Venue: Mandela Room
Contact: Susan Lightwing
Welcome and Evacuation Procedure
The Chair read out the Building Evacuation Procedure and welcomed all present to the meeting.
The Chair wished to record her thanks to the former Chair, Vice Chair and Members of the Corporate Affairs and Audit Committee for their contributions and work during the past four years.
Declarations of Interest
any declarations of interest.
no declarations of interest received at this point in the meeting.
The minutes of the Corporate Affairs meeting held on 28 April 2023 were submitted and approved as a correct record, subject to the following amendment:
Page 2, 3rd paragraph: “This was because work was still on-going in relation to the value for money qualification on Governance.”
This sentence to be removed as it was incorrect - the value for money work had been completed.
A timeline for the Statement of Accounts was presented to the Committee
There were currently three sets of accounts being prepared relating to
2021/2022, 2022/2023 and 2023/2024.
Due to a number of high profile private sector
accounting issues, there had been increased scrutiny which had fed through to
the public sector and regulation around the process had extended
significantly. The Statement of Accounts
was required to show a true and fair view of the Council’s finances and provide
a value for money assessment.
The additional work required and audit queries had led to a backlog of
work for the Council’s Finance Team on the accounts and the audit process. The timeline provided details of the work
that was required to close off the outstanding accounts. The 2021/2022 accounts were almost complete,
the 2022/2023 were close to completion and the 2023/2024 accounts were
currently being prepared.
The Director of Finance was currently seeking additional investment in
the Finance Team to assist with the backlog of work. Additional external examination of the
accounts and the position of the Council in terms of financial sustainability
and going concern were adding to the workload.
A Member highlighted recent press reporting that delays to the
publication of the Teesside Pension Fund Accounts had caused some issues for
other Employers in the Teesside Pension Fund.
The External Auditor stated that the overall timetable for the approval
of the accounts was not necessarily holding up the pension fund work. The work for 2021/2022 was completed and
published in March 2022 and at the end of that month the valuation of the
pensions came out and the values had increased significantly.
It was confirmed that whilst were no financial penalties for not
meeting the deadlines for publishing draft or audited accounts, there could
potentially be reputational damage. A
notice had to be placed on the Council’s website to explain why deadlines had
not been met. The Officer added that
the Council was quite close to being able to publish within the statutory
In terms of recruitment of additional resources, the Council had been
unable to recruit to the Chief Accountant post.
The skill set was in high demand but there was potential to employ
suitable people through recruitment agencies.
A further update would be provided at the next meeting.
AGREED that the
information provided was received and noted.
The External Auditor Ernst and
Young had concluded the planned audit work in relation to the financial year
2020/21 and presented the Annual Report to the Committee for information and
The report included the Auditor’s
conclusions and recommendations in relation to the audit of the financial
statements and in relation to the assessment of the Council’s arrangements for
securing robust governance and Value For Money. The findings had been subject of previous
reports to the Committee over the period July 2022 and updates through to April
2023. However as the Corporate Affairs
and Audit Committee had a new membership following the local elections in May
2023, it was appropriate for the Committee to formally consider the Auditor’s
Annual Report. The External Auditor
suggested that the audit planning reports for 2021-22 should be circulated to
Committee Members for information.
The Council provided management
responses to the auditor’s 7 recommendations in relation to Value for Money in
July 2022 as set out in the Annual Report.
The Council continued to progress the delivery of its Improvement Plan
over the last year and the latest progress update was due to be presented to
Council on 5 July 2023.
The External Auditor’s Annual
Report was attached at Appendix 1 to the submitted report and included the
• Purpose and
• Value for
• Appendix 1
Members’ attention was drawn to
paragraph 9 of the covering report which set out in detail the fees for the
2020/2021 audit. The fees were
significantly higher than both the planned fee for the 2020/21 (4.5 times
higher) and the final fee for the previous year’s audit. This related primarily to the length of the
audit at just under two years, the increasing changes in both risk and
regulation involved with the audit activity, and some of the specific
governance issues which culminated in a value for money qualification for the
Council. All these points had been
raised previously by EY to both Officers and the Committee. The increase in audit fees had been
acknowledged by the Council and was being factored into the on-going
medium-term financial plan. Given the
level of increase in fees, a fee variation request has been submitted by EY to
Public Sector Audit Appointments (the regulatory body in this area). The
Council could submit its comments as to whether it accepted the fees or not and
could provide further explanation or evidence if needed.
The External Auditor drew
Members’ attention to the following aspects of the Financial Statement Audit
and provided further detailed explanation in relation to each heading:
Areas of Significant Risk:
due to fraud or error (Council and Pension Fund).
• Risk of
fraud in revenue and expenditure recognition (Council).
of land and buildings (Council only).
for infrastructure assets (Council only).
of unquoted pooled investment vehicles (Pension Fund only).
• Valuation of directly-held property (Pension Fund only). ... view the full minutes text for item 23/5
The Head of Internal Audit,
Veritau, presented a report to seek Members’ approval for the 2023/2024 Planned
Programme of Internal Audit and to asked Members to note the Counter Fraud
2023/2024 Work Programme.
The Internal Audit work was high
level, risk based and prioritised to those areas of most benefit to the
Council. The Auditor tried to be responsive to emerging issues and risks that
had not been identified previously and therefore the programme was flexible
throughout the year. The proposed areas
of coverage had been subject to consultation with the Corporate Affairs and
Audit Committee and senior officers including Directorate Management Teams.
Appendix 1 to the submitted
report set out the proposed internal audit work for 2023/24 and eleven key areas
identified for audit were as follows:
management and data quality
and contract management
and project management
The planned work was based on an
initial assessment of risk undertaken.
The identification of risks included in the assessment had been informed
in a number of ways. This included
review of the organisational risk management processes, sector-wide risk
information, understanding the Council’s strategies and objectives, other known
risk areas (for example areas of concern highlighted by management), the
results of recent audit work and other changes in Council services and systems.
Further meetings would be held
throughout the year to plan and confirm the
scope and timings of audit work
and regular updates would be provided to the Corporate Affairs and Audit
Committee on the coverage, scope and findings of internal audit’s work.
The total days allocated to
internal audit assurance in 2023/24 was 555.
A Member queried the proposed
audit in relation to Domestic Abuse. The
Internal Auditor explained that this had been identified through discussions
with officers and would examine the Council’s plans for monitoring activity,
assessing outcomes and what plans were in place for improving performance.
In relation to those audits
marked “to do later”, the Internal Auditor clarified that those audits would be
done in Quarter 3 or Quarter 4.
Internal Audit’s aim in relation
to counter fraud was to prevent fraud occurring at the Council, raise awareness
amongst staff, demonstrate that there were consequences of fraud and recover
any money that was lost.
Proposed areas of counter fraud
work in 2023/24 were set out in Appendix 2 to the submitted report.
No estimate of time was made for
each area as this would depend on the levels of suspected fraud reported to the
team. The priorities for the work programme were set annually in the Council’s
Counter Fraud Strategy Action Plan and annual Fraud Risk Assessment which were
most recently presented to the Committee in September 2022.
The total days allocated to
counter fraud work in 2023/24 was 150.
AGREED as follows that the:
Audit Work Programme 2023/2024 was approved.
2. Counter Fraud Work ... view the full minutes text for item 23/6
Any other urgent items which in the opinion of the Chair, may be considered
A proposal was put forward that an additional meeting of the Corporate Affairs and Audit Committee should be convened in August 2023. The Director of Legal and Governance Services suggested that this proposal should be discussed outside of the meeting in consultation with the Chair and Vice Chair.