Agenda and minutes

To receive any apologies for absence.

Apologies were received from Cllr Mike Caswell (in virtual attendance), Cllr Shane Collins, Cllr Habib Farbahi, Jennifer Whitten (in virtual attendance)

To receive and note any declarations of disclosable pecuniary or prejudicial or personal interests in respect of any matters included on the agenda for consideration at this meeting.

(The personal interests of Councillors of Somerset Council, Town or Parish Councils and other Local Authorities will automatically be recorded in the minutes.)

To approve the minutes from the previous meeting.

The minutes of the Audit Committee meeting held on 27 April 2023 were agreed signed by the Chair as an accurate record of the meeting:

·       Replace Portfolio Holder for Resource with Lead Member for Resources and Performance

·       Amend ‘because of their ownership the funding had come from different budgets’ to ‘because of their ownership and management, the funding had come from different budgets’.

The Chair to advise the Committee of any items on which members of the public have requested to speak and advise those members of the public present of the details of the Council’s public participation scheme.

For those members of the public who have submitted any questions or statements, please note, a three minute time limit applies to each speaker and you will be asked to speak before Councillors debate the issue.

We are now live webcasting most of our committee meetings and you are welcome to view and listen to the discussion. The link to each webcast will be available on the meeting webpage, please see details under ‘click here to join online meeting’.

The Chair noted that there had been no public questions submitted by the published submission deadline.

Progress update from SWAP for 2022/23. It reports against the Internal Audit Plan agreed by the Somerset County Council (SCC) Audit Committee in March 2022.

A Point of Order was raised regarding the inaccuracy of Agenda Item 5 title and the submitted report.

In response, Alastair Woodland, Assistant Director SWAP Internal Audit Services, advised that the correct report had been published, and that the title in the agenda was inaccurate, Somerset West and Taunton should read Somerset County Council.

The Assistant Director SWAP Internal Audit Services, Alastair Woodland, presented the report, highlighting, that the report detailed the outturn for the 2022/23 internal audit plan for Somerset County Council; the significant findings identified since the previous Audit Committee Meeting, 27 April 2023, including the two limited assurance audits of  the Climate Emergency: Governance Arrangements and the school's financial value standard at Ashton's Community of England Primary School; the themed based work of the school programme scheduled to be reported at the 24 August 2023 Audit Committee Meeting; the availability of the new audit software system for 2023/24 and the provision of real time access to information in addition to the updates provided at Audit Committee; that the outstanding and agreed management actions are to be reviewed together with any actions outstanding from the previous County Council and four District Councils to produce a new dashboard for August 2023; the overdue audits and the follow up working taking place: School Balances, Transport Budget Governance, Community Learning Partnerships, Athena contract, Children Missing from Education; the work and progress of the  Commission and  Delivery in Schools Follow up; the four audit reviews that are unfinalised relating to Somerset County Council and the inclusion in 2023/24 Somerset Council report; summary of the outstanding District Council Work and governance and audit of the Housing - Service Charges, and the required action by Homes in Sedgemoor.

The Chair invited comments from other Members present, questions and points raised included; the duplication of content of Item 5 and Item 6 agenda reports, and the clarification of the reports content; detailed reports requested additional to summaries of limited or no assurance audit items to provide context and enable the Audit Committee to consider and have in depth knowledge of risks and issues.

Alastair Woodland, Assistant Director SWAP Internal Audit Services, to circulate to Members of the Audit Committee, and where appropriate publish, full audit reports for limited or no assurance audits, additional to summaries in advance of the Audit Committee meeting, furthermore to circulate the Climate Emergency: Governance Arrangements – Final Report 2023 report, to all Audit Committee Members.

The Chair requested that the Climate Emergency Governance arrangements report to be added to the Audit Committee agenda, 24 August 2023.

The Vice Chair asked for an update on the 10 actions agreed by Management to be implemented by 1 June 24, regarding Climate Emergency: Governance Arrangements; including specifically what the actions are, the timeframe, the staffing structure and the carbon baseline measurement.

In response, the Executive Director, Climate and Place, Mickey Green, provided a summary of the work underway to bring together the former District Councils and County Council strategies to reflect the ecological  ...  view the full minutes text for item 17.

Internal audit provides an independent and objective opinion on the Authority’s risk management, governance, and control environment by evaluating its effectiveness.

Cllr Mandy Chilcot raised the point that the Progress Update Report (Agenda Item 5) and the Opinion Report (Agenda Item 6) from SWAP were exceedingly similar. Alastair Woodland, Assistant Director SWAP Internal Audit Services, explained that the reports contained the same information, however, the Opinion Report gave an overview of how well governance risk and control had worked throughout Somerset County Council (SCC) during 2022-23.

Alastair Woodland, Assistant Director SWAP Internal Audit Services, presented his report of Internal Audit Activity highlighting the internal audit plan agreed by the SCC Audit Committee in March 2022.  Appendix D provided details on the progress made to date and any new work agreed.  He commented that there were recommendations overdue. Mr Woodland confirmed that they would follow up on those recommendations with management to affirm they have been implemented and the risks in those areas had been reduced.

Alastair Woodland further noted that there were 4 reviews not yet finalised. These would be brought forward and included in the 23-24 Audit Plan for Somerset Council.

He noted that there were medium risk rated weaknesses, some isolated high risk weaknesses, but no critical weaknesses. It was further affirmed that 63% of the recommendations that were followed up were implemented and that SWAP were broadly satisfied with the results.

Alastair Woodland then went through the significant Corporate Risks for the 2022-23 year and noted that the reports which had not previously been finalised due to the legacy councils coming to an end, namely the Athena Contract and Climate Emergency: Governance Arrangements. These would be circulated to the Committee Members after the meeting. The Committee would then consider the reports and, if necessary, bring them to the next meeting agenda.

He further went through the significant strategic risks for the 2022-23 year and noted that they were in conformance with the public sector auditing standards.

Alastair Woodland confirmed that the two outstanding recommendations were a work in progress and they would assess what action needed to be taken and what impact that had on the risks in their follow up update appended to their progress report to the committee. The report would indicate whether they thought the risk was significantly reduced to move it out of limited assurance and no longer needed to be monitored. He assured the committee that these were high priority recommendations and would ensure that those would be implemented. However, the recommendations were still in the tracker and a report would be circulated straight after the meeting to the Members.

Following a debate on internal controls, it was decided the Committee would work with Members and Officers to review and refine how the papers are managed and presented to ensure that the appropriate level of information is provided behind the summaries provided. For example, the year-end report would reflect which actions in relation to the risks had been taken and when the next action date was as well, because if any reports had been discussed during the year, they needed to be noted  ...  view the full minutes text for item 18.

The purpose of this report is to provide an overview of the planned scope and timing of the statutory audit of Somerset Pension Fund for those charged with governance.

The Public Sector Audit Manager, Liam Royle, presented his report and noted that the 22/23 year is a triennial review year for English Local Government Pension Scheme (LGPS) funds with a new baseline set per the data as 31^st March 2022 to be used for the next three years. He noted that this would impact fees.

He highlighted the significant risks and further drew attention to the disclosure of audit related services, the ISA19 letters. He explained that this meant they finish this work in order to enable the work of the other audits to be signed off. They essentially issued the assurance to the other auditors, (Ernst & Young who audit Mendip District Council, for example) which gave them assurance that they could place some reliance on the estimate for pensions.

The Pension Fund Manager, Anton Sweet, mentioned the deficit and the Committee undertook to discuss this further to strategize how to get the deficit down. 

The Chair pointed out that the Pension Fund’s net liabilities had already been massively reduced from March 2022 to March 2023.

The Committee noted the report.

The Account and Audit Regulations 2015 require the Council to have in place effective arrangements for the management of risk. These arrangements are reviewed annually and reported as part of the Annual Governance Statement (AGS). There is a direct link to the Council’s Plan and the Medium-Term Financial Plan.

The Corporate Risk Manager Somerset Council went through the Strategic Risk Report for Somerset Council.

She confirmed that 17 risk were identified.

·         7 were new strategic risks.

·         6 were continuing strategic risks of the former Somerset CountyCouncil

·         4 wereemerging risks.

This list would be reviewed by a meeting of the Corporate Leadership Team in July, latest August, and then would be brought to the committee again in time for the next audit meeting.

After discussions surrounding the level of engagement and support after the old County Council ended, it was decided that The Chair meet with The Corporate Risk Manager and the Equalities and Risk Manager regarding risk engagement, reporting and risk visibility for Members in order to improve the understanding of risk across the organisation and this would be put on the agenda for the next Audit meeting in August.

Cllr Mandy Chilcott asked for clarification on an item that was 477 days overdue and the S.151 Officer undertook to work with Executive Directors and the Corporate Management Team regarding the organisation and direction of travel for risk, including risk reporting, engagement and that strategic risks are regularly updated. This would be brought to the 24 August 2023 Audit Committee meeting.

The Committee noted the report.

The Audit Committee has the responsibility for the approval of Statement of Accounts for the 5 predecessor councils including the Annual Governance Statements.

The Chair introduced the item, highlighting the publication omission of the Annual Governance Statement reports for Somerset West and Taunton Council and South Somerset District Council, advising that the reports to be circulated to all Committee members for review and comment.

The Director of Resources and Corporate Services, Jason Vaughan, further added to the above points; that the Annual Governance Statement of the five predecessor Councils have been published though the respective Councils process, and available in the public domain; that the five predecessor Councils Annual Governance Statement to be brought to the Audit Committee as one report, 24 August 2023.

The Committee noted the report.

Jason Vaughan is available to give a verbal update.

The Executive Director, Jason Vaughan, gave a verbal update on the expected completed statements of accounts, highlighting the national picture and the backlogs of outstanding audits; explained the key drivers and risks of publishing the accounts.

The Service Director, Finance and Procurement, Nicola Hix provided an update on the current position and publishing dates of the five predecessor Councils accounts.

The Committee noted the verbal update.

A detailed document setting out the workplan items for the year ahead.

The Committee noted the Audit Committee work plan.