Audit and Governance Committee Minutes

Audit and Governance Committee Minutes

Date:
Thursday 13 February 2014
Time:
10:00 a.m.
Place:
Mandela Room, Town Hall, Middlesbrough
 

Attendance Details

Present:
Junier, (Chair), C Hobson, Loughborough, McPartland, Taylor, I Hope (Independent Member)
Officers:
C Bates, P Clark, G Field, H Fowler, S Harker, I Johnson and M Padfield
Apologies for absence:
were submitted on behalf of Councillors Hudson and P Khan
Declarations of interest:

There were no Declarations of Interest at this point in the meeting.

Item Number Item/Resolution
PUBLIC
13/16 MINUTES - AUDIT AND GOVERNANCE COMMITTEE - 5 DECEMBER 2013

The minutes of the meeting of the Audit and Governance Committee held on 5 December 2013 were taken as read and approved as a correct record.

13/17 FLEET MANAGEMENT

A copy of the Internal Audit Report on Fleet Management issued on 29 July 2013 had been circulated to Members of the Audit and Governance Committee at the last meeting. In view of the Auditor’s recommendations and the limited assurance given, representatives of the service area were present at the meeting to provide assurance that the Auditor’s recommendations had been implemented.

 

Appendix 1 to the Final Internal Audit Report on Fleet Management detailed the findings of the audit, together with the associated risk and remedial action required. The Environment Services Manager referred to each recommendation and provided an update as to the action taken to address the issues and risks identified.

 

There was one Priority One recommendation which related to servicing of fleet vehicles. At the time of the audit, the report indicated that fifteen individual vehicle services remained outstanding, despite regular reminders from fleet management. The Environment Services Manager confirmed every vehicle had an up to date MOT. Where vehicle services might not have been completed exactly on time, it was generally because they were seasonal vehicles. For example, a grass cutter might have been due for service on the first of the month, but the service might have been moved back a couple of weeks during the winter months because the vehicle was off the road anyway. It was confirmed that no vehicles were permitted to operate without an up-to-date service record.

 

In relation to the management of contracts, Fleet Management now had a contract with the ESPO - Eastern Shires Purchasing Organisation. It was confirmed that new controls were in place in relation to the purchase of second hand vehicles, income from vehicles sold at auction and from MOTs carried out at the depot. The record-keeping system, Tranman, had been reviewed and all personnel and service records were up-to-date. 

 

During the next financial year there would be no vehicles on long term hire and guidance would be issued as to when it was appropriate to hire a vehicle. A Transport Review was underway and the future use of purchase cards would enable officers to use a range of service providers and obtain best value for the Council. 

 

The Council currently offered an MOT test for £35 and it was queried how well this service was promoted. It was clarified that the service was advertised to Council staff via the intranet.  Whilst it was acknowledged that the service could be promoted more widely, the Council needed to be mindful of the service's capacity to take on this additional work.

 

With regard to future business planning and key performance indicators, as part of the Transport Review, the Council was examining everything the service did in order to ascertain whether things could be done more efficiently to bring unit costs down, whilst increasing the level of quality. An example was given of an analysis of call outs for breakdowns which identified that 95% were for flat batteries. All operators had now been issued with battery chargers and it was calculated that this would save at least 150 hours.

 

AGREED that the information provided be received and noted.
 

13/18 INTERNAL AUDIT - COUNTER FRAUD REPORT

The Audit Manager presented a report to update Members on the impact of fraud on the UK by summarising the main findings from the Audit Commission’s Annual Report on Protecting the Public Purse (PPP) 2013. The purpose of the report was to consider the potential impact of fraud on the Council and Middlesbrough residents, the key risks to be managed, the existing counter fraud arrangements in place and further action that could be taken to safeguard the Council from fraud and loss.

 

Fraud cost the UK public sector more than £20 billion per annum and local government more than £2 billion. Each year, the Audit Commission requested local government bodies to submit data relating to detected frauds and used this information to help formulate its annual PPP Report. A summary of the key findings and national key fraud risks identified by PPP 2013 were outlined in paragraphs 9 and 10 of the submitted report.

 

The PPP 2013 report stated that Councillors had a crucial role to play in supporting the Council’s approach to prevention and detection of fraud and recommended that a Councillor with portfolio responsibility for fighting fraud should be appointed.

 

Middlesbrough Council had a number of counter fraud arrangements in place including Whistleblowing, Anti-Fraud and Corruption, Anti-Money Laundering and Prosecution Policies, procedures for declaring gifts, hospitality and interests, internal audit, the Benefit Fraud Team, Data matching, and information sharing with other local authorities and bodies and the National Action Against Fraud Network (NAFN).

 

Details of the work of the Benefit Fraud Team were included in the submitted report and it was highlighted that the number of referrals had reduced after steadily rising for a number of years. The Team were targeting resources and focussing on areas where successful prosecutions had been made. In 2012/2013, as a consequence of fraud investigations, a total of £460,290 in overpaid housing and council tax benefits was discovered. Of the 192 cases where benefit was found to be incorrect as the result of an investigation, formal action was taken in 102 instances. In addition to prosecutions, there were 29 cautions and 27 Administration Penalties offered and accepted, as an alternative to criminal proceedings.

 

Tees Valley Audit and Assurance Services (TVAAS) investigated suspected internal fraudulent activity and reviewed anti-fraud controls whilst carrying out audits across the Council. An Annual Risk Assessment was completed using the national fraud risks. TVAAS considered the risk to Middlesbrough as a whole and tried to identify any controls to include in the following year’s Audit Plan.

 

The Audit Manager clarified that the number of days that TVAAS was engaged by Middlesbrough was determined by the Section 151 Officer and the Service itself could not employ more resources if a large investigation was required. TVAAS could however, highlight particular risk areas and suggest that audit days were allocated to it within the Plan.

 

TVAAS also shared information with colleagues at other local authorities and discussed any particular fraud risks that were coming up. It was suggested that it might be beneficial from an audit perspective to run an awareness campaign about the risk of fraud throughout the Council. A summary of other areas where additional action could be taken to strengthen the Council’s counter fraud environment was included at paragraph 24 of the submitted report.

 

AGREED as follows that:

1.    the information provided be received and noted.
2.    an appropriate officer be invited to the next meeting to provide an update on whether fraud was increasing, decreasing or static within the Council and what measures and resources were being applied to prevention and recovery.

13/19 ANY OTHER URGENT ITEMS WHICH IN THE OPINION OF THE CHAIR, MAY BE CONSIDERED.

Training

 

The Chair reminded Members that a joint training session with Members of Redcar and Cleveland Council's Audit and Governance Committee had been arranged for 2.00 pm on Wednesday 19 March 2014 at Eston CLC.  The training would include the role of internal audit, how it should interact with the Committee, and the new public sector internal auditing standards.  Members wishing to attend were asked to notify the Governance Officer.

 

Coroner's Service

 

The Chair informed the Committee that a qualified audit report had been issued recently in respect of the Coroner’s Service. This was due in part to the Coroner’s reluctance or inability to provide certain financial information in relation to long inquest fees that was requested by the Auditor. 

 

Reference was made to an investigation into the Coroner's Service which was completed by the Probation Service.  It was unclear whether the final report was a public document or not.

 

AGREED as follows that:

1.   that a position statement in relation to the Audit of the Coroner’s Service be presented to the next meeting of the Audit and Governance Committee.

2.   clarification would be sought as to whether a copy of the Probation Service's final report on the Coroner's Service could be made available to the Committee. 

 

Thanks

 

On behalf of the Committee, the Chair thanked the Senior Scrutiny Officer for his contributions to the Committee and wished him well for his forthcoming retirement.

13/20 EXCLUSION OF PRESS AND PUBLIC

ORDERED that the press and public be excluded from the meeting for the following items on the grounds that, if present, there would be disclosure to them of exempt information as defined in Paragraph 7 of Part 1 of Schedule 12A of the Local Government Act 1972 and that the public interest in maintaining the exemption outweighed the public interest in disclosing the information.

EXEMPT
13/21 INTERNAL AUDIT - COUNTER FRAUD REPORT - APPENDIX 1 - SUMMARY OF TVAAS INVESTIGATIONS (SINCE 2011)

AGREED that the Internal Audit - Counter Fraud Report - Appendix 1 - Summary of Tees Valley Audit Assurance Service Investigations (Since 2011) be received and noted.

Powered by E-GENDA from Associated Knowledge Systems Ltd