Agenda and draft minutes

Venue: The Library, Bristol City Council Offices

Items
No. Item

1.

Evacuation Procedure

In the event of a fire, please await direction from the West of England Combined Authority staff who will help assist with the evacuation. Please do not return to the building until instructed to do so by the fire warden(s).

 

Minutes:

The evacuation procedure was set out.

 

2.

Membership of Committee - To Note

The Membership of the Committee is printed on the front sheet of the agenda and Members are asked to note the membership for 2019/20.

Minutes:

The membership of the Committee for municipal year 2019/20 was noted.

 

3.

Election of Chair

The Committee to elect a Chair for municipal year 2019/20.

Minutes:

It was moved by Cllr John Ashe, seconded by Cllr Andy Wait, and

 

Resolved: That Cllr Geoff Gollop be elected as Chair for the WECA Audit Committee for 2019/20.

 

(Councillor Gollop was in the Chair for all subsequent items)

 

4.

Election of Vice-Chair

Having elected a Chair, the Committee to elect a Vice-Chair for municipal year 2019/20.

Minutes:

It was moved by Cllr Kent, seconded by Cllr Cleo Lake, and

 

Resolved: That Cllr Tom Davies be elected as Vice-Chair for the WECA Audit Committee for 2019/20.

 

5.

Apologies for absence

To receive apologies for absence from Members.

Minutes:

An apology for absence had been received from Cllr John O’Neill (Cllr James Arrowsmith attended as substitute)

 

6.

Declarations of Interest under the Localism Act 2011

Members who consider that they have an interest to declare are asked to: a) State the item number in which they have an interest, b) The nature of the interest, c) Whether the interest is a disclosable pecuniary interest, non-disclosable pecuniary interest or non-pecuniary interest. Any Member who is unsure about the above should seek advice from the Monitoring Officer prior to the meeting in order to expedite matters at the meeting itself.

Minutes:

There were no declarations of interest declared under the Localism Act 2011.

 

7.

Committee Terms of Reference - To Note pdf icon PDF 102 KB

The Audit Committee’s Terms of Reference to be noted.

Minutes:

The Terms of Reference for the WECA Audit Committee were noted.

 

8.

Minutes of previous meeting - to confirm as a correct record pdf icon PDF 86 KB

To consider and approve the minutes from 21 February 2019 of the West of England Combined Authority Audit Committee.

Minutes:

The minutes of the meeting held on 21 February 2019 were agreed as a correct record and signed by the Chair.

 

9.

Items from the Public

If you wish to present a petition or make a statement at this meeting, you are required to submit this in writing by 12 noon on the working day before the meeting by email to democratic.services@westofengland-ca.gov.uk   For this meeting, this means that your petition/statement must be received in this office by 12 noon on Tuesday 30 July 2019.

 

If you wish to ask a question at the meeting, you are required to submit the question in writing to democratic.services@westofengland-ca.gov.uk by no later than 3 working days before the meeting. For this meeting, this means that your question(s) must be received in this office by 5:00pm on Thursday 25 July 2019.

 

In presenting any statements at the meeting, members of the public are generally permitted to speak for up to 3 minutes each. The total time available for this session is 30 minutes.

Minutes:

There were no items from the public.

 

10.

Petitions

Any member of the public in the West of England Combined Authority may present a petition at a West of England Combined Authority Audit Meeting.

Minutes:

There were no petitions received.

 

11.

Statutory Accounts 2018/19 pdf icon PDF 107 KB

The purpose of this Report is to present to Members of the WECA Audit Committee the West of England Combined Authority Annual Statement of Accounts for 2018-19 for their review and approval.

Additional documents:

Minutes:

Malcolm Coe, Director of Investment and Corporate Services, presented a report on the 2018/2019 Statutory Accounts.  He explained that the WECA Audit Committee would not be able to formally agree the 2018/2019 accounts due to a delay in the auditing.  He confirmed that the draft accounts had been published on the Authority’s website by the statutory deadline of 31 May 2019.  It would therefore be necessary to hold an additional meeting of the Audit Committee in September 2019 for final sign-off of the accounts.

 

Barrie Morris, Grant Thornton, the Authority’s External Auditors, tabled the Audit Findings updated as at 12noon the day prior to the meeting and summarised the main points. The following points were raised:

 

  • The audit work had not identified any issues in respect of pension fund net liability and consideration of the McCloud judgement had been taken into account;
  • The Authority had been recommended to formalise a Medium Term Financial Plan.  However, as the Authority’s activities were evolving the Plan would be formulated when projects had been timetabled and funding confirmed. It would be a ‘living’ and ‘evolving’ document that would be constantly updated. Any such plan would be agreed and scrutinised in the usual ways.  The Chair asked whether an action plan could be brought to the next meeting.  Malcolm Coe stated that an intended direction of travel could be reported;
  • The Chair asked that accounts be published through Mod.Gov;
  • The Chair queried the provision for the NNDR (National Non-Domestic Rates) appeals., e.g. whether the provision was adequate.  It was confirmed that the amount had been agreed with the three billing authorities;
  • The Chair also asked for an explanation on how LEP accounts were audited.  It was confirmed that WECA acted as LEP’s banker and this is reflected in WECA’s accounts.  All transactions had been correctly disclosed.  Clarification was requested in the final version of the accounts;
  • It was stated that the Authority’s imminent move to a new IT system was crucial to ensuring the robustness of the financial systems and making regular updates;
  • The Authority was waiting for legal sign-off for the memorandum of understanding for the allocation of risk to the IBB function;

 

Agreed:

 

(1)  That the latest Audit Findings be noted;

 

(2)  That an Action Plan/intended direction of travel be brought to a future meeting of the Audit Committee;

 

(3)  That an additional meeting be arranged for September 2019 for sign-off of the final accounts.

 

12.

Treasury Management Outturn Report 2018/19 pdf icon PDF 187 KB

The CIPFA Treasury Management in the Public Services: Code of Practice requires the Authority to approve a Treasury Management Strategy before the start of each financial year, review performance during the year, and approve an annual report after the end of each financial year. This report provides a review of performance to 31st March 2019.

Minutes:

The Director of Investment and Corporate Services introduced a report providing a review of performance to 31 March 2019.

 

The report stated that the CIPFA Treasury Management guidelines required the Authority to approve a Treasury Management Strategy before the start of each financial year, review performance during the year and approve an annual report after the end of each financial year.  The report provided a review of performance to March 2019.

 

The average rate of investment return for 2018/19 was 0.97% which was 0.41% above the benchmark rate.  The Authority’s Prudential Indicators for 2018/19 were agreed by the Authority at its meeting on 2 February 2018 (Minute 11 refers) and performance against those key indicators was set out in Appendix 1.  All indicators were within target levels.

 

The Authority did not have any external borrowing.  Gross interest earned on all investments for the period April 2018 to March 2019 was £1,852k.

 

The following points were raised during the debate:

 

  • The Authority had to be cautious and had constraints on possible investments but could push for better rates of returns with some medium-term options such as property investments which could offer better value for money;
  • The Committee were keen to see the detail of a Medium Term Financial Plan when available although were conscious that the demands and timetable of the capital schemes were not yet known in the medium term;
  • Checks were made on all potential investors; the Authority mainly invested with other Local Authorities, again appropriate checks were made, but it was felt that the investments were relatively low risk, although all investments did have an element of risk;

 

Agreed:

 

  1. That the Treasury Management Report to 31 March 2019, prepared in accordance with the CIPFA Treasury Code of Practice, be noted;

 

  1. That the Treasury Management Indicators to 31 March 2019, as detailed in the report, be noted.

 

13.

External Audit Progress Report pdf icon PDF 98 KB

Grant Thornton is the appointed external auditor for the West of England Combined Authority. Their audit plans, progress on delivery, key findings and recommendations and scale of fees are reported periodically to the audit committee.

Additional documents:

Minutes:

The Committee received a report from Grant Thornton, the Authority’s external auditors, setting out the progress on delivery, key findings and recommendations and scale of fees.  The following had been appended:

 

Appendix 1 – progress report and sector update;

Appendix 2 – fees letter 2019/20;

Appendix 3 – IAS 240 letter and Audit Chair response.

 

A fuller briefing was given at the meeting.

 

The following points were raised during the debate:

 

  • A query was raised in respect in response to Q20 regarding possible litigation or claims that may affect the financial statements, specifically 20 NHS foundation trusts’ claiming charitable relief from 49 local authorities, including B&NES.  The LGA were confident that the chances of the claim being successful were low.  No financial provision had been included in the accounts.  An outcome was expected before the end of the year.  It was expected that the Government would have to intervene were the claims successful.

 

Agreed: That the updates from the external auditor be noted.

 

14.

Internal Audit Annual Report 18/19 pdf icon PDF 181 KB

This is the Annual Report of the Internal Audit function detailing progress against the Plan, a summary of audit performance and key issues, as well as the formal opinion on the internal control framework.

 

Minutes:

The Committee received a report from Jeff Wring, Internal Audit (Audit West) setting out the annual report of the Internal Audit Function, detailing progress against the Plan, a summary of audit performance and key issues, as well as the formal opinion on the Internal control framework.

 

The report stated that the performance dashboard showed that 100% of the plan had been ‘substantially completed’.  This included work that was either finalised or at reporting stage.  Appendix 1 recorded the estimated status of each audit review within the 2018/19 Audit Plan at the end of the year.  This stated that six formal audit reviews had been finalised along with seven follow-up audits and eleven further pieces of targeted audit work.

 

The percentage of audits completed within the initial allocated days was recorded at 100%.  The number of allotted days was reported at the meeting as 80, although it was noted that this may need to increase as the number of functions carried out by the Authority increased.

 

The Chair stated that he felt that the Committee’s role was to challenge and guide the Authority in these areas, including highlighting areas where the Committee believe there to be a potential risk.  There may be some overlap therefore with the WECA Overview and Scrutiny Committee.

 

Agreed: That the Internal Audit Annual Report 2018/19 and the formal opinion on the internal control framework be noted.

 

15.

Internal Audit Plan 19/20 pdf icon PDF 126 KB

To present the Internal Audit Plan for 2019/20 for approval.

 

Additional documents:

Minutes:

Jeff Wring, Internal Audit (Audit West) introduced a report presenting the Internal Audit Plan for 2019/20 for approval.  The Committee was asked to consider the areas included within the Audit Plan and the core assurances it required from its audit function on its core systems and governance framework.  The Committee was further asked to ensure it could rely on the independent assurance given by its Internal Auditor’s as laid out within the Audit Charter.  The Internal Audit Plan for 2019/20 was attached at Appendix 1.

 

Agreed: That the report be noted and the Internal Audit Plan, as attached at Appendix 1, be approved.

 

16.

Counter Fraud Strategy pdf icon PDF 88 KB

The West of England Combined Authority, (WECA), is regularly reviewing and enhancing its corporate governance arrangements. In response to a recommendation by Internal Audit, we are proposing that the Audit Committee endorse the adoption of a Counter Fraud Strategy as detailed as Appendix 1 to this report.

Additional documents:

Minutes:

The WECA Audit Committee, following a recommendation by Internal Audit, received a report requesting endorsement of the adoption of a Counter Fraud Strategy as detailed in Appendix 1 to the report.

 

In response to a question raised it was noted that any whistle blowing incidents would be reported through internal audit, who ensured the policies were closely aligned, and include in their reports in the usual way.  Internal Audit would also ensure the actions in the Counter Fraud Strategy were being followed.

 

The Chair stated that it was more difficult for staff to ‘whistle blow’ in a small organisation with a small number of employees and asked that the policy be brought to the Committee during in 2019/20.

 

Agreed: That WECA’s Counter Fraud Strategy, as attached at Appendix 1, be endorsed.

 

17.

Dates of Future Meetings

Audit Committee meets four times a year.

 

Members are asked to agree the future meeting dates for 2019/20. 

 

Suggested for November 2019 and February 2020.

Minutes:

Further to Minute 11 it was noted that an additional WECA Audit Committee would need to be arranged for mid-to-late September 2019 to sign-off the final accounts.  If possible, this meeting would also contain a training session and pre-meeting prior to the public meeting. 

 

Further meetings to be arranged for November 2019 and February 2020.