Transcript

Good morning, Chairman. We are now live. A little damp, thank you. So I would like to say thank you to everyone for attending today, and particularly to Will and Shambhavi who are at the rear there. They are sit for trainees, I believe, and they are joining the team, so they are sitting in today to see how we conduct ourselves in the audit committee. I hope we don't disappoint. And our colleagues from fire and rescue and we will have the external auditors with us as well. I would like to make one announcement. We have all known Sue for many years, you may cock, and I understand Sue that you are retiring, so this will be your final meeting with us. So I am sure from all members of the committee we would like to thank you sincerely for all your help over the years. So thank you again and best of luck for the future. Enjoy your retirement. So that concluded. If we can then, on the agenda, move on to the minutes. Apologies if I haven't said I apologize. Thank you, Chairman. We have apologies from Councillor King. Thank you. Those are accepted, thank you. And declarations of interest. Any declarations -- no, I can do that at any time during the meeting, of course, if necessary. Okay. So we move on to item three, which is the minutes of the audit committee held on the 25th March. Paul. Just a small point. I actually sent my apologies in on the 4th of March and it was acknowledged on the 5th of March and it's not recorded on there. Thank you, Chair. Paul, thank you. Are we happy to approve those minutes then for the seconder? All those in favour, thank you. Okay. So if we can then move on to item four, which is the update of assurance on the implementation of the control systems for Lincolnshire Fire and Rescue, which we've touched on at an earlier meeting. But I'll hand over to Mark to fill us in. Thank you, Mark. Thank you. So the purpose of the paper really is just to give an update in regards to the assurance progress all relating to the implementation of the new control system. So a little bit of the brief background. This is really on the back of us agreeing that we would exit our current agreement with the East Coast consortium. And that was based on a value for money and a risk evaluation, recognising we had more resilient and value for money options in regards to having a standalone control system. And through that process and through a key decision paper, we awarded a contract that was implemented and signed in January 2024, which was enabling us to work alongside NEC to actually implement a new control system along with rotor availability systems, station end equipment, a secondary location for our control function and also our mobile data terminals. We've set a full governance programme put in place to mitigate the risks and to monitor progress. And we are looking for the first real significant milestone of implementation of the new control system by the 31st of March 2025. During this process, we are linked in through the LCC strategic risk register and we had identified three risk descriptors that we are focusing on. They are in regards to failing to procure a suitable system, which we are currently at a green status because we have actually secured the contract with the new system. The second risk is the implementation of the system, this is currently at AMBA and this is being mitigated through the robust programme and assurance processes that we have in place. And the third risk is the transition onto the new system and again this is being mitigated by the programme governance process that is detailed within the paper. A couple of areas which I think is worth pointing out, we have seen the significant benefit of actually appointing a full-time project manager that is dedicated onto this project. He's absolutely been moving forward the whole of this programme and also gives quite high detailed updates and progress on all of the areas relating to this programme. In regard to the formalities of the governance and assurance, we have an exec board that meets monthly and then we also have a steering group that they meet fortnightly and they are continually assessing the progress of the programme. In regards to the actual programme, we have split it into two phases, the first phase which is the element that links into the actual mobilising systems and our secondary location. As I said, that is all to be implemented by March 2025 and then the phase two of the programme which is our station and equipment and the mobile data terminals that will be completed by the end of 2025. At the moment we are making good progress in regard to that, we have positive working relationships with the primary supplier NEC. We have recognised there are a few areas in regard to the project timetable where they have missed some timelines on some of the pieces of work to move that forward. These aren't, as we have evaluated, risk critical in regard to the mobilising systems, so in regard to the high risk which is all about our statutory duties to ensure that we can provide an effective 999 system to enable that we can receive calls and to mobilise our assets to the people of Lincolnshire. In those areas I feel like they are going to be in any position being compromised during this programme and also in regards to March 2025 where our deadline is. One of the key areas that we wanted to mitigate early was if there was going to be any risk that the partnership wasn't able to deliver the new system by the deadline of the 31st of March 2025. We have entered into an agreement with the East Coast Consortium which we are currently under at the partnership arrangements and we do have an agreement with every other partner in there to extend if we require it, so we will continue to always have a robust 999 mobilising system. That was a very early mitigation of risk that we got in place and we have had that through what we call a deed variation which is a legal document that we have had agreed with all of our partners to ensure that we can continue with a robust and effective 999 system. If, and that is what I will emphasise, if we are not able to meet the deadline of the 31st of March but to give some assurance, all the work that we are working on at the moment we feel that we have sufficient confidence that we will meet that deadline. So, Chair, that is really a bit of an overview and I think would be useful probably for me to just pause at this moment. I should have said at the earlier programme, I have got Steve Topham here, Assistant Chief Fire Officer who is the programme sponsor for this who has all the technical details and knowledge in regards to this programme, so obviously we are here to answer any questions that we have. Thank you. Could we go to, sorry? Thank you, Andrew, keep moving. Thank you, Chairman, I was quite happy to follow you, if necessary. The situation is that we have got a green risk that is now being dealt with by virtue of the fact that we have actually let the contract, although the risk is failure to procure a suitable system as opposed to failure to actually obtain the actual contract. I mean the system still needs to be delivered to a great extent and those risks are obviously both amber as we stand at the moment. This is a significant issue in terms of the 999 calls, you know, so it is very important that we do try and deliver as you set out in your presentation. The, and I am sure that we will get further reports in due course to show that we are progressing over whatever is left now, six, seven, eight months, something like that. You know, the horizon and date is, you know, with invisibility and so it is going to be key, I think, to see that work does take place that actually moves us in that direction. The comfort that I have is that we have the ability to continue with the current arrangements with the East Herra Fisher, is it, fire and rescue system, although I did, I think, see in the earlier report that we had actually given notice of that, as we have to, and that we would not be party to that as of the end of March next year, and because there is a notice period that goes with it and I think that is why you have to give notice. And I did, I think, see in the previous report that you were trying to actually get an extension of six months to actually cover any difficulties that might occur in March next year and give us the comfort that we have got, you know, a system that we can continue to use. I thought that was under negotiation, does that mean that we have actually negotiated that now and we have a legal document that gives us that right to a six month extension to the current arrangements, is that correct? Yeah, just to confirm on that, so as you rightly pointed out, part of the East Coast Consortium terms of reference, any partner that wanted to withdraw from the consortium needed to give 12 months notice. We had to give that 12 months notice to ensure that we met our deadline of 31st of March 2025, but we did enter into those negotiations and we have created what we call a deed of variation, which enables us to have a six month window to withdraw formally, which actually does give us more flexibility and actually also does give us an additional resilience and we can evaluate, even if we are going to meet the deadline of 31st of March, we may want a few months of a transition period to enter there, so it does give us that assurance that we have got that flexibility to ensure we have got absolutely no compromise for our 999 systems. Can I just confirm that a deed of variation is now signed by all parties? Yes, it is. Yes. Thank you. Also, expressing assurance and comfort, although when you mentioned the word horizon, I thought you were straying into post office territory there. The problem with new systems is typically not the buying and matching the spec, it's the ongoing management of implementation. If you take your eye off that ball, that's when things go pear shaped. I see nods from your technical colleague there. So I take comfort from the fact you have decided to make the investment in a project manager from whom you will be getting regular reports and maybe we will receive periodic reports as we approach the nine month deadline and that gives me assurance that you are anticipating it can go pear shaped and you have got somewhere to tell you if it is. Yes, that is absolutely true. What isn't necessarily in the report is we have put four months of parallel running in there, so we have a significant period of running both systems to make sure that the system we are purchasing is as resilient as we need it to be. Actually, the system is running in other services around the country and feedback is extremely positive, so it is a well tested system. However, having said that, we were insistent that we had a significant period of parallel running to make sure that the system did provide everything we needed to and we ironed out any technical issues we might have prior to the 31st of March 2025. Thank you. Just on a minor point, really, I noticed that you are looking at mobile data terminals. Those of us who live in parts of the county, rural areas, will know that the Wi-Fi connections for 4G are not particularly good and I know that from a different authority where they have actually installed terminals in their dust carts, for instance, they have not particularly worked well and there's been issues with the NHS as well on their things. I'm just wondering if that has been looked into and what is being done to ensure that if there was a disaster in one of those areas that they're not being penalised by poor broadband connectivity. Yeah, that's a really valid point and so we've had similar issues in the past. We've had mobile data terminals for some time and do see the signal dropping out. The specification for the new system will allow the information to be held locally so there will be nothing stopping crews accessing the information they need to. We have backup systems as well which allow other forms of communication so there is some resilience built into that given the risk criticality of it but that is a key point, yeah. The specification will include the ability to hold that information locally to make sure crews absolutely do have the information they need at the scene rather than relying on an internet connection effectively. Thank you and if I could just take it a step further. I don't think this has ever occurred with the fire and rescue but perhaps not that it has with the police. I know that when we are sending vehicles out into the rural areas following sat navs and things they can end up in areas which are not accessible to vehicles. I'm thinking particularly an area around Teilby where there's a fall which probably wouldn't affect a heavy vehicle like the main tender but it might do for smaller vehicles, is that being looked at as well? Yeah, the arrangements Control have for mobilising and getting vehicles to locations is very, very intricate as you might imagine so a lot of that information is contained in Control which is why this system is absolutely key. So they have all the up-to-date information on accessibility, routes in, routes out, what routes can accept a heavy goods vehicle which is essentially what a fire engine is. So yeah, all that information is absolutely caught and kept up-to-date on a regular basis through Control. Thank you Stephen, Andrew and Mark. Any further questions from Mark? Just one from the chair Mark if I may and to Steve as well. Are we happy about the four-month parallel running period as you have indicated towards the end of the report that that may have been a bridge somewhat? Yeah, that was deliberately put in as four months. The view professionally from those who are technically more qualified is that that is excessive. We have built in the capacity to reduce that down. In fact we have several plans in the background to model what that would look like if we concertinaed it if we had to. We are absolutely adamant though that we're sticking to that as things stand at the moment. That is not a safety net for the provider to just extend their current deadlines. Absolutely we are aiming for four months of parallel running. However we do have plans in the background. If we do need to concertina that slightly or compress that slightly it's prudent to have that in place ready to go. All the indications are that we're going to deliver and have a robust system by March 2025 and that is everything that we're gearing up for that including the four-month parallel running time. Thank you for that assurance. Thank you gentlemen. I think the Commission would agree with me and my Vice-Chairman has suggested perhaps we could ask you to come and give us another update in about three months time if that would be okay? Yeah absolutely Chair. In regards to the exact date if we might just have a bit of a confirmation because I think we've got some key timelines coming around about that. So I think it would be of benefit for in regards to that scrutiny assurance that it does tie into regards to when we've got some key timelines in regards to that project plan. And also whether it's just assurance we do report into public protection and community scrutiny so we have the ability to be reporting into which is our main scrutiny board there as well. It's just also that understanding that we're reporting into two committee meetings at the moment in time. So if we can move on to the Monitoring Officer's annual report please. Thank you Will. Thank you Chair. Yeah this is my first report for the period 1st of April 2023 to 31st of March 2024. It follows the format previously approved by this committee going back a number of years and I should just pay credit to my predecessor David Coleman who has contributed to this report for the period through which he was still an employee of the County Council so thanks to David for his time and effort on that. I'll just take you through the constituent parts or the main constituent parts of the report. Firstly in terms of my role as a moniker officer to ensure that the constitution remains up to date and legislatively compliant. I have embarked upon a thorough review of the constitution and members will recall that I brought my first report on that to the committee on the 25th of March with those changes that were identified in that report being approved by the full council at its annual meeting on the 17th of May. And further reports on the progress of that review will be submitted to this committee over the next few months. In terms of lawfulness every decision making report that comes before the County Council the executive or individual executive councilor is required to contain a legal comment from myself as monitoring officer and as part and parcel of this I am carrying out a review of the decision making report template to enhance that process but nonetheless I am pleased to report that as a result of these controls there was no occasion during the year where I had to issue a formal report indicating that the lawfulness or legality of any of the council's decisions was called into question which is a real positive. The report also deals with the council's interaction with the local government and social care ombudsman. For the period of the report 64 referrals were referred to the ombudsman, 50 of these were not investigated. Of the 14 that were, three haven't been concluded at the date of this report so will be picked up in next year's report and that leaves 11 cases, three of which were remitted to the satisfaction of the ombudsman. One was investigated and no fault was found. Seven resulted in findings of fault and I have given details of those seven cases in the report but pleasingly none of these were resulted in a public report being issued against the County Council. In terms of standards and code of conduct 10 complaints were made against members of the County Council for the period and all were made by members of the public however eight didn't engage the code of conduct and I dismissed under my discretion under paragraph 36 of the standards arrangements because in essence these were complaints in some cases incorrectly directed to county councillors when they were actually district council matters but also complaints in relation to the tardiness of members responding to issues so members were contacted and asked to provide responses which happened so in those circumstances the complaints didn't progress into the formal code. Two were progressed in accordance with the code arrangements but following consultation with the independent persons no further action was taken and consequently there have been no hearings under the arrangements against members of the County Council for the period in question and again members will recall that I did bring a report again to this committee on the 25th of March seeking to make some minor adjustments to the local hearings arrangements also the arrangements themselves and also to put in place a model form of complaint to be completed when complaints are brought against members of the County Council and again those amendments were approved by the full council at its meeting on the 17th of May. In terms of register of council interests members have been contacted as is the course following the annual general meeting to review their register of interests and members have completed them and similarly some members have sought dispensations for publication of sensitive interests under the Localism Act and these arrangements are administered by democratic services and registers of officers or interests again have been completed by officers pursuant to their obligations in respect to the register of officers or interests. In terms of the council's activity under the regulation of the Investigation of Powers Act 2000 there have been no applications for the period in question there is a review of the Ripper policy currently underway at the moment and this will be reported to the relevant Executive Councillor for approval in the next few weeks but as I say for the period in question there have been no applications for authorisation and finally in terms of whistle blowing a review of the current policy is underway and been completed by my colleague Claire as Head of Audit and this will be reported to the committee in due course. So Chair that is my report and I'm happy to take any questions. Thank you Will for that information. I will pass over to my colleagues. Andrew. Thank you, helpful, informative and in that respect an audit committee should be satisfied that you've looked at the right things alerted, reported, accurate etc. I'm interested in the substance behind the seven complaints for example, discovering you've got a problem through a complaint might suggest that the horse was out before you closed the stable door and maybe we should have picked it up through normal monitoring systems and even I might ask of Claire was internal audit suspicious in this area etc. And then having highlighted these complaints and I'm particularly about the admission to education at statutory age even though compensation was paid the damage to the child might have been greater than a few thousand quid because they may have been excluded from education for a significant period of time. So what happens to that issue? Is it picked up by education committee to say have we got a problem with our admission arrangements or what? Yeah, thank you for that. My understanding is that actually in terms of those issues that children's services I put it in the report have confirmed that they have reviewed the policy in light of these issues with the DFE and that policy has been reviewed to the satisfaction of the DFE so hopefully that has now been addressed in terms of that policy issue. So hopefully that assists in that regard. Thank you Chairman. I was interested in the same issues that Andrew Middleton has just raised with you. But overall it's very comforting I think to see that you are enhancing our procedures or filling in gaps in our procedures or bringing them up to date and I think which is very, very useful. It does give us a degree of protection. The question I was going to ask is the same as Andrew but it's very interesting to see what's been picked up and what the results of the complaints were but it's most important that the relevant committees are aware of these issues and to adjust their processes and procedures to actually ensure that these issues don't occur again and that's not really for the audit committee to do that. It's I think for the audit committee to see that these things are being picked up but it's the in-house committees I think that have to deal with them. I'll ask a different question then in that case. The council's register of interest is a public document I believe. Is the officer's register of interest a public document or is it purely internal? It's an internal document. Some councils do publish it. I think most don't. There's no legal requirement for it to be published. So as I say as things currently stand it's an internal facing document. What I would say to give some comfort on that as well that every week I receive declarations from officers, appropriate declarations and the declarations come across all directorates of the county council which suggests to me that the process is well embedded across the organisation which is a real positive. It's not just certain directorates as I say there's a wide covering across the organisation and it's a fertile area of declaration which is really encouraging. I think it's well understood. It's well managed. As I say the managers are clearly giving the appropriate advice to officers to ensure that declarations are made and as I say they come through to me on a regular basis and all are entirely appropriate. There's nothing that I've been asked to consider that's given me any cause for concern other than officers recognising the need to make the appropriate declaration and doing it in a timely manner. So as I say that's a real positive as well. Can I ask a follow-up question then? The purpose of the members' register of interest to a certain extent is to ensure that they're aware of what that entails and that they take appropriate action in terms of not taking part in votes or discussions or fundamentally the business of the council if there is a conflict of interest. So what is the purpose of the officers' register of interest then? Obviously what you say is being used and there's no question that interests have been hidden away but what is the purpose of it? A similar purpose in reality so that officers that may have an interest recuse themselves and being involved in any further decision making. For instance if an officer were to declare an interest in a particular contractual issue then I would ensure that as a result of that declaration through appropriate recommendation that the officer wasn't then involved in any further procurement or contractual arrangements in relation to that particular organisation that the interest has derived from. And as I say that's the pleasing aspect for me is that officers do from time to time, perfectly understandable in terms of their private lives, there will be a conflict and they raise that conflict through making the declaration and that means that they then will be recused from any further involvement should they have an involvement and in the vast majority of cases the declarations are more akin to sort of gifts and hospitality issues where service users have wanted to express their gratitude to the support that an officer has given so they will give them a small gift or a token of their appreciation. That's I suppose the main area of declaration but there will be, as I say from time to time, those where officers through their private lives will have relationships with external bodies that will be declared and that will then mean that that officer will not then be involved in any, as I say, further arrangements. So as I say from my position in sort of overseeing these matters I think that just demonstrates to me that as I say the process is well embedded and understood which is a positive. So thank you very much, that's fine. Thank you Will for that very detailed response, very much appreciated. I do, I'll anecdote a little, the democratic services on a member level are very helpful in assisting members to make the right declarations so any members, any queries or whatever they're always most anxious to help just as a point of information. A very short question from myself. The RIPA powers, I suspect for county council there will be very few instances where we'd need to use those certainly from a district council it would be different. Can you just give us some information on that one please. Yeah that's absolutely right Chair. I think from the county council's perspective it's few and far between. It's more in relation to its trading standards and consumer protection responsibilities as you say at the district council level, much more fertile areas in terms of benefit fraud and enviro-crime which of course not functions at the county council is responsible for. But as I say we recognise that the policy does need a refresh and that has been undertaken at the moment but alongside that we're putting in train some awareness sessions for officers in terms of RIPA and reviewing the list of authorising officers because at some point in time we will be due for another inspection so we're trying to get ahead of the game on that. But again from the conversations and discussions I've had I am satisfied that the nil return is an accurate return because as you say in terms of the limited scope that RIPA has for the county council but nonetheless I am keen to ensure that along with the constitution that it's as up to date as it can be and that we do have a sufficient awareness across the officer structure as to whether there is a RIPA issue or not but I am satisfied that the figures are appropriate given the functional responsibilities of the county council. Thank you Will and further questions from the council? Thank you very much Chairman. I just with the county's recent investment into anti-social behaviour boosting the district's teams this might actually influence the rewrite of the RIPA and I just thought it was an opportune moment to mention that. Thank you Jim. So we have a recommendation that we consider the report. Do I have a seconder? All those in favour? Thank you. That's carried. Thank you. So if we can move on please to item six which is the draft statement of accounts and we have obviously had our training on those prior to the meeting so I'll pass over to Sue Maycock to present the paper. Thank you. Thank you Chairman. So this is the draft unaudited statement of accounts for the financial year 2023-24 and members are asked to consider the draft statements as well as the contents of the covering report and Appendix C. Firstly I'd like to apologise for the lateness of issuing these draft statements to you and I appreciate that you won't have had very much time to read them. The covering report explains that we've had some difficulties this year in closing the accounts. The statutory deadline was the 31st May which we didn't meet and we were also unable to meet the audit committee report deadline of last week. As required we published an explanatory notice on the Council's website on the 31st May and we notified our external auditors that we were unable to meet the statutory deadline. So in terms of why this had happened, members may recall that in April 2023 the Council implemented a new version of the finance and HR system and this was therefore our first year of closing the accounts using that system and I think it's important to say that in most areas we had no difficulties as a result of that new system. The finance team prepared well for the fact that we had a change. We asked people to practise running reports early and highlight any kind of omissions and gaps to try and mitigate against that risk. But there was one area that did cause us difficulties and this was the accounting area of capital expenditure and fixed assets. So the issues were firstly that we couldn't migrate any of our fixed asset data until after we closed our 22/23 accounts and were also far enough through the external audit process to be confident that that data wasn't going to change. This meant that we started that process of data migration quite late and then we hit some issues when we were migrating the data and it meant that the hosts of our system had to engage a fixed asset consultant to support us with that work and help to resolve the problems. That was in October of last year and then immediately after that we went into a period of testing for a system upgrade in November and December and once again hit problems with the fixed assets part of the system and it took some time to resolve those problems. All of this meant that the process of converting our capital expenditure into fixed assets couldn't start until February and in a normal year we'd start that work in October so we were some months behind at that stage. There was therefore a lot of work to do in a very short space of time and then the process of converting that capital expenditure into fixed assets was more difficult than usual because of the way transactions had been coded in the new system and again that contributed to it taking longer to do. So all of those issues put us about a month behind where we would normally be in our closure timetable for capital fixing the out-term position in terms of spend against the budget and then the fixed asset work that follows. Now the fixed asset accounting entries don't impact our revenue budget and our net position against the revenue budget but they do affect many areas within the accounts so we've been working really hard to try and catch up from that late position we were in. Unfortunately despite that we couldn't achieve the statutory deadline. So the accounts that we circulated to you on Friday are almost complete but not quite. We have a handful of validation areas that we are still working through and what that means is that some of the figures in the accounts are probably going to change as we resolve those errors. None of those validation errors are material in value so I do feel that those draft statements that you received on Friday do give you a reasonably accurate picture of our transactions in the year and of our financial position at the end of the year so we don't expect the changes we make will be significant. So we're working towards publishing a complete statement of accounts ready for the audit this week and we'll ensure that you're sent a link to those when that happens. In terms of the covering report paragraph 1.1 sets out those areas of the accounts that are incomplete and also confirms that although the section 151 officer has seen parts of the accounts he obviously hasn't had the opportunity to review the full set of complete accounts so that will also need to happen before they're published. So when we published the committee papers on the 7th of June we did provide you with a draft narrative report and also the Lincolnshire pension fund statement so that you would have something to read through. These are both included in those draft statements issued on Friday. The narrative report in the draft statements has been updated since that earlier version that you saw but the pension fund statements are the same as those in the appendix. As is usual the pension fund statements may be subject to change so if we receive updated valuations for assets as at the 31st of March that are materially different from those included in the draft accounts then changes would be made as is usual and these will be reported to you. So although we've had some difficulties in closing the accounts, the accounts themselves contain no surprises so we've not reported any exceptional items of expenditure or income and you may remember in previous years, the past two to three years, we've been reporting expenditure and income on COVID as being exceptional but not this year and also our balance sheet has remained fairly stable when compared to last year's balance sheet. So again in previous years we've had quite big swings on the net pension liability position but in this year the difference is not that great. We've also included details in Appendix C of the final fees from MSARs, our previous auditors for the pension fund audits for the last two years for your information and we reported the audit fees for Lincolnshire County Council earlier in the year to you. So they're the main points I wanted to make, thank you and as always we're happy to receive any questions or comments from members. Thank you Sue and obviously as you rightly pointed out, the fixed asset element doesn't affect any taxation issues but it does pervade all the notes in the accounts so we put one figure in and it requires a lot of automatic changes but they will change those figures so it's quite technical is what I understand. Thank you Sue and these comments come from not just what I've read and what you've said but also from the training session we had previously which I always find valuable as an occasional visitor to this chamber. It's a measure of your professionalism that you've been so fulsome in an apology that I, let's put it this way, I don't think you've committed a felony or anything like that. These were almost inevitable hiccups with new systems and approaches and whilst I appreciate your apology I don't think it's a serious issue at all. What is comforting about these accounts is that they're boring, they're unexciting, there are no surprises, the variations from budget are minor and it paints a picture of a highly prudent decision making authority that does not do silly speculative things unlike many others that make the headlines. A very clear financial management and reporting system, a symbiotic relationship with the audit committee because throughout the year we're always pressing and probing and challenging you to give us greater assurance and comfort and finally there would be hundreds of councils who would die for accounts like this and the papers that go with them so my overall comment is congratulations to the team for an excellent job. Thank you for that, I'll make sure I pass that on to the team. Thank you Andrew. Ian. Thank you Andrew, I was always stolen thunder on that one as well but I'd say also from my point of perspective just so the rest of the committee is comfortable, I had a chat with Michelle last week, we were going through some of the technical areas. As an accountant I'm completely a) have been there, got that t-shirt and shared the degree of empathy that goes, we've all been there. The revaluation, I'm happy with the technical treatment, I think it's just that recovering even a month is very, very difficult, we're really back on track, I know we're a little bit behind but for me I have absolutely zero concerns and I echo Andrew's thanks as well. I think actually if you look at the actual detail in the accounts there's a lot less newsworthy stuff this year which is even better but I think there will always be the challenges but again it's that bit of, we know where it's come from, I know when we're talking to Michelle as well, the other company that we involve with this have never used the revaluation model before so again there's a lot of this is actually we're trying to find out ourselves and again that's quite an interesting moment in life when you realise nobody can help you so but for me I just want to say thank you and I think the guys are doing a fantastic job. Thank you Chairman, likewise I'm very comforted in terms of what I've seen in the reports and there is an understanding obviously of how the hiccups occurred. The question I'd raise is next year when we're having the same sort of meeting will those issues not be an issue, it's just a hiccup this particular year, is that the case? Yeah I think it is, it is the case, so we've been working closely with the hosts of the system as well to rectify the issues that were discovered, I think there's one remaining one to do which would have been done by now except for they needed us to do testing on it and we just said we simply don't have the time to do that whilst we're still closing the accounts so we found a manual work around for that and we'll do that testing and implement the fix after we've finished. The coding issues have been rectified from April as well and I think we've got plans to implement our closure in terms of converting capital expenditure into fixed assets much earlier in the year this year so I'd be really, I know I won't be here but I'd be really surprised if you had the same problems next year, I'm sure you won't. Thank you Sue, we'll send you a letter. I think it's also worthwhile pointing out that there's lots of councils in the same position for various reasons and probably not as understandable as the reasons that we've been given today and there are lots of councils that have still got years of previous accounts outstanding so we are in a far better position than lots and lots of councils. Just a point of information Sue, you did refer to the 23 accounts, have they been formally shut down on the system now? Yes they have and the balances have been rolled forward into the 23/24 year so that's all done, thank you. There's no capability of going back for security reasons and putting, in other words the auditor's got to agree all those figures before you do the final carry forward. Yeah I think the auditors will be paying attention to that because those opening balances for 23/24 come from our old system and not the new system so we've already had engagement with their IT auditor asking questions about that so yes that will be something they'll be looking at. Yes, thank you chair, so in terms of that specific issue if you recall the audit plan that I presented at the last audit committee that included a specific other risk regarding data migration and that's that exercise that Sue's alluded to there in terms of looking at that data exercise, it's probably just helpful if I mention the impact on the external audit so in terms of the impact, first thing we think about is practicality, is this going to delay anything? It's pleasing to know that the pension fund accounts we've already started that audit so that's good. In terms of the council's accounts we're not planning to start that until the 8th of July and we've been in regular communication with various colleagues at the county regarding do we need to face some of that work slightly differently and we will continue that discussion with colleagues as well. One thing we also do is revisit that risk assessment, once we get a set of accounts we reflect on what's happened, does that change any of our risk assessment? So you'll recall that the last audit committee we presented about significant risks, below that we have risks rated as base and elevated, we will reflect on this, the issues the council's experienced and think is that still the right risk for each of those areas and we'll provide an update in our ISO 260 report which we then present. There's been a comment regarding the impact on the financial position and it not having an impact and certainly that's my feel for it, now I can't conclude on that because I've got to undertake the audit and make sure there's been no significant amendments to those usable reserves but certainly that's the indications I've got and we haven't seen any risks during the course of the year such as the county not being able to monitor its financial position and I have seen that at other local authorities that have implemented new financial systems in the past so there's no specific risk indicators there but again I will revisit that once we do our audit of the financial statements and the impacts on our VFM responsibilities. Thank you myself for making that so clear, thank you once again. I will pass over to Andrew. What one supplementary if I may and I'm pleased that KPMG are looking at pensions at the moment. Well beyond our control this scenario ebbs and flows doesn't it, I understand eight years ago you were required to top up the fund to a fair extent, I've read in financial pages that the scenario looks a bit more rosy that some schemes are in surplus now so two things Michelle, if there were, are there big shocks coming along in pension liabilities and commitments that we may have a problem with or have we got prudent reserves to cope with some moderate size risks and or where are we at with our pension fund funding levels at the moment. So Claire might be able to help me with the funding levels, I'll just answer that bit first and actually on the liabilities that's a lot to do with our actuary and their assumptions and Claire can comment on that as well, thank you. Yeah, happy to. So if you actually look in the pension fund accounts there are two notes in there, one which describes the funding position on a very similar basis to the funding position in the councils account so on an IS 19 basis so that's basically a very fixed period in time. Note 17 sets out the funding arrangement so that's where we were funded at the last valuation which was undertaken for April 2022. At that point in time the fund was just over 100% funded, that's at a whole fund level so LCC will be very slightly different to that as all our employers are. If you roll that forward which is set out in that note which the actuary does for us on an annual basis for our accounts, in terms of our assets performance has been good so we've kept pace with the discount rate that has been set for us. Liabilities however have increased so our funding position has reduced overall. At the 31st of March that was around the 95% mark. The next valuation will be April 2025 so there's still a little bit of time before that and we will obviously look at the assumptions with the actuary as to what will be appropriate going forward. I would anticipate that there might be a deficit for the County Council at the next valuation but that overall contribution rates will probably stay broadly the same. Thank you Claire, obviously the detailed note 17 on the accounts that we can look through, so thank you again and Andrew. So can we ask some questions of Michelle regarding the accounts in full? I just wondered about asking some further questions on the accounts. We touched on this on the pension fund accounts but this is really important on the main accounts, the level of reserves we have. Now I know some of them are non-cash reserves and they're the bigger figures in terms of revaluations and those sorts of things which are annotated on the notes of the main accounts and we've got again a smaller but still very large figure regarding usable reserves but can you just explain to us how important those are in terms of our financial resilience and also our financial volatility reserve which understands in the region about 27 million, we're understating that and also that is prudent and a wise thing to do in terms of what we see at other local authorities. So I'll pick up on that. So the balance sheet that was in the draft statement of accounts sets out our usable reserves and our unusable reserves and as you've said chair, the unusable reserves are just effectively balance sheet entries, accounting entries that recognise the change in the valuation of things like properties and things like that. So the usable reserves are the cash backed reserves and they are key to the financial resilience of the council and dropping values of reserves is a key indicator of financial stress so it's a key thing that the auditors will be looking at in terms of our value for money and a key thing that the government are looking at in terms of our financial resilience and going forward. So we currently have a financial volatility reserve of 47 million, so you did understate it a little bit, so that's 47 million and that hasn't moved for a couple of years and that's a reserve that the section 151 officer has in place so that he can give assurances to council when we set the budget that we have enough reserves if we have financial stress going forward to make sensible decisions and to move forward with any changes in our funding level or budget pressures and things like that. We have a general fund reserve which is around 2.5% of our total net budget requirement and we aim to keep that and that really is the reserve of last resort and that reserve hasn't been drawn upon I think in the whole time that I've worked in the finance team of the county council. We've maintained it at that level which is just over 16 million and that is the reserve of last resort. It's probably worth noting as well that we, as part of our budget setting every year, we have a contingency which we have drawn down on the last couple of years because of our cost pressures in our system but we've had sufficient contingency to deal with any unexpected cost pressures in year. The usable reserves you'll see have gone down from last year to this, 7 million I think that value is, and that was part of our planned budget setting for 23/4. We'd planned to use that so we could invest in highways and that was a decision that was made in council. So the key thing around financial resilience is looking for any unplanned use of reserves and the need to draw down reserves to cover day-to-day expenditure and we're not in that position and that's quite key to our financial resilience. I hope that covers it. Thank you Michelle. I think that's a vital point and one that members should note going forward as well that serving an adequate level of reserves is absolutely and utterly crucial in any organisation, whether it be in the public or the private sector. In terms of our revenues, I've been looking at the monies, we've got some council tax and everything, that seems to be a little bit up from last year. Obviously we've had quite a lot, huge figures, our interest on deposits and things, substantially more than it was the year before and we'd expect that because of rising interest rates. And looking at the narrative report, looking forward again, looking at the reserves, we're going to have pressures in both children's and adults' social care and that's over time, I think that's inherent pressure we're going to have for many years to come. So I think it's something that we've been reporting on for a little while, so there's some key pressures that the council are dealing with, so children's social care placement costs, children's school transport and adult placements are also starting to create some pressures because of the rising demands around adults with learning disabilities and mental health issues. So I think they're all pressures that are national. I think they are more challenging in some areas of the country than others, but something that the government recognises and do look certainly recognises and keen to work with people to try and help with those scenarios, but definitely pressures, definitely national pressures as well as local. Thank you Michelle. Thank you chair, in fact actually you just really picked up what I was concerned about with the pressures on income and expenditure, but just on the adult social care and children's social care I can understand a national thing. Bus school transport from my experiences before I was a councillor in schools has been a major problem for this council for a long time and really I understand that there hasn't been much change nationally. Is there anything we ought to be doing to try and mitigate the potential problems there because at the moment I think we have cut quite a bit of transport haven't we for sixth formers and that sort of thing which does have some effect on their education ability. So quite a lot going on in the transport realm. I think county councils networks produced a report actually as well to look at the national picture. I think mainstream provision is fairly static if you like in that its cost and numbers of demand are fairly stable. The area that is providing the most challenge for us and nationally is in the special educational needs and alternative provision. So increase in numbers requiring specialist types of education has had a massive impact on our school transport requirements because they're often not local schools and the rising numbers are challenging that. So we have just finished or in the process of finishing a £100 million investment in specialist school places and they're looking at a second phase now to try and create some hubs in schools to try and make more local provision for special school places alternative provision as well looking at the impact on that. So there's work being done and looking at the procurement as well so whether we can procure that differently to help with some of the cost pressures so quite a lot of work going on in that area as well but demand will always be a challenge whilst those send numbers are increasing. Can I just quickly come back on that. Welcome obviously money going into special education needs and send and so on and behavioural issues. We concentrate mainly on primary as I understand. It is the problems that I think being faced in the secondary level which is and also could be more expensive particularly if you're having to buy out and pay for transporting out. Are we looking towards capital investment in those areas and it's not strictly this committee but I think it's important that that could be a great challenge on our capital levels. Yes, something that I'm sure will come back to children's scrutiny in time but they're definitely looking at a second phase of specialist provision now and more of a hub based approach maybe in mainstream schools that will probably cover the children in that cohort that you're talking about. Thank you. To go from one extreme to the other, can I ask you a really nerdy question now? IFRS 16, one of the joys about, yes, sorry, there we go, the sheep size kicking in, adoption is one thing, maintenance is another and I think that's what a lot of businesses are now finding. It's like great, you did a huge amount of work to actually capture the 16 and the leasing requirements. How are we in terms of being able to keep on top of that because obviously we've made some working assumptions and... Yes, so we'll pick this up. I think probably just one thing to mention is that we've had an awful lot of support from our property colleagues which has really been reassuring. I know the valuers have been involved for training, haven't they, to try and support and have been massively supportive in that but I'll hand over to Sue to give you a bit more detail. In terms of this set of accounts that you've seen today, we have included IFRS 16 in note one so we've disclosed what we think the impact will be on the 24/25 accounts because it's implemented from the 1st of April 24 and I'll be honest with you, it's been hard work this year pulling together the information that we needed to do that. So we finished that now and all of the information is in note one and as a team, we had a session just last week where we all just contributed our ideas as to how we are now actually going to implement it in the accounts because we haven't done any accounting entries for it, it's simply a disclosure note at the minute and there's a lot to do this year so we'll be busy. I think the team will be very busy on it. Do you want to give a quick summary of what it is? Well, yes. I don't know what it might be. Yeah, it's a new accounting standard for leases and what that accounting standard says is that where the council is a lessee, so where we are using an asset, so it could be a property or it could be a vehicle or a piece of equipment that we don't own and we rent it or pay lease rentals, all of those assets have to now be considered to see whether they should be accounted for as our assets so they go onto our balance sheet and that's the exercise we've been through this year. We've had to try and identify all those leases and sometimes they're not called leases, they're lease-type arrangements but they're not actually called a lease so you have to try and find them and then you have to assess them and there are some exemptions so things of low value don't have to go onto the balance sheet so all of our working papers will show all of the leases we've looked at, that assessment as to whether they're on or off and then when they're deemed to be on balance sheet what we think the accounting entries are going to be when we implement next year. Could I just ask therefore because I say this is the shared pain point, is we are massively exposed to that almost better, more significantly than my day job anyway. I think I'd like to get a sense halfway through the year before we get to that so when KPMG are coming in and they've looked at it there's that sense check because I know it's a pain point coming. I think it's really important that we get ahead of that curve so whatever it fits in terms of the audit committee cycle I'd like to have something presented here to say right where's that learning, have we checked it out because it will trip us up if we're not careful and recovery from that is going to be a nightmare so I know Councillor Allen said, I agree we haven't repeated this year's niggle that is my 20 quid bet with that will be next year's niggle. Going back to the issue of transport and special education needs et cetera, I recall a radio conversation with the leader of the West Country Council and I was surprised at the significance of the issue, the size of impact on the budget and the rising cost of it, it's not small beer. So this is an observation and I must declare an interest here chair as a former principal of a Lincolnshire FE college that lived by county funded transport without which there wouldn't have been a college in Stamford because it draws from a rural area. It can be tempting to seek savings, cash savings by pruning those budgets but the potential impact on educational opportunity and meeting particular student interests and needs is equally major so I'm sure the education colleagues who are in discussions on these budgets will be making those points to you that it can have a massive impact and an unequal impact according to family income. Professional families may easily afford a significant contribution to transport but it might be seriously deleterious to the choice and opportunities for people on low incomes. So having declared an interest I've contributed a sort of informed perspective on that so it's a plea to the policy makers, consider the impact on opportunities and access. So just to provide some reassurance, as far as I'm aware there is nothing built into our budget that would suggest any policy changes going forward so I do think we have a charging policy for post-16 I don't think there's any plan to change any of that either way that the key pieces of work are looking at procurement and scheduling, things like that. Thank you, Chairman. I would just like to pursue the resilience issue a little bit further if at all possible because I do see that as being quite important particularly in terms of what is facing all of us over the next six months in terms of elections and election results across the UK, Europe and America even and the consequence of that. And resilience to a certain extent is a little bit of crystal ball gazing and we have the same issue with pensions although I keep on getting told in pensions that it's a long-term investment and it will all work out in due course whether that's going to be the same for core council expenditure it may be a little bit more difficult to actually assess and analyse so I just wondered whether a resilience to a greater extent is dependent on the reserves that we hold. I was just hopefully seeking some comfort that we have enough resilience to take us over this what could be quite a difficult situation for local government expenditure with new governments coming in and opening the drawer and finding the letter there that there's no more money left and what are you going to do about it. Is there enough money, do we have enough resilience built into the immediate situation to at least get us over whatever the consequences might be of all these changes coming into effect? So I think that financial volatility reserve is our key resilience measure that would take us going forward. It is but is it enough? It is, well I think there's a professional view that it's enough yes so we've done some forecasting based on the government projections around reductions in funding for non-protected services which is effectively what local government is they've set, well the current government has set forward their spending plans going forward for public services and they set their dels for this area as a non-protected service that would mean a reduction in budget for us, a reduction in funding for us and we've kind of modelled that and the financial volatility reserve would see us through that period of time obviously you'd have to make decisions during that time about if you needed to make cuts or savings or whatever but absolutely it's seen as sufficient to see us through that period, yes. Thank you Michelle. Just looking at the financial statements overall and we take account of a reserve position on pension schemes Claire quite rightly has pointed out and on the main accounts for the County Council but I mean looking at the main balance sheet there's a few changes there, there's no unexplained movements that we've got, there's no big numbers going backwards and forwards which is good and I think we've reiterated the importance there for the reserves and we will get a full sheet of those won't we Michelle, that's my misquoting of the numbers but I should have known it was 47 million not 27. And going on to Ian's very technical point about the definition between an owned asset and a leased one highly technical but this is a national policy for just accounts in general so it affects the private sector similarly but I mean the irony of it is we're putting onto our balance sheet assets that we don't legally own at the end of the day which is a bit of a funny one but it's to make businesses' accounts comparable and again we've said before it doesn't actually, it's not that helpful in a local government setting but we have to abide by the international accounts so we're just going to have to do that but the work involved I think could be horrendous. Now does the fixed asset programme we have, can they assist us with that Sue or possibly not? I think as Michelle said one of our valuers has been on our project team implementing or trying to get us ready for IFRS 16 so they've currently provided desktop valuations for all of the property assets that we've determined are leased but should go onto the balance sheet and what they're going to do is do actual valuations for 24/25 accounts and then after that for all of those assets and after that then they'll be divided into five and they'll go onto the five-year rolling revaluation programme in the same way as the assets that we own, the building assets, building and land assets that we own so that's all kind of scheduled in and as Michelle said property has been really, really helpful in terms of the project and doing that work. Still on one technical point, if we had leased payments on a piece of equipment for instance which we'd expensed in the past and then you put in them into fixed assets how do you unwind that for the council tax calculation because that's the other one as well. It has been technical, yeah, we have to basically calculate a notional split between the principal element of that payment and the interest element and the interest will still be expensed in our revenue account but the principal element will be used to write down the lease liability on the balance sheet so that will involve an impact on our revenue budget but we'll have an increase in the cost of minimum revenue provision because we're treating those as fixed assets, they affect our capital financing requirements so we're going to have to charge minimum revenue provision so we'll be moving budget we don't think there's going to be an overall impact on the bottom line but budgets will be moving around to deal with that. That's right. I think we've discussed that quite in depth but it's not an easy concept to get your head around basically. Hence, chair, that's why I asked the question because I'm seeing it again, I'm not looking forward to this paper but I'm really looking forward to this paper. So could we just late on in the year just have an update on how we're getting on with that, please? Yeah, I think if we work with the external auditors then once they've audited that area they may have some recommendations and then we can bring those back to this committee, you know, together with a plan of what the team are going to implement during the year. Okay, that's very good, thank you all and do we have any further questions regarding the draft statement of accounts? Obviously we'll have those updated in due course when we have the figures available. So thank you once again everyone and we have those for noting. So we can then move on to item 7 which is our internal audit and your opinion. Thank you, chairman. So this is a different format to the type that's previously been shared with you. The intention of that is to make the link between the contents and the evidence that supported that opinion a little bit more clear. The report outlines the approach I've used to gather the information to inform the opinion along with the framework that was agreed with management as the assessment framework for forming that opinion. Sufficient work has been delivered to enable me to provide an opinion and overall I have judged the governance risk and control environment to be adequate. The report has a narrative on each of the sections covering governance risk and the control environment, all of which are delivered in a manner which are fit for purpose and with appropriate processes supporting them. The area of improvement makes recommendations for the oversight and visibility of the adequacy of maintained school internal processes which was accepted by CLT and discussions are currently entrained to further this work in an appropriate manner. The report also includes delivery of our performance indicators with feedback being consistently excellent and all -- an actual performance has exceeded where we've set the targets with 100% across all our indicators. So I'm very happy to take any questions on any content or the process that's been used. Thank you, Claire. Andrew. Good read, assuring, Claire. And here's another declaration of interest. I'm an academy governor, secondary academy governor and member of the audit committee and we are big enough to afford a director of corporate services with a financial qualification but small primary schools must struggle and I see you've got one that's given you serious concern. So my question is really having done your job in alerting us to a significant problem in a small area but there are other primary schools that might be you on the cusp because they probably have a school business manager part-time. The head may not be financially savvy or interested. His passion is educational development. What are the arrangements for spotting, supporting, mentoring, training in those contexts so that they don't really hit the rocks and cause a major headache for anybody? So we work very closely with our education colleagues and our education governance colleagues and we also work very closely with schools finance teams. So we share intelligence between schools finance and ourselves so if there's something that's causing a concern or starting to raise its head, they will either ask us for support in relation to doing an audit to understand the situation a bit more or we share some of our informal feedback across both of those planes as well. We are starting to develop that a bit further and we've started to have conversations about some potential joined up, a little bit more formality in how we provide that assurance across our school fields but we work quite closely together as it is so that we are sharing that intelligence so that we're able to give the level of assurance that we hopefully should be able to. Thank you Claire. Thank you Andrew. Any further questions for Claire? Can I just build on that then Claire? So I think obviously we've identified this particular area of concern. I think from an audit committee's point of view I think it would be interesting, I don't need the detail, that it's how that was spotted, what was the source of trigger, so whether that was a your review or a school's review and therefore the extrapolation point that says how do we build that into the monitoring. It's like anything else with everything that we do. When we work out there was a problem, how do we spot that more globally and how do we build that into the process. So I'll take it offline but I think that the key thing for me is in terms of telling us I think it would be helpful from the committee's point of view to start understanding sources of detection. So whether it's something you've done and how we build it into the business itself so first and second might do it or we get tip-offs, I think that just provides a little bit more colour about how we get that detection process but probably one for another time just to give that a bit more flavour. Does that make sense? Yeah it does Ian, thank you and I think it's fair to say that we've started to have more focus on what's first line responsibility, what's second line responsibility in relation to governing bodies even though they're county council schools but we've started those conversations already if that gives you a little bit of peace of mind. On another subject chair I wanted to update the committee, I work in the NHS on a part-time basis as well and I've asked questions previously in this committee about how the integrated care system is working and how we are benefiting or not benefiting from that etc. Claire didn't miss this point and she broke at a meeting I had with the director of public health and the director of adult social services which was very very productive and positive and there is a paper in presentation that's coming back to our next committee with assurance that we are playing our full part in that integrated care system as far as we are able because you've got to have willing horses. To go to the drinking trough but I was mightily impressed that those two key post holders director of public health and director of adult social services are really gripping the issues in what we've heard already is a highly challenging and risky area of children's and adult social care which is always going to be on a rising demand and cost basis. I will pass that feedback on thank you. Thank you Andrew for that and thank you Claire for instituting that meeting and as we say we'll look forward to receiving reports of future meeting. Looking at your comments regarding risk management obviously just members of the committee at least will be aware that we are having some training as members on our risk management system which I'm having this afternoon so I'd be quite informative about how that works and that will give members a little bit more of a handle on how the system is operating and just keep us up to date on the current risk. Very very helpful thank you so we have the recommendation on the report we're all happy to do that thank you. Always in favor please. So if we can then move to the information. Sure it's annual report. So this is the annual report and it captures activity across three strands that's records management information security and data protection and I want to start with a very positive indicator and that's request for support over the year increased by 41 percent with the team and that reflects continued request for engagement and demand for the services. I think that's a matter of reflecting the proactive work we've undertaken over the year and the trust and the service we deliver but I think it also shows colleagues understand the benefits of good information assurance and I think that's evidence of an IA aware organizational culture and governance and action. I think the increased demand has meant that over the year we've had to prioritize resources and focus on those areas that present the greatest risk but we take lots of positive out of that and the high level engagement has presented many benefits to the organization. So it's presented opportunities to help colleagues identify and manage information risk. It's also presented opportunities to promote good practice and good governance and it's continued to improve confidence in the way we handle information on a daily basis. Importantly it's helped us to demonstrate accountability for the information we use across the council. If I may I'll just pick out a couple of key points across each of those strands in terms of data protection and we've had a reduction in formal contact with the information commissioners office so we've had five formal contacts that included two complaints that were upheld to do with individual rights requests both of those complaints were resolved as factory. Secondly we've had an increase in data protection infringements investigated by our data protection officer and of those 82% were not upheld. Those that were upheld were subject to resolution and there are a number of still ongoing from the previous year. So my view is that the numbers are very low considering the amount of personal data we process on a daily basis but I can give you assurance that any complaint received is thoroughly investigated, reported on and recorded. Just a note on the mandatory IEA learning. We hit 99% of the organisation this year which is an excellent result. We've hovered around 85-90% and we've had a big push this year resulting in that excellent result as I say and that helps maintain the positive IEA culture. In terms of records management it's the penultimate year of a four-year project to review hard copy records. That's looking at all the problem areas around the estate. The project has continued to make excellent progress against the project plan. To give you an idea of numbers we've processed now over 200,000 files and records. They are all now subject to better governance. 20% of those were subject to destruction. The risk continues to be reduced almost on a daily basis in that area as we support service areas to review and reduce the records they hold. We've also been flexible enough to respond to requests for support. In fact I would say that we're a victim of our own success because we've got a long waiting list of people who need records management support. Again a very good sign of increased awareness. In terms of information security, no surprise to know that cyber threat remains the most relevant threat. Risk from ransomware continue to increase and over the previous 12 months we've seen many organisations succumb to this devastating attack. You only have to look across the border at Leicester City Council, colleagues across there dealing with one attack at the moment and also in the news recently NHS hospitals in London. Local data sort of reflects this. The most common type of threat being phishing, email, that's continued to increase but fortunately we've had no significant events despite that increase. Internally we've had an 8% increase in the number of internal security incidents or data breaches. Analysis shows the usual trends, that's human error, misdirection of information. Interestingly that reflects the national trends recently published by the Information Commissioner's Office and we continue to encourage reporting. Context is really important here so despite us having 320 reported incidents that includes even the most small incidents so we're getting colleagues to report everything which is really good, we can record, we can investigate and we can identify trends. Interestingly we analysed the reporting data, 94% of staff involved in an incident had already undertaken their IEA training and when we investigated it, it came down to human error, people making mistakes unfortunately. One data breach reached the threshold which required reporting to the Information Commissioner's Office and that was unauthorised access to the social care system. The ICO closed that and was content with our response and that individuals left the organisation. Again I can give you assurances that any security incident reported regardless of how small it is, is thoroughly investigated, reported on and managed with recommendations to reduce the risk of it occurring again. That covers some of the key points, Chair. Good evidence of high levels of engagement across every strand of the IEA service, demonstrating an IEA aware culture and I think it's given us lots of opportunities to continue to improve controls and governance across the organisation. Happy to take any questions. Thank you David. Ian. Thank you, Chair. David, I think you got there with the 'be careful what you wish for' was definitely at play here which is great and again that often is the first step of really getting in there. I would put a request in that we don't have another function with initials I and A, especially sat too close to each other because it did confuse me when I started reading the report. I think the two things that really came out for me were, one with the DPO where we have found problems and as you said we got over 80% where there weren't, is the, even if we continue to investigate the speed of which that might, needs to be fed back in to prevent further going forward even if you don't resolve, that's the first question, are you happy that is going as quick as it needs to so we don't have to wait for formal resolution to make improvements in a process. And the second question is if I was back in the civil service I'd break out, that's a very interesting statement, Minister, to the full data cleanse of records stored offsite has improved. The one thing I know about a lot of dispersed functions like ours is knowing where everything is, is impossible. So a full data cleanse of data offsite I find an interesting statement, could you just allude to just how likely that is, please. Okay, thank you. So in terms of the data protection officer complaints, the DPO has an excellent relationship with the customer information service. So as soon as a complaint is received, the DPO is on it and starts that investigation immediately. So anything we can do to reduce the impact of that complaint is done immediately. We don't wait for any formal outcome. We do communicate with the individual at all times, making sure they're clear on where that complaint is and that the data protection officer is involved and the data protection officer offers her individual telephone number and email to then communicate with that individual. So it's a very robust process. In terms of records management, I'm confident that the risk has reduced and that the data cleanse has massively improved the situation within the council. There are still problem areas and you're absolutely right, there are areas we still haven't yet discovered. The areas that we are aware of we have resolved and although this project is coming to the end this year, we are putting a bid in for additional funding because I think this is something that needs to happen over the next five to ten years because of the holdings we have. So I'm confident it has massively improved but there's still lots of work to do. I'm way more comfortable with that statement that it's massively improved. Absolutely, it's just that the full bid was my main concern. And I think for me, I think you're right, not only is it the finding the black holes but as you say we're going to be creating new black holes that we don't know yet. So I think that continual maintenance is really important for me as well. Thank you, Chair. Thank you. And Michelle, we can obviously, that will be a budgetary consideration going forward but obviously that's really important. Yes, so we'll be reviewing budgets over the summer to look at what needs to be built into the planning process for next year. And we kind of go around all the directorates to ask what the pressures are and considerations. So I'm sure it will be considered alongside those. Any further questions for David? Just a question through the Chair, David. You did have on one of the recommendations that was outstanding, just the loss of data files. Are they recoverable or are they just completely lost? So that investigation is ongoing. It refers to the loss of digital files. They have gone completely and that was because of a technical failure, not because of a breach or a malicious attack. As I say, that is ongoing, however, and a full report will be provided once we've completed the investigation. And it's obviously, that would advise minimising those possibilities going forward. I mean, it's horrific to sit in front of a computer and see this stuff disappear in front of your eyes and no, you're not going to be able to see it again. And we've referred to the Verizon thing before, which was obviously a much larger scale, but a problem there. So you want to nip those things in the bud if you can, but you can't ensure yourself against that 100%, can you? We do have backup processes in place, but unfortunately this technical issue wasn't resolved through the backups. So the root cause of that issue was now being removed from our infrastructure, so that doesn't present a risk anymore. But as I say, the investigation is still ongoing, we've still got some facts to establish, and hopefully that report will be out very soon. Do you have a backup somewhere down the line, even though it might be a bit old? Okay. Right, if we can move to item nine then, please, members of the year, and that's the draft AGS, the annual governance statement. Thank you, Chair. So again, this is a different format, which includes definitions for the framework that's been applied in determining the effectiveness of governance and how any significant issues that may have been found would have been determined. So it just gives you a little bit more information around the framework. A good AGS should be a concise review of governance practices and provide an assessment against an agreed criteria, which I believe it does. This criteria used is the CIP for good governance framework, and it's not unusual for councils to use that. I'm pleased to report that overall governance is good, robust and fit for purpose, and is in accordance with the CIP for framework. During the review, there were two areas that were worthy of note for improvement and inclusion in drawing your attention to those. The one is the maintained school aspect, pulled in from my annual opinion, and the other is a lack of independent assessment of IT services across the council. These are critical functions and independent involvement with the assessment review of their information and their security arrangements has not been sufficient, in my view, to provide the required assurance into governance arrangements. The report concludes with a suggested statement for the committee to adopt in its assessment of the council's governance arrangements in place for 23/24. Again, very happy to take any questions about the format, the source data or the process that I've applied. Thank you, Claire. Andrew? Can you expand on that point, Claire? You've just waved a very red flag for us on independent oversight of IT systems. Do you not have scope to commission such independent review as part of audit programmes? So, yes, it was something that was talked about back before the start of last financial year, and it was agreed that this would be undertaken externally. The audit had no involvement in that scoping of that role, and unfortunately it didn't give, in my opinion, an adequate assessment, the basis of the assurance. It was built on conversations as opposed to evidential basis. So it's something that we have started to address, we have taken on additional staff across the council and have already had very adequate conversations with those about internal audit's involvement in scoping of any terms of reference and any audit that we will take, and we've agreed a framework that we'll look at, and we've agreed some funding for that as well. So it will look very different for this year in relation to the independent assurance for our IT services. Having waved the red flag, you just hold it down the flagpole a bit because you've just given me assurance that you're on it. Yeah. Thank you. And I'll just thank Claire, Ian, and then Mark. And I think just to build on that, it's not the fact that there's no assurance. I think the key thing for this committee is to understand when we have reviews or an external, the word audit health checks are often banded around, it's understanding the quality context of magnitude of assurance that we're getting from it and not getting any false assurance. So it's not the fact that it wasn't of value, it's the understanding to what we can place reliance on and the weight we can place on it. I think when we start getting stuff like that, it's just that understanding of what is it, what it is and what it isn't is helpful. Thank you. Thank you. Well, I think my question has been answered because I was interested in the timelines that are associated with dealing with the issues that you have flagged up. And I see you said we should see a significant difference over this financial year. Yes, this year. So just going a step back to number one in terms of the schools, what's the timeline for that? So we've had an initial scoping conversation and I'm going to wait to do some work on assurance mapping and formalising a proposal for assurance mapping. And then we're going to meet again and look at that. There's been no resistance to that across the council at all, either for the IT or for the schools. So everybody's very happy to go with the recommendation and to engage in the remedial action that's necessary. So does that mean there is a timeline associated with the systematic assurance process being put in place? Yes, so we've not agreed the timeline because there's the additional work of the formality of the assurance mapping and the factors that feed into that. But that's work started and there is an appetite for everybody involved in that to engage in that until we reach a suitable resolution. So I can't give you a yes, it will be done, but my expectation is it will be done for application during this financial year. So it's wait for the next report to a certain extent, is it? A little bit. All right. Thank you. Any further questions for Claire? No? Thank you very much for those explanations, Claire, and then we'll look forward to the IT issue progressing. So we have the recommendations on the paper, so we have proposal a second, please. Seconded. All in favour? Thank you. So we'll move on to the audit work programme, which is the next item, item 10. Thank you, Chair. So the work plan has developed to include the additional papers requested from the combined risk reporting back in February that Andrew's mentioned earlier. So this has been updated to include the one that Mark did for Lincoln Fire and Rescue did for you today, and also the risk papers that will be coming to the July meeting. And it's also been updated to include a review of our whistleblowing policy, which will be coming to the committee in July. Claire? Any comments on the work programme? Obviously we've had a few suggestions of other things we will be considering as reports come to us during the year. We're happy with the audit work programme. Adam? Just a small comment, actually, about the July meeting. It does seem to be quite heavy, to put it mildly. There's a lot of items on that agenda, so I'm just wondering, is there any scope to move some of those into September to balance it out a bit better rather than having it all on one agenda? I'm happy to be led by the committee. Members of the committee, any comments regarding that, obviously? I think the assessment is, do we need to know it earlier, rather than later? I'll have a look. I know we've got the stat accounts in September. I thought that might be quite a heavy item, which is why I sort of front-loaded it in July, but happy to take people's views. To be fair, they're often over quite quickly when we've had them audited. It just depends quite a lot on what KPMG say. And on the next meeting, we've obviously got the strategy from the -- some of these things are more timely than others, aren't they? A bit more time-sensitive. The accounts will depend massively on what KPMG say. People watching brief and look at it in June -- well, I was a bit late to look at it in June when we saw it on the agenda. Yeah, I'll work with Tom and we'll put a proposal together and just share it around people for your views, if that's okay. Well, it's not really a question, it's just a comment in terms of training for the Audit Committee. And the fact that we got a lot of training that's been coming, you know, quite late in the day regarding the Audit Committee. We're picking things up, you know, three years, two years into it. Could I suggest that there is a sort of training program put in very early in terms of the next County Council because I have a feeling there won't be a lot of new members who might need to be brought up to speak quite quickly. Yeah, we've discussed this before, but Mark has a very valid point. There's quite a few people who will be retiring. There'll be a change of, no doubt, of basis. And I think it's, you know, going back to what we've said about that financial resilience, you know, people need to be aware of how important that is. And obviously we'll have all the financial training in place to make sure people are aware of that. Thank you. So do we have a vote on the audit program, don't we? Yes. Seconded. All those in favor? Okay, thank you. If we could move to the exempt item, I believe, is it? If we could read the statement. Yeah, I will in a moment. I'm just trying to make it so I can see it. Thank you. Okay. So at item 11, we're considering the consideration of exempt information. So in accordance with section 100A, subject of 4 of the Local Government Act 1972, gender item 12 has not been circulated to the press and public on the grounds that it is considered to contain exempt information and defined in paragraph 3 of schedule 12A of the Local Government Act 1972 as amended. The press and public may be excluded from the meeting for the consideration of this item of business. I propose. Seconded. Let's give it a second. Thank you. All those in favor? Aye. Opposed? No.