Agenda and minutes

There were no disclosable pecuniary interests.

To agree the minutes of the meeting held on 15^th March 2021

The minutes of the meeting held on 28^th June 2021 were agreed as a true record. There were no matters arising.

Report of the Director of Law and Governance

The Audit and Procurement Committee considered a report of the Director of Law and Governance which identified issues on which a further report / information had been requested or was outstanding so that Members were aware of them and could manage their progress.

Appendix 1 to the report provided details of issues where a report back had been requested to a meeting, along with the anticipate date for consideration of the Matter. In respect of item 2 relating to ‘Update report on the key issues highlighted in the Audit Findings Report be submitted to a future meeting of the Committee’, and item 3 relating to ‘further detail of planned IT audit work for 2021/22 be submitted to the Committee when the Annual Audit Plan is submitted’, the Committee were advised that these matters would be dealt with in reports being considered at this meeting.

Appendix 2 of the report provided details of items where information had been requested outside formal meetings, along with the date when this had been completed. 

RESOLVED that the Audit and Procurement Committee notes the Outstanding Issues report.

Report of the Director of Law and Governance

The Audit and Procurement Committee considered a report of the Director of Law and Governance which set out the Work Programme of scheduled issues to be considered by the Committee during the Municipal Year 2021/2022.

The Committee noted that the items headed ‘Audit Findings Report 2019-20 (Grant Thornton)’ and ‘Draft Statement of Accounts 2020-2021’ had been re-scheduled for consideration from the 26^th July meeting to 27th September 2021 meeting and the Work Programme would be revised accordingly.

RESOLVED that the Audit and Procurement Committee notes the revised Work Programme for 2021/2022.

Report of the Director of Finance

The Audit and Procurement Committee considered a report of the Director of Finance that provided an update on the delayed 2019-20 accounts closedown, including responses to recommendations from the External Auditors and matters that had arisen since the last update to Committee. It was noted that Grant Thornton would provide their own official update on any outstanding issues at the conclusion of the audit. An appendix to the report provided a summary of the issues resolved and were in-Progress.

The local government accounts reporting deadlines for 2019/20 were extended due to the Covid pandemic and following the passing of the Accounts and Audit (Coronavirus) (Amendment) Regulations 2020. The revised arrangements set out were for councils to publish their draft accounts by 31st August 2020 and to have their final Statement of Accounts audited and published by 30th November 2020. The Council published its draft accounts on 26th June 2020 which provided a five-month window in which to have the accounts audited and submitted to the Audit and Procurement Committee for final approval. Grant Thornton’s draft Audit Findings Report (AFR) was submitted to Committee on 30th November 2020 and highlighted a higher than normal number of issues and adjustments for the Council’s accounts, the large majority of which had been accepted by the Council. The Committee resolved to receive an update report on the key issues highlighted in the report to a future meeting.

The Committee was also informed that it wasn’t possible for the Council’s accounts to be signed off at that time. The external auditors reported a small number of issues remained outstanding which had prevented the final audit opinion from being issued. The AFR stated that the auditor’s work was “substantially complete” and there were no matters which they were of aware of that would require modification of their audit opinion or material changes to the financial statements. The outstanding matters outlined were receipt of assurance confirmations from component auditors of Tom White Waste Limited and Coombe Abbey Park Limited, receipt of the management representation letter and a review of the final set of financial statements.

Subsequent external audit activity undertaken to enable the Council’s accounting statement to be finalised identified further issues that had been the subject of significant work since November. This had caused further delay to completion of the 2019/20 accounts and had had an impact on work required for the 2020/21 accounts. This report provided an update on this position.

The report set out the Council’s response to the Audit Findings Report brought to the 30th November 2020 meeting and outlined the auditor queries that had been the subject of additional work since that date.

The responses fell into the following categories:

a)  Matters where Grant Thornton and the Council had agreed accounting adjustments (Items 4, 5 and 6) – all these would be incorporated into the final accounting statement.

b)  Areas where further information was outstanding (Items 1 and 2) – all outstanding information had been provided.

c)  Subjects where the  ...  view the full minutes text for item 5.

Report of the Director of Finance

The Audit and Procurement Committee considered a report of the Director of Finance that summarised the Council’s Internal Audit activity for the period April 2020 to March 2021 against the agreed Audit Plan for 2020-2021 and the Public Sector Internal Audit Standards. The report also provided the Audit and Procurement Committee with the Chief Internal Auditor’s opinion on the overall adequacy and effectiveness of Coventry City Council's risk management, internal control and governance arrangements for the financial year 2020-2021. Appendices to the report provided: details of the Audits completed in 2020-2021; the Summary findings from key audit reports; and a Cyber / IT Security briefing note.

The Audit and Procurement Committee approved the Council's Internal Audit Plan for 2020-2021 at its meeting on the 30th November 2020.  During the last financial year, the Committee received a progress report summarising completed audit activity in January 2021. This report detailed the performance of the Internal Audit Service against the Plan for 2020-2021, which was presented in order for the Audit and Procurement Committee to discharge its responsibility, as reflected in its term of reference - “To consider the Head of Internal Audit's Annual Report and Opinion, and a summary of internal audit activities (actual and proposed) and the level of assurance given within the Annual Governance Statement incorporated in the Annual Accounts”.

The report was set out in the following sections:

•  Assessment of the performance of the Internal Audit Service against its key targets.

•  The results of the Quality Assurance and Improvement Programme and the Chief Internal Auditor’s statement on conformance with the Public Sector internal Audit Standards.

•  A summary of the audit activity in 2020-21 and highlighting issues that have not been reported to the Audit and Procurement Committee previously and are relevant to the overall opinion.

•  The Chief Internal Auditor’s opinion on the overall adequacy and effectiveness of Coventry City Council's risk management, internal control and governance arrangements.

The key target for the Internal Audit Service was to complete 90% of its agreed work plan by the 31st March 2021. Whilst the plan was originally developed on the basis of an estimate of 550 available audit days, this was subsequently slightly amended to 500 days following a reassessment of available resources in quarter four, and reflected the fact that establishing an accurate resource position was more difficult when changes in staffing occurred during the year. As a result, the performance of the Service had been assessed against the revised audit plan of 500 days. The service delivered 91% of the plan.

As a result of the pandemic and the need to prioritise work which had been required to support the Council’s response to Covid-19, the Service had been unable to progress the improvement actions from the 2019-2020 improvement plan. These actions had therefore been carried forward to this year’s plan, along with new actions which had been identified during 2020-2021. Forthcoming progress against these actions would be included in future reports to the Committee. 

Details of  ...  view the full minutes text for item 6.

Report of the Director of Finance

The Audit and Procurement Committee considered a report of the Director of Finance that submitted the draft Internal Audit Plan for 2021-22, attached as an appendix to the report, to the Audit and Procurement Committee to allow the Committee to express its views on the extent and nature of the planned coverage.

In terms of proposed audit activities, the draft Internal Audit Plan documented the outcome of the audit planning process for 2021-2022. The report set out the mechanism for allowing the Audit and Procurement Committee to discharge its responsibility but also enabled them, as a key stakeholder of the Internal Audit Service, to comment on the content and scope of the proposed Internal Audit Plan.

The priorities of internal audit activity were determined through the development of an annual risk- based Internal Audit Plan. The report documented the planning process and identified the outcome of the process, namely the draft Internal Audit Plan for 2021-2022.

Key points to note from the results of the initial assessment of priorities included:

 i.  The draft plan was based on an allocation of priorities against the current level of audit resources available. The resource requirements had been assessed taking into account the requirement to produce an annual audit opinion and the Council’s overall assurance framework. Due to current vacancies in the Service, it was difficult at this stage to precisely define the overall level of resources that would be available for 2021-2022, however a current estimate had been made that there would be 650 days for audit and corporate fraud work, compared to 500 days in 2020-21. In the event that there was a significant change in the available audit days over the course of the year, flexibility would be retained in how these resources were utilised. Updates on the resource position and any resulting change to the audit plan would be provided in future reports to the Committee. 

ii.  In focusing the available resources to develop a plan which met the needs of the Council, the following approach had been taken:

•  A documented risk assessment has been undertaken, which considered the Council’s corporate risk register and key priorities as identified from consultation with Directors and other senior managers, alongside other priorities linked to areas of risk which have been highlighted by the Chief Internal Auditor. Where appropriate, an assessed risk level had been made. Where stated as medium rather than high, this generally reflected findings of previous audit reviews in the respective area / an initial assessment of the control environment.

•  A risk-based approach to the audit of schools, rather than a cyclical programme of audit work.

•  A flexible and responsive approach to issues highlighted by senior officers with dialogue to ensure resources were directed in accordance with their priorities.

•  A flexible approach to corporate fraud investigations, offering expert advice and support rather than undertaking the Investigating Officer role. 

•  The need to continue to allocate some resource to supporting the administration and assurance requirements linked to the  ...  view the full minutes text for item 7.

There were no other items of public business.