Agenda and draft minutes

To receive declarations of interest from Members in respect of items listed on the agenda.

There were no Declarations of Interest made at the meeting.

To receive questions relating to items of business on the agenda from members of the public or press who are present at the meeting.

There were no members of the public or press present at the meeting.

To determine whether the following items should be considered under the categories suggested in accordance with Part 1 of Schedule 12A (as amended 2006) of the Local Government Act 1972.

Agenda Item No. 6 Children and Young Peoples Services Strategic Risk Register Update has a confidential appendix so will be exempt from the press and public.

(Exempt under Paragraph 3 of the Act ( (Information relating to the financial or business affairs of any particular person (including the authority holding that information)) of Part I of Schedule 12A of the Local Government Act 1972.

Agenda Item No. 7 (Regeneration and Environment Risk Register) has a confidential appendix so will be exempt from the press and public.

(Exempt under Paragraph 3 of the Act (Information relating to the financial or business affairs of any particular person (including the authority holding that information)) of Part I of Schedule 12A of the Local Government Act 1972.

Agenda Item No. 14 (Internal Audit Progress Report for the period 1st December 2023 to 31st January 2024) has a confidential appendix (Appendix D) so will be exempt from the press and public.

(Exempt under Paragraph 7 of the Act (Information relating to any action taken or to be taken in connection with the prevention, investigation or prosecution of crime).

Agenda Item No. 17 (Asset Management Risk Register) is exempt from the press and public.

(Exempt under Paragraph 3 of the Act (Information relating to the financial or business affairs of any particular person (including the authority holding that information)) of Part I of Schedule 12A of the Local Government Act 1972.

Therefore, when considering these items, the Chair will move the following resolution:

That under Section 100(A) 4 of the Local Government Act 1972, the public be excluded from the meeting for the following items of business on the grounds that they involve the likely disclosure of exempt information as defined in those paragraphs indicated of Part 1 of Schedule 12(A) of such Act indicated, as now amended by the Local Government (Access to Information) (Variation) Order 2006 (information relating to any individual and which is likely to reveal the identity of an individual).

Resolved:- That, under Section 100A (4) of the Local Government Act 1972, the press and public be excluded from the meeting for Minute Nos. 70 (Children and Young People’s Services Strategic Risk Register Appendix), 71 (Regeneration and Environment Risk Register Appendix), 76 (Internal Audit Progress Report Appendix D) and 80 (Asset Management Risk Register as defined in the paragraphs indicated below of Part 1 of Schedule 12(A) of such Act indicated, as now amended by the Local Government (Access to Information) (Variation) Order 2006.

To consider and approve the minutes of the previous meeting held on 9^th January, 2024, as a true and correct record of the proceedings.

Consideration was given to the minutes of the previous meeting of the Audit Committee held on 9^th January, 2024.

Resolved:- That the minutes of the previous meeting of the Audit Committee be approved as a correct record of proceedings.

Nicola Curley, Strategic Director Children and Young People’s Services, presented a report providing details of the Risk Register and risk management activity within the Children and Young People’s Services Directorate.  Helen Sweaton, Joint Assistant Director, Commissioning and Performance, and Rob Savage, Departmental Business Services Manager, were also in attendance to answer any questions that may arise.

The Directorate level Risk Register currently had 5 risks items listed of which 2 were also included on the Corporate Risk Register:-

·        CYPS01 (SLT01) - Keeping Children, Young People and Families safe from harm

·        CYPS02 (SLT16) – CYPS to achieve budgetary savings linked to Medium Term Financial Strategy and Maintaining a balanced budget and Medium Term Financial Strategy that enables the continued delivery of core Council services and ensure the ongoing financial resilience of the Council

Risk formed a critical part of management oversight in CYPS and were discussed/reviewed at the CYPS Assurance Board meeting on a quarterly basis with escalations reviewed as exception outside of the reporting cycle.  Each CYPS DCS took ownership of the Directorate risk management arrangements and, where required, would meet with the CYPS Risk Champion to provide additional sign off should the aforementioned meetings not take place within a satisfactory time period.

Each Assistant Director was accountable for managing a Service Risk Register which was formally monitored and reviewed with their senior managers on a monthly basis. 

The Directorate’s Risk Champion had successfully completed accredited Institute of Risk Management training.  To increase risk management capacity within the Directorate, a further 3 officers had also completed the same training in February 2024.  This continuous development of the CYPS workforce was expected to strengthen the Directorate’s approach to risk management

Discussion ensued with the following issues raised/clarified:-

-        The budget savings target for the Directorate had been carefully considered and not felt to have caused a specific risk to children and young people or services generally.  If children needed to come into care, which was where the big spend was, they came into care

-        CYPS05 (deliver the Supporting Families Programme and receive Payment by Result) and CYPS08 (to maintain and develop key IT business systems to underpin the delivery of services across CYPS) had both been de-escalated to the Service Risk Register

-        CYPS05 was more a financial risk than a risk to children and young people and their families.  Close work had taken place with Finance colleagues to ensure the forward planning and forecasting was accurate.  There were challenges with regard to the Payment by Result as it was with other authorities

-        CYPS08 the risk to recommission the IT system had been mitigated and would not impact on children and young people

-        The Directorate actively reviewed and considered its services to ensure they met the needs of the children and young people of Rotherham.  Investment had been received for the Early Help Services and where there was the potential/flexibility from some of the new initiatives that were coming through recent Government Guidance

-        Discussions were  ...  view the full minutes text for item 69.

In accordance with Minute No. 43, Simon Moss, Assistant Director, Regeneration and Environment, presented an update in relation to the position of the red risks on the Regeneration and Environment Directorate Risk Register.  Also present was Sam Barstow, Assistant Director, Community Safety and Street Scene, and Polly Hamilton, Assistant Director, Culture, Sport and Tourism.

Since the register was last presented, one of the 4 risks was no longer red rated (R&E41 Delivery of the new Central Library and Markets to achieve regeneration aims in the Town Centre).  A report was to be considered by the 18^th March Cabinet and would be re-assessed as amber.  It would continue to be monitored.

The remaining 3 red rated risks on the Directorate Risk Register were:-

-        Risk R&E 9 – Provide effective Home to School Transport

The risk had been reviewed and remained as it was.  It was an area that continued to be overspent but was not an area unique to Rotherham due to the ever increasing demand for this type of service nationally as well as the increasing complexity of the young people the service supported.  The level of overspend currently forecast resulted in high level scrutiny.  The structures in place had been reviewed to manage Home to School Transport and work programme.  The Working Group met every 3 weeks and reported into the Strategic Directors as well as the Leader and Cabinet Member with portfolio responsibility.

Good progress had been with the Independent Travel Training.

-        Risk R&E 51 – Good management of highway structures – specific risk for Centenary Way viaduct

A number of mitigations were in place as well as traffic management installed on the bridge to protect the central reservation from vehicle strikes.  It was inspected every day and the bridge structure monitored on a weekly basis.  Design work was now complete and work proposed to commence in the Summer lasting 3-4 months.

-        Risk R&E52 – Trees Service – Effective management of Council-owned trees

Following the Internal Audit report, a follow-up audit in January 2024 had given an opinion of Substantial Assurance with one recommendation which was on track for completion by the end of March.  Consequently the likelihood score had been reduced to 15.  The ongoing IT improvements would enable the tree inventory to be completed in December 2026 together with an escalation process to monitor progress and ensure that all the good work was embedded.  This would be finalised by March 2024.  There would be a further follow-up audit in December 2024 which would give an opportunity to monitor and check again that the new systems and processes introduced had been fully embedded. 

Discussion ensued with the following issues raised/clarified:-

·        The programme of work in the SEND Sufficiency Strategy looked to deliver more resources locally and educate young people nearer to their own home.  This would mitigate some of the increasing costs of transporting young people to their educational provision

·        R&E9 was reviewed every 3 weeks to manage  ...  view the full minutes text for item 70.

Karen Middlebrook, Head of Procurement, presented an update on some of the key activity delivered in the last 12 months by the Procurement Team to ensure robust procurement activity was undertaken across the Council.  The report highlighted 3 key issues:-

1. The Procurement Bill

-        Had received Royal Assent in October 2023 and was now referred to as the Procurement Act 2023.  The new Act would govern the regime the Council would be required to adhere to where procurement activity was above the relevant threshold

-        Some exclusions would still remain e.g. contracts referred to under the Light Touch Regime where the full application of the Legislation was not required, but at present it remained unclear as to what parts of the Legislation were relevant or not. 

-        The formal implementation date for the Act was still to be confirmed but estimated to be October 2024.  Until such time the current regime still applied

-        It included new objectives for public procurement that must be at the forefront when services were considering procurement requirements

-        The changes from the current Public Contracts Regulations 2015 to the Procurement Act 2023 were significant and moved procurement activity away from what could be considered as a transactional function into a strategic space.  Focus was now being given across the entire procurement lifecycle rather than just the procurement phase

Key Changes and Challenges of the Procurement Act 2023

-        Pre-procurement considerations i.e. early supplier engagement and pipeline publishing requirements

-        Changes to procurement procedures and routes to market

-        Competitive Flexible Procedure

-        Changes to assessment and award

-        Contract management and governance

-        Planning for the changes

2.  Provider Selection Regime

-        Came into effect 1^st January, 2024 The Health Care Services (Provider Selection Regime) Regulations 2023 (“PSR”)

-        The PSR removed procurement activity in relation to health care services totally from the current Public Contracts Regulations 2015 and the future Procurement Act 2023. 

-        Those contracts that fell within the scope of PSR would be defined by the use of Common Procurement Vocabulary (CPV) codes

-        If a contract was to fall within the scope of PSR the legislation would apply irrespective of value

3.  Ethical Procurement Policy

-        The Policy had been updated and refreshed to bring it up-to-date with the Council’s current position

-        The update/refresh would take place on an annual basis

Discussion ensued with the following issues clarified:-

·        A briefing session had taken place with the Strategic Leadership Team to inform them of the planned changes with a further presentation to be given at one of the Wider Leadership Sessions to engage and raise awareness with the wider management cohort of the organisation

·        There were still a lot of unknowns in relation as to how the Act would operate in practice.  It would be underpinned by further secondary legislation (Regulations) but had not been realised as yet

·        Detailed training for practitioners was not yet available although the Cabinet Office had committed to 4 levels of training

·        An  ...  view the full minutes text for item 71.

Gareth Mills, Grant Thornton, presented the external auditor’s 2022-23 annual report for Value for Money (VFM).  Under the National Audit Office Code of Practice, external auditors were now required to consider whether the Authority had put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources.  Auditors now reported in more detail on the Authority’s overall arrangements as well as key recommendations on any significant weaknesses in arrangements identified during the audit.

Grant Thornton had identified risks in respect of:-

Financial Sustainability

-        No significant weaknesses in arrangements identified.  2 improvements recommendation made

Conclusion

·       Overall satisfaction that the Council had appropriate arrangements in place to ensure it managed risks to its financial sustainability

·       No risks of significant weaknesses identified

·       2 improvement recommendations to further strengthen the Council’s current arrangements around financial sustainability.  They are mainly in respect of improving the reporting content in the financial monitoring reports to the Cabinet during the year

Governance

-        No significant weaknesses in arrangements identified.  No improvement recommendation made

Conclusion

·       No significant weaknesses identified in respect of the Council’s governance arrangements

·       Overall satisfaction that the Council had appropriate arrangements in place including for budget setting, monitoring and reporting and risk management

Improving economy, efficiency and effectiveness

-        As a result of the Council’s actions since January 2022 to date, there was no longer a significant weakness in SEND arrangements as highlighted in Ofsted/CQC report in July 2021.  As a result the key recommendation had been lowered to an improvement recommendation

-        In addition 2 improvement recommendations had been raised in the 3Es theme

Conclusion

·       Overall the Council has arrangements in place for partnership working and continually demonstrated a good level of collaborative working with local and national partners

·       2 improvement recommendations:-

To develop an operational plan with clear roles and responsibilities to action the issues arising from the change in Procurement Legislation, allocated appropriately to Directorates and senior management

That the Council sets out the key actions and challenges in achieving Net Zero 2030 and updates the Council’s Corporate Strategic Risk Register accordingly on a timely basis

The report also included an update on the progress made to date with regard to previous recommendations. 

Gareth thanked the Finance Team, Simon Dennis and Karen Middlebrook as, unlike the accounts, the value for money work included contacts outside of the Finance Service.  It was good to be in a position of where the 2022/23 audit was fully completed.

This was Gareth’s last meeting as he was coming to the end of his 5 years as Engagement Lead in accordance with the External Audit contract.  The new Grant Thornton representative for Year 6 would be Michael Green.  The Chair thanked Gareth for all his work and assistance.

Resolved:-  That the update be noted.

Phil Horsfield, Assistant Director Legal Services, presented a report on the actions taken and implementation of the recommendations made with regard to the Partial Assurance received from Internal Audit on building security.

The Service had undergone 2 Internal Audits in 2022 and 2023.  The 2022 audit had been given a Partial Assurance with 4 recommendations to improve internal control arrangements surrounding building security across the corporate property estate with implementation dates of 31^st October 2022 (x 3) and 31^st December 2022 (x1).  The follow-up audit was again given a Partial Assurance due to the agreed action from the previous audit not being implemented in full.  This had resulted in a further 3 recommendations with agreed implementation dates of 30^th November and 31^st December 2023 and 31^st January 2024.  All 3 recommendations had been implemented by the due dates.

Asset Management had been on an improvement journey over the last few years with a new Head of Service appointed in May 2020.  There had been a number of substantial re-organisations and restructures resulting in a considerably reduced but streamlined Service.  However, it had faced a number of challenges including the recruitment and retention of staff, an aging workforce and increasing workloads.  A further re-organisation was conducted and implemented on 1^st October 2022 including a dedicated Servicing and Compliance Team who ordered and monitored all the works ensuring that the CIPFA Asset Management System was updated with all compliance certification.

The agreed actions from the September 2022 Internal Audit Review of building security were completed but were not effective in resolving the issues identified. During the latter half of 2023 both the Operational Facilities Manager and Compliance Manager had retired leaving a considerable gap within the Operational Facilities Management Team. The Head of Asset Management would continue with the monitoring and sample testing on a monthly basis and continue to be responsible for implementing the recommendations until the 2 posts were recruited to.

The Service had been under the temporary responsibility of Finance and Customer Services since 7^th August 2023 with considerable improvements made across the Service.

All actions had been completed on time and ensuring that delivering against all aspects of building security.

Resolved:-  That the actions taken and implementation of the recommendations made with regard to the Partial Assurance Internal Audit reports on building security be noted.

Consideration was given to a report presented by Louise Ivens, Head of Internal Audit, which detailed how Internal Audit was a major source of assurance to the Council on the framework of control, risk management and governance. It was, therefore, important that it operated in conformance with Public Sector Internal Audit Standards.  The Standards included the need for a QAIP to provide continual improvement, based on ongoing quality assurance and an annual self-assessment, with an external assessment at least every 5 years.

An external assessment was completed in November 2020 which showed general conformance with those Standards.  This was the highest classification of results that could be achieved.  The QAIP was updated to address the areas where further improvement could be made based on the suggested actions to consider in the report.

The latest self-assessment had now been completedusing a checklist developed by the Chartered Institute of Public Finance and Accountancy and still showed general conformance with all standards, the Code of Ethics, Core Principles, Definition and Mission Statement.  However, in line with the concept of continual improvement, there were always actions that could be taken to maintain and improve performance.  All individual areas showed conformance except for one relating to the use of computer aided audit techniques.

The new Global Internal Audit Standards were issued by the International Internal Auditing Standards Board (IIASB) in January 2024 and would become effective on 9^th January, 2025.  The UK Public Sector Internal Audit Standards Advisory Board (IASAB) had begun its review of the new global standards and would determine the implications for PSIAS and develop proposals for revised material which would be suitable for the UK public sector context.  Any subsequent changes to the UK’s PSIAS and their implementation would be subject to consultation and appropriate transitional arrangements.

The report showed the status of actions in previous year’s QAIPs and the actions identified as being relevant for the coming year.  The action plan would continue to be implemented during 2024/25.  An internal self-assessment would be undertaken against the new Global Internal Audit Standards later in the year to highlight any areas for further development.

It was noted that some of the improvement areas had not commenced as yet and would be worked on during the next financial year.  It was proposed that, as part of progress updates, progress against the improvement plan be included to enable the Committee to track progress.

Resolved:-  (1)  That the production and ongoing implementation of the QAIP based on the internal self-assessment be noted.

(2)  That the new Global Internal Audit Standards, effective as from 9^th January, 2025, be noted and that the implications for the UK’s PSIAS, including any subsequent changes would be subject to consultation and appropriate transitional arrangements.

Consideration was given to the Internal Audit Plan for 2024-25 presented by Louise Ivens, Head of Internal Audit.  The report explained Internal Audit’s approach to the development of the Plan, as well as detailing the specific activities Internal Audit planned to review during the year. It reflected a comprehensive risk assessment process including discussions with Strategic Directors and Assistant Directors to obtain their views of key risks and areas for audit coverage.

It was designed to enable the Head of Internal Audit to give his annual opinion at the end of the year on the adequacy and effectiveness of governance, risk management and the control framework.  The Plan would remain flexible and reviewed during the year to ensure it remained relevant.

In line with the PSIAS, the proposed audit plan had been devised adopting a risk based approach using:-

-        The Council’s risk management processes and the strategic and Directorate risk registers

-        Reports by management to the Audit Committee on the management of risks and the outcomes of external inspection reports

-        The results of previous Internal Audit work and ongoing assessment of the auditable entities within the Authority

-        Planned work deferred from 2023/24

-        Council Plan and Year Ahead Delivery Plan

-        Knowledge of existing management and control environments

-        Professional judgement on the risk of fraud or error

-        Consultation with all Directorate Leadership Teams and the Strategic Leadership Team taking into account feedback from Assistant Directors, Strategic Directors, the Monitoring Officer and the Chief Executive

-        Awareness of relevant local and national issues

-        Regular dialogue with authorities within South and West Yorkshire helped to ensure that the Authority was aware of emerging risks within other councils so that they could be considered during audit planning

The outputs from the planning process had been prioritised to produce a plan that balanced the requirement to give an objective and evidence based opinion on aspects of governance, risk management and internal control, the time required for anti-fraud and corruption activity, the requirement for Internal Audit to add value through improving controls and the need to retain a contingency element to remain responsive to emerging risks.

In line with auditing standards, the plan did not become fixed once it was approved; it remained flexible and would be revised to take into account any significant emerging risks facing the Authority.  It would be subject to half year review in consultation with Strategic Directors and Assistant Directors.

It was noted that, as in previous years, the technical audits of IT systems would be conducted by Salford City Internal Audit Services who specialised in this field of work.  The Internal Audit Team comprised 7.72 full-time equivalents with 1,005 days allocated in the plan for 1^st April, 2024 to 31^st March, 2025.  The plan was considered sufficient to allow the Head of Internal Audit to give the annual opinion at the end of the year.

It was clarified that in 2023/24 20 days had been included in the Finance  ...  view the full minutes text for item 75.

Consideration was given to a report presented by Louise Ivens, Head of Internal Audit, which provided a summary of Internal Audit work completed during 1st December, 2023 to 31st January, 2024, and the key issues that had arisen therefrom.

The current position of the plan provided sufficient coverage for the Head of Internal Audit to provide their annual opinion at the end of the year and would be kept under review throughout the year. The plan attached as part of the report showed the position at the end of January 2024. In the year to date the Service had delivered 822 days of productive work, showing it was on target for the year as a whole.  

The plan was updated following discussions with DLT colleagues to ensure it remains relevant and was focused on current risks.

Internal Audit provides an opinion on the control environment for all systems or services which were subject to audit review. The report detailed the audit opinions and a brief summary of all audit work concluded in the last quarter. 5 audits had been finalised since the last Audit Committee, 3 of which had received Reasonable Assurance, one Substantial Assurance and one Partial Assurance.

In addition to the planned audit assurance work, Internal Audit also carried out unplanned responsive work and investigations into any allegations of fraud, corruption or other irregularity. There have been one investigation report issued since the last meeting of the Audit Committee (Appendix D).

Internal Audit’s performance against a number of indicators was also summarised in Appendix C.  One audit report was issued outside of the target time and available productive time was affected by staff training and sickness.

It was noted that presently 2 recommendations remained outstanding and due for completion by the end of April and June.  Audit performance indicators would be reviewed against best practice and neighbouring authorities and included in the 2024/25 audit plan.

It was clarified that the audit into fire safety was progressing.  A number of actions were outstanding but had not yet reached their completion date.  Additional work was being undertaken to provide assurance that the Service continued to work through the various compliance measures to ensure all the assurances were in place as required.  A review was to be undertaken as well as a review of the sites within Council ownership to ensure that all the appropriate arrangements were in place.  Currently Asset Management had been placed within the Finance and Customer Services Directorate as a temporary measure.  Work would continue to identify any issues.  A repeat audit was included within the Audit forward plan.

Resolved:-  (1)  That the Internal Audit work undertaken since the last Audit Committee, 1^st December, 2023 to 31^st January, 2024, and the key issues that have arisen from it be noted.

(2)  That the information contained regarding the performance of Internal Audit and then actions being taken by management in respect of their performance be noted.

Consideration was given to the proposed forward work plan for the Audit Committee for June 2024 to March 2025. The plan showed how the agenda items related to the objectives of the Committee. It was presented for review and amendment as necessary.

Resolved:  That the Audit Committee forward work plan, as now submitted, be approved with the inclusion of an update on the implementation of the Procurement Act 2023 in the last quarter of the 2024/25 financial year.

To consider the referral of matters for consideration by the Overview and Scrutiny Management Board.

There were no items for referral.

Further to Minute No. 43(2) of 28^th November, 2023, the Strategic Director of Finance and Customer Services, presented an update on the current position of the Asset Management Risk Register and risk management activity within the Service.

The report set out the background to the move to the Finance and Customer Services Directorate and the reviews that had taken place since. 

Discussion ensued with the following issues raised/clarified:-

-        Review of the risk register with some risks reworded/combined and in some instances change of scores

-        There would be a follow-up audit by Internal Audit

-        Soft marketing exercise conducted and now in preparation phase for the production of a heat decarbonisation plan

-        More work required to provide assurance with regard to Reinforced Autoclaved Aerated Concrete

Resolved:-  That the progress and current position in relation to risk management activity in Asset Management be noted.

(This item was exempt under Paragraph 3 of the Act (information relating to the financial or business affairs of any particular person (including the authority holding that information) of Part I of Schedule 12A of the Local Government Act 1972)

To consider any item which the Chair is of the opinion should be considered as a matter of urgency.

There was no urgent business to be considered.

The next meeting of the Audit Committee will be held on Tuesday, 25^th June, 2024, commencing at 2.00 p.m. in Rotherham Town Hall.

Resolved:-  That a further meeting be held on Tuesday, 25^th June, 2024, commencing at 2.00 p.m.