Transcript

I'd like to welcome you to the meeting of the Joint Audit and Governance Committee. I think I'm new to many of you, so I'm Nigel Coulston, newly elected Councillor for Hillside Ada. We've got to do a few bits and pieces around health and safety which you're all familiar with, so let me just run through that. Please familiarise yourself with the far exits from this room. There are marked refuge points at the top of the staircases for mobility vehicle users. There are no fire alarms planned during this meeting. Therefore, if the alarm sounds, please leave via the fire exits to the assembly point. Which is the far side of the car park by the flint wall. Should you become aware of the fire situation, the call point decides to leave via the fire exits to the assembly point, which is the far side of the car park by the flint wall. Should you become aware of the fire situation, the call point decides to leave via the fire exits to the assembly point. Which is the far side of the car park by the flint wall. Should you become aware of the fire situation, the call point decides to leave via the fire exits to the assembly point. There is no return to the building until advise it is safe to do so. Please remember this meeting has been audio streamed and recorded. Before speaking, all members and officers must check the call point to sound the alarm. Which is the far side of the car park by the flint wall. Should you become aware of the fire situation, the call point decides to leave via the fire exits to the assembly point. Should you become aware of the fire situation, the call point decides to leave via the fire exits to the assembly point. Which is the far side of the car park by the flint wall. Should you become aware of the fire exits to the assembly point? Should you become aware of the fire exits to the assembly point? Should you become aware of the fire exits to the assembly point? Which is the far side of the car park by the flint wall. Should you become aware of the fire exits to the assembly point? Should you become aware of the fire exits to the assembly point? Should you become aware of the fire exits to the assembly point? Which is the far side of the car park by the flint wall. Should you become aware of the fire exits to the assembly point? Should you become aware of the fire exits to the assembly point? Should you become aware of the fire exits to the assembly point? Should you become aware of the fire exits to the assembly point? Should you become aware of the fire exits to the assembly point? Should you become aware of the fire exits to the assembly point? Thank you. Can we just move on to item one then, which is apologies and substitute members. We have apologies from Dan Humphreys, Simon Norris-Jones and Deb Stainforth. Item two is declaration of interest, so can I ask are there any members that wish to declare any pecuniary interest in relation to the items of business on tonight's agenda? Sorry, Councillor Ford. Thank you, Chair. Not a pecuniary interest, but I'm currently working with Ernst & Young on the annual report and accounts for sell on to NHS trust. Anyone else? Okay, fine. We'll move on to the minutes then. I request that all the committee approve the minutes of the joint audience and government committee meeting held on the 21st of March as an accurate record of the meeting. Once approved you can sign the minutes as a correct record and I will collect them from you at the conclusion of the meeting. Is everyone content with that? Agreed. Fine, thank you. Okay, item four is public question time. Can I just check, have we received any questions from the public? No. We don't think we have any members of the public here currently, do we? Have we received any members questions? This is item five. Thank you. Item six, items raised under urgency provisions. I haven't been advised of any urgent items of business to be considered. There are none. Thank you very much. Item seven then is the statement of accounts 2022-23 and can I ask officer Emma Thomas to introduce the report please? Thank you chair. The report before members provides an update on the 22-23 accounts and the external audit position. Firstly I would like to say and ensure members that statement of accounts were prepared for both Adrian Worthy for 2022-23 and these were published on our council website in the summer. In normal circumstances an external audit would have been completed for the statements by now, however due to a number of reasons including the pandemic, resourcing and increased audit regulation requirements there is a national backlog. To address this the government are proposing measures to address the backlog. Section 4.4 of the report at page seven set out that there will be several phases to these measures. Initially there will be a reset which means that any statements up to the 2022-23 year that are not completed, if the audit is not completed by the 30th September 2024 they will not be fully completed and the audits will get a disclaimed opinion. Adrian Worthy have had all their audits done up to 2021-22 therefore it is only the 22-23 year that is affected but it does mean that a full audit will not be completed for those statements. A value for money work was done by the external auditors for that financial year and a report was brought to this committee in March. The next phase is of recovery where the introduction of backstop dates will be introduced to ensure external audits are completed by the 30th November of the following year by the 2026-27 financial year. I would want to just reiterate to members that this is a national situation and it isn't local to Adrian Worthy. There will be however an impact on the audit opinion for the Adrian Worthy statements for 23-24 and potentially 24-25 as a result of the full audits not being done in 22-23, not least because there are comparative figures in the following year that will not have been audited. That's as much as I wanted to say but I am more than happy to take any questions members might have. Thank you. So any questions from any members please? Sorry yes that's, sorry hello Lindsay sorry I couldn't see your name tag. Thank you very much indeed. I'm happy to actually ask my questions last but I don't see anybody asking questions before me. On page 7 the phase 1 the reset. The code of audit practice is this going to be amended? September is a few short months away and my concern is that Ernst & Young are under huge pressure at the moment and we're not the only council that they audit and is this actually doable to do the, to complete the work by the deadline set by the end of September and if not what are the implications? Yes so the code of audit practice is going to be amended and that will essentially facilitate us not to do the work which is, which is the whole point of our strategy so we won't be undertaking the audit so by the 30th September if the legislation does go through then we will be in a position to present that disclaimer of the audit opinion. So on our value for money work we are proposing not to do the accounts work and therefore by the 30th September we will be able to issue that report. I have, I have two further questions if you're okay with that? Yeah please go ahead. So the disclaimer on the audit opinion, could you firstly explain the difference between a value for money audit and a traditional audit because that's where we're going to be affected so that's the first thrust of my question and I think that it's important that everybody around this table understands the differences. Yeah that's fine. So financial statements audit looks at the accounts of the council and gives an opinion on those as to whether the numbers within that set of accounts are true and fair so it's the numbers as presented at the 31st of March or the respective year. The value for money work is a code of audit practice requirement that looks at the arrangements you have in place to give economy efficiency and effectiveness to your stakeholders so the council tax players, partners of the council for example. So it doesn't look specifically at the numbers, it looks at the arrangements you have in place to produce financial reports for your medium term strategy, for your governance arrangements, for your use of procurement arrangements, so very different aspects looking at two different things that are all brought together under one envelope. So my third question then is that there's not going to be a clean audit report, sorry my words are failing at the moment. Is the wording of the audit report going to be of such a nature that it's actually going to be detrimental to the council? Well obviously all the councils and everybody's affected by this but my concern is that we have a risk going forward that's going to impact ability to borrow, borrowing costs and there's a whole raft of things apart from the fact that the previous US figures won't have been audited so if you could help with that I'd appreciate it. So that's a very big issue that's been discussed by all partners as they've tried to develop these proposals. Our understanding, and that's understanding that has got to be subject to guidance that's yet to be produced, is that the audit report will refer to the legislation once that legislation has gone through and been passed so that will explain why such an audit report, just claiming the accounts has been given. We will also have our normal reporting in terms of our auditors annual report that will set out the specifics of what has happened for each individual council, whether it's a position to reset or whether there are any indications of there are fundamental issues at the council that sit behind that. So that will reflect the value for money report we brought to your last meeting in March and if I can draw members' attention back to that we did say we're happy with the arrangements to produce financial accounts at that point. So for Adrian Worthing councils it won't be pointing the finger at you and saying your arrangements are deficient. We had also been led to understand there was going to be significant communication by the national audit office and the FRC as a couple of partners and probably other ones as well to make information available to the public, to yourselves as members, audit committees and to officers what this would look like, how it would be presented and for that information to be made available over time. So people when looking at that audit report will be able to refer to it and have further information to be able to interpret what it means. So until we actually see that guidance and see that information, that's the best information I can give you at this point in time and that's one of the things we're still waiting for in terms of actually to see the legislation and guidance come through, but that's our understanding of the intent. Thank you Mr Souter. Any further questions? Yes, Councillor Howard. I'm hoping I'm looking at the right page. On internal work finalised as of 16th of May 2003, it says discretionary housing payments limited, does that mean they are, you are unhappy with what you found? Sorry, Councillor, that's not my paper. Oh, sorry, wrong one. It's the different, that's not this item. Sorry, that's what I was worried about because I did it on here and now I've got paper it's thrown me a bit. We'll come back to that. Councillor Howard. Councillor Morgan. Thank you. So I've got a few questions. So firstly, do you, when you're giving your overall opinion and strategy, take into account the internal audit when forming your opinions? Yes, in general we do. So we can come back to that in our next report if you like because that's not strictly relevant to this paper because we won't be doing the audits, we won't be taking into account their views. My point specifically is that in the internal audit there are gaps and things which have no allocation or plan assigned to them or date or timescale at the moment. So my question more specifically would be have you seen that? And if you, basically have you seen that because I would expect that to trigger some form of level of concern or I can't see it basically identified anywhere in your report that there are elements of the internal audit that have no timescale at all against them. So in terms of the paper that we're discussing at the moment, in terms of the reset of 22/23, that's not been taken into account because internal audits, that's the internal audit papers for 23/24. When we come on to our next report, yes, that is sort of the information we do take into account. Sorry, have you got a further question? Thank you again. Okay, so when we sat last time around there was, you quite rightly pointed out a similar thing which is basically around timeline, which was there was an incident of internal fraud and it was basically down to systems not being followed, lack of training, staff being inducted and training other staff on workarounds that they'd created themselves. And last time around you said that that wasn't in that window. So I wondered again if this fell in that window and noted that again there's no change in levels of risk or fraud and if that did fall inside this window, why is there no change in levels of risk or fraud? Okay, so again that will be considered our next paper, the audit plans for 23/24. So it doesn't fall into the relation to this paper for the 22/23 audit. So that might feel semantic but it's quite important which year it actually falls into. So if the chairman was happy for me to comment on the next paper, yes, we have reviewed that. We mentioned in our audit plan that the value for money risk assessment is ongoing. So we are looking at that. We have had the detailed information through from internal audit and from officers in terms of some of the redacted information and we are considering it so it does fall into the 23/24 audit. Sorry, Councillor Morgan. I've got a question from Councillor Ford first and we'll come back to you. Thank you, Chair. This may be a question more for Emma. Does the backlog or the position present any risks or have any implications in terms of financial planning management and control for the councils? No, we won't have any impact on that because this is about the dates that they get audited by. So we would have prepared our accounts, we would have done all our out time work at the same time that we ordinarily would. So this is more about resetting the audit dates. So no, I don't foresee any impact on that unless something came out of the audit that would impact back onto our actual reserves position. Councillor Morgan. I'll ask the question anyway. So I noted fees and I noted what you said about the fact that you're essentially not undertaking an audit in the traditional sense. And I noticed obviously, worth £140,086, ADA £141,951 with some additional fees, £45,000, £46,000. Are those fees still going to be the fees given that you're not going to be undertaking the audit in a full capacity? Or is that relevant for here? Those are the fees for 23/24 I believe. We haven't had our 22/23 fees completely confirmed yet. They're still to be confirmed. So this is a national strategy to address a national problem. I just want to check how stable is that strategy? For instance, if there's a change of government, is that likely to impact on this strategy or is it wider than that and more long term than that? I can give my reflection on that. The auditors may have a different view on that. I don't think it's a political strategy. It is a strategy to try and address what is an ongoing issue with audits. I therefore believe that there will need to be a strategy and I'm not sure that there will be any need to review it and refresh it for anything different. I could be wrong but I think the issue will still be there regardless of the politics behind parliament. That is my personal view on that. I do have, coming on from the questions that have been asked, if I can step back and ask on a more general basis, Councillor Morgan touched on the value for money audit and he touched on the internal audit impact. This issue was raised in March. Will the internal auditors have to be relied on more heavily to provide assurance to Ernst & Young that actually the value for money audit and to provide assurance that actually everything is okay within the financial aspect of the Council. This actually is a current issue but it's also a historical issue because we're looking back at a previous year's set of financial statements. Were the internal auditors, was the internal audit work considered as part of the value for money review or not? Internal audit work is always considered as part of the value for money review. They raise valuable findings that either indicate the assurances are in place and there are no risks or to the contrary they may raise issues that we need to look at and consider under our responsibilities. So we always look at internal audit's work. Looking around, any further questions? That's a no. Okay. The joint audit and governance committee is asked to note the content of the report providing an update on the statements of accounts for 2022/23 and the progress of the external audit and note the update information relating to government proposals to make legislative changes to align the statutory deadline for audited financial statements over the next four years to target dates of eight months after year end. Now is the committee just happy to note the contents of the report? Noted. Thank you. Okay. We now move on to Item 8, the external audit planning reports. And we have here, we've obviously been hearing from Kevin Souter and we've also got his colleague Afewe Dardini. So over to you gentlemen. I've obviously got that wrong. So thank you again, Chairman. So obviously following on from the previous item, which we have touched on aspects of this report, these are the two reports of the audit plans to the external audit of both Council's financial statements and value for money arrangements for the year 23/24. Both plans make various references to the subject we've just been talking about, including some of the uncertainties around additional guidance that we're still going to need and that's why we're likely to have to bring you updates in the future. The plans are quite similar. So we will go through the main points together. So if I can ask the members from ADA to refer to page 15 of the agenda pack, and if the members from Worthing go to page 71. So I'll hand over to Afewe and what he'll do, he'll take you through the key highlights, drawing those to your attention, and then we'll pull out the differences between the two Councils as well as we go through. So, Afewe. Thank you, Kevin. As he highlighted that the audit planning report is from page 15 to 74, ADA and 71 to 121 for Worthing. Since the Council has a joint structure, the audit risks are similar, but I will highlight as he indicated the way we have differences. Our audit risks are presented on page 22 to 23 and 78 to 79 respectively. We have similar audit risks to the last year we audited. The first one is the risk in relation to the financial statement as a whole that they are not free from material misstatement whether caused by fraud or error. This is a risk that auditors have to recognize on every audit, commonly referred to as the risk of management override. The second risk is related to the risk of fraud in revenue and expenditure recognition through inappropriate capitalization of revenue expenditure. That risk relates to the valuation of land and building valued at existing use value or fair value. In both Councils, we have decreased this risk from significant to inherent risk. Because we have identified immaterial misstatement in the last set of audited accounts in relation to the valuation of land and building. Therefore, we concluded to reduce this risk to an inherent risk. However, it is still an area of enhanced focus because of the estimated techniques included and small changes in assumption may lead to large misstatement. This also applies for the remaining risk. Fourth risk is related to the valuation of investment properties valued at fair value. For ADA only, we have decreased this risk from significant to inherent risk. This is because we have identified immaterial misstatement in the last set of audited accounts in relation to the valuation of investment properties. We therefore concluded to reduce this risk to an inherent risk. However, we continue to see this risk as a significant risk for within because of the previous year misstatement in material addition since our last completed audit. Next risk related to the valuation of land and building valued using depreciated replacement cost, which is no change from the previous year we audited. Last but not least is the valuation of housing rent accounts properties. This is only applicable to ADA. And finally, pension liability valuation, which is no change from the previous year we audited. Moving to our materiality. Our materiality has been calculated based on the gross revenue expenditure taken from the 22-23 accounts in both councils. They are represented on page 41 and page 96 for ADA and within respectively. We will revise these once the 23-24 accounts are provided to us. Materiality essentially is a margin for error before a misstatement would lead the reader to the wrong overall conclusion on either council's financial position. The report in our results report identifies a misstatement greater than $0.54 million for ADA and $0.51 million for within. We ask you to note these levels. Moving on to our value for money responsibilities. This is set out in section 3 of our report, which begins on page 31 and 91 respectively. We have yet to complete our detailed value for money planning and will report this once it is completed. However, for ADA we have reported the significant weaknesses in the previous two financial periods concerning non-compliance with relevant housing standards in association with ADA's home housing stock. Therefore, this will be a significant risk for the 23-24 audit. The details of these significant weaknesses and the planned procedures are outlined on page 39. At the present time, there are no identified significant risks of weaknesses for within. The last item we want to highlight to you is the audit fee. Our audit fees are outlined on page 58 for ADA and on page 113 for within respectively are set by the Public Sector Audit Appointment, which is PSIA. As per the new PSIA contract, the audit fee has significantly increased for the 23-24 period. However, the necessary work in relation to the updated ISA 215, the adoption of the IFRS 16, which is the new accounting standard on leases, and the additional work on the ADA's value for money significant weaknesses in arrangements are not covered by the scale fee set by the PSIA. We will expect to charge additional fees for this. This takes to the end of our report. Kevin and I will be happy to take any questions that you may have. Thank you. Members, before asking your questions, can I just ask that when you do so, please, if you could refer to your page numbers. It would just make everything a bit easier if we do that. So, any questions, please? Yes, Councillor. Me first, thank you. On page 41 of the ADA report and the commensurate page on the Worthing Report, you have planning materiality and you have performance materiality, and the performance materiality is 75% of the planning materiality. Could you explain the difference between the two? Thank you. Yes. So, planning materiality is essentially what the PRA referred to in its presentation. So, that's the value that we would see. Any misstatements greater than that amount would lead the reader to a misleading interpretation of your accounts. So, your accounts wouldn't be a true and fair view. In terms of performance materiality, we set a threshold of either 50% or 75% of your planning materiality to make sure that our work covers and would identify any misstatements greater than the planning materiality. To make sure we are doing enough work, we drop that level down to make sure our samples are big enough to make sure we capture any potential risk in there of an error. So, that's the key difference. Any further questions? Councillor Morgan. So, forgive me. I put my hands up and I think I got muddled. Where everyone was sitting together, I thought the items or the reports were somewhat merged, if you see what I mean. So, hence my questions might have been out of sync with the meeting. The question I proposed before about the instance of fraud, and I think you said that you could refer to that in the subsequent report. I'm not sure that you did at the time. So, your previous question regarding whether we've taken into account the issues on the last audit committee. So, with our value for money work here, we said our planning is ongoing. So, that's where we would capture those issues. So, as I said in the previous item, we are aware of it. We have received additional information. We are considering that for our value for money work for this financial year. It's a supplementary to that one. So, how come that there's no change in the risk level? Does it not signify a change in the risk level? So, at the present time, for our value for money work, we haven't identified it as a significant risk. So, we're still considering it. It might do, but as the point of writing these plans, it hasn't. Thank you. Any further questions? That's a no. Well, the report doesn't come with any recommendations, so you can ask the committee if they're happy to note the contents and then we can move on. Thank you. So, item nine is the internal audit annual reports and can I ask Sam Lowe from MESA to introduce the report, please? Good evening, everyone. Sorry, I've mislaid my ... Well, I'm Sam, everyone, if you haven't picked it up. So, we've got two reports on the pack for this evening. I'll talk through the draft annual report on page 127 and then pause for any questions there before moving on to the progress report. Obviously, on the latter, there's a degree of overlap around the 23/24 plan. So, we've presented the annual report as a draft reflecting the position as of 16th of May so that you had a summary of where we stand at the moment, the work finalised and some detail of the work still outstanding. As a result, we've left opinion pending on page 130. That will be added, obviously, when we have finalised the remaining work and I suppose the other comment on the report as a whole, we've provided it as a condensed version to save space in the pack. When we finalise, it will be split into respective Ada and Worthing reports but as all the audits conducted have been joint, we would expect them to be substantially similar. You'll see for yourselves the summary of the finalised work and the recommendations arising from that on page 131 and then we've noted the in progress position. So, those have been moving on in the background but still some work to finish off. And then the benchmarking position for recommendations and assurances compared to previous years on page 133. Obviously, that reflects only the finalised work but as it stands in terms of opinions and recommendations, broadly in line with the previous years, obviously pending completion of those final pieces. Whereas the previous year was a moderate opinion overall. Otherwise, I'll pause for any questions there before moving on to the progress report. Thank you very much. Any questions in regard to that part? So, Councillor Ford. Thank you, Chair. On page 136 in relation to the implementation of recommendations, can I just ask for those recommendations which identified as not implemented, the 62 recommendations there. Is that more an issue of you not being provided with a management update or is it a question of the recommendations actually not being implemented and with particular reference to the five priority one recommendations identified in the report? It's a question of the management updates and particularly, I suppose, beyond that the supporting evidence to allow us to do additional testing to verify that update. So, we have a mixture of some where a few where there hasn't been an update over status and then somewhere we've been given a status or told it's been done but we then need to re-perform testing to independently verify that. Given the resource challenge where things have proved tricky. Thank you. Councillor Lough. I might be quick but I don't think we have anything between page 70 and 127. That would have been a wording report. [inaudible] Councillor Lough, we are on to agenda item 9 of the internal audit which you will find starts at 127 and at 127 that's when we are in both councils whereas before, number 8 is split between the two different ones. Thank you Councillor Hermitage. Any further questions on that report? Yes, Lindsay. I have two questions. The first I'd actually like to refer back to what Sam said about on page 136 about the 62 items that haven't yet been implemented. He mentioned the fact that further testing needs to be done and that there's a shortage of resources. The question is are those council resources, are they MAZOS resources or are they a combination of both? That's the first question. I suppose there's an element of a combination of both. I would say it's principally been up around the council resource. We set aside time throughout the year to conduct follow-up activity but we received less than we hoped for. Slightly looking ahead into the next paper, we have been having conversations about how we can streamline the process, make it easier for council officers to manage alongside day-to-day responsibilities going into next year. I suppose what we can do to help signpost things better and schedule but effectively we had time set aside for field work and we didn't receive the information that we needed to be able to sign some of these off as implemented. Again, that might not mean the status here of not implemented is necessarily the fact on the ground but we have to report on the basis of what we've been able to test as opposed to obviously if there are gaps in our information or if it's solely anecdotal. Thank you. This crosses a line where I can't, as the independent person, I can't suggest for example that we get a report back as to what the problems have been, the challenges and whether in fact there are resources available to help everybody address those. So that I need to put to the rest of the committee. But my second question, if I may ask it now, was how has MAZO's work adapted and has it increased to assist the council and Ernst & Young achieve the objectives which were put on the table in the first report? Because I think that that's going to have quite a big impact in the near future and in the longer term and everybody needs to work together as a team, so that's my question. So I suppose in terms of our work, the sort of pulling together of the internal audit plan on an annual basis involves discussion with a large number of council stakeholders around the various needs and objectives and being mindful of external audits work and obviously we see each other's papers. I would note there are differences of objectives in the work that internal audits and external audits perform, so I think that they would rarely want to rely wholesale on our work and vice versa, but we are sort of mindful of each other's findings and I suppose make sure that there's no undue duplication in terms of the significant impacts on their work. I suppose that's possibly more of a question that Emma might want to step in on. Any further questions from any other members, please? I'll go on from Councillor Milburn first. Thank you Chair. So on page 144, obviously that's the plan and the bottom four items have no dates starting or ending as yet. Is this report bang up to date in the sense that there are dates assigned to that now? And if there aren't dates, I suppose I'd like to understand a little bit more detail of why not, especially because from the IT perspective I'd say it's in a stronger position this year than it was last year and it was audited. The accuracy of data in the housing system, rent accounts, I mean it's very vague at what that means, but that would seem to be quite a serious potential problem if I'm reading accurately what that means, which is that we are, I don't know, charging people too much, charging people too less. Again, it's so vague it doesn't really give that much detail. So on the question of dates, it is the most upstate position but phrased concisely. Basically the four that are in there, we're still looking to schedule the exact dates to our end, the carbon reduction programme, because that was a sort of late deferral from the 23/24 plan, so we didn't book it in at the same time as constructing the rest of the plan. So we have got some dates positioned in Q4. I just, at the time this was written, hadn't shared those with the audit owners to verify. The NFI testing sits in the advisory space as a piece of ongoing work and support we do to help the Council with the National Fraud Initiative, so it's more predictable and also less demanding in terms of resource. That's just one that we need to look at how we break that down internally, but I suppose isn't something that I see as a concern at this stage, it's just we haven't quite got there. The IT pieces, they're subject to ongoing discussion, so we've got the quarterly targets for those in the plan, it's just that the exact fieldwork dates were still being discussed at the time that this went into the paper, so I didn't want to give a confirmed start date that hadn't landed yet, but it's not that we haven't been thinking about it or talking about it with the key contacts. So that's another IT piece on the accuracy of data from the rent accounts, so both those in discussion with the stakeholders, the outline scope for that was in more detail in terms of the plan that was presented and the rationale at the last meeting. We then get into the nitty-gritty of the full scope in terms of reference, you just get the title in these progress reports, but I'd be happy to come back with a further update or any questions offline if needed. Thank you. Councillor Hermitage. Just supplementary to that one, if I could ask that as a committee that we're given, I think it would be reasonable to have some dates, firm dates assigned to them by the next meeting, would that be reasonable to ask for? Certainly. I think with a few of these there's some provisional dates and I was a bit cautious, but we can always put in the targets and then just update them as they move. Just one question from me, Sam, that since you've come in at the start and obviously this is only a second meeting, just in your confidence and assurance of now working alongside officers within the internal audit that we have got the structures in place to effectively fulfill the rest of the audit in time ahead of the new future dates in the recovery plan coming in that we will have. Stable audit complete ahead of the future work? Yes, reasonable assurance. I suppose the only of the ones we've highlighted still being in progress, the only one still in a live field workspace is the specific follow-up on housing recommendations where there have been resourcing challenges. We've moved the dates back at our end on a few occasions and that's where we've put in an end of May cut-off so that we can finalise the report in whatever state that is and therefore finalise the annual report off the back of it. As it stands, as of last week, the last time I was looking at it, there were some areas that were looking incomplete or that we might not be able to evidence. We've waited to see, come Friday, what we've received and how much that picture improves. It might be that that report paints a similar picture in terms of us needing to report on some areas as not implemented, whether that's because they're genuinely not implemented or the information can't yet be provided. That's the only one where I have a bit of concern and obviously we would then update in the annual report to include the latest dates of those housing pieces. Everything else, field work, has been completed. A few areas where we're tidying things up might go back with extra questions but it's all either draft reports at review, our end or draft reports awaiting management responses. Thank you. Any further questions, please? Yes, Lindsay. [Silence] No, that's me missing something from the review. The Civica Connect HR piece was under review and I think that's one change that we've missed out when we were finalising this piece for the committee. So in fact that one actually has been reviewed so those figures in the Civica Connect HR one, I think if you take those out that should balance things but apologies for that. That piece wasn't finalised and I'm not sure that we had two priority ones in there anyway so I'm not quite sure what's happened there. Any further questions? Okay, again the report comes with no recommendations. Oh, I beg your pardon, we're moving on to debate. [Silence] You've got your second part to do now, haven't you? Yeah, so we're slightly spilled over into it anyway so I'll try and keep this snappy. We've given a snapshot of activity, changed since the last committee on page 141, most of which relates to the 23/24 work that we've touched upon in the annual report. In any case, the report's finalised, we've got the discretionary housing payments, plan maintenance and bereavement services, two limited opinions there which have been fed back in the totals in the annual report. There was a question during the previous item around the assurance opinions, those are set out on page 146 so I suppose the catchall there is that there are significant weaknesses in the framework of governance, risk management and control such that it could be or could become inadequate or ineffective. We operate on a relatively standard four-step assurance opinion framework so obviously having limited isn't good news but I do always say if you get an audit committee update that's a sea of green substantial opinions, I would generally sound a note of caution there that it suggests that we might not be looking in the right areas and again this comes back to the planning process that we conduct each year to make sure that we're looking at areas of high risk and where there might be concerns as well as points where we can add value. So just to pick up from the question that was a while ago there, otherwise we've set out the summary that we've touched upon already of 24/25 work, most of which sat under planning. Obviously we've got those provisional dates in earlier than we did last year and have been airing them with the key audit contacts, actually since this came through a lot of the planning ones we've had scoping calls, terms of reference have been shared, fieldwork has begun on a few others and obviously we'll keep updating for the latest picture as part of progress reports for future meetings. And the final point that I'll pause on briefly on page 145, there was an action from the previous meeting in terms of sort of explaining the cause of some of the delays and what we were doing where we've set out some of the actions which you can see for yourselves. And the point I will make here is that I don't see presenting this report as having completed those actions, it's more ongoing mechanisms and there's a few actions that Ewa and I in particular have been discussing and continuing to find improvement. So as part of future progress reports, obviously without drowning you in too much we'll keep you abreast of anything that we think can be done differently and that's a wider sense of how our work is progressing. Thank you Sam. Any questions from members? We'll start again with Lindsay. I'd like to come back to page 136 please and if it's not out of order I'd actually like to propose a motion for this committee please. So on page 136 there are 62 items that are not implemented and I want to know whether I've got the authority to propose a motion to this committee. Lindsay, if I may through your chair. Yes, thank you. Lindsay, it would be sensible for one of the councillors to propose the motion on your behalf and then seek a seconder, thank you. But it's open to you to put to the committee the motion that you consider. Alright, so I'd like to put the motion to the committee and then if one or two of the committee members can propose and second it on my behalf I'd appreciate it. So the proposal I'd like to make is to ask Massachusetts to provide us with a breakdown of the 62 to this committee to provide meaningful information of the status of these items which have not been implemented which will include whether the lack of implementation is as a result of a challenge within Massachusetts or within the council, the due date that it should have been provided by the proposed action taken post due date and I'm happy if anybody wants to add anything further to that. Thank you. Oscar. Sorry, Councillor McGregor. I'd like to propose a motion what she said. Is there a seconder? And I've got Councillor O'Neill seconded. Okay, that's open to debate. Councillor Morgan. Thank you Lindsay and our Councillors for taking this forward. Could I just elaborate that we have the report broken down item by item in the sense that I'm sure some items may fall on both parties for the delay, some on one and some on the other, and so of the 62 that we're given a reason or an account based on each individual item as opposed to a collective. Thank you. Sorry, just for clarity. So the volume of 62, I think that was what Lindsay was proposing was that the ones that are not implemented. This report relates to the ones that are not implemented and hopefully I've got that right. Is that right Lindsay? Councillor O'Neill. I think just for clarity that they are the ones that are itemised here as priority one and priority two on the table on page 136. Thank you. Councillor Ford. Thank you chair. I support what is being proposed and without complicating the motion at all and separately it would also be helpful prospectively for the committee to have assurance about those priority one and priority two actions which are being identified through the future internal audit reports so that we can have assurance that they are being implemented effectively. Any further comments? Please go ahead. I think it would be helpful at this stage Lindsay if you and Councillor McGregor would be able to write down the proposed motion so that we can read it to the committee so it can be seconded and then any amendments to that motion can then be proposed and seconded and debated. Thank you. Any further comments? They are doing that. I think Sam wanted to make a comment. One clarification, one comment on our work. Just some quiet while Sam speaks. Thank you. Possibly this is stating the obvious but I think it would be useful just to make one clarification that in terms of the implementation of actions remains responsibility for council officers management once and if they accept any recommendations arising from the report. The role of our follow-ups is when something has been confirmed to come in and perform the additional testing to verify in terms of the direction of this motion. What we have already been looking to pick up as part of the ongoing discussions between Emma and myself is to rationalise the current position, come up with full figures, I suppose not just of the population but also how many are legacy items, some that might be seen as no longer applicable. Pending wider discussion I would be happy to, I am looking to present it to Emma anyway internally, so I would be happy to share something along those lines at the next meeting. I suppose some of the figures might be potentially changeable because part of the problem might be that there are recommendations that have been sat on the tracker for a long time and are being ignored. So if we are looking to do a bit more of a refresh but certainly in principle we would be able to come back with an update of how many recommendations remain relevant, what the latest management position is in response to those. I am not sure whether we have been able to independently verify them because by default we haven't. But possibly I am making the matter more confusing. I hope that is some clarification. Thank you. So we are just waiting for these formal words. [No audio] [No audio] Councillor McGregor. Thank you. Alright. I think we've got it. The motion is to ask Mazars to provide us with a breakdown of the 62 items not implemented on page 136 to provide this committee with meaningful information on the status including due dates and the proposed action to be taken. Plus reasons for delays on an item by item basis. Thank you. [No audio] Councillor O'Neill are you happy with that wording? Thank you. I am except I was just wondering whether we ought to actually highlight the fact that they are priority one and priority two. But I am happy to leave it as it is. I am sure it can be elicited. There is only priority one and priority two. If there were priority threes I think you would be right. Yeah. Sam did you want to add any more? Yes. Sorry if this seems pedantic but I will say it now before it gets recorded. So the figure might be different to 62 when it comes back purely because we have made more reports, sort of the recommendations that haven't previously been subject but happy to present the latest picture in keeping with that principle. In terms of the reason for delays, ultimately it is the action known as management that need to provide that. So we can do our best to provide that but if we don't get that information all we will be able to do is say no response received which might be of some use to the committee. But just to make that clear. Thank you Sam. Any further debate on that? Yes. Councillor Morgan. The only addition that I would make to that motion is that we put a time scale against it. I don't know how much work it involves in generating, well basically doing the legwork to find the detail on those individual items. So the only, as I said, gap in the motion is there's no time scale attached to it but we need to find out what is realistic for that. Councillor Hermitage. Sam can I ask a question? Would the meeting of the 26th of September be enough time in order to get a full picture of that? Yes definitely. I mean we're looking to pull something together for I think our next meeting is on the 11th as an interim position. So I think we should be able to provide you with the latest picture at that point, hopefully an improved picture and if we've been able to do any interim follow up at that stage. So a bit might change but I think I understand the general ask of the committee and we'll tailor to that. In which case can I propose an amendment to the motion that includes that the report is available for the meeting of the 26th of September? You'll need a second I'll second. Then you'll need a vote. I'd like to second that motion. Thank you very much Councillor McGregor. Then you'll need a vote on the amendment. 26th of September. Okay so those in favour of the motion with the amendment by a show of hands please. Of the amendment yes. Yes so an amendment to the motion has been presented. We need a seconder for the amendment. So that amendment is now open to debate. If no one's got anything more to say we'll just move straight to the vote on the amendment please. All those in favour of the amendment please raise your hands. Is that unanimous? Thank you that's unanimous. So now we move back to the substantive motion as amended. Councillor McGregor would you care to read it again as amended? Thank you. For the meeting of this committee on the 26th of September 2024 ask Mazars to provide us with a breakdown of the 62 not implemented on page 136. To provide this committee with meaningful information of the status including due dates and the proposed action to be taken. Plus reasons for delays on an item by item basis. Thank you. Thank you Councillor O'Neill you seconded that. Thank you. So the matter is now open to debate again or we can go straight to the vote. All those in favour of the motion would you please raise your hand. That's unanimous chair. Okay any further questions? Just one question and apologies for my ignorance if this is something I should know. Just in terms of I'm looking at page 144 and the internal audit plan for 24/25. I'm just interested how that list is populated and prioritised please. The topics, the item topics in it. So the plan is produced annually through consultation with key stakeholders at the council and then presented to the audit committee for discussion and approval. Obviously a lot of the initial work takes place with Emma but then is broadened out into wider directorate heads to identify areas of priority based on perceived level of risk, key changes to controls. Some areas that if they haven't been covered for a long time just to check in and there are some areas such as key financials that we do tend to come back to every year on a cyclical basis. My predecessor in post sort of carried out the detailed planning this year but that's the general approach to populate it and then in year if there's any changes or amendments we would update that as part of the progress report. Just if I can come back on that this is more for my loan than anything so this is the stage in the process if we wanted to amend that list or change priorities within it that we could do that. That's not something I'm proposing committee but is that the case? So if there's to be a change to plan I suppose the more common route tends to be if something's identified by officers within the council or if it's a deferral request at which point we would manage that but then send it through to be noted at the next meeting. So obviously plans and risks do change. I suppose I'm thinking the most drastic examples were during Covid thinking back a while ago but a lot of plans were completely sort of ripped up, moved around, doing a lot more around staffing, business continuity etc. So obviously if items of discussion turned up at the committee and you wanted to add audits in or drop and change, yes, in short yes that would be open for discussion. If I could just make a comment on that as well. I think it's also worth bearing in mind you'll see that the status is they're planning so if you want to change anything we have to bear in mind some work has possibly already gone into doing some planning and scoping of those audits. That's work that's already done by MSARs that we would have committed to so I think it's just important to make sure that if we wanted to change anything there would have to be a good justification as to why we were shifting those about. It is open for discussion but I think we have to be mindful of that when we're having those discussions. Thank you. Anybody else? Okay. Councillor Hermitage. So I'm really aware that we've entered the new electoral year and we've got some new members to the committee and I'm aware of how much work is already being done so I'm not going to want to add too much onto it. However with the national guidelines that are in place that we're navigating I would like to propose that part of the progress report for and again by the time I get to the end of this you can tell me if it's suitable or you need a bit more time for the 19th of November. That part of that progress report sets out in clear language the plan and resourcing of internal audit work to cover the backlog in order to be in the best place possible to meet 24/25 backstop and ultimately the future dates set out by the recovery proposals from the national audit guidelines. So do we have a seconder for that proposal please? Councillor Bearer. Emma. Yeah I was just going to make the comment that the external auditors have actually left so that would be a question for themselves because the backstop dates relate primarily to the external audits. Is that something we can take away Emma? We certainly can. Yeah I just wanted to make the point so it was clear that's relating to the backstop dates for the external audits. I'm going to withdraw the proposal and I'll catch up with Emma and Joe and we'll discuss that. Is that alright? So I can just tell you. I'll speak to you afterwards. So are you content with that Councillor Powell? Thank you. Councillor Morgan. Just following on what Councillor Hermitage was saying for the newer members, so having sat on this committee for a time there has been a tendency for the committee to sometimes feel that you can't get clear information of what's happening and the information you need is always at the next meeting, at the next meeting or a time and date in the future. So all I think we're asking for is that we're presented with, as Councillor Hermitage is saying, meaningful information in a timely fashion so that we can be confident that the plan for the auditing, both internal and external, this goes for both, we can see that it's going to be achievable and we're not going to find ourselves in a position that we find on a regular basis which is it's been missed but there's promises to catch up in the future. We'd like to see that there is a realistic chance of catching up or if there isn't then we're aware of that. I'm aware that the auditors don't do the work, you're only reporting on what you see and you can't necessarily influence that but it leaves us always feeling like we are playing catch up I suppose as a committee. We're not able to do our job as a committee because we never have the information in a timely fashion. That's my opinion, I don't know if others share that. Anybody else? I don't have a debate in view of my position but I would actually like to second what Councillor Morgan has said. It's been a concern for a while for a number of councillors, this matter that he has raised. Thank you. Councillor Hamadish. Just to follow up on it, I think what I was trying to get at here is to say that I don't think anybody around this table is under any disillusion, how difficult the national audit situation is at the moment out of the hands of many people. I think as a committee we're just looking to ensure now that what we've got in terms of all the accounts up to date is fantastic, unlike other councils around the place we're in a really healthy position. I think it's accepted, not right but utterly accepted that lots of councils are going to look at disclaimers in the next situation because of this national guideline. And I think making sure now that for 24/25 onwards we can try and reduce, if we've got the chance of not disclaiming into a future year, then it would be really good to see the plan and the actions in place in order to give that assurance. Thank you. Anybody else? OK, I'll pick your pardon, please go ahead. I will try and keep it snappy, but I take on board the comments. I think we've tried as part of the updated progress report to do more to reflect things, specifically on timings and the internal audit plan, where we have got the confirmed dates, field work. We've not got anything starting later than January, I think deliberately as a lesson learned from the 23/24 plan, to make sure that we've got that built in contingency. Obviously coming back to future meetings, I'll continue to update this progress report for later status so you can see the movement and equally if there's anything where concerns are raised to build that into the narrative in the snapshot. That said, we're more used to getting comments saying that committees want less information from us, but if we've gone too concise, if there's things missing, as you've said with the follow-up actions, very happy to take those on board. If there's any tweaks we can make going forward, we're happy to do what we can to make sure we're giving you the service you need. Thank you. Anyone else? Okay, I'll be happy to note the contents of the report. Thank you. Okay, we're now moving on to item 10, which is the annual governance statements for 2023/24. Can I ask Emma to introduce the report, please? Thank you, Emma. Thank you, Madam Chair. The report for members presents the annual governance statement for 2023/24. This annual statement is a statutory requirement and requires approval by the 31st of May of the following year. The purpose of the statement is to set out the Council's governance arrangements and form a view on the adequacy of those arrangements. On page appendix A, page 158 of the report is an action plan which presents items which require regular review to ensure they are keeping on top of policies and procedures and ensure they remain fit for purpose. The statements themselves are set out at appendix B on page 183 of the report. Within these, there is quite a lot of detail around how our framework works and how it meets best practice as set out in the solace guidance on the operation of governance frameworks. I was not going to intend to go through all of the statements themselves, but I'm more than happy to take any questions members may have. Thank you. Any questions, members? Yes, Lindsay. I seem to need it all the time. On page 159, Emma, point 82/03, the due date is January 2024 but the status is progressing well, green. Is there an error in that? Should it be ongoing or could you explain what it is? I do apologise, it does look like it hasn't been updated. I could defer to the monitoring officer actually because this was relating to the procurement strategy and I do believe that has been reviewed. I'm not sure it's actually been changed but it's been reviewed. Thank you, yes. It's developing and maintaining the robust policies and procedures in relation to procurement strategy. So the procurement strategy is currently being updated. It needs to be reviewed in relation to the new procurement act which comes into force in October. It is progressing, we have got people on it and we're working on it and it should be ready in advance of the procurement act coming into force. Does that answer your question, Lindsay? I was concerned that it said that the due date was January 2024 and we're now in May and I wondered whether there was a typo. Sorry, it's the procurement act that comes into force in October 2024. The due date should not be January 2024, apologies, it should be October 2024. Lindsay, thank you for picking that up. Any further questions from members? No, okay, oh sorry, yes, Councillor Morgan. This is a question for the monitoring officer. When we met just recently we identified that IT was being involved at an earlier date, is that being included in the strategy? Thank you, Councillor Morgan. Yes, I can confirm that the contract standing orders have now been updated so that any contract which requires provision of software or IT in any format must go through the head of the IT department in advance of procurement. That's done, thank you. Any further questions? Okay, this item is now open for debate. Councillor Morgan. Sorry to take up all the oxygen. So just to elaborate for the committee's benefit, Joanne and I and head of IT met and I raised that when Lindsay and I met with IT that they sometimes aren't involved at an early enough stage within the procurement process and so that has been revised. And secondly, certain contracts that were rolling in terms of IT were basically rolling without necessarily going through the re-procurement process and that has been identified and captured and tightened up. It's really just a comment. Thank you, Councillor Morgan. Anybody else? Okay, so the Joint Audit and Governance Committee is recommended to note the evidence of compliance with the Code of Corporate Governance and the progress report produced to deal with any issues arising from these requirements as set out in Appendix A. Is the committee happy to note the contents? Thank you. The Joint Audit and Governance Committee is also recommended to approve the annual governance statements for each council as set out in Appendix B and C to this report. Can I ask someone to propose this as a motion? Thank you, Councillor Hermitage. Sorry, I didn't see the seconder for that. Councillor Ford, thank you. Thank you very much. We're moving on to… All those in favour? Thank you very much. Moving on to Item 11, which is the Joint Audit and Governance Committee appointments for parish councillors. Can I ask Jo, as monitoring officer, to introduce the report, please? Thank you, Chair. Good evening, members, and thank you for being here. So the report at Page 11, Agenda Item 11, Page 209, advises the members of the Joint Audit and Governance Committee on the nominations from Lansing Parish Council and Sompting Parish Council for the representatives to be appointed to the Joint Audit and Governance Committee as co-opted members in accordance with the Constitution hearing. I will immediately go straight to Page 211 and apologise in your paper report. You do have a typing error, which is unfortunate. It was a bit of a hangover from the last report, so forgive me. That has now been updated online, but obviously in your papers it will still read the previous nominees. But in your recommendations, if I may note that the nomination from Lansing Parish Council of the appointment of Councillor Liz Hayward as the co-opted member for 2425 to the Joint Audit and Governance Committee, and the co-opted member from Sompting Parish Council is Councillor Tim Hicks for 2425 for the Joint Governance and Audits Committee. And there's nothing really more for me to say, but if any members have any questions, I'd be more than happy to take them. Thank you. Any questions on that matter, then? Looking round, no questions. The item is now open for debate. Any further comments? Looks like a no. OK. The Joint Audit and Governance Committee is asked to note the nomination from Lansing Parish Council of the appointment of Councillor Liz Hayward and from Sompting Parish Council, Councillor Tim Hicks as co-opted members of the Joint Audit and Governance Committee for 2425 and recommend the appointment to Eda District Council and Worthing Borough Council. Are you happy to note the contents? Noted. Thank you. Excellent. OK. Item 12 on the agenda is the member code of conduct complaints reports. And again, over to you, Jo. Thank you, members. So as agenda item 12, you've got a report in front of you from the monitoring officer, which sets out the standards complaints or code of conduct complaints that have come to the monitoring officer during the course of the previous year. I can say there have been five code of conduct complaints in the last year, which is a continuous improvement on the years before. You have before you the type of alleged breach or breach of conduct. Every time a monitoring officer receives a code of conduct complaint, the responsibility is to consider and consult with the independent persons for standards. There are two wonderful, independent and experienced persons. One of them is Lindsay, who is also an independent person for audit governance, and the other one is Simon Norris Jones, who is on annual leave this evening and can't be with us. We always carry out a full and thorough review of the allegations made, and the findings are set out in your paper at pages 218 and 219. If I can take you to page 220, you can see that the complaints continue really to decrease. I think, so a domestic council was one more than last year, but I can say the complaints there were very minor and dealt with very easily. Nothing for me to worry about. We can carry out code of conduct training on a regular basis, and I think generally members are taking heed of their training, their code of conduct, and being brilliant in the way they carry about their daily activities. I would like to thank all the members for their compliance and for making life easier, because code of conduct complaints do take an awful lot of time and resource to look at, so thank you. Any questions, please? No questions? Okay, the item is now open for debate. Dan? Thank you, Chair. It's just to note, I noted it to Joe earlier, but for the sake of the committee to acknowledge the work that's gone on over the last few years with this, to bring complaints down from quite high levels in three or four years ago to recent, all the work that the Democratic Services team have put in around training for code of conduct and inequalities and beyond is showing that I think sometimes when you look at cultures of places, it's quite hard to pinpoint evidence or ways of showing that culture either changes or improves in ways, but looking at data like this that shows the drastic come down to two complaints is thank you for the work that you've done in order to improve that culture. Councillor McGregor? Thank you. As someone that's been involved with code of conduct complaints for a very long time, I can say that I think the training has worked and I also think that the main reason that we get the complaints we get is that the members of the public haven't also undergone that training, so had they done so, they would know in the majority of occasions that there was no grounds for a complaint and I think what's happened as well to reduce the number is that we have had less mischief making from some certain quarters of the public that we endured in the past. Thank you. Would anyone else like to add any comments? Just to respond to a point you raised there, Councillor McGregor, the code of conduct, so if a person wants to make a complaint about a Councillor, a code of conduct complaints form is now online and that complaint form requires the complainant to say which part of the code of conduct has been breached and I think that helps considerably. Thank you. Would anyone else like to add anything? Okay, the Joint Audit and Governance Committee is asked to note the content of this report and the actions taken by the monitoring officer and the council. Is the committee happy to note the contents? Noted, thank you very much. Okay, I'd just like to say a few words myself just before we close the meeting. Thank you all for being so gentle with me. Thank you for welcoming me to the committee. I do appreciate how important this committee is and ensuring that the public person is spent appropriately. And it's quite clear from, you know, this is my first meeting, it's quite clear the depth of knowledge and if there were particular, if I was giving prizes out today then obviously the first prize would go to Lindsay because she clearly spent the entirety of the public holiday weekend going through that report line by line and it's incredibly, incredibly important work. So thank you very much. I hope to contribute in some way. It's going to take me a bit of time to get up to speed but thank you all and I look forward to working with you. Okay, so the time is now, is that 8 o'clock? 8pm, I declare this meeting closed at 8pm. Okay, thank you very much. Okay, thank you very much. Okay, thank you. [ Silence ]