PWYLLGOR ARCHWILIO
PWYLLGOR ARCHWILIO
2.00 PM - DYDD MERCHER, 27 MAWRTH 2019 YSTAFELLOEDD PWYLLGOR 1 / 2 - CANOLFAN DDINESIG PORT
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1. Datganiadau o fudd
AGENDA
2. Cofnodion y Cyfarfod Blaenorol (Tudalennau 5 - 8)
Adroddiad Swyddfa Archwilio Cymru
3. Cyngor Bwrdeistref Sirol Xxxxxxx-xxxx Port Xxxxxx - Cynllun Archwilio 2019 (Tudalennau 9 - 28)
4. Diweddariad y Pwyllgor Archwilio - Cyngor Bwrdeistref Sirol Xxxxxxx- xxxx Port Xxxxxx (Tudalennau 29 - 42)
Adroddiad y Pennaeth Cyllid
5. Monitro Rheolaeth Trysorlys 2018-2019 (Tudalennau 43 - 46)
6. Cynllun Archwilio Mewnol - 1 Ebrill 2019-31 Mawrth 2020
(Tudalennau 47 - 62)
7. Adroddiad Cynnydd hyd at 28 Chwefror, 2019 (Tudalennau 63 - 78)
Adroddiad Cadeirydd y Pwyllgor Archwilio
8. Adroddiad Archwilio Blynyddol Drafft 2017-2018 (Tudalennau 79 - 80)
9. Eitemau xxxx
10. Mynediad i gyfarfodydd
RHAN 2
Adroddiad Preifat y Pennaeth Cyllid
11. Archwiliad Mewnol - Ymchwiliadau arbennig (Tudalennau 81 - 86)
X.Xxxxxxxx Prif Weithredwr
Canolfan Ddinesig
Port Talbot Dydd Sadwrn, 23 Mawrth 2019
Aelodaeth y Pwyllgor:
Cadeirydd: X.X.Xxxxxx Is-gadeirydd: X.X.Xxxxxxx
Aelodau: Councillors X.X.Xxxxxx, X.X.Xxxxxx, X.X.Xxxxxx, X.X.Xxxxxxxxx, X.Xxxxx, X.Xxxxxx, X.X.Xxxxxxxx, X.X.Xxxxxxxx, X.X.Xxxx a/xx X. xx Xxxxxx
Xxx pleidleisio aelod lleyg:
Mae’r dudalen hon yn fwriadol wag
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AUDIT COMMITTEE
(Port Talbot Civic Centre, Committee Rooms 1/2)
Members Present: 5 December, 2018
Chairperson: Councillor X.X.Xxxxxx Vice Chairperson: Councillor X.X.Xxxxxxx
Councillors: X.X.Xxxxxx, X.X.Xxxxxx, X. xx Xxxxxx,
X.X.Xxxxxx, X.X.Xxxxxxxxx, X.X.Xxxxxxxx, X.X.Xxxxxxxx and X.X.Xxxx
Officers In Attendance:
X.Xxxxx, X.X'Xxxxxxx and X.Xxxxxx
Representing the Wales Audit Office:
X.Xxxxxxx
1. MINUTES OF THE PREVIOUS AUDIT COMMITTEE HELD ON 19 SEPTEMBER, 2018
RESOLVED: that the Minutes of the meeting held on 19 September, 2018 be noted.
2. WELSH AUDIT OFFICE - AUDIT COMMITTEE UPDATE
The Committee received an overview from the Wales Audit Office on the current and planned Welsh Audit Office work.
It was noted that Members requested more clarity on Waste Management and Thematic Review, Leisure Services. It was agreed that X.Xxxxxxx, Wales Audit Office would find out more information and feed back to Members.
RESOLVED: that the report be noted.
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3. PROGRESS REPORT TO 15 NOVEMBER, 2018
Members received an update on work undertaken and progress made to 15 November, 2018, as detailed in the circulated report.
It was noted that an update regarding the outstanding recommendation in respect of Awel Y Mor Primary School would be reported to the next meeting.
It was also noted that an email would be sent to all Headteachers on behalf of Committee, reminding them of the importance of complying fully with DBS guidance.
RESOLVED: that the report be noted.
4. AUDIT COMMITTEE - DRAFT ANNUAL REPORT 2017-2018
A Draft Annual Report prepared by the Chair summarising work undertaken by the Audit Committee throughout the 2017-2018 Civic Year, was circulated to all Committee Members.
It was agreed that this item would be put on the Agenda for the next meeting.
RESOLVED: that the report be noted.
5. ACCESS TO MEETINGS
RESOLVED: that pursuant to Section 100A(4) and (5) of the Local Government Act 1972, the public be excluded for the following item of business which involved the likely disclosure of exempt information as defined in Paragraphs 12, 13 and 14 of Part 4 of Schedule 12A to the above Act.
6. INTERNAL AUDIT - SPECIAL INVESTIGATIONS
Members received an update on special investigation audits undertaken in the last quarter, together with special investigations currently in progress.
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RESOLVED: that the report be noted.
CHAIRPERSON
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Mae’r dudalen hon yn fwriadol wag
2019 Audit Plan – Neath Port Talbot County Borough Council
Audit year: 2018-19
Date issued: March 2019
Document reference: 1126A2019-20
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This document has been prepared as part of work performed in accordance with statutory functions.
Further information on this is provided in Appendix 1.
No responsibility is taken by the Auditor General, the staff of the Wales Audit Office or, where applicable, the auditor acting on behalf of the Auditor General, in relation to any member, director, officer or other employee in their individual capacity, or to any third party.
In the event of receiving a request for information to which this document may be relevant, attention is drawn to the Code of Practice issued under section 45 of the Freedom of Information Act 2000. The section 45 Code sets out the practice in the handling of requests that is expected of public authorities, including consultation with relevant third parties. In relation to this document, the Auditor General for Wales, the Wales Audit Office and, where applicable, the auditor acting on behalf of the Auditor General are relevant third parties. Any enquiries regarding disclosure or re-use of this document should be sent to the Wales Audit Office at xxxxxxxxxxx@xxxxx.xxxxx.
We welcome correspondence and telephone calls in Welsh and English. Corresponding in Welsh will not lead to delay. Rydym yn croesawu gohebiaeth a galwadau ffôn yn Gymraeg a Saesneg. Ni fydd gohebu yn Gymraeg yn arwain at oedi.
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Contents
2019 Audit Plan
Summary 4
Audit of accounts 4
Performance audit 8
Certification of grant claims and returns 10
Fee, audit team and timetable 10
Future developments to my audit work 12
Appendices
Appendix 1 – respective responsibilities 13
Appendix 2 – performance work in last year’s audit outline still in progress 16
Appendix 3 – other future developments 17
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2019 Audit Plan
Summary
1 As your external auditor, my objective is to carry out an audit which discharges my statutory duties as Auditor General and fulfils my obligations under the Public Audit (Wales) Act 2004, the Local Government (Wales) Measure 2009 (the Measure), Wellbeing of Future Generations (Wales) Act 2015, the Local Government Act 1999, and the Code of Audit Practice, namely to:
• examine and certify whether your financial statements are ‘true and fair’;
• assess whether you have made proper arrangements for securing economy, efficiency and effectiveness in the use of resources;
• audit and assess whether you have discharged the duties and met requirements of the Measure; and
• undertake studies to enable me to make recommendations for improving economy, efficiency and effectiveness or for improving financial or other management arrangements.
2 The purpose of this plan is to set out my proposed work, when it will be undertaken, how much it will cost and who will undertake it.
3 There have been no limitations imposed on me in planning the scope of this audit.
4 My responsibilities, along with those of management and those charged with governance, are set out in Appendix 1.
Audit of accounts
5 It is my responsibility to issue a certificate and report on the financial statements which includes an opinion on their ‘truth and fairness’. This provides assurance that the accounts:
• are free from material misstatement, whether caused by fraud or error;
• comply with statutory and other applicable requirements; and
• comply with all relevant requirements for accounting presentation and disclosure.
6 I also consider whether or not Neath Port Talbot County Borough Council (the Council) has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources and report by exception if the Annual Governance Statement does not comply with requirements.
7 Appendix 1 sets out my responsibilities in full.
8 The audit work I undertake to fulfil my responsibilities responds to my assessment of risks. This understanding allows me to develop an audit approach which focuses on addressing specific risks whilst providing assurance for the financial statements as a whole. My audit approach consists of three phases as set out in Exhibit 1.
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Exhibit 1: my financial audit approach
9 The risks of material misstatement which I consider to be significant and which therefore require special audit consideration, are set out in Exhibit 2 along with the work I intend to undertake to address them. Also, included are other key areas of audit attention my team will be focusing on.
Exhibit 2: financial audit risks
Financial audit risk | Proposed audit response |
Significant risks | |
The risk of management override of controls is present in all entities. Due to the unpredictable way in which such override could occur, it is viewed as a significant risk [ISA 240.31-33]. | My audit team will: • test the appropriateness of journal entries and other adjustments made in preparing the financial statements; • review accounting estimates for biases; • evaluate the rationale for any significant transactions outside the normal course of business. |
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Financial audit risk | Proposed audit response |
Other areas of audit attention | |
New accounting standards IFRS 9 financial instruments applies from 1 April 2018 and brings in a new principles- based approach for the classification and measurement of financial assets. It also introduces a new impairment methodology for financial assets based on expected losses rather than incurred losses. This will result in earlier recognition of expected credit losses and will impact on how the bad debt provision is calculated. IFRS 15 revenue from contracts with customers introduces a principles-based five-step model for recognising revenue arising from contracts with customers. It is based on a core principle requiring revenue recognition to depict the transfer of promised goods or services to the customer in an amount that reflects the consideration a body expects to be entitled to, in exchange for those goods or services. It will also require more extensive disclosures than are currently required. | My audit team will assess the likely impacts of the new IFRSs and undertake work to respond to any identified risks of material misstatement. |
Accounting for property, plant and equipment Issues were identified within the Council’s processes for depreciating assets over their remaining useful lives in 2017-18 which resulted in material amendments in the financial statements. If these weaknesses are not addressed, there is an increased risk that asset values are materially misstated. | My audit team will: • review how assets identified for closure have been accounted for; • test the appropriateness of useful lives assigned to these assets. |
10 I do not seek to obtain absolute assurance on the truth and fairness of the financial statements and related notes but adopt a concept of materiality. My aim is to identify material misstatements, that is, those that might result in a reader of the accounts being misled. The levels at which I judge such misstatements to be material will be reported to the Audit Committee prior to completion of the audit.
11 For reporting purposes, I will treat any misstatements below a ‘trivial’ level (set at 5% of materiality) as not requiring consideration by those charged with governance and therefore I will not report them.
12 My fees and planned timescales for completion of the audit are based on the following assumptions:
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• the financial statements are provided in accordance with the agreed timescales, to the quality expected and have been subject to a robust quality assurance review;
• information provided to support the financial statements is in accordance with the agreed audit deliverables document1;
• appropriate accommodation and facilities are provided to enable my audit team to deliver the audit in an efficient manner;
• all appropriate officials will be available during the audit;
• you have all the necessary controls and checks in place to enable the Responsible Financial Officer to provide all the assurances that I require in the Letter of Representation addressed to me; and
• Internal Audit’s planned programme of work is complete and management has responded to issues that may have affected the financial statements.
13 In addition to my responsibilities in respect of the audit of the Council’s statutory financial statements set out above, I am also required to certify a return to the Welsh Government which provides information about the Council to support preparation of Whole of Government Accounts.
14 In addition to the audit of the accounts, I have statutory responsibilities to receive questions and objections to the accounts from local electors. These responsibilities are set out in the Public Audit (Wales) Act 2004:
• Section 30 Inspection of documents and questions at audit; and
• Section 31 Right to make objections at audit.
15 Audit fees will be chargeable for work undertaken in dealing with electors’ questions and objections. Because audit work will depend upon the number and nature of any questions and objections, it is not possible to estimate an audit fee for this work.
16 If I do receive questions or objections, I will discuss potential audit fees at the time.
Other financial audit work
17 I am also responsible for the audit of the audit of Margam Joint Crematorium Committee. The Joint Committee’s accounts are expected to be an annual return which requires limited audit review. Our planning work has not identified any specific risks relating to the return.
18 In addition to my responsibilities in respect of the audit of the statutory financial statements set out above, I am also responsible for the independent examination of the Welsh Church Act Trust Fund. My team will undertake the independent examination of these accounts on my behalf in accordance with the timescales agreed with the Council and the Charity Commission.
1 The agreed audit deliverables document sets out the expected working paper requirements to support the financial statements and include timescales and responsibilities.
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19 My audit fee for this work is set out in Exhibit 4.
Performance audit
20 I need to balance my existing, new and proposed statutory duties with the need to continue to undertake meaningful, risk-based and proportionate audits and assess- ments. In discharging my responsibilities, I will continue to seek to strike the most appropriate balance and add value by:
• providing assurance on the governance and stewardship of public money and assets;
• offering insight on the extent to which resources are used wisely in meeting people’s needs; and
• identifying and promoting ways by which the provision of public services may be improved.
21 As it is likely that the anticipated Local Government Wales Bill will propose that the Local Government (Wales) Measure 2009 no longer applies to councils, I will con- tinue to minimise work that focuses on the process of improvement planning.
22 In my audit plan for 2018 I explained that in previous years I had placed reliance on my work under the Measure to help discharge my duty under the Public Audit (Wales) Act 2004 to satisfy myself that councils have made proper arrangements to secure economy, efficiency and effectiveness (value for money) in the use of re- sources. Given that in the future it is likely that I will be unable to rely on my work un- der the Measure, in 2019-20, and subsequent years, the focus of my local perfor- xxxxx audit programmes will continue to be more clearly aligned to discharging my Public Audit (Wales) Act 2004 duty.
23 In 2018-19 I undertook an examination of the extent to which you are acting in ac- cordance with the sustainable development principle in taking steps to meet your well-being objectives. During 2019-20 I will undertake a further examination to as- sess the extent to which you are applying the sustainable development principle when taking steps towards meeting your well-being objectives. This will be the final piece of work I will undertake to discharge my duties under the Wellbeing of Future Generations Act at the Council prior to laying my first cyclical report with the National Assembly in 2020. During 2019-20 I will also be considering how to discharge my duties under the Act over the period 2020 to 2024 and I will seek to engage with lo- cal authorities as well as other stakeholders in developing my approach.
24 The Wales Audit Office also undertakes a programme of local government studies. This work is included within the Wales Audit Office estimates for funding from the Welsh Consolidated Fund and not local fees. These studies primarily lead to a na- tional report augmented by good practice and shared learning outputs rather than by local reports. Local findings, where relevant, will be captured in improvement as- sessment work and reported in annual improvement reports depending on the timing and the focus of conclusions.
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25 Taking all these factors into consideration, my 2019-20 programme of work will comprise:
Exhibit 3: performance audit programme
Performance audit programme | Brief description |
Improvement audit and assessment work including improvement planning and reporting audit | Audit of discharge of duty to publish an improvement plan, and to publish an assessment of performance. |
Well-being of Future Generations Act (Wales) 2015 (WFG Act) examinations | Examination of the extent to which the Council has acted in accordance with the sustainable development principle when taking steps to meet its wellbeing objectives. |
Assurance and Risk Assessment | Project to identify the level of audit assurance and/or where further audit work may be required in future years in relation to risks to the Council putting in place proper arrangements to secure value for money in the use of resources. |
Financial Sustainability | A project common to all local councils that will assess financial sustainability in light of current and anticipated future challenges |
Local Performance Audit Project | Review of the Council’s performance management system |
2019-20 Local Government Studies | (Funded by the Welsh Consolidated Fund) The Auditor General has recently completed his consultation on his forward work programme and new local government studies to commence in 2019- 20 will be confirmed shortly. |
26 The performance audit projects included in last year’s Audit Plan, which are either still underway or which have been substituted for alternative projects in agreement with you, are set out in Appendix 2.
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Certification of grant claims and returns
27 I have been requested to undertake certification work on the Council’s grant claims and returns.
28 As was the case last year, the Welsh Government will not require me to provide any report of factual findings related to any activity levels or outcomes.
29 My audit fee for this work is set out in Exhibit 4.
Fee, audit team and timetable
Fee
30 Your estimated fee for 2019 is set out in Exhibit 4. There have been some small changes to my fees rates for 2019 however my audit teams will continue to drive efficiency in their audits to ensure any resulting increases will not be passed to you. There is no change in the baseline fee compared to last year.
Exhibit 4: audit fee
Audit area | Proposed fee (£)2 | Actual fee last year (£) |
Audit of accounts3 | 177,398 | 176,406 |
Performance audit work | 99,449 | 99,537 |
Grant certification work4 | 45,000 | 46,434 |
Other financial audit work5 | ||
Margam Crematorium | 1,757 | 1,759 |
Welsh Church Act Trust Fund | 1,662 | 1,662 |
Total fee | 325,266 | 325,798 |
31 Planning will be ongoing, and changes to my programme of audit work and therefore my fee, may be required if any key new risks emerge. I shall make no changes with- out first discussing them with the Council.
32 Further information on my fee scales and fee setting can be found on our website.
2 Notes: The fees shown in this document are exclusive of VAT, which is not charged to you
3 Payable November 2018 to October 2019.
4 Payable as work is undertaken
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Audit team
33 The main members of my team, together with their contact details, are summarised in Exhibit 5.
Exhibit 5: my audit team
Name | Role | Contact number | E-mail address |
Xxxxxx Xxxx * | Engagement Lead – Financial Audit | 07909 882609 | |
Xxxxxxx Xxxxxxx | Financial Audit Manager | 07966 866242 | |
Xxxxxxx Xxxx | Financial Audit Team Leader | 07812 072003 | |
Xxxxx Xxxxxx | Performance Audit Manager | 07786 800258 | |
Xxxxxx Xxxxx | Performance Audit Lead | 07773 193217 |
*Engagement Director for the Council
34 I can confirm that that my team members are all independent of the Council and your officers. In addition, I am not aware of any potential conflicts of interest that I need to bring to your attention.
Timetable
35 I will provide reports, or other outputs as agreed, to the Council covering the areas of work identified in this document. My key milestones are set out in Exhibit 6.
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Exhibit 6: timetable
Planned output | Work undertaken | Report finalised * |
2019 Audit Plan | December 2018 to February 2019 | March 2019 |
Financial accounts work: • Audit of Financial Statements Report • Opinion on Financial Statements • Financial Accounts Memorandum | February to July 2019 | July 2019 July 2019 September 2019 |
Performance work: | ||
• Improvement Plan Audit | April – May 2019 | June 2019 |
• Assessment of Performance Audit | October – November 2019 | November 2019 |
• Assurance and Risk Assessment | April – December 2019 | January 2020 |
• WFG Act Examinations | April – September 2019 | October 2019 |
• Financial Sustainability | TBC | TBC |
• Local Performance Audit Project | December 2019 – February 2020 | March 2020 |
Annual Improvement Report | April 2019 – May 2020 | June 2020 |
2020 Audit Plan | December 2019 to February 2020 | February/March 2020 |
* Subject to timely clearance of draft findings with the Council.
Future developments to my audit work
36 Details of other future developments including forthcoming changes to key
International Financial Reporting Standards, the Wales Audit Office’s Good Practice Exchange (GPX) seminars and my planned work on the readiness of the Welsh public sector for Brexit, are set out in Appendix 3.
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Appendix 1
Respective responsibilities
Audit of accounts
As amended by the Public Audit (Wales) Act 2013, the Public Audit (Wales) Act 2004 sets out my powers and duties to undertake your financial audit. It is my responsibility to issue a certificate and report on the financial statements which includes an opinion on:
• their ‘truth and fairness’, providing assurance that they:
‒ are free from material misstatement, whether caused by fraud or error;
‒ comply with the statutory and other applicable requirements; and
‒ comply with all relevant requirements for accounting presentation and disclosure.
• the consistency of information in the Annual Report with the financial statements.
I must also state by exception if the Annual Governance Statement does not comply with requirements, if proper accounting records have not been kept, if disclosures required for remuneration and other transactions have not been made or if I have not received all the information and explanations I require.
The Public Audit (Wales) Act 2004 requires me to assess whether the Council has made proper arrangements for securing economy, efficiency and effectiveness in the use of resources. To achieve this, I consider:
• the results of the audit work undertaken on the financial statements;
• the Council’s system of internal control, as reported in the Annual Governance Statement and my report thereon;
• the results of other work carried out including work carried out under the Local Government (Wales) Measure 2009 (the Measure), certification of claims and returns, and data-matching exercises;
• the results of the work of other external review bodies where relevant to my responsibilities; and
• any other work that addresses matters not covered by the above, and which I consider necessary to discharge my responsibilities.
The Public Audit (Wales) Act 2004 sets out the rights of the public and electors to inspect the Council’s financial statements and related documents, to ask me, as the Appointed Auditor questions about the accounts and, where appropriate, to challenge items in the accounts. I must also consider whether in the public interest, I should make a report on any matter which comes to my notice in the course of the audit.
My audit work does not relieve management and those charged with governance of their responsibilities which include:
• the preparation of the financial statements and Annual Report in accordance with applicable accounting standards and guidance;
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• the keeping of proper accounting records;
• ensuring the regularity of financial transactions; and
• securing value for money in the use of resources. Management agrees to provide me with:
• access to all information of which management is aware that is relevant to the preparation of the financial statements such as records, documentation and other matters;
• additional information that I may request from management for the purpose of the audit; and
• unrestricted access to persons within the Council from whom I determine it necessary to obtain audit evidence.
Management will need to provide me with written representations to confirm:
• that it has fulfilled its responsibilities for the preparation of the financial statements;
• that all transactions have been recorded and are reflected in the financial statements;
• the completeness of the information provided to me for the purposes of the audit; and
• to support other audit evidence relevant to the financial statements or specific assertions in the financial statements if I deem it necessary or if required by ISAs.
Performance audit
The Public Audit (Wales) Act 2004 requires me, by examination of the accounts or otherwise, to satisfy myself that the body has made proper arrangements for:
• securing economy, efficiency and effectiveness in its use of resources; and
• that the body, if required to publish information in pursuance of a direction under section 47 (performance information) has made such arrangements for collecting and recording the information and for publishing it as are required for the performance of its duties under that section.
The Measure places a general duty on improvement authorities to ‘make arrangements to secure continuous improvement in the exercise of [their] functions’. It also places specific requirements on authorities to set improvement objectives, and to publish annual improvement plans and assessments of performance. Improvement authorities are defined as county and county borough councils, national park authorities, and fire and rescue authorities.
The Measure also requires me to carry out an improvement assessment for each improvement authority every year, to determine whether the authority is likely to comply with its general duty and requirements of the Measure. I must also carry out an audit of whether the authority has discharged its improvement planning and reporting duties.
The Auditor General may also in some circumstances carry out special inspections (under section 21), in respect of which he will provide a report to the relevant authorities
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and Ministers, and which he may publish (under section 22). The Auditor General will summarise audit and assessment reports in his published Annual Improvement Report (under section 24). This will also summarise any reports of special inspections.
Section 15 of the Well-being of Future Generations Act (Wales) 2015 requires me to carry out examinations of public bodies for the purposes of assessing the extent to which it has acted in accordance with the sustainable development principle when:
(a) setting well-being objectives; and
(b) taking steps to meet those objectives.
I must carry out such an examination of each public body at least once during a five-year period. Before the end of the period I must report on the results of those examinations to the National Assembly.
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Appendix 2
Performance work in last year’s audit outline still in progress
Exhibit 7: performance work in last year’s audit outline still in progress
Performance audit project | Status | Comment |
WFG Act Examinations | Fieldwork complete | Report in draft |
Service User Perspective – Channel Shifted Services | Fieldwork complete | Report in draft |
Delivering with Less – Leisure Services Follow Up | Fieldwork stage | Draft output due May 2019 |
Delivering with Less – Environmental Health Services Follow Up | Fieldwork stage | Draft output due May 2019 |
Digital Risk Diagnostic | Fieldwork stage | Draft output due May 2019 |
Review of Corporate Arrangements for Safeguarding | Fieldwork April/May 2020 | Draft report due June 2019 |
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Appendix 3
Other future developments
A. Forthcoming key IFRS changes
Exhibit 8: changes to IFRS standards
Standard | Effective date | Further details |
IFRS 16 leases | Expected in 2020-21 | IFRS 16 will replace the current leases standard IAS 17. The key change is that it largely removes the dis- tinction between operating and finance leases for les- sees by introducing a single lessee accounting model that requires a lessee to recognise assets and liabili- ties for all leases with a term of more than 12 months, unless the underlying asset is of low value. It will lead to all leases being recognised on balance sheet as an asset based on a right of use principle with a corre- sponding liability for future rentals. This is a significant change in lessee accounting. |
B. Good Practice Exchange
The Wales Audit Office’s GPX helps public services improve by sharing knowledge and practices that work. Events are held where knowledge can be exchanged face to face and resources shared on line. The main areas of work are regarding financial manage- ment, public-sector staff and governance.
Further information, including details of forthcoming GPX events and outputs from past seminars.
C. Brexit: preparations for the United Kingdom’s departure from membership of the European Union
In accordance with Article 50 of the Treaty of Rome, on 29 March 2019 the United King- dom will cease to be a member of the European Union. Negotiations are continuing, and it currently remains unclear whether agreement will be reached on a transition period to 31 December 2020, or whether a ‘no deal’ immediate exit will take place next March.
The Auditor General has commenced a programme of work looking at the arrangements that the devolved public sector in Wales, including all NHS bodies, is putting in place to prepare for, and respond to, Britain’s exit from the European Union. This will take the form of a high-level overview to establish what is being put in place across the Welsh
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public sector, and what the key issues are from the perspectives of different parts of the Welsh public service.
The Auditor General intends to carry out this initial work in two tranches. In autumn 2018, he issued a call for evidence to compile a baseline summary of arrangements being put in place. On 19 February 2019, the Auditor General issued a report6 on preparations in Wales for a ‘no deal’ Brexit. This will be followed up by further audit fieldwork during the rest of 2019.
6 Preparations in Wales for a ‘no deal’ Brexit
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Wales Audit Office 00 Xxxxxxxxx Xxxx Xxxxxxx XX00 0XX
Tel: 000 0000 0000
Fax: 000 0000 0000
Textphone: 029 2032 0660
E-mail: xxxx@xxxxx.xxxxx Website: xxx.xxxxx.xxxxx
Swyddfa Archwilio Cymru 24 Heol y Gadeirlan Caerdydd CF11 9LJ
Ffôn: 029 2032 0500
Ffacs: 029 2032 0600
Ffôn testun: 029 2032 0660
E-xxxx: xxxx@xxxxxxxxx.xxxxx Gwefan: xxx.xxxxxxxxx.xxxxx
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Mae’r dudalen hon yn fwriadol wag
Audit Committee Update – Neath Port Talbot County Borough Council
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Audit year: 2019
Eitem yr Agenda4
Date issued: March 2019 Document reference: APS032019
This document has been prepared as part of work performed in accordance with statutory functions.
In the event of receiving a request for information to which this document may be relevant, attention is drawn to the Code of Practice issued under section 45 of the Freedom of Information Act 2000. The section 45 code sets out the practice in the handling of requests that is expected of public authorities, including consultation with relevant third parties. In relation to this document, the Auditor General for Wales and the Wales Audit Office are relevant third parties. Any enquiries regarding disclosure or re-use of this document should be sent to the Wales Audit Office at xxxx.xxxxxxx@xxxxx.xxxxx.
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We welcome correspondence and telephone calls in Welsh and English. Corresponding in Welsh will not lead to delay. Rydym yn croesawu gohebiaeth a galwadau ffôn yn Gymraeg a Saesneg. Ni fydd gohebu yn Gymraeg yn arwain at oedi.
Contents
Progress update
About this document 4
Audit plan 4
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Financial audit update 5
Performance audit update 6
WAO local government improvement studies 9
WAO national studies 11
Page 3 of 13 - Audit Committee Update – Neath Port Talbot County Borough Council
Audit committee update
About this document
1 This document provides the Audit Committee of Neath Port Talbot County Borough Council (the Council) with an update on current and planned Wales Audit Office work. It covers financial and performance audit work together with information on the Auditor General’s programme of local government related studies.
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Audit plan
2 The dates we presented our audit plans for 2018 and 2019 are set out in Exhibit 1.
Exhibit 1: audit plan.
Area of work | Status |
Audit Plan 2018 | Presented to Audit Committee April 2018 |
Audit Plan 2019 | To be presented to Audit Committee March 2019 |
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Financial audit update
3 Our financial audit work included in our 2018 audit plan is complete. Exhibit 2 provides members of the Audit Committee with a brief overview of progress against the planned financial audit key outputs and milestones set out in our 2019 audit plan.
Exhibit 2: financial audit update
Planned output
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Financial Statements 2018-19
Margam Crematorium Joint Committee Annual Return 2018-19
Welsh Church Act Trust Fund 2018-19
Certification of Grants 2018-19 Annual Audit Letter
Scope
Audit of the Council’s 2018-19 financial statements.
Audit of the Committees 2018-19 Annual Return
Independent examination of the Trust Fund 2018-19 financial statements
Certification of grants and returns 2018-19 Letter summarising our 2018-19 audit work.
Status
Opinion planned to be issued July 2019.
Opinion planned to be issued July 2019
Opinion planned to be issued October 2019
Planned for December 2019 Planned for December 2019
Page 5 of 13 - Audit Committee Update – Neath Port Talbot County Borough Council
Performance audit update
4 Exhibit 3 summarises the progress of the performance audit work set out in the 2017 and 2018 audit plans which is still in progress and provides a brief overview of progress against the planned performance outputs and milestones set out in our 2019 audit plan.
Exhibit 3: performance audit update
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Topic
Scope
Status
Timescale
Performance audit work - 2017 audit plan
Service User Perspective Review
This project will test the service-user interface at all authorities. The review will evaluate what it feels like (as a member of the public) to deal with council services, involving a selection of services and scenarios. In Neath Port Talbot CBC we looked at the Council’s Digital
Strategy and specifically at the Council’s approach to ‘channel shift’ (moving services online)
Fieldwork complete.
Reporting March/April 2019.
Performance audit work - 2018 audit plan
Well-being of Future Generations Act (Wales) 2015 (WFG Act)
examinations
Examination of the extent to which the Council has acted in accordance with the sustainable development principle when taking steps to meet one or more of its wellbeing objectives. The ‘step’ that is being reviewed is ‘We will work with partners to ensure that we target support to those children at risk of adverse childhood experience in the first 1,000 days of their lives’.
Fieldwork complete. Draft report shared with Council officers March 2019.
Reporting March 2019.
Page 6 of 13 - Audit Committee Update – Neath Port Talbot County Borough Council
Topic | Scope | Status | Timescale |
Thematic Review - Environmental Health | Review of the arrangements the Council has put in place to deliver environmental health services, building on the study previously undertaken by the Auditor General as part of the ‘delivering with less’ themed studies. | Fieldwork stage. | Draft report due May 2019 |
Thematic Review - Corporate Safeguarding Arrangements | Review of the effectiveness of corporate safeguarding arrangements, building on the study previously undertaken by the Auditor General in this area. | Fieldwork to be undertaken April/May 2019 | Draft report due June 2019 |
Thematic Review - Leisure Services | Review of the arrangements the Council has put in place to deliver leisure services building on the ‘study previously undertaken by the Auditor General as part of the ‘delivering with less’ themed studies. | Fieldwork stage. | Draft report due May 2019 |
Annual improvement Report | Annual report summarising the audit work undertaken in the last year, which also includes a summary of the key findings from reports issued by ‘relevant regulators’. | Work planned to be undertaken April 2018 – May 2019. | By August 2019. |
Performance audit work - 2019 audit plan | |||
Well-being of Future Generations Act (Wales) 2015 (WFG Act) examinations | Examination of the extent to which the Council has acted in accordance with the sustainable development principle when taking steps to meet its wellbeing objectives. | Not started | Reporting - October 2019 |
Assurance and Risk Assessment | Project to identify the level of audit assurance and/or where further audit work may be required in future years in relation to risks to the Council putting in place proper | Not started | Feedback - January 2020 |
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Page 7 of 13 - Audit Committee Update – Neath Port Talbot County Borough Council
Topic | Scope | Status | Timescale |
arrangements to secure value for money in the use of resources. | |||
Financial Sustainability | A project common to all local councils that will assess financial sustainability in light of current and anticipated future challenges. | Not started | To be confirmed |
Local Performance Audit Project | Review of the Council’s performance management system. | Not started | Reporting – March 2020 |
Improvement audit and assessment work including improvement planning and reporting audit | Audit of discharge of duty to publish an improvement plan, and to publish an assessment of performance. | Improvement Plan audit - Not started Assessment of Performance Audit – not started | Certification – June 2019 Certification – November 2019 |
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Page 8 of 13 - Audit Committee Update – Neath Port Talbot County Borough Council
WAO local government improvement studies
5 The Wales Audit Office also undertakes a programme of local government studies funded from the Welsh Consolidated Fund, which lead to national reports rather than local reports. Exhibit 4 summarises the present position on the programme of studies currently underway.
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Exhibit 4: local government improvement studies programme of work
Topic | Scope | Status | Timescale |
2017-18 Local Government Improvement Studies – 2017 audit plan | |||
Integrated care fund | The review will examine if the Integrated Care Fund is being used effectively to deliver sustainable services that achieve better outcomes for service users. Interviews will be undertaken with a selection of officers on each of the Regional Partnership Boards and Welsh Government officials. | Local outputs presented at regional partnership board level. | National report due to be published 2nd quarter 2019. |
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Topic | Scope | Status | Timescale |
2018-19 Local Government Improvement Studies – 2018 audit plan | |||
First point of contact assessments under the Social Services and Well- being Act | The study will review the first point of contact and assessments for adult social care. | Fieldwork complete, drawing Conclusions. Neath Port Talbot CBC was not a fieldwork site in this study. | National report due to be published in the 3rd/4th quarter of 2019. |
Tackling Violence Against Women, Domestic Abuse and Sexual Violence | Our review will focus on determining whether local authorities and their partners are effectively working together to prevent gender-based violence and domestic abuse and protecting all of the people involved. | Fieldwork complete, drawing conclusions. Neath Port Talbot CBC was not a fieldwork site in this study. | National report due to be published in 3rd/4th quarter of 2019. |
Planning Service: Improving the Wellbeing of Wales | Our review will provide independent assurance that planning authorities are supporting sustainable development and delivering for the future long-term wellbeing of their communities and for Wales. | Project set up and fieldwork Progressing in five local authorities. Neath Port Talbot CBC is not a fieldwork site in this study. | National report due to be published in the 3rd/4th quarter of 2019. |
2019-20 Local Government Improvement Studies | |||
The Auditor General has recently completed his consultation on his forward work programme and new local government studies to commence in 2019-20 will be confirmed shortly | To be confirmed | To be confirmed | |
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Page 10 of 13 - Audit Committee Update – Neath Port Talbot County Borough Council
WAO national studies
6 The Audit Committee may also be interested in the WAO national studies programme that are related to local government. Exhibit 5 provides information on our recently published national studies that have relevance to local authority organisations.
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Exhibit 5: local authority related national studies
Topic | Findings | Status |
Preparations in Wales for a ‘no deal’ Brexit | The Auditor General for Wales has a role in providing assurance on the Welsh public sector’s approach to managing the implications of a ’no-deal’ Brexit. This report sets out his early views on the evidence that has been gathered, together with some key messages for public bodies, to help with their planning in the coming weeks and months. | Published 19 February 2019 xxxx://xxx.xxxxx.xxxxx/xxxxxxxxxxx/xxxxxxxxxxxx- wales-no-deal-brexit |
Discussion Paper: Six themes to help make scrutiny ‘Fit for the Future’ | This discussion paper and six-point checklist has been produced for councils in Wales to help improve overview and scrutiny functions. These bring together some common themes and issues that have been identified during audit work across the 22 local authorities during 2017-18. | Published 12 February 2019 xxxx://xxx.xxxxx.xxxxx/xxxxxxxxxxx/xxxxxxxxxx- paper-scrutiny-six-themes |
The Welsh Government’s youth discounted bus fare scheme – ‘MyTravelPass’ | This report sets out the key facts about budget announcements made and decisions that the Welsh Government took in setting up the MyTravelPass scheme and then continuing it beyond its initial pilot phase. It also considers the costs of the scheme and its uptake by young people. | Published 10 January 2019 xxxx://xxx.xxxxx.xxxxx/xxxxxxxxxxx/xxxxxxxxxxxx |
Page 11 of 13 - Audit Committee Update – Neath Port Talbot County Borough Council
Topic | Findings | Status |
The maturity of local government in use of data | This study assesses whether local government has the right building blocks and culture in place to capitalise on the data that it holds. Based on these findings, the Auditor General has concluded that local authorities are slowly developing a culture that values and uses data to its full potential to help improve services and outcomes. | Published 6 December 2018 xxxx://xxx.xxxxx.xxxxx/xxxxxxxxxxx/xxxxxxxx- local-government-use-data |
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Page 12 of 13 - Audit Committee Update – Neath Port Talbot County Borough Council
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Wales Audit Office 00 Xxxxxxxxx Xxxx Xxxxxxx XX00 0XX
Tel: 000 0000 0000
Fax: 000 0000 0000
Textphone.: 029 2032 0660
E-mail: xxxx@xxxxx.xxxxx Website: xxx.xxxxx.xxxxx
Swyddfa Archwilio Cymru 24 Heol y Gadeirlan Caerdydd CF11 9LJ
Ffôn: 029 2032 0500
Ffacs: 029 2032 0600
Ffôn testun: 029 2032 0660
E-xxxx: xxxx@xxxxxxxxx.xxxxx Gwefan: xxx.xxxxxxxxx.xxxxx
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We welcome correspondence and telephone calls in Welsh and English. Rydym yn croesawu gohebiaeth a galwadau ffôn yn Gymraeg a Saesneg.
NEATH PORT TALBOT COUNTY BOROUGH COUNCIL AUDIT COMMITTEE
27th MARCH 2019
REPORT OF THE HEAD OF FINANCE – XXX XXXXX
Matter for Information Xxxxx Affected - All
TREASURY MANAGEMENT MONITORING 2018/19
1. Purpose of Report
This report sets out treasury management action and information recently reported to Cabinet (13th February 2019) which also needs to be reviewed by the Audit Committee.
2. Rates of Interest
2.1 The Monetary Policy Committee (MPC) voted on the 2nd August 2018 to increase the bank rate to 0.75%. The reason given for this rise was to try to halt the rises in the rate of inflation.
Effective Date | Bank Rate |
4th December 2008 | 2.00% |
8th January 2009 | 1.50% |
5th February 2009 | 1.00% |
5th March 2009 | 0.50% |
4th August 2016 | 0.25% |
2nd November 2017 | 0.50% |
2nd August 2018 | 0.75% |
2.2 The following table provides examples of external borrowing costs as provided by the Public Works Loans Board as at 15th January 2019:
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Equal Instalments of Principal | Annuity | Maturity | ||||
Previous 09Oct18 | Current 15Jan19 | Previous 09Oct18 | Current 15Jan19 | Previous 09Oct18 | Current 15Jan19 | |
% | % | % | % | % | % | |
5-5.5 years | 1.84 | 1.83 | 1.84 | 1.83 | 2.11 | 1.97 |
10-10.5 years | 2.11 | 1.97 | 2.12 | 1.98 | 2.52 | 2.33 |
20-20.5 years | 2.52 | 2.33 | 2.55 | 2.36 | 2.55 | 2.79 |
35-35.5 years | 2.82 | 2.72 | 2.85 | 2.77 | 2.79 | 2.75 |
49.5-50 years | 2.88 | 2.83 | 2.86 | 2.82 | 2.70 | 2.67 |
3. General Fund Treasury Management Budget
3.1 The following table sets out details of the treasury management budget for 2018/19 along with outturn figures for 2017/18. The budget consists of a gross budget for debt charges i.e. repayment of debt principal and interest, and interest returns on investment income.
2017/18 Outturn £’000 | 2018/19 Original Budget £’000 | |
18,011 | Principal and Interest charges | 19,203 |
Investment Income | ||
(527) | - Total | (400) |
192 | - less allocated to other funds | 110 |
(335) | Subtotal Income | (290) |
Contribution from General Reserves | (340) | |
594 | Contribution to/(from) treasury management reserve | |
18,270 | Net General Fund | 18,573 |
# NB: Other funds include Trust Funds, Social Services Funds, Schools Reserves, Bonds etc.
4. Borrowing
4.1 The Council has not entered into any loans since the last quarterly monitoring report.
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5. Investment Income
5.1 In line with the Council’s Investment Strategy, the 2018/19 original budget for investment income is £400k, actual investment income for the financial year to date is projected to be approximately £435k. Any income received in excess of the budget will normally be transferred into the treasury management equalisation reserve at year end, however it is expected that by year end the income generated and cost of new loans will allow circa £100k underspend on this budget and be made available to underpin the 2018-19 net budget outturn position.
Members should note that the majority of investments are classified as ‘specified’ i.e. up to 12 months and are currently deposited with Local Authorities, UK banks including, Lloyds Group, Close Brothers and Santander Bank.
5.2 The Council policy will allow investments up to a maximum of
£25m for periods of more than 1 year and up to 5 years, and this will be considered when decisions on investing surplus funds are made. The Council has no such investments.
Financial Impact
6. All relevant financial information is provided in the body of the report.
Equality Impact Assessment
7. An equality impact assessment was not required for this report.
Workforce Impacts
8. There are no workforce impacts arising from this report.
Legal Impacts
9. There are no legal impacts arising from this report.
Risk Management
10. There are no new risk management issues arising from this report. Borrowing and investment decisions are made in line with the Council’s Treasury Management Policy. The Council has appointed Link Asset Services to provide support and advice in relation to this policy.
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Consultation
11. There is no requirement under the Constitution for external consultation on this item.
12. Recommendations
It is recommended that Audit Committee Members note the contents of this report for information
Appendices
13. None
List of Background Papers Treasury Management Files PWLB Notice Number 020/19
Officer Contact
Mr Xxx Xxxxx – Head of Finance Tel. No. - 00000 000000
Xx Xxxx Xxxxxxxxxxx – Group Accountant – Capital and Corporate Tel. No. - 00000 000000
E-mail – x.xxxxxxxxxxx@xxx.xxx.xx
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NEATH PORT TALBOT COUNTY BOROUGH COUNCIL AUDIT COMMITTEE
REPORT OF THE HEAD OF FINANCE – XXX XXXXX
27th March 2019
Matters for Decision Wards affected - All
INTERNAL AUDIT PLAN FOR THE PERIOD - 1 APRIL 2019 – 31 MARCH 2020
1. Purpose of Report
1.1 The purpose of this report is to seek members’ approval of the attached Draft Internal Audit Plan for 2019/20.
2. Internal Audit Plan 19/20
2.1 The Internal Audit Plan has been compiled from cumulative audit knowledge and experience, with reference to the Corporate Plan and Corporate Risks. The plan also includes audits which are subject to service level agreements and those which are carried out annually. In addition to the specific audits there are allowances put in place for such items as special investigations that arise during the year, contingencies and for advice and guidance. The plan has to be flexible in order to allow for unexpected items during the year that require audit input.
3. Recommendation
It is recommended that members approve the Internal Audit Plan as set out in Appendix 1.
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4. Reason for Proposed Decision
To ensure compliance with the terms of reference of the Audit Committee.
6. Financial Impact
There is no financial impact associated with this report.
7. Equality Impact Assessment
There are no equality impacts associated with this report.
8. Workforce Impacts
There are no workforce impacts associated with this report.
9. Legal Impacts
There are no legal impacts associated with this report.
10. Risk Management
The Audit Plan and the proposed audits contained therein form a fundamental part of the risk management processes used by the Council.
11. Consultation
There is no requirement under the Constitution for external consultation on this item.
12. Appendices
Appendix 1 – Internal Audit Plan for the period 1 April 2019 – 31st March 2020
List of Background Papers
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Audit files
Officer contact
Xxx Xxxxx – Head of Finance
(Tel. 00000 000000 – email x.xxxxx@xxx.xxx.xx)
Xxxx-Xxxxx X’Xxxxxxx – Audit Manager
(Tel. 00000 000000 – email xx.xxxxxxxx@xxx.xxx.xx)
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Mae’r dudalen hon yn fwriadol wag
NEATH PORT TALBOT COUNTY BOROUGH COUNCIL
INTERNAL AUDIT PLAN FOR THE PERIOD
1 April 2019 – 31 March 2020
Finance & Corporate Services Directorate Internal Audit Service
Issue Date –
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CONTENTS
Heading
Foreword to Plan
Section 1
Legislative requirements
Section 2
Calculation of available days
Section 3
Detailed Audit Plan in respect of 2019/20
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STRATEGIC AUDIT PLAN IN RESPECT OF THE PERIOD 1 APRIL 2019 TO 31 March 2020
1. INTRODUCTION
1.1 I outline in this plan details of the Internal Audit Service involvement in Council services/functions for the period 1 April 2019 to 31 March 2020.
1.2 The plan has been prepared using the following assumptions and methodology.
1.3 The staffing complement for 2019/20 has increased to 8.18 FTE, due to the creation of a new fraud auditor post and additional hours being worked due to staffing changes.
1.4 An allowance has been made for special investigation type work
i.e. fraud, theft, general malpractice issues in relation to employees and clients of Council services, along with requests for advice and guidance from service managers.
1.5 The risk factors noted against each audit heading are based on a formula that calculates the scores using 12 different variables.
1.6 The plan details the areas that are due to be audited during 2019/20. However, the audit plan is almost invariably subject to change as issues arise during the year. This flexibility is vital to ensure that new or increased risks are assessed and reported upon in order that assurance can be provided to Members. Any changes to the plan will be reported to Audit Committee throughout the year.
2. INTERNAL AUDIT SERVICE PERFORMANCE MONITORING
Updates in line with corporate guidelines will continue to be given to the Council’s Audit Committee and where required to the relevant Scrutiny Committee. Information will also be outlined in our performance indicator results. The section’s work will also follow the requirements of the Public Sector Internal Audit Standards.
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3. AUDIT COMMITTEE
Since this Committee was established as a ‘stand-alone’ entity in May 2002, numerous reports on a variety of topics have been submitted and this has assisted Members’ awareness of their role
i.e. effective compliance with the laid down Terms of Reference of the Committee.
The Committee undertakes its duties in line with the guidance given in the Public Sector Internal Audit Standards 2013 which supersede The Code of Practice for Internal Audit in Local Government in the UK. Members were advised of this change at the March 2014 Audit Committee meeting.
4. THE YEAR AHEAD
As for every year to date, a number of challenges lie ahead:
• Provide an adequate level of audit coverage with reduced resources;
• Implement agreed recommendations resulting from the external review undertaken during 2017/18;
• Provide assurance to Members on the adequacy and effectiveness of internal controls on systems that have been affected by the budget reductions faced by the Authority;
• To further improve the assessment of risk in audit work;
• Continuing with the progress made to date in improving, and, enhancing the role of the Audit Committee;
• Continuing to work closely with service managers to improve the effectiveness of audit work, particularly with regard to the increasing emphasis on corporate governance issues;
• Continuing to work closely with Wales Audit Office to maximise the effectiveness of audit work for the Authority.
In terms of ongoing requirements, there is a need to constantly monitor and review the progress being made in connection with the various assignments contained within the Audit Plan (aided by a computerised Audit Management System which has been developed in-house for our purposes). The 3 monthly progress reports will continue to be presented to Audit Committee. In
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addition, our External Auditor’s report on the performance of Internal Audit in terms of compliance with the Public Sector Internal Audit Standards in line with their statutory responsibility in its entirety is submitted to the Audit Committee.
Finally, this Internal Audit Plan is submitted to the Audit Committee for approval at its meeting scheduled for 27th March 2019.
Xxx Xxxxx Head of Finance
Xxxx-Xxxxx X’Xxxxxxx Audit Manager
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SECTION 1
LEGISLATIVE REQUIREMENTS RELATING TO THE PROVISION OF THE INTERNAL AUDIT FUNCTION
1.1 This section deals with the legislative question and the manner in which compliance is effected by the Authority.
1.2 Section 151 of the Local Government Act 1972 requires that “every local authority shall make arrangements for the proper administration of their financial affairs and shall ensure that one of their officers has responsibility for the administration of those affairs.”
1.3 The responsible financial officer in this Authority is the Director of Finance & Corporate Services, and one of the more important ways in which he exercises his statutory responsibility for financial administration is through the work of the Internal Audit Service.
1.4 The Accounts and Audit (Wales) Regulations 2014 state … (1) A relevant body must maintain an adequate and effective system of internal audit of its accounting records and of its system of internal control. (2) Any officer or member of that body must, if the body requires (a) make available such documents of the body which relate to its accounting and other records as appear to that body to be necessary for the purpose of audit; and (b) supply the body with such information and explanation as that body considers necessary for that purpose. (3) a larger relevant body must, at least once in each year, conduct a review of the effectiveness of its internal audit. (4) The findings of the review referred to in paragraph (3) must be considered, as part of the consideration of the system of internal control refers to in regulation 5 (3), by the committee or body referred to in that paragraph.
1.5 It is a requirement of the Public sector Internal Audit Standards that each Internal Audit service has an Audit Charter. The standards state “The purpose, authority and responsibility of the internal audit activity must be formally defined in an internal audit
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charter, consistent with the Definition of Internal Auditing, the Code of ethics and Standards. The chief audit executive must periodically review the internal audit charter and present it to senior management and the board for approval.” This committee approved the service’s charter at the committee meeting in December 2014.
1.6 These Accounts and Audit Regulations are supplemented by this Authority’s Financial Regulation No 3.4.5 and Financial Procedures Nos. 4.9.8 and 4.9.9 which state:
Financial Regulation 3.4.5 – Audit Requirements
This states that the Accounts and Audit Regulations require every local authority to maintain an adequate and effective internal audit.
Financial Procedure Nos. 4.9.8 & 4.9.9
4.9.8 Responsibilities of the Director of Finance & Corporate Services
To ensure that internal auditors have the authority to:
• Access Authority premises at reasonable times
• Access all assets, records, documents, correspondence and control systems
• Receive any information and explanation considered necessary concerning any matter under consideration
• Require any employee of the Authority to account for cash, stores or any other Authority asset under his or her control
• Access records belonging to third parties, such as contractors, when required
• Directly access the head of paid service, the executive and Audit Committee
• To ensure that effective procedures are in place to investigate promptly any fraud, irregularity or mal practice.
4.9.9 Responsibilities of Corporate Directors (Chief Officers)
• To ensure that internal auditors are given access at all reasonable times to premises, personnel, documents and assets that the auditors consider necessary for the purposes of their work.
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• To ensure that auditors are provided with any information and explanations that they seek in the course of their work.
• To consider and respond promptly to recommendations in audit reports
• To ensure that any agreed actions arising from audit recommendations are carried out in a timely and efficient fashion.
• To notify the Director of Finance & Corporate Services immediately of any suspected fraud, theft, irregularity, improper use or misappropriation of the Authority’s property or resources. Pending investigation and reporting, the Corporate Director should take all necessary steps to prevent further loss and to secure records and documentation against removal or alteration.
SECTION 2
INTERNAL AUDIT PLAN 2019/20 CALCULATION OF AVAILABLE DAYS
2.1 The total number of days included in the Plan is based on a total of
8.18 (FTE) staff.
2.2 A number of allowances have to be made to the total number of days available to allow for annual leave, public holidays, sickness, training etc. An estimate also has to be made for staff vacancies arising from the possibility of staff turnover occurring over the year.
2.3 These allowances result in a total number of ‘available’ days to the section of 1,628. From this is deducted a number of days to allow for the general supervision and management of the Section and other ‘non-chargeable’ items such as attendance at seminars, team meeting etc. The total number allocated to these overhead type areas is 210 days.
2.4 This leaves a total of 1,418 days available for planned work.
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SECTION 3 – INTERNAL DRAFT AUDIT PLAN FOR 2019/20
Service Area Days Risk Allocated Factor
Education Leisure & Lifelong Learning
School based audits
Primary Schools 120 M
Secondary Schools 35 H
Other education
Unofficial Funds (Primary) 15 H
Unofficial Funds (Comps) 30 H
Education Grants 20 M
Leisure
Margam Park & Orangery 40 M
Total number of days = 260
Service Area Days Risk Allocated Factor
Chief Executive’s
Members Driver Declarations 15 M
Total number of days = 15
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Service Area | Days Allocated | Risk Factor |
Environment | ||
Stores – stocktake assistance | 5 | H |
Stores processes | 15 | H |
Equipment Tracking/Write Offs | 15 | M |
Winter Gritting | 20 | M |
Town Centre Regeneration Prog. | 10 | M |
Contingency | 30 | N/A |
Days Allocated
Total number days = 95
Service Area
Finance & Corporate Services
Risk Factor
Revenue Collection
Council Tax 5 L
Council Tax Recovery 15 M
NNDR 5 L
Sundry Debtors 5 L
Cash collection 10 H
Benefit Administration
Housing Benefits 5 L
Exchequer
Payroll 5 L
Creditor Payments 5 L
Creditors (FIS) checks 20 H
Off payroll payments (IR 35) 10 H
Accountancy
Treasury Management 15 M
VAT 10 M
Other
Financial Assessments 15 M
Court Deputy 15 M
Contingency 10 N/A
Total number of days = 150
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Service Area Days Risk Allocated Factor
Social Services, Health & Housing
Social Services
Hillside Secure Unit 15 M
Grant certification 15 M Safeguarding:
Children’s & Adult Services 70 H
(To include Child Sexual Exploitation & Professional Strategy Meetings)
Contingency 25 N/A
Total number days = 125
Service Area Days Risk Allocated Factor
Cross directorate
Special Investigations 210 N/A
Advice & Guidance requests 90 N/A
Corporate Governance 15 N/A
Data Security 15 H
Contract Audit (final accounts) 5 M
Officer Declarations 15 M
Risk Registers 20 M
DBS Checks 15 H
Complaints Processes 20 M
Procurement 35 H
Money Laundering 15 M Fraud (to include joint working
With DWP & NFI) 210 H
GDPR 15 M
Contingency 8 N/A
Total number of days = 688
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Other Commitments | ||
Banking Administrator | 10 | N/A |
Attendance at working | ||
Parties | 20 | N/A |
Servicing Audit Committee | 20 | N/A |
Vision Impaired West Glam | 10 | L |
SWTRA | 10 | N/A |
FOI Requests | 5 | N/A |
10
N/A
Staff association/lottery
Total number of days = 85
Total number of days for 19/20 = 1418
H = High, M = Medium & L=Low
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NEATH PORT TALBOT COUNTY BOROUGH COUNCIL AUDIT COMMITTEE
27th March 2019
REPORT OF THE HEAD OF FINANCE – XXX XXXXX
Matter for information Wards affected: All wards
Progress Report to 28th February 2019
1. Purpose of the Report
The purpose of this report is to:
• Provide details of the work undertaken in the last quarter
• Provide details of Post Audit Reviews undertaken in the last quarter
• Provide an update on progress against the plan
• Advise members of any staffing issues within the team
2. Background
One of the terms of reference of this Committee is to ‘monitor internal (and) external audit performance’. In order to comply with this requirement to monitor the in-house service, a progress report is given below outlining internal audit work undertaken in the last quarter. This work is then set against the original Internal Audit Plan to show what progress has been achieved.
In addition, information is provided for members on the current position regarding staff vacancies and other staffing issues within the team.
3. Audit Assignments Completed
A total of 16 formal audit reports have been issued since 15th November 2018 in line with normal distribution guidelines. Attached as appendix 1 is a schedule of the reports along with a brief summary of the findings and the risk rating applied following the audit.
The following is a list of those reports issued:
• 3 Private Items
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• 7 Primary Schools
• 2 Comprehensive Schools
• 2 DBS Checks - Schools
• Vision Impaired West Glamorgan
• Procurement Cards
4. Post Audit Reviews Undertaken
The following Post Audit Reviews (PARs) have been undertaken.
Audit | Date of PAR | Issues arising |
Cwmtawe Comprehensive | 29.11.18 | None |
Ysgol Bae Baglan | 30.11.18 | None |
Baglan Primary School | 18.01.19 | None |
Tairgwaith Primary | 23.01.19 | |
Sandfields Primary School | 28.01.19 | None |
YGG Xxxxxxx-xxxx | 04.02.19 | None |
YGG Trebannws | 06.02.19 | None |
5. Progress against Plan
Appendix 2 gives details of the work carried out to date against the 2018/19 plan.
There are currently 3 special investigations in progress.
6. Staffing
The Auditor vacancy will be filled on a secondment basis for 6 months, from 1st April 2019 by one of the audit assistants, a review of the position will be undertaken at the end of the secondment. There are no plans to fill the resultant audit assistant vacancy until such times as the outcome of the secondment is known.
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7. Financial Impact
There will be a budget saving in respect of salary costs for the vacant Assistant Auditor post.
8. Equality Impact Assessment
There are no equality impacts associated with this report.
9. Workforce Impacts
There are no workforce impacts associated with this report.
10. Legal Impacts
There are no legal impacts associated with this report.
11. Risk Management
The work undertaken by Internal Audit is a fundamental part of the risk management processes in place across the Authority.
12. Consultation
There is no requirement under the Constitution for external consultation on this item.
14. Appendices
Appendix 1 – Published Reports
Appendix 2 – Audit Plan Monitoring 2018/19
Officer Contact
Xxx Xxxxx, Head of Finance Email: x.xxxxx@xxx.xxx.xx Tel: 00000 000000
Xxxx-Xxxxx X’Xxxxxxx, Audit Manager Email: xx.xxxxxxxx@xxx.xxx.xx
Tel: 00000 000000
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Appendix 1 – Published Reports
R35 | Ysgol Xxxx Y Coed Head of Participation | Good controls were found to be in place and the school is complying with current DBS guidance. Recommendations made within the report will further enhance the controls operating within the school. | 2 |
R36 | Private Item | ||
R37 | Blaenhonddan Primary School Head of Participation | The school is complying fully with current DBS guidance in relation to staff, however, guidance had not been fully complied with in relation to DBS requirements for Governors. | 2 |
R38 | Ysgol Hendrefelin Head of Participation | The school is complying in full with current DBS guidance in respect of both staff and governors and the recommendations made within the report will enhance the good controls currently operating within the school. | 2 |
R39 | YGG Cwmnedd Head of Participation | Good controls were found to be operating effectively and the recommendations made within the report will further enhance working practices. The school was complying fully with all DBS guidance. | 2 |
R40 | Private Item | ||
R41 | Rhydyfro Primary School Head of Participation | DBS Portability Forms had not completed in respect of 2 staff members who had taken on additional roles within the school. A payment for staff lunches on an inset day had been paid for from the Unofficial Fund, it has been accepted that this was ineligible expenditure and the fund will be reimbursed. | 2 |
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Appendix 1 – Published Reports
R42 | Godre’xxxxx Primary Head of Participation | Good controls were found to be operating within the school and the recommendations made will further enhance the existing controls. The school was found to be fully complying with DBS guidance. | 2 |
R43 | Vision Impaired West Glamorgan Director of Finance & Corporate Services | The financial statements of VIWG have been independently reviewed and examined and were found to be accurate when compared to supporting documentation. | 1 |
R44 | Private Item | ||
R45 | DBS Check Ysgol Cwm Brombil Head of Participation | The required DBS disclosures in respect of all staff and governors were found to be in place. | 1 |
R46 | Procurement Cards Head of Finance | Generally good controls were found to be operating and the recommendations made within the report will further enhance the controls currently operating. | 2 |
R47 | YGG Tyle’r Ynn Head of Participation | In one instance a DBS Portability Form had not been completed when a staff member took on additional duties at the school and the school did not comply fully with DBS guidance in respect of Governors. | 2 |
Appendix 1 – Published Reports
R48 | Ysgol Carreg Hir DBS Check Head of Participation | The required DBS disclosures in respect of all staff and governors were found to be in place. | 1 |
R49 | Xxxx Xxxxxx Comprehensive School Head of Participation | Good controls were found to be operating and the school was complying with DBS guidance. | 2 |
R50 | Private Item |
Risk Categories
Category 1 – testing found good controls to be in place
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Category 2 – testing found some controls that need enhancing which will be achieved by the implementation of the recommendations
Category 3 – testing revealed a number of areas where improvements in controls are required. A verbal update will be provided
Category 4 – testing revealed areas of concern, the Head of Service will provide a written response to the audit report for consideration by Members of Audit Committee
Appendix 1 – Published Reports
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Category 5 – testing revealed areas of significant concern. The Head of Service and/or Service Manager will attend audit committee
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Monitoring Date | 28th February 2019 | ||||||||
Audit Plan Item 2018-19 | Risk | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | ||||
Factor | |||||||||
Education, Leisure and Lifelong Learning | |||||||||
School Based Audits | |||||||||
18 Primary Schools | M | 1 school audited | 5 schools audited | 7 schools audited | 7 schools audited | ||||
3 Secondary Schools | H | 1 Audit Complete and report issued | 2 Audit complete and reports issued | ||||||
Other Education | |||||||||
Parent Pay | M | Audit Complete & Report Issued | |||||||
Youth Service | H | Audit in planning stage | Audit in progress | Audit complete and draft report issued | |||||
Education Grants | M | 1 grant audited | 3 grants audited and reports issued | 3 grants audited | |||||
Leisure, Culture and Lifelong | |||||||||
None | |||||||||
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Appendix 2
Finance and Corporate Services | |||||||||
Revenue Collection | |||||||||
Council Tax | L | CRSA* Issued | * Controlled Risk Self- Assessm | ||||||
NNDR | L | CRSA Issued | |||||||
Sundry Debtors | L | CRSA Issued | |||||||
Cash Collection | H | Unannounced visits undertaken | Unannounced visits undertaken | Unannounced visits undertaken | Unannounced visits undertaken | ||||
BACS | H | Advice provided where requested. | |||||||
Benefits Administration | |||||||||
Housing Benefits | L | CRSA Issued | |||||||
Exchequer | |||||||||
Payroll | M | Work being undertaken by WAO | |||||||
Creditor Payments | L | Audit in progress | Findings to be included in CRSA report. | ||||||
Creditor (FIS Checks) | H | Regular monthly checks undertaken | Regular monthly checks undertaken | Regular monthly checks undertaken | Regular monthly checks undertaken | ||||
Off Payroll Payments (IR 35) | H | Advice provided where requested. | |||||||
Accountancy | |||||||||
Treasury Management | M | Wales Audit Office confirmed they are undertaking an audit in this quarter. Therefore not to be done by Internal Audit to avoid duplication of work. WAO confirmed they will share findings with IA. | |||||||
Bank Reconciliation | M | Audit complete and draft report issued | Audit complete and final report issued | ||||||
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Appendix 2
VAT | M | Due to number of staff changes this has been postponed. The responsible Chief Accountant confirmed from April the officers to be dealing with VAT in the future will commence training and therefore in early 2020 there will be sufficient data available to be tested from work undertaken as a result of the changes changes. | |||||||
General | |||||||||
Travel & Subsistence | M | Audit in progress | Audit Complete & report issued | ||||||
Legal Services | |||||||||
Margam Crematorium | L | Audit complete and draft report issued | Audit complete and final report issued | ||||||
Other | |||||||||
Contingency | N/A | ||||||||
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Appendix 2
Chief Executive's | |||||||||
Members' Declarations of Interest | M | Audit in progress | Audit Complete & report issued | ||||||
Disciplinary Processess | M | ||||||||
Social Services, Health and Housing | |||||||||
Housing General Fund: | |||||||||
None | |||||||||
Social Services | |||||||||
Hillside Secure Unit | M | Audit in planning stage | Audit complete and draft report issued. | ||||||
Grant Certification | M | 1 grant audited and report issued during the year. | |||||||
Abbey View Complex Needs Service | M | Audit in planning stage | Audit complete and final report issued | ||||||
Complaints | M | Audit in planning stage | |||||||
Safeguarding - Children & Adult Services | H | 2 DBS reviews undertaken and reports issued. | |||||||
To be agreed with Chief Officers | |||||||||
Assistive Technology | M | Audit complete & report issued | |||||||
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Appendix 2
Environment | |||||||||
Stores/Equipment attendance at stock takes | H | Attendance at year end stock take undertaken | |||||||
Stores processes | H | ||||||||
On call procedures | M | Audit in planning stage | Audit complete and draft report issued | ||||||
Tregelles Court Workshop | M | ||||||||
Cash/Income Collection | M | Audit in progress | No issues identified. | ||||||
Car Parking | M | Audit complete and draft report issued | Audit complete and final report issued | ||||||
Cemeteries | M | Audt in plannning stage | Audit in progress | Audit complete and draft report issued | |||||
Cross Directorate | |||||||||
Special Investigations | N/A | 3 in progress | 4 in progress | 7 in progress | 3 in progress | ||||
Advice & Guidance Requests | N/A | Ongoing | Ongoing | Ongoing | Ongoing | ||||
Corporate Governance Arrangements | N/A | ||||||||
I.T. Audit | N/A | ||||||||
Contract Audit | N/A | 3 final accounts audited | |||||||
Officer Declarations | M | Audit in progress | Audit complete and final report issued | ||||||
Xxxxx Cash | M | Audit in planning stage | Audit ongoing | ||||||
Risk Registers | M | ||||||||
DBS Checks | H | Audit in planning stage | Audit complete and final report issued | 2 reports issued | |||||
Purchasing Cards | H | Audit in planning stage | Audit complete and report issued | ||||||
Travel & Subsistence | M | Audit in progress | Audit Complete & report issued | ||||||
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Appendix 2
Other Commitments | |||||||||
Banking Administrator | N/A | Ongoing | Ongoing | Ongoing | Ongoing | ||||
Attendance at working parties | N/A | Ongoing | Ongoing | Ongoing | Ongoing | ||||
Servicing Audit Committee | N/A | Ongoing | Ongoing | Ongoing | Ongoing | ||||
Vision Impaired West Glamorgan | L | Audit complete and report issued | |||||||
SWTRA | N/A | ||||||||
FOI Requests | N/A | All which have been received have been anwered | All which have been received have been answered | All which have been received have been actioned | All which have been received have been actioned | ||||
Staff association/lottery | N/A | Ongoing advice being given | Ongoing advice being given | Ongoing advice being given | |||||
National Fraud Iniaitive | N/A | All data downloaded from internal systems and uploaded to Cabinet Office | Review of matches in early stages | ||||||
Contingency | N/A | School meal income audit complete and report issued. Settlement Agreements audit complete and report issued. | Members' Declarations of Interest, audit complete and report issued |
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Appendix 2
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Appendix 2
ent |
Neath Port Talbot County Borough Council
Audit Committee – Draft Annual Report 2017-2018
Introduction
This report summarises the work undertaken by the Audit Committee of Neath Port Talbot County Borough Council throughout the 2017-2018 Civic Year. It is the first such report to be produced by the Committee, and its publication is an attempt to provide an element of good practice for members in addition to the production of an appropriate yardstick with which to approach the generation of future reports.
Membership
The Members of the Audit Committee were:
Councillors X.X.Xxxxxx, X.Xxxxxxx, X.X.Xxxxxxxxx, X.X.Xxxxx, X.Xxxxxx, X.X.Xxxxxxxx, X.X.Xxxxxxxx, X.X.Xxxxxx, X. Xxxxxx and X.X.Xxxx.
Voting Lay Member: X.Xxxxxxx.
The Committee Chair was Cllr. Dr. Xxx Xxxxxx, and the Vice Chair was Cllr. Xxxxx Xxxxxxx.
Work Programme
The Committee’s forward work programme is agreed by members on a rolling basis, although this Committee’s work is often driven by statutory requirements or by the dynamic necessities of particular circumstances as they arise.
The Committee met four times formally during the year, and there were additional training opportunities provided for members outside of these formal meetings.
Specific Duties and Tasks Undertaken by the Committee
The Committee approved the Council’s Statement of Accounts including the Annual Governance Statement.
The Committee approved the Council’s Internal Audit Plan for the year.
The Committee continually monitored Internal Audit performance against the plan. The Committee monitored External Audit Performance.
The Council participated in the external review of Internal Audit to ensure compliance with the Public Sector Internal Audit Standards (PSIAS); the Committee oversaw this activity, whilst the Chair actively participated in an interview with the external review officer.
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The Committee received the external assessors’ report in relation to the external review, and the accompanying action plan on the Council’s compliance with PSIAS; it was pleasing to record that Neath Port Talbot Council was awarded the highest rating possible.
The Committee approved a revised Internal Audit Charter.
The Committee received regular details of all investigations relating to theft, fraud and malpractice.
The Committee received Treasury Management Progress Reports.
The Committee received training in key aspects of the Committee’s duties and work requirements. The key items covered during 2017-2018 were the Role of Internal Audit and the Role of the Audit Committee. The Committee Chair has also attended training in relation to chairing committees.
The Chair and Vice Chair of the Committee are offered pre-committee briefings prior to each meeting in the cycle, which have been attended.
Cllr. Dr. Xxx Xxxxxx, Chair November 2018
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