risks currently faced by the council and any new risks which emerged since the risk register was last reported in July 2021.

The risks categorised as red and faced by the council related to children’s social care, GDPR, medium term financial strategy (with the local government finance settlement to be published in the following month), cyber security and the towns fund programme.

Emergency planning, business continuity, commonwealth games aquatic centre, Oracle Fusion (business management system) implementation, and Grant Thornton audit findings recommendations were among the amber risks.

The risk score of a number of issues had changed since the last update to the Committee. The assessment of risk 4 on the register, children’s social care, had reduced to 12 (red), which was due to improvements in staffing levels, a permanent senior leadership team being in place in the operational area of the Children’s Trust. In addition, a recent review by Ofsted of the Council’s fostering service which found all areas to be rated as “Good”, demonstrating a positive direction of travel.

The target date for risk 53, Oracle Fusion (previously referenced as Business Management System), had been moved back due to delays in the project implementation. The assessment of risk 56, Towns Fund Programme, had increased from amber to red, due to delays in the production of business cases and the full establishment of the programme management office (due to key officer absence). Remedial actions were being implemented, including the transfer of a Senior Regeneration Officer to manage the programme; an external recruitment process and additional resources allocated to the production of some of the business cases.

Several new risks had been identified for inclusion as separate risks in the risk register, which had previously been under the umbrella of other risks:-

·      Risk 27b – In year budget monitoring and management which considered the arrangements in place to ensure the Council operated within the resources available and allocated in its budget and that planned savings and efficiencies were being delivered and achieved.

·      Risk 61- Partner/ contractor delivery of services. This risk considered the arrangements in place to ensure effective contract management arrangements were in place, in particular within the Council’s key contracts, to ensure compliance with the contract terms, good quality service delivery and to provide assurance on value for money.

The following was noted in response to comments and questions:

·      A member expressed concerns that the council had too many risks to prioritise. He sought clarification regarding target dates and whether officers had been realistic with deadlines. In response, due to senior officer shortages there had been some delays in achieving some of the deadlines set out in the report. However, the council was optimistic that the new leadership team would review and set forth appropriate completion deadlines within the register.

·      In response to a query regarding the Towns Fund completion date, the Director of Finance confirmed that the  ...  view the full minutes text for item 6421.

That the public and press be excluded from the rest of the meeting. This is to avoid the possible disclosure of exempt information under Schedule 12A to the Local Government Act, 1972, as amended by the Local Government (Access to Information) (Variation) Order 2006 relating to information which is likely to reveal the identity of an individual (Agenda Item 12); and information relating to the financial and business affairs of any person, including the authority holding that information (Agenda item 13).

Resolved that the public and press be excluded from the rest of the meeting to avoid the possible disclosure of exempt information under Schedule 12A to the Local Government Act, 1972, as amended by the Local Government (Access to Information) (Variation) Order 2006 relating to information which is likely to reveal the identity of an individual.

To note the progress with regards to the resolutions from the Audit and Risk Assurance Committee.

The Committee noted the progress with regards to the resolutions it had made at the meeting on 16 September 2021 (Minute No. 47/21 refers).