Transcript

[ Silence ]

That is an introduction. And a good morning to everybody. We were hoping that Virginia might be watching, but I don't know whether she is. She'll watch a recording, perhaps, because the first thing that I just wanted to say was that this is the first meeting that Virginia Rennie won't be attending. And I have worked with Virginia for as long as I've been chair of this committee, which is over 21 years. She has been an absolutely first-class colleague, an ultimate professional, an ultimate Warwickshire officer of this superb county council. And I'm sure you all want to join with me in thanking her for her incredible contribution to Warwickshire County Council over the years. Not just a technical contribution, but the grace with which she's given it. Her ultimate diplomacy -- she'd never embarrass me, and she's never embarrassed any of her bosses either, which is a great credit to someone in that sort of job. But you knew you could count on her. I always could, both formally and informally. She will be very difficult to replace, but I'm sure, having heard so many good reports about her successor for NEMA, that she will have a successor who will aspire to the wonderful standards that Virginia has set. And with your endorsement, I think we should wish Virginia all the very best for her future. She and her husband have got a lot of things that they want to do together, and I hope they have a lot of fun doing it. Well said. Thank you. So with that as a valedictory, we can move on to apologies for this meeting. We have one from Joe Barker, and we have no other apologies. We will go on to disclosures of interest. Haven't seen the agenda. There's nothing anyone wish to disclose as an interest. Thank you. And then we will go on to the minutes of our last meeting, which was on Thursday, the 14th of October. Could I ask if everyone finds that a fair record of the meeting? Thank you. Okay, I'm happy. Good. I, too, am happy with that. And so we will move on to item -- well, I would just -- is there anything which is a matter of arising which does not appear on the agenda? I wasn't sure I could find something, because I knew that item two was coming up, which is a welcome item on our agenda, and it is that we all smile. And so we are asked to comment on the external auditor's update of audit certification based on the 2017-18 accounts objection, and I'm sure you will share my relief that this matter -- Have you got something back on it? This now is being dealt with. Yes. The matter has now been dealt with. I've only seen three objections in the course of 20 years, and they've all been of equally apparent small impact, but it's important that they're dealt with properly, and this has finally been dealt with properly, and I think we've had enough time on it. Let's move on. And we'll move on to item number -- Andrew, did you want to say anything? Andrew, sorry, did you want to say something? Just to introduce the report on the audit certification and give some other information for the committee. Oh, sorry, yes, yes. So, the external audit certification report is twofold. The first part of the report is -- introduces audit progress report and sector update, which is an annual update to the committee on the progress of the delivering the responsibilities as our external auditor. The report includes somewhere of national issues and developments such as addressing the delays in local audit and the financial trajectory of local government finance across the sector. Our colleagues at Grant Thornton are at attendance to answer any questions from the committee on that aspect of the report. The second part of the report, as Chas already mentioned, is the conclusion to the objection to the 1718 accounts. Following Grant Thornton's extensive work on this matter, Grant Thornton formally closed the consideration objection on the 10th of April with a letter to the objector. The letter has been shared with the chair of this committee and the conclusion is that no further action will be taken against the council. However, as part of the investigation, Grant Thornton's letter contained one recommendation to the council for avoidance of doubt. Avoidance of doubt is not a statutory recommendation. It's simply a best practice recommendation. And that's included in paragraph 1.5, page 14 of the report, which is that where section 106 agreements contain specific legal conditions that need to be met in order for the funds to be utilised, council reports should contain a section which adequately demonstrates how these have been considered and complied with. The council tries to do this as a matter of course, but for the monitoring officer, we have formally informed services and directors that this has to be a requirement from now on in all future reports. Finally, as the former response to the objector has been issued and conclusions have been drawn, Grant Thornton can now provide the audit certifications to formally close the audits for the financial years 17-18 right through to 22-23, both for the county council and for the mortgage pension fund. Thank you, chair. -Thank you, Andrew. -Well, first of all, just thank you for the patience around this matter. I know it's been a matter of interest since I've been on the committee for the last few years, and I'm just thankful that it's actually closed now and it's done, yes. And, yeah, so there's one recommendation, but it's a best-practice recommendation in that sense, and we are looking to sign off all the certificates within next week or so, so that should be all done, and we can just start 23-24 with no backlog of activity required. -Thank you. -Who have done things differently? -In terms of this objection, I think there's -- the main delay was caused probably by capacity within the audit team and the impact of COVID and things like that which created the backlog. So I don't think it's anything specifically the council needs to think about. It's probably something, as auditors, we just got to reflect on and make sure that we don't take as long, because generally when we do ask the council and, you know, for support and evidences, they are quite prompt at getting the information back, and it's just something that I think as an auditor and the audit team, we just need to reflect on what happened, what went wrong there, and make sure it doesn't happen in the future. Ultimately, it was not under anyone's control. There was a person dealing with the objection, and time elapsed, and they still haven't done that work, and I think that's my learning, is to make sure that that doesn't happen again. -Sorry. -Yes, this seems to happen quite often, that there's a minor objection which really has very little to do with... It doesn't really justify, in my opinion, holding up the accounts, and I just wondered if this is a fading of the system rather than a specific particular objection, whether the whole thing should be done, whether just one objector with a fairly minor, possibly spurious, objection can hold up the whole process. By a matter of years, it doesn't... No, I just wondered whether there was any thoughts of changing it, you know, to... -I'm so used to not putting it on. I think you've got to... I think in some areas of life, one would say, Is there a case to be answered on something like this? Is there actually something of such significance that it should be delayed? Perhaps we ought to ask the question when... Because this has been ridiculous, this delay, hasn't it, really? And I think, well, did somebody at the beginning, when something like this happens, does somebody look at it and say, Do we really need to delay this because of this? The question somebody said, Is it a spurious complaint? Well, I don't know if that question was asked, but either way, it does seem a waste of time, if not money, that we've been delayed for so long. So that's just a thought. Do we need to ask somebody to consider, if we have an objection in the future, is there a process which is followed? Because I don't know the answer to that. Is there a formal process that's followed to decide if it's worth deferring it for this huge delay?

• Thank you.
• Just to comment on that. So it's a requirement that if we do get an objection in a period of when the accounts are published, that we have to consider them all. And it's at that point we determine whether we take anything forward. We can actually write to, if we do get some objections, which we don't think actually are objections, we can write back and say we're not gonna follow this up, or this is actually followed up in the work that we're already doing. It's only at times where it's something very specific, where we think actually there could be merit in this, which we will investigate. But a lot of the work now, sometimes what we do, is we produce the annual auditor's report, which is the value for money commentary. If we think that something links into that aspect of our work, we try and incorporate it into that. So I think you may have noted, like in last year's annual audit report, we did have a specific section on capital programmes, and that was to do with something which was started off as an objection, but we incorporated into our existing work and said actually we don't think this is a proper objection, but we will focus a little bit of work on this as part of our normal process.
• Well, that's reassuring, thank you. And all we can do is to commend you to be as rigorous as you possibly can to ensure that these matters are only dealt with if they are of sufficient substance. The problem I think we have is the external perception is that if the certification of our accounts has been held up for such a long time, it must be something of great significance, and I'm sure there will be disquiet outside to find out that it wasn't. Andrew, did you want to say something at that point?
• So as Aftar has said, the certification comes right at the end of the process. Warwickshire has a very strong track record of delivering strapped accounts by statutory deadlines and getting a clean audit opinion on those accounts, regardless of when a certification is received. So we are able to hopefully push that perception to our taxpayers that we are delivering accounts and we say we're going to deliver them and we're receiving a clean audit opinion on those accounts, which has been the case right up to 20 to 23 so far.
• Yes, thank you, Robert.
• Check, can I move away from the certification point and draw attention to the rest of the report, which I think has got some valuable advice for the committee, but I refer in particular page 22, in which the report addresses preventing failure in local governments. I think, chair, I know that there's a concern of yours. And there's some advice here for audit committees, which I think is worth looking at. Focusing on risk management alone, not having multiple roles. I'm not sure I totally accept that because this is an audit and standards committee, but leave that. Independence, well, we have an independent chair and we have an independent member. Specialist training and support. Here I think members might appreciate being offered. There are some new members of the committee. We're dealing with technical areas involving pensions and audit. I think that there could be some scope here for more training to be offered. Direction over internal audit. Well, I think we do that as a matter of course. Curiosity and asking the right questions. Well, that's down to us. But I think it is a valuable set of guidelines that perhaps have helped us at Warwickshire to avoid falling into some of the traps that some other neighboring authorities have fallen into in recent years. But we mustn't be complacent, chair. So I do commend that section of the report.
• Thank you. Anyone have, please.
• Thanks, chair. I'd echo that. I'd highlighted that section myself. But in particular, I felt that specialist training and support and the curiosity asking the right questions are key to a committee like this. It's a technical issue. And whilst, if you like, the current committee are well able to manage that, future committees where members are not so experienced in financial matters wouldn't welcome that specialist training. So I agree with Robert totally on that. The other thing that I wanted to raise was, funnily enough, is page 21, just going back one page, where the last paragraph on the left-hand side and the first, oh, the last, the bullet point on the left-hand side and on the top of the right-hand side where it says, changes the code of audit practice to support auditors to meet backstop dates and promote more timely reporting of their work and value for money arrangements. And I wondered, just if you like, not trying to be controversial here, but is that a weakening or a dilution of the audit purpose with the, with that kind of, if you like, backstop, it feels like that second part, that second bullet point is about weakening the process. And I welcome some comment and thought on that, looking at Avtar. (laughs)
• No pressure.
• Yeah, I think there's a reflection that the local authorities audit and the accounts process is in trouble at the moment. And there's a lot of authorities out there which are just struggling to actually produce the financial statements from a number of years ago. And it just, the idea of this backstop was trying to create that clean slate and moving forward. And again, I'm not going to delve into the detail of the whys and why nots. It's just something which ministers will have to agree on. But given that there's a general election happening as well, who knows what happens with the backstop audit because that could change as well, given new governments and whatnot. So we just have to wait and see what happens with whether audits can get backstopped or not, going forward.
• Yes, thank you. I'd just like to add that there was a conference of local audit committee chairman, not so very long ago, in which this was highlighted as being a national problem. I have to say that we are less badly affected than many, many other local authorities, some of which have got a horrendous backlog of a large number of issues. And what the NAO is doing, I'm not sure whether they've got all the resources they need to do it, but what they're trying to do is that on the one hand, they're trying to put in more resource, but that of course is about recruiting people. And that is about paying them properly. And that's about budgets. So that's one issue. But the other issue is also simplification, both of accounting and reporting, and also the auditing which attaches there too. You could argue that if some of the accounting standards weren't as complex as they are, the audit wouldn't have to be as complex. So you can see this is a problem which has got many dimensions. It is being addressed, but it needs people of the right insight and the right experience and the right technical background to address it properly. And all we can do, I think, is to rely on officers of the council to ensure that this is being given enough priority, elections notwithstanding. I don't think this will be a general election issue, but to local authorities, it is very important. It is hugely important that we both have the right standards to which we have to account and the right auditing which goes to back it up. It's fundamental to effective control, but it is being addressed. Good morning, Serafini. We knew you were coming because if you weren't coming, you would have apologised. I would have done an apologies chair. I was blocked in in a car park somewhere else, so I had an early morning meeting and it took me half an hour to get myself unblocked from the car park. Oh, wonderful. So I was quite flustered. Quite flustered and I was not happy. I thought page 26, which is page 10 of 12, was really interesting when it talked about making the most of Devlin-Gotham's because, no, not the doom loop, the one before that. No, I didn't get to, well, I did read the doom loop, but I thought those key questions that audit committees can ask were actually really good questions, but they left me with a couple of reservations, actually, because when it started talking about, do we know which of our projects are on task and which are at risk, I think we have to take a measured view of that because otherwise we're gonna spend a long time getting audit to audit things that may not really cause significant risk. I think it's about making sure we know which of our problems are the risk, which of our projects are the riskiest projects and kind of applying those questions to those, but I thought they were actually very good questions because one of the things we saw last year was the impact of inflation on a number of schools' projects and we've had to put more money in as a county council so that we can deliver, quite rightly deliver those course projects, but it has cost us more than was anticipated at the outset and I thought that these questions really made me think, yeah, actually these are the right questions here, but making sure we apply them to those risky projects that are gonna significantly affect the council's performance really.
• Thank you. Have you thought about how these questions are engineered though? Should they be engineered in private session by members of this committee or should we rely on officers to suggest what those appropriate questions might be?
• I'm always happy to take advice of officers because I think that they have the sense to tell us which are and which shouldn't. I mean, I know there's always a tension between what is commercially sensitive as well and I think I would absolutely take the lead from Rob and his officers to say what he felt was appropriate to be public and what wasn't.
• That's right and I think that's a key point, isn't it? We are totally reliant on officers to lead us in the direction of the right questions that we should be asking. We can't ask questions about things about which we know nothing.
• Yes, but I wouldn't want us to be precluded from asking questions. (laughing)
• I'm sure you're right. I'm sure you're right. The point that I would make about both failures in local government and the sort of questions that we could ask. I still feel that both we and in fact councilors could be better prepared to know of all the failures, the increasing number of failures that there are in local government or what is behind this. Because there's not just a failure of audit committees, there's a failure of overview and scrutiny as well. But for each, whether it's Birmingham or whether it's Northamptonshire or whether it's Thirruk or whether it's Croydon, I won't go through the list of them all. The problems that they had were foreseeable if people had realized the consequences of their actions. And those consequences of actions were foreseeable before it came to audit and scrutiny, but audit and scrutiny should have been on the ball. If it had got past audit and scrutiny, then audit and standards should have been on the ball. What are the lessons for Warwickshire just from those four councils? Now, we haven't seen them yet. We would all benefit from them 'cause we can learn. Councillor Feeney.
• Thank you, Chair. Yeah, I seem to recall and we must be due on this year 'cause we're now into a new municipal year. We normally have a training session and I wondered whether this could perhaps form part of a, if officers felt that we were far enough along in some of the learning, whether this could form part of a training session for us as a committee.
• Very good suggestion.
• Can I say something? - Yes, please.
• Thank you. So I shared a document with yourself and with Robert Zara relating to a report that was produced from the LGA learning from councils which face finance and governance challenges. And in that, it did specifically mention audit training. So I've been in contact with Grace Collins from the LGA to try to arrange something for the future. She signposted me to something that's more proactive from the committee's point of view. We're trying to get somebody to come in and do something instead.
• What sort of timings do you think will be possible, Amy?
• I don't know as yet. I'm still waiting for her response. So I'd be hopeful that we can get something by the autumn. That'd be good.
• Councillor Gifford.
• Yes, on the question on the issue of training, pensions, subcommittee and entity pension fund, we have a lot of training, but it's often quite short. So it's a sort of a maximum of an hour session on teams. And I think Councillor Jensen would agree that it actually works rather well, little and often. It seems to work quite successfully.
• Thank you. Councillor Shen.
• Yeah, I'd go along with that to some degree. I think the problem with the pensions training, I mean, you've got the pension regulator, you've got Hyman's, there's a number of modules that it's a very technical, even for someone like myself who's been through the accountancy route, it's a technical, I find pensions very technical area, and that's trying to get some of that training into auditing standards. It's gonna be problematic. I mean, Councillor Gifford knows just how many modules there are in the pension training. I mean, they are endless, they're constant. And I can't remember in the time that I've sat on this committee having any training that approaches anything like the training that we get on pensions, and that's why, come back to Robert's point and Sarah's, Councillor Feeney's, sorry, (laughing) a point about the need for training. I think that's essential. The learning points, and I agree with you on the learning points. Again, I've highlighted the fact that on page 23, it actually talks about how many authorities have had section 104 notices, and how many chief executives are worried going forward. And whilst we are fortunate in that we're not in that position, we have a good medium-term financial strategy, we have a good standard of committee, it would be interesting to know what, if you like, what tipped councils like Birmingham over the weak area, the areas of weakness. Was it purely lack of financial knowledge, or was it political, or was there something in there that we should be aware of so we can spot these things when they come up, were the committee blindsided, totally.
• Yes, thank you. I think we can take this as a ringing endorsement of our need for some training. I don't think any of the failures in local government, of which you've already commented, are about technical accounting issues. They are much more fundamental about decision-making processes within councils, and it is that of which we have oversight, because we have oversight of governance. But no, that's a ringing endorsement, and as soon as we can get some training on board, the better, Amy. Thank you.
• We are, we're still now on this item, on external audit. Does anyone else have any points to make on this item? Pages is item, this is agenda item number two. No? Thank you. If we could then move on to agenda item number three, which is the annual governance statement. Chris, I think you're going to talk to this initially. Thank you.
• Yes, thanks. So this report presents the 23-24 annual governance statement. It's had input from a range of stakeholders across the council through a managed stakeholder group, and input from corporate board. Its purpose is to consider our governance arrangements and the effectiveness of them. So it runs through the framework, an assessment of compliance with that framework, an assessment of the effectiveness of our arrangements against key governance principles. So for example, things like behaving with integrity, ensuring openness and engagement, and managing risks. It also sets out the key challenges that we're facing, and shows you the governance action plan from 23-24, and shows you a plan for the coming year. Some examples of things that have been updated year to year, so it reflects the new council structure. For example, the split of the people group. We have, for example, a new director of workforce and local services. It reflects the council delivery plan, the capital program governance arrangements, and the sustainable future strategy. This is a draft statement for comments. This will go alongside the accounts being published for comment, and will be brought back here in final form. Supporting this document, directors have signed off assurance statements regarding risk management and compliance with governance standards during the year. So we've got that layer of assurance sitting underneath this document. That's all I had to say by way of introduction. I have to take any comments.
• Thank you. One of the things which has been prompted by the recent post office inquiry, the current post office inquiry, is the extent to which at senior positions there were effective transitions from one job holder to the next, particularly with regard to what I call working process. Could you say where in our governance processes we put responsibility, overall responsibility, for handover of working process in our senior positions?
• I can't, I wouldn't talk about senior positions per se, but we do have a--
• For example, when we change our director of finance.
• We do have formal guidance for managing levers. So there's a managing levers checklist. When there's a change of personnel, that checklist is available for people to use as an aid when while to cover the right things. And that includes things like knowledge transfer, dealing with IT, all those sorts of things. So that's one thing I can share.
• Ron.
• Yeah, I mean, we take it very seriously when there are changes in senior roles. We plan for the handover, and we've had several different types of circumstance recently in my area. So Andy Felton left, handed over to Virginia Rennie. I think he left a 30-page handover note that we still refer to to this day. That handover was unbelievably seamless. And Virginia is doing a few further days work between now and the actual end of her employment with us, but not in the role of the director of finance, as Panima Sherwood beds in when she takes up the post on the 3rd of June. So it's taken seriously, we document things, and we have absolutely fantastic heads of service, a number of whom are sitting around the table here who are absolutely instrumental in keeping things moving even if there are changes at the top of the organisation. So I don't know specifically how that's been handled in other directorates, but certainly in my own where we've had two changes of director, or two in a bit if you count the interim period in finance, I think it's been as smooth as you could really hope for.
• Thank you. Councillor Feeney.
• Thank you, Chair. I think one of the things that you've raised that kind of sparked a moment for me there was how, and I think this is where actually our excellent audit team do do the work, but how do we make sure that we're, you know, in Birmingham, I think for me, part of the learning seems to be that offices weren't necessarily very open about what was going on in terms of the huge overspends until it was far, far too late in a way. But I think, you know, I think that learning about, you know, the post offices, people knew, but not everybody knew. How do we make sure that the right people know to kind of press the stop button if necessary? I think it's really key as well, isn't it?
• Yes, thank you, Robert.
• Chair, can I ask for clarification, please? On page 21, and again on page 22, there are a couple of passages highlighted in yellow which are clearly intended to be completed at some later point. Is there any update that anybody can give? I don't understand the one on page 21 at all, I have to say. Internal page 21. Sorry, I've got the page number completely wrong. It's page 53. 53, I'm so sorry. And 54.
• So these refer to the--
• So I do apologise.
• Yeah, this refers to at the time of writing the final internal audit opinion not being available, so this was a placeholder for that.
• Thank you.
• Sorry, group, you didn't catch that. So this was a placeholder at the time of writing of this draft, the final internal audit opinion being available.
• Thank you. Just going back to the question of handover of senior positions, is there an overall scrutiny of how between the directorates, we've heard from Rob how well this goes in finance, but how about the other important parts of Warwickshire County Council?
• I think we'd expect the HR policies and procedures, the things that Chris has already spoken about, to pick up some of those issues and ensure that those handovers are clear, and actually, more importantly, there's clear accountability for the different elements of the responsibilities. I think ultimately it will be the exec director for the relevant service area who will be accountable for ensuring that particularly at the senior level there is a smooth handover, and as Rob said, I don't think we've had experience previously of touch wood, things going awry in that context. So I think the detailed handover notes have become more of an expectation across the organisation.
• Good, thank you. So, sticking with this agenda item, which is the draft annual governance statement, are there any other questions which have arisen which people want to ask questions about? This goes up to and including page 32 of 32. Council Feeney.
• Thank you, chair. On page 59 of this, it talks about school place provision. I know that's quite a hot topic in the county. I don't think there's probably very few members who haven't had some form of interaction with our residents around are the places in the right place obviously in SEND as well. I know that there's a lot of work going on in that, but I guess where do we feel as the audit committee we can add value to that work, because one of the things that gets kind of brought back to us as a county council is are we putting the places in the right place, as it were. So that sounds very strange. Schools in the right places in SEND provision. What do we, I suppose my question is what do we as the audit committee feel that we should be looking at on this, because it's in our governance document. So clearly it's identified as a key risk.
• Just before we ask what we should be doing, are you happy with this as a governance statement as far as school place provision is concerned? Okay. So then your question would be what are we doing to ensure that governance in that area is working as effectively as it might? How do you think we should look at it?
• I was hoping you weren't going to ask me that question, Chair. (laughing) I mean, I think it's about, it's that sense check, isn't it? Is do we correlate, because obviously overview and scrutiny, children's overview and scrutiny ultimately scrutinize some of this, but do we correlate the resident experience and the kind of feedback we're getting from residents, and issues being raised against are we delivering best value? Are we delivering the right thing in the right place? I think there's some work for us perhaps as audit standards to kind of take that further back step from the overview and scrutiny committee, actually let them do their work, but kind of check on them really, isn't it?
• Let's ask Chris if he's got something to say about that. That is one of the dimensions of the governance statement we're being asked, the council is quite properly asked, how do we ensure this is in fact mirrored in behavior in the council? How do you think we should do that?
• I'm not sure if I'm best placed to answer that question, being honest.
• Who do you think might be? (muffled speaking)
• It's a challenge, definitely, which is why it's in the governance statement. I think the committee might want to think about what's an executive matter, the education efficiency strategy and plan goes through a different route and what's an audit matter. And obviously the overview and scrutiny committee for children and young people would look at this in more detail. Some of the things about checking resident experiences, that's really in the remit of overview and scrutiny, I think. So I think I would just urge a little bit of care about what's an audit of standards matter vis-a-vis something that should be taken through a different governance route. It's a risk, it's on our risk register, it's regularly reported to cabinet in all of the quarterly reports. And we do bring forward very transparently both the strategy and the plan for school places and indeed send provision to the executive.
• Thank you. Councillor Gifford, did you have a point?
• Yeah, I was gonna say, it did come up at cabinet just the other day. I happened to have to act as a substitute to question the cabinet. And it certainly was an issue there and it was taken quite seriously and it was a matter of, and it was discussed at full council as well. But it is a major issue, yes. I think the question which it raises is very much to what extent do we wish to intervene without knowledge of detriment. Now in all of these areas, I think we have to be awfully careful that we are not imagining detriment before detriment is apparent. And we rely on officers to indicate to us that there may be a problem here because for every aspect of our governance, things could be going wrong. But we're not gonna use our time effectively if we imagine what might go wrong, are we? Unless we think there's sufficient risk of harm that we should lock the precautionary principle is that well, maybe there's some precautions which should be being taken, which we don't think are. And I think if that should be the case, then we should raise it. But otherwise, there's a danger that we intervene in the absence of detriment, it seems to me.
• One of these strange cases where if we get it wrong, it could be wrong for 30 years. (laughs) Because it's about where we actually spend capital or how we spend the capital. Or indeed, how we actually raise the capital. Because one of the concerns that I think became quite evident was that the 106 money was raised at one point. And then of course, with the substantial inflation over the last couple of years or so, particularly in construction costs, it meant that there was this gap. But also with the whole issue of SEND, that's meant that making sure we have the right sort of places, so the right sort of academies or schools or whatever, are built, the provision is made for those particular. So it is desperately important. But if we get it wrong, it's something that's gonna be wrong for a long time.
• You're absolutely right. But we're asked to consider the government statement. Does this represent an appropriate governance position for Warwickshire County Council to take? And it seems to me everyone believes it is. Now we have to hold Warwickshire County Council to account to make sure they behave in that way. But that is a statement government seems sensible. So if we look at all the statements of governance principles, is there anything in this, and we look forward to the gaps being filled, Chris, obviously, is there anything in this which anyone would like to raise as a concern? So is it something which as a committee we are happy to support? And an endorse for publishing and issuing to our external auditors? So that we so do. Thank you. So that has resolved agenda item number three. The agenda item number four is the external audit risk assessment for the year ending 24, which we just passed, which Grant Thornton are going to introduce, over to you.
• Thank you, Chair. So you probably see this every year. So it's the annual iteration of specific questions we ask management in terms of general inquiries, fraud, laws and regulations, related parties going concern, just as a requirement of the ISAs, the audited standards that we work to. So the responses given here are management's responses to the questions we've asked. And it's just really for the audit committee just to have a look at those responses and to see if they seem reasonable and in line with your knowledge. And from my review of the responses given, there's nothing here which presents a specific audit risk or uncover something else that we need to do in our role. So I'm happy to take any questions, but it might be I need to defer to management to answer anything specifically.
• Who would like to speak to if further information becomes available between this committee and the draft? Any changes will be reported? From whom will that report come? Rob, will that come from you? Any update in the risk assessment or something which has been left off?
• I'm not aware of either.
• No. Chris, will anything come from you or so? No? Okay. So this is the risk assessment, which will direct our thoughts in the audit. Does anyone have any questions about anything missed off?
• A bold man who says there is some. Councillor Gifford, bold man.
• It's just I thought that Andrew Harford might be the person who'd come back to us on this.
• Councillor.
• Thank you, Councillor Gifford. Yeah, my team are responsible for the management responses, a draft management responses to Grant Thornton. So everything that's in here will emerge from my team. So any changes to that will originate in my team and I can update if anything changes. At this point in time, there are no changes to that between now and the draft deadline for publishing the accounts.
• When you look at the risk assessment, to what extent do you review risk assessments of the past and decide whether some risks are now redundant and so don't need attention? And to what extent do you commend particular attention to new risks identified?
• Our starting point is reviewing the risk assessments of the past and taking an incremental approach to those to remove ones which are no longer relevant and adding to any new ones as we come across them.
• So if we, I'm not saying we would, but if we were to say, well, which risks from last year have now been removed, you would be able to tell us that, would you?
• No, not off the top of my head, unfortunately, but we--
• Ask, I'm talking conceptually now.
• Yes, we keep a track of all risks that have been removed from the response to Grant Thornton.
• Okay, thank you.
• Just to add, if there's something did change in the responses from here, when we present our external audit findings report, we would flag that in there just to say, this has changed and we've done some specific work on this area.
• Well, one of the things which one conventionally looks at in a risk assessment, you look at scale, magnitude, probability and that sort of thing, and you attempt to quantify where management should direct its primary attention.
• There's not much in this about priorities, is there?
• This, you've got to remember, this is a document which is more of an overview of like the, if you're looking at a helicopter view of what's going on at the authority and are there any specific concerns which would impact the financial statements or the value for money that the auditors should be looking at? And I think when we review the contents of this, there's no major alarms that are coming off to us to say, actually, after I direct some audit resource into this area or that area, and that's in line with my understanding of how the council is operating at this moment. So everything in here seems to be in line with expectations and knowledge and discussions with management, et cetera. So there's nothing that I'm worried that is missed off at this point in time. (muffled speaking)
• Sure, yeah. Any questions?
• Right, that was item number four then, which is the external audit risk assessment for the council. We can now go on to item number five, which is the external audit risk assessment of our pension fund.
• Okay, please.
• Okay, it's just, it's the same as I said for the council. This is just the response from a pension fund side. And, you know, again, I've looked through the responses. There's nothing from an audit perspective, which I'm too worried about. But if there are any questions, again, I'll just defer to management to help answer anything.
• He's smiling.
• One, okay, one, I'm being a bit pedantic here. You said too worried about it. (laughing) I am worried about it, I'm not worried about it. These are just the, these are standard responses. They're similar to what was presented last year as well. So there's nothing which is coming out, which I think we need to pull specific audit attention or audit risk is coming out from the responses given.
• We're still somewhat all in the dark about the cyber attack through capita of a major pension fund, which it is said has cost many tens of millions. Are we any further ahead in knowing whether there are any lessons to be learned from that as far as Warwickshire's pension fund's concerned?
• I'd probably defer to management to look at a response to that.
• Okay, I'll ask Chris.
• Mr. Gifford.
• You'd be pleased to know that we, pensions subcommittee and the pension fund, we had training on, just the other day, on the dangers of the cyber attack on the pension.
• Very good, and you found it useful?
• Yes indeed, it was interesting and useful. Made me aware of the different types of cyber attack that might take place and how they can not be, they can be for a very minor sort of door that's left open inadvertently by quite a junior member of staff or indeed a counselor. And the danger of not being careful with the emails you receive, for example, you know.
• Are you happy that we've incorporated the right sort of precautionary measures?
• I am, but I think that what it really showed to me was that Warwickshire pension fund is not being complacent about it.
• Yeah, thank you, Councillor Schengen.
• I think I was on the same training and the key message is not if, it's when.
• When.
• Yeah, and we're well aware that there will be an attack at some point.
• Thank you. Chris.
• Yes, so talking about the pension fund first of all, we've engaged with Aon as external consultants to support us in reviewing our cyber security policy. So that has just happened and that will be going through the pension fund committee process and will also be seen by the local pension board on the other side. So that will have kind of scrutiny, governance oversight on it. The annual governance statement just rising above the pension fund has got commentary about some of the things that we're doing around cyber security risk. So it is taken seriously. It is a high risk on the risk register for the pension fund and we give it quite a lot of attention, not just looking at the risks facing us as an organisation, but the pension fund relies on lots of other entities and systems. So part of the new cyber security policy will include how do we go about assuring ourselves that other people who handle our data and our money and so on have got the right arrangements in place and not just assume that it's okay.
• Thank you. Any other questions on that pension fund? (mouse clicking) Thank you. Then move on to item number six. And item number six, which begins on page 137, which is an attempt to capture the richness of all the things that we've covered in the course of the past year, for which thank you very much, Amy, for having done this job. Does anyone have any questions about the account of our activities?
• Councillor Gifford.
• That's not a question, but a comment. I'm pleased to see that the SEND funding is mentioned there.
• Yep.
• I think it's something that has become, I think we were right to go for a report at an early stage. It's certainly an issue that's a big issue and it's become a much greater issue in that period of time since we had the report. And I'd like to think that it may have helped the council give thought to it.
• Well, and thank you for having made it such an important issue too, because I think you raised our awareness. Anything else which anyone would like to make as a comment on this account of our activities? Robert, you're happy?
• Sure, thank you.
• Good, well, thank you very much, Amy. We are happy that that account of our activities goes ahead. That takes us to item number seven, which is our work program for the year ahead and confirmation of our next meeting. The work program you will see includes one item for July, which is the internal or the annual report, but then quite a lot going on through next year and indeed thereafter. Anyone have any questions about that? Good, and thank you, Amy, for liaising with everybody to make sure that we're kept up to date. Is there any other business for this open part of our meeting? Thank you, then we will move on to a consideration of exempt and confidential information. I wonder, could someone propose that we move into a private session? Thank you, Councillor Feeney. Thank you, Councillor Gifford. Then we will.