Audit Annual Report 24 25
Renfrewshire Council · 19 May 2025
Back to Audit, Risk and Scrutiny Board — 19 May 2025 and its agenda
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To: Audit, Risk & Scrutiny Board On: 19 May 2025 Report by: Director of Finance & Resources Heading: AUDIT, RISK & SCRUTINY BOARD ANNUAL REPORT 2024/25 1 Summary 1.1 It is important that the Audit, Risk & Scrutiny Board fully complies with best practice guidance on Audit Committees to ensure it can demonstrate its effectiveness as a scrutiny body as a foundation for sound corporate governance for the Council. 1.2 The Chartered Institute of Public Finance and Accountancy (CIPFA) issued an updated guidance note entitled Audit Committees Practical Guidance for Local Authorities and Police 2022 Edition, which incorporated CIPFA’s Position Statement: Audit Committees in Local Authorities and Police which included the production of an annual report on the performance of the Audit Board against its remit for submission to the Council. 1.3 The Annual Report for the Audit, Risk & Scrutiny Board for 2024/25 is attached as an Appendix to this report for consideration by Members and provides an overview of the Audit, Risk & Scrutiny Board’s activity during the period 1 April 2024 to 31 March 2025 and a summary of key developments. It sets out how the Board has fulfilled its remit and provides assurances to the Council. 1.4 Members are asked to note the Annual Report for 2024/25 and agree that the report be submitted to the next meeting of the Council, to be held on 26 June 2025, in line with best practice guidance. 2 Recommendations (a) That the Audit, Risk & Scrutiny Board Annual Report 2024/25 be noted; (b) Agree that the report should be submitted to the next meeting of the Council, to be held on 26 June 2025, in line with best practice guidance.
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Implications of the Report Financial – none HR & Organisational Development – none Community Planning – none Legal – none Property/Assets – none Information Technology – none Equality & Human Rights - The Recommendations contained within this report have been assessed in relation to their impact on equalities and human rights. No negative impacts on equality groups or potential for infringement of individuals’ human rights have been identified arising from the recommendations contained in the report. If required following implementation, the actual impact of the recommendations and the mitigating actions will be reviewed and monitored, and the results of the assessment will be published on the Council’s website. Health & Safety – none Procurement – none Risk – none Privacy Impact – none Cosla Policy Position – not applicable Climate Risk – none List Of Background Papers - None Author: Carol MacDonald, Senior Committee Services Officer, Finance & Resources. email: carol.macdonald@renfrewshire.gov.uk
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To: Council On: 26 June 2025 Report by: Director of Finance & Resources Heading: AUDIT, RISK & SCRUTINY BOARD ANNUAL REPORT 2024/25 1 Summary 1.1 The Chartered Institute of Public Finance and Accountancy (CIPFA) guidance recommends that all audit committees should “prepare an annual report that provides assurance to all those charged with governance that it fulfils its purpose and can demonstrate its impact.”. (Audit Committees Practical Guidance for Local Authorities and Police, published by CIPFA in 2022). 1.2 Taking the CIPFA guidance into account, the reporting dates for this Annual Report is from 1 April 2024 to 31 March 2025 and provides an overview of the Audit, Risk & Scrutiny Board (the Board) activity during the financial year 2024/25 and a summary of key developments. 1.2 This report has been prepared to inform Renfrewshire Council of the work carried out by, and the impact of, the Audit, Risk & Scrutiny Board and provides details of the Board’s membership and attendance. It sets out how the Board has fulfilled its remit and provides assurance to those charged with governance that it has fulfilled its purpose and demonstrated its impact. 1.3 The annual report is timed to support the annual review of governance and preparation of the Annual Governance Statement. This enables the Board to take stock of the assurances it has received and the extent to which its own performance has contributed to governance arrangements. 1.4 This annual report highlights the issues considered by the Board during 1 April 2024 to 31 March 2025 when the Audit, Risk & Scrutiny Board met seven times. The report was submitted to the Board in terms of the Council’s Code of Corporate Governance.
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1.5 At each meeting, the Board considered significant findings from Internal Audit reports together with monitoring the progress made by management in completing agreed actions to improve the Council’s control environment. It also considered the status of external audit action plans arising from external audit reports received and the external audit annual plan for 2024/25 from the external auditors in March 2025. 2 Recommendations 2.1 That the Audit, Risk & Scrutiny Board Annual Report 2024/25 be noted; 3 Background and Context 3.1 Remit and Role of the Board The Audit, Risk & Scrutiny Board is a key component of the Council’s governance framework. Its purpose is to provide an independent and high-level focus on the adequacy of governance, risk and control arrangements. The Board’s role in ensuring that there is sufficient assurance over governance risk and control gives greater confidence to all those charged with governance that those arrangements are effective. The Board has oversight of both internal and external audit together with financial and governance reports, helping to ensure that there are adequate arrangements in place for both internal challenge and public accountability. 3.2 Scrutiny enables Members to review decisions, policies and performance that affect the Council and helps to ensure that the services and policies meet the Council’s aims and standards. The scrutiny process not only provides a means of reviewing the Council’s own services but enables examination of services provided by other organisations on issues causing public concern. 3.3 In order to fulfil the remit, the Board sought assurance on the adequacy and effectiveness of the Council’s systems of governance, risk management and internal control to ensure efficient operations and the highest standards of probity and accountability. This was achieved through reports received from Internal Audit, other Council functions and External Audit with focus in particular on internal control and governance. 4 Core Functions of the Audit Committee 4.1 The core functions of the Audit, Risk & Scrutiny Board reflects both standard practice for audit committees across all sectors and the specific legislative and professional standards requirements for local authorities. The CIPFA Position Statement sets out the core functions of the audit committee as follows. Supporting the establishment and maintenance of good governance, risk management and control arrangements. Supporting accountability and public reporting, in particular the financial statements and the annual governance statement, and other statements that accompany the financial statements.
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Supporting the establishment and maintenance of good arrangements for internal audit and external audit. 4.2 The Audit, Risk & Scrutiny Board met seven times during 2024/25 comprising meetings on 20 May, 19 August, 23 September, 22 October, 4 November 2024, 20 January and 17 March 2025 respectively, to consider reports relevant to the Audit cycle and other matters as deemed appropriate. 4.3 Pre agenda meetings were also held ahead of the Board meeting involving the Convenor, Depute Convenor and appropriate officers to allow for informal discussion, briefing Members on key issues, and facilitating a more efficient and informed decision-making process. 4.4 All Pre-agenda meetings were held using the Microsoft Teams platform to allow remote participation. The Board meetings were held on a hybrid basis, with members and officers able to attend in-person or via Microsoft Teams, and were webcast for live and retrospective viewing by the public on the Council's live- streaming website. 5 Membership of the Board, Political Balance and Attendance 5.1 In accordance with Renfrewshire Council’s Procedural Standing Orders membership of the Audit Committee should comprises nine Elected Members drawn from all the political parties/independent Members represented on the Council, having regard to the party balance on the Council (three Administration/six opposition groups/parties/independent Members). The quorum of the Audit, Risk & Scrutiny Board is three Elected Members. 5.2 Councillor Gray resigned from the Conservative Group and left the Audit, Risk & Scrutiny Board on 5 March 2025. This created a vacancy on the Board on which he had been nominated by the Conservative Group as a member. At the Council meeting held on 1 May 2025 Councillor Mylet was appointed to the vacancy on the Board. 5.3 The membership and attendance of the Audit, Risk & Scrutiny Board are as follows:- ELECTED MEMBER PARTY POSITION APPOINTED TO BOARD MEETINGS ATTENDED POSSIBLE NO OF MEETING TO ATTEND Andy Doig IND Convener June 2022 6 7 J McDonald LAB Depute- Convener (appointed Feb 2024) June 2022 7 7 J Adam SNP Member June 2022 7 7 G Graham LAB Member December 2024 2 2 L Hughes SPN Member June 2022 7 7 R Innes SNP Member June 2022 7 7 J MacLaren CONS Member June 2022 7 7 B Smith LAB Member February 2024 7 7
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W Mylet IND Member 1 May 2025 0 0 C Gilmour LAB Left Board 12 December 2024 June 2022 5 5 J Gray REFORM Left Board 5 March 2025 June 2022 6 6 5.4 The Convener is an independent Member, and the Depute Convener is from an opposition party. In terms of the Council’s Procedural Standing Orders, Members have been drawn from the political parties represented on the Council on a proportionate basis, having regard to party balance on the Council. It should be noted that members of the Leadership Board and members who are Conveners of another Board may not be Members of the Audit, Risk & Scrutiny Board. 5.5 CIPFA advises that “Elected Members of local authorities are part of the body charged with governance and bring knowledge of the organisation, its objectives and policies to the Audit committee”. Members with experience in scrutiny or standards offer additional knowledge of activity, risks and challenges affecting those areas. Ideally, the selection of Elected Members to the audit board will take account of aptitude and experience. 5.6 The Cross-Party Working Group report on governance submitted to Council on 29 February 2024, suggested that additional support to the Board, perhaps through external independent membership, particularly from a finance/accounts background, may be appropriate. Members of the Audit, Risk & Scrutiny Board considered this matter at a development session on 26 February 2024. They agreed it would be appropriate for there to be an option for the Board to appoint up to two individuals as non-voting lay members where they identified any need for specific assistance or any deficiencies in areas of experience of Board Members was identified by them . The Board’s request to change the Guidelines for Operation of the Audit, Risk & Scrutiny Board was agreed at the Council Meeting of 9 May 2024. The Board has not sought to recommend any specific appointment to Council since this change was agreed. 5.7 At a development session held on 26 February 2024, members considered whether it would be beneficial to recruit independent/lay members to supplement the Audit, Risk and Scrutiny Board in particular areas. 5.8 At the Audit, Risk & Scrutiny Board held on 18 March 2024, the members considered a report entitled CIPFA Audit Committee Guidance – Self Assessment and Action Plan. The report proposed that “the Board may appoint up to 2 individuals as non-voting lay members to bring access to external expertise, knowledge or experience, as necessary. Lay members should be appointed by the Council after a recommendation from an interview panel chaired by the Convenor of the Audit, Risk and Scrutiny Board. Lay members should not be a member of any political party. This was agreed and subsequently included in the “Guidelines for Operation of the Audit, Risk & Scrutiny Board”.
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5.7 Attendance by Officers at the Board Meetings The Audit, Risk & Scrutiny Board meetings were attended by the Chief Auditor, Head of Corporate Governance and the Director of Finance & Resources. Other senior officers also attended meetings as appropriate for items of business for which their presence was relevant. Representatives from the Council’s external auditors - Azets Scotland, the appointed external auditors, were also present at all of the meeting. 6 Governance Arrangements 6.1 Internal control, governance and risk management arrangements are in place to help ensure the Council makes appropriate use of its resources and powers. The Audit, Risk & Scrutiny Board is a key component of governance. Its purpose is to provide an independent and high-level focus on the adequacy of governance, risk and control arrangements and the Board plays an important role in supporting leadership teams and elected representatives and helps the Council to achieve its priorities. 6.2 The Audit, Risk & Scrutiny Board is different from the Council’s Policy Boards. It is politically neutral with the Convener and Depute Convener being selected from either different parties or being non-affiliated. The role of the Convener is undertaken from outwith the Administration and Party Whips do not apply. The Board reports to the full Council. 6.3 There is a wide-ranging set of arrangements to support the running of the Council in place and these are reassessed each year by Internal Audit and reported through the Board. It should be noted that the Council’s external audit arrangements have never flagged any material issues with governance arrangements in the Council, however, there are always opportunities to improve and strengthen governance arrangements. 6.4 The Terms of Reference for the Board differ from other Policy Board as there is no general delegation on specific service performance monitoring. The Board has specific delegations:- • Audit: Including acting as the Council’s Audit Committee • Corporate Governance: The Council’s code of corporate governance • Risk Management: Including approval of the risk management strategy • Monitoring and Reviewing Service Delivery Performance, Policies and Practices • Community Leadership through Monitoring of Other Public Bodies • Standards and Ethics: in relation to Elected Members • Written Intimations: Specific requests from Members of the Board
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7 Audit, Risk & Scrutiny Board Activity and Issues considered by the Board during 2024/25 7.1 Audit of Accounts - The Board at a special meeting held on 22 October 2024 considered a report relative to the audit of the Council’s 2023/24 accounts. The report intimated that the 2023/24 unaudited Annual Accounts were approved at the meeting of the Council held on 27 June 2024. Each year the Council's appointed external auditors carry out an audit of the Council’s financial statements and provide an opinion as to whether the statements provide a true and fair view of the financial position of the Council and its income and expenditure for the year; and whether they had been prepared in accordance with the relevant regulations. The report advised that there was one material adjustment made to the annual accounts over the course of the audit in relation to an amendment to the value of the Council’s pension asset disclosed in the 2022/23 Balance Sheet, owing to the exclusion of unfunded liabilities. Other minor and presentational changes were also agreed. 7.2 Annual Internal Audit Plan 2025/26 – The Board at the meeting held on 17 March 2025 agreed a risk-based internal audit plan for 2025/26. The plan considered the outcomes of the internal corporate and service risk identification and evaluation processes, and the current business environment. In addition to undertaking work which would provide assurance on the robustness of key internal controls, the plan sought to reflect the key priorities and challenges for the Council. The report set out the methods that had been employed to facilitate production of the Plan and the influencing factors that had been considered in the assessment of the current business environment and the priority areas of audit. Progress on the 2024/25 annual audit plan and summaries on the findings and conclusions of each audit assignment were reported to the Board on a quarterly basis. 7.3 External Audit and External Audit Plan 2023/24 – The Board at the meeting held on 17 March 2024 considered a report which outlined Azets’ approach to the audit of the 2024/25 annual accounts and the Coats Observatory to assess whether they provided a true and fair view of the financial position of the Council, and whether they had been prepared in accordance with proper accounting practice. The plan outlined the responsibilities of Azets and the Council, their assessment of key challenges and risks and the approach and timetable for completion of the 2024/25 audit. At the meeting of the Board on 23 September 2024, Azets, the External Auditor, submitted a Best Value Thematic report as part of the annual audit process. The report noted that the Accounts Commission had directed auditors to report on workforce innovation and how councils responded to workforce challenges. The report outlined the external auditors’ (Azets) findings in relation to questions posted by the Audit Commission. Key messages were highlighted and findings and suggested areas for improvement were detailed. The report also included an indication of planned management actions in response to the recommendations made by Azets.
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7.4 Summary of Internal Audit Activity in Partner Organisations - Members of the Audit, Risk & Scrutiny Committee expressed an interest in the outcomes of audits undertaken in partner organisations. A proposed revision to the Audit, Risk & Scrutiny Board’s Terms of Reference, to facilitate this, was agreed at a meeting of the Council on 4 May 2024. The Board considered quarterly reports which provided Members with a summary of the internal audit arrangements within each partner body. 7.5 Internal Audit Findings – The Board considered quarterly reports on the findings of internal audit in terms of national guidance produced by CIPFA on the implementation of audit committee principles in Scottish local authorities, in line with which internal audit submitted regular reports on the findings of audit work to the Board based on the work of internal audit and detailing the key issues arising. 7.6 Internal Audit and Counter Fraud Progress and Performance – The Board considered regular reports which detailed progress and performance in terms of delivery of the audit plans for the internal audit and counter fraud teams. The Director of Finance & Resources had set annual targets to demonstrate continuous improvement. In terms of counter fraud, due to the diverse nature of fraud referrals, no formal performance targets had been established and the outcomes from investigations were monitored and reported on a regular basis by the Council’s management. 7.7 Actions Monitoring Report - Dargavel Primary School – The Board, at meetings held on 20 May, 19 August, 23 September and 4 November 2024 considered action monitoring reports relating to Dargavel Primary School. Following the findings of an independent review into the circumstances of the errors in planning and delivery of primary school provision in the Dargavel area, a SMART action plan had been developed which detailed the Council’s response. Each report provided an update in relation to the Bowles independent review report, the Accounts Commission S.102 report, and the actions related to the report of the Cross-Party Working Group. At the Board meeting of 4 November 2024, the Board agreed to receive periodic reports concerning school roll projections and learning estate planning over the whole Council area and the associated financial impacts of those matters. 7.8 Strategic, Corporate and Service Risks – The Board, at meetings held on 20 May and 4 November 2024, considered the latest position in managing the Council’s risks entering the respective quarters of the financial year. 7.9 Annual Complaints Handling 2024/25 – The Board at the meeting held on 20 January 2025 considered a report which detailed complaints received by the Council from 1 April 2023 to 31 March 2024 and how this information had been used to ensure that the Council delivered high quality, efficient and responsive services. A summary was included of the numbers and types of complaints received; responded to within timescales; customer satisfaction monitoring; and key complaint areas including what was being done to address the issues raised. The report advised that 10,025 complaints had been received in 2023/24 compared with 9,155 in 2022/23. The report detailed the performance on key indicators, and highlighted improvements made to the complaints handling process over the past year to ensure that complaints were handled well.
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7.10 Corporate Governance – The Board, at its meeting held on 17 March 2025 considered a report by the Chief Auditor which reviewed the adequacy and effectiveness of the revised Local Code of Corporate Governance. Internal Audit carried out a sample check of the evidence used to demonstrate compliance and confirmed that the Council complied with the requirements of the Local Code of Corporate Governance. In addition, it was evident that the Local Code had been subject to review and updates in line with developments in best practice and any revised Council Policies. At the same meeting on 17 March 2025 the Audit, Risk & Scrutiny Board considered a report by the Chief Executive which reviewed the Council’s Local Code of Corporate Governance 2024 and provided evidence of how the Council complied with the Code. The evidence presented within the report demonstrated that strong governance arrangements had remained and were in place within the Council, and that Councillors and Officers were working together to lead and manage the Council in order to provide vital public services. Annual Reports by other Bodies 7.11 Audit Scotland Reports – during the period covered by this report, there were six reports submitted from Audit Scotland: Local Government in Scotland – The National Fraud Initiative in Scotland 2024; Tackling Digital Exclusion; A summary of a recent Audit Scotland Report on Transformation in Councils; Alcohol and Drugs Services; and Local Government Financial Bulletin 2023/24 Each report highlighted key points and the Council’s position where available. 7.12 Scottish Public Services Ombudsman (SPSO) – Annual Report 2023/24 – The Board at the meeting held on 20 January 2025 considered a report which highlighted that the health sector was the sector which the SPSO received most complaints, with local authority cases receiving the second highest number. The report advised that information received separately from the SPSO indicated that the number of complaints determined by the SPSO was 54, compared with 35 in 2022/23. The report noted that there were 58 cases received (these included cases carried forward from the previous year). Of the 54 complaints determined during the period, one went to investigation stage. 8 Annual Programme of Reviews 8.1 The guidelines suggest that in relation to (a) scrutiny of service delivery and performance and (b) monitoring and reviewing service delivery, performance, policies and practices, the Board may select particular areas for investigation as part of its annual programme, thereafter making recommendations to the Council. 8.2 In relation to the Council's role in community leadership, the guidelines recognise that this is not clear cut and requires to be considered carefully to ensure that the respective functions and responsibilities of other public bodies are not compromised but that the Board allows the Council to provide a forum for an informed public debate on these issues.
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Current Reviews 8.3 The 2024/25 Annual Programme was agreed at the Audit, Risk & Scrutiny Board on 20 May 2024. The following reviews went forward as part of the Annual Programme: • Neighbour Disputes; • Lack of house and garden maintenance by some tenants and residents; and • Lead Piping in Public and Private Housing in Renfrewshire. 8.4 The review on neighbour disputes was presented to the Board on 23 September 2024 and noted by Council on 12 December 2024. 8.5 The review of lack of house and garden maintenance by some tenants and residents is currently underway by Lead Officer Maurice Gilligan and Members will receive a briefing on his findings at the Audit, Risk & Scrutiny Board to be held on 18 August 2025. Future Programme of Reviews 8.6 The Lead Piping in Public and Private Housing in Renfrewshire review is still outstanding and should be added to the list of Reviews for 2025/26. 8.7 The External Auditors have suggested that in relation to the scrutiny of service delivery and performance, that the Audit, Risk & Scrutiny Board select particular areas for investigation as part of its annual programme. At the annual assessment/development session held in 2024 it was agreed that officers would assist Members to develop the Board’s annual programme of reviews to ensure that due consideration was given to the corporate risks and priorities. 8.8 At a development session held for Members of the Audit, Risk & Scrutiny Board on Friday 16 May 2025 consideration was given to strategic and corporate risks and Council priorities to inform the development of the annual programme of reviews. The outcome of this development session will be reported to the next Audit, Risk & Scrutiny Board to be held on 18 August 2025. 8.9 It should be noted that Members still have the ability to submit written intimations to the Board to consider matters they would like reviewed. 9 Delivering Effectiveness and Strengthening the Audit Board 9.1 A wide range of briefings and other training was offered to Elected Members during 2024/25. A training record is kept by Committee Services. Topics of particular relevance to the Scrutiny & Audit committee included:
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Audit, Risk & Scrutiny Committee briefings Date No. of Members attending Member’s Attendance Cyber Security 20 May 2024 9 Andy Doig, McDonald, Adam, Gilmour, Gray, Hughes, Innes, J MacLaren and Smith Governance Arrangements for City Regions 19 August 2024 9 Andy Doig, McDonald, Adam, Gilmour, Gray, Hughes, Innes, J MacLaren and Smith Development Session on Financial Management and an Overview of Financial Reporting 18 November 2024 9 Adam, Andy Doig, Gilmour, Gray, Hughes, Innes, J MacLaren, McDonald and Smith. Annual self-assessment of the operation of the Audit Board against the CIPFA Position Statement and Audit Committee Guidance. 16 May 2024 - - Governance arrangements and the value of good governance 19 May 2025 - - The role of External Audit 19 May 2024 - - 9.2 The Guidelines for Operation of the Audit, Risk & Scrutiny Board - Role of Members, was amended in 2024 to recommend that all Members of the Audit, Risk and Scrutiny Board undertake an annual assessment of knowledge and skills which would be used to develop an annual training and development programme, as recommended in the CIPFA guidance. The Terms of Reference and the Guidelines for the Operation of the Audit, Risk & Scrutiny Board were also updated to formalise this change. 9.3 As a consequence, the annual self-assessment of the operation of the Audit Board against the CIPFA Position Statement and Audit Committee Guidance was undertaken by officers on Friday 16 May 2025 and the outcome will be reported to a future meeting of this Board. 9.4 The development session on 16 May 2025 looked in depth at: • CIPFA Guidance on Audit Committees • 2024 Action Plan Update • 2025 Self Assessment • Members Development Programme 9.5 Where individual Members indicated specific development requirements, it has been agreed that the Chief Auditor will arrange for one-to-one meetings to determine how best to support each Members development. 9.6 During the week of 7 October 2024 Members undertook a briefings and skills workshops. The development programme included examining the latest guidance in the Local Code of Conduct for Councillors.
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9.7 It should be noted that the capabilities of new Members of the Board are developed through formal development, and focuses on providing new Members with the necessary knowledge and skills to effectively contribute to their roles. This programme aims to ensure Members understand their responsibilities, the council's structure, and the Audit, Risk & Scrutiny Board's specific functions. Key components of the induction programme include: • Understanding of the Board’s functions: • Review of relevant legislation and protocols: • Training on audit and risk management principles: • Understanding of scrutiny processes: • Briefings on key policies and procedures: Implications of the Report 1. Financial – none. 2. HR & Organisational Development – none. 3. Community/Council Planning – none. 4. Legal – as set out in the report 5. Property/Assets – none. 6. Information Technology – none. 7. Equality & Human Rights The Recommendations contained within this report have been- assessed in relation to their impact on equalities and human rights. No negative impacts on equality groups or potential for infringement of individuals’ human rights have been identified arising from the recommendations contained in the report. If required following implementation, the actual impact of the recommendations and the mitigating actions will be reviewed and monitored, and the results of the assessment will be published on the Council’s website. 8. Health & Safety – none. 9. Procurement – none. 10. Risk – none. 11. Privacy Impact - none 12. Climate Risk - none 13. Cosla Policy Position – none. 14. Children’s Rights – none
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List Of Background Papers • Cross Party Working Group Review of Governance Arrangements – Council, 29 February 2024 • CIPFA Audit Committee Guidance – Self Assessment and Action Plan – Audit, Risk & Scrutiny Board, 24 March 2024. • Guidelines for Operation of the Audit, Risk & Scrutiny Board Author: Carol MacDonald, Senior Committee Services Officer, Finance & Resources. email: carol.macdonald@renfrewshire.gov.uk