To receive any apologies for absence.

There were no apologies for absence received.

To receive any declarations of interest.

There were no declarations of interest received.

To consider the minutes of the meeting held on 9^th November 2020.

RESOLVED UNANIMOUSLY: That the minutes of the meeting held on 9^th November 2020 were approved as an accurate record.

Councillor L Jones asked if there was an update on some of the comments that had been raised at the last meeting, around benchmarking, the financial monitoring figure being checked and the level of debt from Berkshire County Council.

Adele Taylor, Director of Resources, said that benchmarks would be reviewed and updated next year. The financial monitoring figure would be updated on reports going forward and it was confirmed that the debt from Berkshire County Council was the full amount.

To consider the audited accounts from the last financial year.

Andrew Vallance, Head of Finance, said that the draft accounts had been scrutinised by the Corporate Overview and Scrutiny Panel in July 2020. He apologised for the delay but there had been a number of objections to the accounts, the pandemic had caused some delays in the process and there had also been sickness amongst the auditors. There were some minor changes to the draft version that had been presented to Corporate Overview and Scrutiny. A paragraph had been added to the narrative report of the RBWM Property Company for materiality reasons. Two assets had been reclassified, from land and buildings to the surplus asset category because they were in the process of being sold and both assets had now been sold. Covid-19 grants had been moved to resources while some amendments had been made to officer remuneration figures as some of these figures were missing in the draft accounts.

On the pension accounts, there was an adjustment for the reduced value of net assets due to Covid and the timing of the valuation of assets of £31.5 million in the pension accounts, most of which has been charged to other bodies. The RBWM share of this was around £3 million. Andrew Vallance was pleased to confirm that there were no unadjusted misstatements in the accounts.

Mr Andrew Hill had registered to speak at the meeting as a member of the public. He said that Deloitte had not received the accounting papers on critical estimates and judgements when required and the accounts until 27^th January 2021, and therefore believed that it was premature to recommend that the accounts were delegated to be signed off by the Chairman of the Audit and Governance Committee once they were complete. Mr Hill noted that the auditors opinion was not published by 30^th November 2020. There was £34 million worth of overstatements in the pension fund accounts. Mr Hill had asked Deloitte at the time if this was materially significant and if it should therefore be reported to the pension regulator. This year, there was £30 million worth of misstatements where old valuations had been used. This had resulted in over £100 million of misstatements over the past two years. Mr Hill asked Deloitte if they considered this misstatement to be materially significant and reportable to the pensions regulator. There was an overnight loan made from the pension fund to RBWM in June 2019 of around £1 million which officers said they approved but there was no formal evidence of this transaction being made. Mr Hill asked why this transaction was made and the reasons why it was approved by the pension fund.

Jonathan Gooding, Deloitte, said that the audit was still in progress but a lot of work had been done since the last meeting. The report set out the work that had been carried out in key areas and also identified significant audit risks. The impact that Covid-19 had on the audit was also considered and Deloitte had ensured that  ...  view the full minutes text for item 21.

To consider the external audit.

This item was considered as part of the Annual Statement of Accounts.

To consider and approve the plan.

Catherine Hickman, Lead Specialist for Audit and Investigation, explained that the 2020/21 financial year had been a period of uncertainty where councils had needed to respond to the Covid-19 pandemic and their changing risk profiles. There had been a significant impact on the way officers work with home working and more reliance placed on information technology, as well as there being changes to systems and processes in response to these changes. In addition, there had been the extent to which the internal audit team had been able to deliver planned activities due to the availability of auditees as they had responded to effects of pandemic within their services.

As such, a degree of flexibility had needed to be built into the current year’s audit and investigation plan. In previous years, an annual plan would be prepared in February for the forthcoming financial year which would have been brought to the Committee for consideration. After discussions with the Director of Resources and Head of Finance, it was agreed that a one-year plan was not practical due to the ongoing uncertainty of the pandemic. Instead for 2021/22, the audit and investigation plan would be prepared on a quarterly basis so that the team could be flexible, forward thinking and responsive to future uncertainties and events.

The 2021/22 internal audit strategy sets out the role, scope and responsibilities of internal audit, the audit planning process, resourcing and reporting, as well as internal audit’s requirements to comply with its service and professional standards, the ‘Public Sector Internal Audit Standards’. The main change to the strategy from last year was the reference to the change from an annual to quarterly planning and reporting process. Going forward, the Committee would be informed of audits undertaken in the previous quarter, along with work priorities for the audit team for the following quarter.

The second part of the report was the 2021/22 quarter one work programme. A similar process had been used to prepare the work programme as in previous years in terms of aligning audit activity with the Council’s Strategic/Operational Risks and Annual Governance Statement; knowledge of impact of pandemic on organisation; systems/processes affected by Covid-19; and external guidance. The subject areas set out in Appendix A(I) had also been agreed on consultation with the Director of Resources and the Head of Finance.

The audit on waste management had been suggested by the Communities Overview and Scrutiny Panel as it was a key strategic risk to the council. A piece of work had been requested by council management on direct payments to see if further work was needed and to seek assurance on system controls.

Mr Hill had registered to speak on the item as a member of the public. He said that in the paper it was stated that internal audit opinion must conclude that the organisations framework of governance was acceptable. Mr Hill asked if the internal audit team felt that they had enough resources to pick up some of the things that the external  ...  view the full minutes text for item 23.

To note and approve the proposed amendments to the policies listed in the report.

Catherine Hickman explained that the council already had a number of anti-fraud and corruption policies in place but it was good corporate governance for these to be refreshed on a regular basis to ensure that they were current and incorporated the latest legislation. In addition, it was a key responsibility of the Committee to oversee the council’s anti-fraud and anti-corruption arrangements. There were a total of six policies and the changes that had been proposed were mostly administrative in nature. The Committee was being asked to note and approve the changes, while it was also important for councillors and officers to be aware of the policies that were in place. Training would also take place to raise awareness with officers and Members, including briefings in the ‘Borough Bulletin’ and in Member updates. Catherine Hickman clarified for the Committee that in the whistleblowing policy, there was a charity mentioned called ‘Public Concern at Work’. This was an organisation that employees could go to if they felt they had exhausted all avenues to raise their concerns within the council. The organisation had recently changed its name to ‘Prevent’ and this had been amended in the policy. Once the policies had been approved, they would be published on the RBWM website.

The Chairman asked how often the policies were refreshed.

Catherine Hickman said that they were originally reviewed annually, but it had previously been decided to refresh them only when significant changes needed to be made.

Mr Hill had registered to speak on the item. He had noted that the contact details in the whistleblowing policy were not correct on the previous policy for the external auditors and the impact that this could have had on the CIPFA report. Mr Hill thanked officers for ensuring that the policies were carefully reviewed going forward.

Adele Taylor made a reassurance that once the error had been noticed it was changed on the council’s internal systems. There was communication between Deloitte and KMPG, the previous auditors, to make sure that any queries were dealt with.

Councillor Sharpe said that these policies were very important and that it was good to see that they had been refreshed. He asked how staff were informed of these policies along with available training which could help them.

Catherine Hickman said that awareness was essential and once the policies had been approved, they would be published on the internal staff intranet. Catherine Hickman said that she would discuss how best to deliver the training with the Director of Resources and the Head of Finance.

Adele Taylor said that these policies were something that she took very seriously, particularly in areas where there was a higher risk of fraud.

A named vote was taken on the recommendation listed in the report.

RESOLVED UNANIMOUSLY: That the Audit and Governance Committee noted the contents of the report and:

i)             Agreed the proposed amendments to the Anti-Fraud and Anti-Corruption Policy, Anti Money Laundering Policy, Prosecutions and Sanctions Policy, Anti Bribery Policy, the Acquisition of Communications  ...  view the full minutes text for item 24.

To consider the Committee’s work programme for the remainder of the Municipal year.

Adele Taylor confirmed that all of the items listed for the next meeting in May 2021 were correct, the internal audit annual report in the suggestion box was a duplication and would be removed. The audit letter from the external auditors would also come to the next meeting and would be added to the Work Programme.