The Audit Committee of Wandsworth Council met on Wednesday 24 January 2018, reviewing external audit arrangements and the effectiveness of the council's anti-bribery and money laundering procedures. Significant progress was noted in addressing issues related to direct payments within Adult Social Services, with further audits planned.

External Audit Arrangements

The committee received an update on current and future external audit arrangements. Mr Adam Swain, Senior Audit Manager at Ernst & Young (EY), presented the Annual Audit Letter, the Audit Plan for 2017/18, and confirmed EY's appointment as the external auditors for Wandsworth and Richmond Councils for a five-year period from 2018/19. The committee noted that the contents of the documents did not raise any concerns and welcomed a significant reduction in audit fees. Mr Swain confirmed that EY's work had not identified any issues and that no public comments had been received. Councillor Peter Carpenter raised a question regarding the differing materiality levels used in the Council's Audit Plan (2%) and the Pension Fund's Audit Plan (1%). Mr Swain advised that EY was considering increasing the materiality level for the Pension Fund to 2% and would provide an update at a future meeting.

Update on Annual Governance Statement

An update on the Annual Governance Statement was presented, detailing progress since the Governance Review in September 2017. Issues identified during the review were outlined in Appendix A, and closed fraud cases were shown in Appendix B. Ms. Liz Bruce, Director of Adult Social Services, highlighted progress on audits with limited or no assurance opinions, noting that direct payments within Adult Social Services was the only remaining area with a limited assurance opinion. She reported that considerable improvements had been made and a new audit would be conducted once these changes were embedded.

Councillor Maurice Heaster, Chairman of the Audit Committee, reported that he, along with the Cabinet Member and other committee members, had met with Ms. Bruce to discuss the issues identified with direct payments. Ms. Bruce provided an update on the changes being implemented, which included updating the legal agreement signed by individuals receiving direct payments, reviewing the financial assessment process and payment suspension procedures, establishing a process for the claw-back of excess funds, developing a new contract specification, and increasing the focus on practitioners recording payments on Mosaic. Ms. Bruce undertook to send the new legal agreement to the Audit Committee members. A full audit was scheduled for March 2018, with a departmental audit already completed and its results under evaluation.

Mr. Jeremy De Souza, Assistant Director of Adult Social Services, Business Resources, explained that priority for implementing new financial control measures was being given to new service users, with existing users to be included once new practices were embedded. He acknowledged that resolving issues related to legacy cases was ongoing and likely to extend beyond the March 2018 audit. Mr. De Souza confirmed that regular progress updates were being provided to the Cabinet Member for Adult Care and Health and the Assistant Director of Resources (Financial Services). The committee reviewed outstanding actions related to direct payments and received updates on each. Councillor Carpenter inquired about any further cases of suspected misuse of direct payments, and Mr. De Souza confirmed there had been none, with clear processes now in place. The Audit Committee noted the good progress made.

Review of Anti-Bribery and Money Laundering Arrangements

The committee reviewed the effectiveness of the Council's anti-bribery and money laundering arrangements. Mr. Paul Guilliotti, Assistant Director of Resources (Financial Services), explained that regular reviews ensure these arrangements remain fit for purpose and are aligned between Richmond and Wandsworth Councils due to the Shared Staffing Agreement. In response to a question from Councillor Terence Walsh about anti-bribery requirements in contracts, Mr. Guilliotti confirmed that these are clearly set out for all contractors. For employees, anti-bribery measures are included in the Council's Code of Conduct, which all employees are made aware of and required to comply with.