Agenda and draft minutes

A minute’s silence was held for Councillor Corina Nicholls of Brimington Parish Council who formally sat on this Committee.

No declarations of interest were received.

Apologies for absence were received from Councillor Tidd.

RESOLVED –

That the Minutes of the meeting of the Standards and Audit Committee held on 11^th September 2024 be approved as a correct record and signed by the Chair.

The Head of the Internal Audit Consortium submitted a report for Members’ consideration. The report detailed progress against the 2024/25 Internal Audit Plan and provided assurance on the governance, risk, and control processes in place in respect of the audits completed.

It was noted that since this committee had last met 3 reports had been issued, 1 with Substantial assurance, 1 with Reasonable assurance and 1 with Limited assurance.

Members requested that the Head of Digital and Technology attend the next meeting of the Committee to provide an update on Network and Cyber Security controls.

The Service Director – Corporate provided a digital presentation to update members on the Freedom of Information/ Environmental Information Regulations Limited Assurance Report, and how the team would be working towards meeting all outstanding recommendations. An overview was provided to the Committee on the type, number and complexity of requests year on year. It was reported that there was a plan to transfer the system to Salesforce which will be able to provide an improved means of monitoring the progression of requests and obtaining management information. A new policy would be in place by April 2025 along with staff and public guidance and a training push.

Members praised the work being undertaken by all involved and wished to receive an update detailing how recommendations have been met in a future meeting.

The progress of the 2024/25 internal audit plan was shown at Appendix 3 of the officer’s report. It was noted that no fraud had been detected. It was reported that due to a turnover of staff, the whole plan is unlikely to be completed however it is currently anticipated that enough of the plan will be completed to enable an unlimited internal audit opinion to be provided at the end of the year.

The Head of the Internal Audit Consortium informed members of the Committee that CIPFA had launched a consultation in October 2024 in respect of the applicability of the Global Standards to the Public Sector with the intention that the Global Standards (subject to the interpretations and requirements of Application Note: Global Internal Audit Standards in the UK Public Sector) will replace the current Public Sector Internal Audit Standards from April 2025.

At the same time CIPFA launched a consultation Code of Practice for the Governance of Internal Audit in UK Local Government. The Code is designed to work alongside the new Internal Audit Standards and replaces the organisational responsibilities set out in the Statement on the Role of the Head of Internal Audit (CIPFA 2019). It is aimed at those responsible for ensuring effective governance arrangements for internal audit.

An exercise is currently being undertaken using the IIA toolkit to perform a self-assessment of compliance with the Global Standards. This will result in an action plan aimed at achieving full compliance. Documents such as the Internal Audit Charter and the Internal Audit Manual will require updating to reflect the Global Standards and the Standards also require a Strategy to be in  ...  view the full minutes text for item 17.

The Head of the Internal Audit Consortium presented a report to inform members of the progress made in respect of implementing internal audit recommendations so that it can be assessed if appropriate and timely action has been taken.

It had previously been agreed that a report detailing outstanding internal audit recommendations be brought to the Standards and Audit Committee every 6 months. The last report was in April 2024.

Attached at Appendix 1 of the officer’s report was a summary of made, implemented and outstanding internal audit recommendations as at the end of October 2024. It was reported that there are 24 outstanding recommendations, 4 high priority, 11 medium priority and 9 low priority. An update from managers in respect of each outstanding recommendation was also shown at Appendix 1 of the officer’s report. It was noted that a number of factors had contributed to the delay in implementation of some of the recommendations such as recruitment difficulties, important budget work and service reviews and restructures.

RESOLVED –

1.   That the report be noted.

2.   That a further summary of outstanding internal audit recommendations be submitted to the Standards and Audit Committee in April 2025.

The Service Director – Finance submitted a report on the Statement of Accounts and the Annual Governance Statement for 2022/23, the Management Letter of Representation and the External Auditor’s Audit Completion Report and the Annual Audit Report.

It was reported that the significant delays in the external audit of local authority accounts continues to be a well-known issue. Following consultations in February 2024, the Ministry of Housing, Communities and Local Government (MHCLG) issued a statement on 30^th July 2024 detailing backstop dates to 2027/28.

The backstop measures introduced are intended to clear the backlog of unaudited accounts up to and including 2022/23. In his statement the Minister recognises that the measures are likely to result in a number of ‘disclaimed’ or ‘modified’ audit opinions with auditors likely to ‘issue hundreds of ‘disclaimed’ audit opinions, and disclaimed opinions will likely continue for some bodies for a number of years’.

The external auditor was required to ‘communicate audit matters to those charged with governance’, i.e. the Standards and Audit Committee, and a copy of the external auditor’s report was attached at Appendix D. Mr James Collins of Forvis Mazars attended the meeting to present the External Auditor’s Report to ‘those charged with governance’.

The report concluded that as a result of the backstop arrangements there had been insufficient time to complete the audit procedures so as to obtain sufficient, appropriate evidence, and the effects of the resulting lack of assurance was pervasive to the financial statements as a whole. As a result, it was reported that a disclaimer of opinion would be issued on the Council’s financial statements.

The external auditor’s report also included the Value For Money (VFM) conclusion and identified two significant weaknesses in arrangements and that recommendations had been set out. It was noted that no evidence of material fraud had been detected but Chesterfield Borough Council had been exposed to risk.

A statement was read out on behalf of the Head of Legal and Monitoring Officer:

The Public Sector Internal Audit Standards and related Local Government Application Note, presume that local authorities will have an Audit Committee undertaking the purpose identified by CIPFA in its 2022 publication “Audit Committees: Practical Guidance for Local Authorities and Police”.

This committee plays a significant role in overseeing the Council’s relationship with its external auditors and takes an active role in reviewing the external audit plan, progress reports and annual report setting out the findings of the Value for Money Review. Forvis Mazars is the Council’s current appointed auditor.

In its latest audit report, Forvis Mazars identified weakness in the Council’s systems. Officers’ have proposed a response to Forvis Mazars and an action plan for strengthening the weakness identified, as contained in the report and verbal representations to this committee today.

These plans are presented for the consideration and agreement of this Committee. The plans should strengthen the weakness identified by Forvis Mazars, therefore the Monitoring Officer as part of her statutory duties will work with the Council’s other statutory officers  ...  view the full minutes text for item 19.