Meeting Details

The Minutes of the meetings of the Business and Transformation Scrutiny Panel held on 7 December 2021, 6 January and 24 February 2022 were submitted for information.

In response to a reference to the meeting held on 6 January 2022 where the Business and Transformation Scrutiny Panel had resolved to recommend to the Monitoring Officer that the Council's Constitution be amended to enable the implementation of a two panel scrutiny structure, a Member asked whether the proposal would be a risk to the Council's governance structures?

The Corporate Director of Governance and Regulatory Services responded that the proposal was to create two panels, plus an ad hoc panel to scrutinise the Council's Budget process; given the reorganisation of local government in Cumbria, meant the changes were not a significant concern. 

RESOLVED – That the Minutes of the meetings of the Business and Transformation Scrutiny Panel held on 7 December 2021, 6 January and 24 February 2022 be noted.

The Manager, Audit (Grant Thornton) submitted the Auditor's Annual Report on Carlisle City Council.  Overall, the Council had performed well with no significant risk being identified during the audit process; a small number of improvement recommendations had been made relating to financial sustainability and governance.  No concerns had been identified in respect of Covid 19 grants.  

In considering the report Members raised the following questions / comments:

- The Minimum Reserves provision was at the lower end of the agreed acceptable scale, were Officers comfortable with that position

The Manager, Audit (Grant Thornton) stated that the Corporate Director of Finance and Resources had indicated she was confident with the Council's financial position.  

In response to a further question from the Member regarding the acceptability of the Reserves in the context of Local Government Reorganisation in Cumbria (LGR), the Corporate Director of Finance and Resources explained that each district council determined its own minimum reserve level.  She gave an overview of the factors that would need to be addressed in bringing the finances of the relevant individual councils and the processes used to achieve that.  The expected time frame for realising financial benefit form LGR was three to seven years.  

- In relation to contract tenders, was it still necessary for the Council to consult the Official Journal of the European Union?

The Manger, Audit (Grant Thornton) confirmed that the requirement remained in place until the relevant Statute was amended in 2023. 

- Had the recommendation that the Council complete the CIPFA checklist been actioned?

The Head of Financial Services & Designated Head of Internal Audit confirmed that the checklist had been completed and that a report on the matter would be submitted to the July 2022 meeting of the Committee. 

- On page 46 of the document pack, the report stated that the External Auditor was "not required to consider, nor have we considered, whether all aspects of the Council's arrangements for securing economy, efficiency and effectiveness ..."; the following page stated that it was a requirement of the External Auditor. 

The Manager, Audit (Grant Thornton) confirmed there was a typographical error in the report and undertook to confirm the External Auditor's duties in relation to the matter.  She noted that no concerns had been identified in respect of Economy, Efficiency and Effectiveness or Covid 19.

A member welcomed the new report format which she felt brought the information to light.  The depth of the audit had provided reassurance to Members.

RESOLVED – That the Audit Committee welcomed the Auditor's Annual report on Carlisle City Council and acknowledged the positive content therein.

The Chair presented report RD.74/21, which summarised the work carried out by the Audit Committee during 2021/22; and to demonstrate to Council and stakeholders the effectiveness of the Committee in maintaining the organisation’s internal control environment and governance arrangements.

A Member proposed the following amendments to the report:

Paragraph 2.3.2, that the final sentence be amended to stipulate when the External Auditor's judgement was considered.  

Appendix B be updated to note that the Committee returned to in person meetings in May 2022. 

The Chair undertook to incorporate the changes. 

RESOLVED – 1) That the following amendments be made to the Audit Committee Annual Report 2021/22:
i) Paragraph 2.3.2, that the final sentence be amended to stipulate when the External Auditor's judgement was considered;
ii) Appendix B be updated to note that the Committee returned to in person meetings in May 2022.

2) That the Annual Report of the Audit Committee, which would be submitted to the City Council on 26 April 2022, be noted and accepted.

The Audit Services Manager submitted the Internal Audit Progress 2021/22 (December 2021 - February 2022) report (RD.80/21).  The report provided an overview of the work carried out by Internal Audit between December 2021 and February 2022 along with information regarding: progress against the agreed Audit Plan, performance indicators, previous audit recommendations, and the amendments to the Internal Audit Plan.  

In relation to the implementation of previous audit recommendations it was noted that of 74 actions 21 had been completed.  The matter was a growing concern and the Senior Management Team had been made aware it.  The forthcoming reorganisation of local councils in Cumbria was another layer of risk exposure in respect of the outstanding actions some of which were due to be implemented during the reorganisation phase. 

In considering the report Members raised the following questions and comments: 

The Chair and Vice Chair expressed strong concerns in relation to the proportion of recommendations following audit not being implemented, as that was a critical element in the Council's management of its exposure to risk; in their view it was vital that key recommendations were actioned in a timely manner.  The Vice Chair proposed that the Committee's concerns be brought to the attention of the Senior Management Team (SMT) with a request that it take robust action to address the matter via a balanced risk based approach and, that a report be submitted to the next meeting of the Committee detailing the progress made.  The Committee indicated its assent to the proposal.  

The Corporate Director of Finance and Resources noted that the Audit Services Manager has developed a new process for keeping SMT aware of the progressing of audit recommendations.  The application of a risk based approach was welcomed along with a need for Officers to set out the risks of not implementing an audit recommendation.  The Corporate Director appreciated that managers may have a number of conflicting work priorities, but felt it was important that consideration was given to the likely implementation of high grade recommendations.  

RESOLVED - That the Audit Committee:
1) Ask the Senior Management Team to take robust action to address the low level of implementation of audit recommendations and provide a report to the next meeting of the Committee setting out progress made;
2) noted the progress against the Audit Plan for 2021/22;
3) received the final audit assignments as outlined in paragraph 2.2 of report RD.80/21;
4) noted the progress made on audit recommendation to date outlined in Appendix B.

The Principal Auditor submitted the Internal Audit Report - Workforce Development (RD.82/21).  The audit had provided reasonable assurances and generated 4 medium graded recommendations which the Officer provided an overview of. 

RESOLVED - That the final audit - Workforce Development report be received (RD.82/21).

The Audit Services Manager added that an outstanding recommendation from a previous audit had identified that, given the changes to working practices as a result of Covid 19, the authority's Homeworking Policy, which would address the concerns raised more formally.  Discussions with responsible manager identified an initial reluctance to undertake a full review of the Policy due to LGR, but following feedback from the Senior Management it was deemed that updated formal guidance should be issued to all staff.  In terms of risk exposure, the Audit Services Manager was of the view that the policy was needed to comply with the records management policy.  

- Had the funding to secure additional staffing resource been utilised?

The Head of Financial Services responded that the additional funding had been secured in respect of the Economic Development Programme Management Office to support its accounting and procurement procedures and that consideration was being given as to the best method of delivering that resource.  

The Chair further asked whether Local Government Reorganisation (LGR) was likely to impact staff recruitment?

In relation to funding the additional staff resources referred to in the report, the Head of Financial Services & Designated Head of Internal Audit (Deputy S.151) stated that the positions would be offered on a fixed term basis extending beyond LGR. 

The Corporate Director of Finance and Resources added that staff resource would be TUPE'd to the new Cumberland Council.  

- Had all staff appraisals been completed by the deadline?

The Head of Financial Services & Designated Head of Internal Audit (Deputy S.151) confirmed that all appraisals had been completed. 

- What impact had LGR had on the e-purchasing project?

The Head of Financial Services & Designated Head of Internal Audit (Deputy S.151) gave an overview of the project and explained that LGR would require a harmonisation of systems from the existing councils to the new unitary authority, as such to progress with the project at the current time may not be an effective use of resources.  Moreover, staff resource was needed to implement the delivery of LGR.  

The report noted that "reference to the migration of data to cloud servers, which has not progressed due to resource issues within ICT service", how close was the IT service to being fully staffed?

The Audit Services Manager responded that an attempt to recruit to the vacant posts had been unsuccessful, therefore consideration was being given to other methods to fill the positions.