Minute of Previous Meeting of the Audit and Risk Committee of 11 December 2023 for Approval
Perth and Kinross Council · 25 March 2024
Back to Audit and Risk Committee — 25 March 2024 and its agenda
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AUDIT AND RISK COMMITTEE Minute of Special Meeting of the Audit and Risk Committee held hybrid on Monday 11 December 2023 at 11.30am. Present: Councillors D Illingworth, L Barrett, A Chan, K Harvey, I MacPherson, G Stewart, and C Stewart. In Attendance: C Mailer, Director (Strategy, People and Resources); L Simpson, J Clark, S MacKenzie, S Walker, K Jamangile, K Molley, A Brown, and R Ramsay (Strategy, People and Resources); F Crofts and L Potter (Communities); and C Palmer (Education and Children’s Services) Also in Attendance: M Bruce and B Howarth, Audit Scotland Councillor D Illingworth, Convener, Presiding. 1. WELCOME AND APOLOGIES/SUBSTITUTIONS The Convener welcomed everyone to the meeting. 2. DECLARATIONS OF INTEREST There were no declarations of interest made in terms of the Councillors’ Code of Conduct. 3. MINUTE OF SPECIAL MEETING OF THE AUDIT AND RISK COMMITTEE OF 30 OCTOBER 2023 FOR APPROVAL The minute of special meeting of the Audit and Risk Committee of 30 October 2023 was submitted and approved as a correct record. 4. OUTSTANDING BUSINESS STATEMENT Resolved: The contents of the Outstanding Business Statement, be noted. 5. DRAFT AUDITED 2022/23 ACCOUNTS AND DRAFT ANNUAL AUDIT REPORT TO THE MEMBERS OF PERTH AND KINROSS COUNCIL AND THE CONTROLLER OF AUDIT FOR THE YEAR ENDED 31 MARCH 2023 There was submitted a report by Head of Finance (23/363) presenting the Council’s draft Audited 2022/23 Annual Accounts in accordance with the Local Authority Accounts (Scotland) Regulations 2014 and draft 2022/23 Annual Audit Report. In response to a question from Councillor C Stewart, B Howarth, Audit Scotland, advised that the Local Government Financial Overview detailing the relative borrowing levels across Local Authorities would be shared with members when made available. B Howarth added that house building across Scottish Councils
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had increased over the last 5 years which would suggest an increase in associated debt. In response to a question from Councillor K Harvey regarding resourcing issues, B Howarth confirmed that concerns over staffing resources had been an increasing issue in Scotland across all public bodies. B Howarth advised that it had been difficult over recent years to recruit agency and temporary staff to supplement peak periods over the Summer and the graduate programme had reduced to a quarter of the number of applicants. However, B Howarth added that Audit Scotland recruit up to 15 trainees a year to help increase the number of qualified staff into the organisation and ongoing work continues to look at ways to increase recruitment into the Audit sector. In response to a question from Councillor I MacPherson regarding unusable reserves, S MacKenzie confirmed that those reserves such as the Pension Fund and the Capital Adjustment Account are accounting and technical adjustments. Councillor D Illingworth queried if the recommendations detailed in the audit would have a material impact on the daily running of the Council. S Mackenzie advised that work would be undertaken with the Auditors regarding valuations going forward as part of the presentation of the accounts rather than have effect on the day-to-day decision making in terms of the allocation of resources. S Mackenzie confirmed that from the accounts there did not seem to be a significant impact on the cash position as the uncommitted reserves had not changed. Members thanked S MacKenzie, S Walker and the Finance Team for their work in producing the accounts and J Clark and her team for completing the audit. Members thanked M Bruce and B Howarth, Audit Scotland, for their informative report. Resolved: (i) The Audited 2022/23 Annual Accounts detailed in Appendix 1 of Report 23/363, be approved. (ii) The Leader of the Council, the Chief Executive and the Head of Finance be authorised to sign the Audited 2022/23 Annual Accounts and the Head of Finance be authorised to sign the Letter of Representation. (iii) The contents of Audit Scotland’s Draft 2022/23 Annual Audit Report detailed in section 6.3 of Report 23/363, be noted. THE VICE-CONVENER LED ON THE FOLLOWING ITEMS. 6. INTERNAL AUDIT FOLLOW UP There was submitted a report by Chief Internal Auditor (23/364) presenting a current summary of Internal Audit’s ‘follow up’ work relating to actions due for completion up to October 2023. Resolved: The current position in respect of the agreed actions arising from Internal Audit’s work, be noted.
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7. INTERNAL AUDIT UPDATE There was submitted a report by Chief Internal Auditor (23/365) presenting a summary of Internal Audit’s work undertaken as part of the Internal Audit Plans for 2022/23 and 2023/24. In response to a question from Councillor C Stewart regarding the further areas of unplanned investigatory work which had arisen during the audit year, J Clark confirmed that the work would vary on a case-by-case basis but would usually arise form contact with Services which may be of a whistleblowing nature or areas for improvement which require further investigations. Resolved: The progress with Internal Audit activity, be noted. THE CONVENER LED ON THE FOLLOWING ITEMS. 8. BEST VALUE THEMATIC REVIEW There was a report submitted (23/366) setting out the findings and two recommendations for improvement contained in the Perth and Kinross Council’s Best Value Thematic Review Report 2022/23. In response to a question from Councillor L Barrett regarding the level of concern over budget setting for 2024/25 and the indicative budgets for future years, B Howarth confirmed that Perth and Kinross Council should be fairly concerned. Perth and Kinross Council face similar concerns to other Local Authorities in trying to find a solution to a funding gap. B Howarth added that many Councils increased their reserves during the pandemic because of Government funding and as that started to reduce there had been a reduction in general funds. B Howarth added there are a substantial planned use of reserves going forward compared to what sits in usable reserves. B Howarth confirmed that Audit Scotland would monitor the outturn in the current year, the budget planning process, and the outcome of the budget for next year. In response to a question from Councillor L Barrett regarding the alignment of the LOIP objectives with the Corporate Plan Objectives, C Mailer advised the LOIP had been created to tackle inequalities and the Corporate Plan to focus on the wider Council priorities. C Mailer added that work had been ongoing with the Community Planning Partnership to review progress against the LOIP, and C Mailer confirmed that the area would continue to be monitored. In response to a further question from Councillor L Barrett regarding if there had been a focus on enhancing the explicitness of Improvemnet Plans, C Mailer confirmed that work had been underway following a previous action from the Scrutiny and Performance Committee for better reporting in terms of where the Council hadn’t performed as well and a clearer link to what the improvement actions are. In response to a question from the Convener regarding the Local Government Benchmarking Framework and the weighting of the 62 values, B Howarth advised that there are two aspects to the overall assessment. He added that when using the wider tool (LGBF) and ranking the Council against those measures then it does treat
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the non-cost measures equally. B Howarth confirmed that the Auditors also assess what the Council priorities are and assess how the Council are doing against its own priorities. B Howarth confirmed it would be expected for the local priority setting and performance monitoring in the Council to reflect the difference of what LGBF says generally and would be deemed important to the Council. In response to a question from Councillor C Stewart regarding the Council reviewing and updating their approach to community engagement and empowerment as part of our Transformation and Change Programme and the ongoing audit of Community Engagement, J Clark advised that the audit being undertaken on Community Engagement would reflect a lot of the changing landscape and would be reported back to the Audit and Risk Committee. In resposne to a question from Councillor C Stewart regarding the figures of participatory budgeting, B Howarth confirmed that the figures and calculations would be checked and reported back to members. Resolved: (i) The contents of Audit Scotland’s Best Value Thematic Review Report, be noted. (ii) Updates on progress against improvements will be reported through the Council’s Annual Performance Report, be noted. IT WAS AGREED THAT THE PUBLIC AND PRESS SHOULD BE EXCLUDED DURING CONSIDERATION OF THE FOLLOWING ITEMS IN ORDER TO AVOID THE DISCLOSURE OF INFORMATION WHICH IS EXEMPT IN TERMS OF SCHEDULE 7A TO THE LOCAL GOVERNMENT (SCOTLAND) ACT 1973 AND S30 OF THE FREEDOM OF INFORMATION (SCOTLAND) ACT 2002. P1. INTERNAL AUDIT REPORT – INFORMATION SECURITY The was a report submitted (23/367) detailing an audit undertaken to evaluate the adequacy and effectiveness of controls over information assets and PKC compliance with Information Security Standards. Resolved: The contents of report 23/397, be noted.