Agenda, decisions and minutes

www.swansea.gov.uk/disclosuresofinterests

In accordance with the Code of Conduct adopted by the City and County of Swansea, the following interests were declared: -

Councillor P R Hood-Williams declared a personal interest in Minute No. 30 - Internal Audit Monitoring Report - Quarter 1 2024/25 and Minute No. 31 - Annual Report of School Audits 2023-2024.

In accordance with the Code of Conduct adopted by the City and County of Swansea, the following interests were declared: -

Councillor P R Hood-Williams declared a personal interest in Minute No. 30 - Internal Audit Monitoring Report - Quarter 1 2024/25 and Minute No. 31 - Annual Report of School Audits 2023-2024.

To approve & sign the Minutes of the previous meeting(s) as a correct record.

Approved.

Resolved that the Minutes of the previous meeting(s) of the Governance & Audit Committee were approved as a correct record.

For Information.

Ben Smith, Director of Finance presented the Draft Statement of Accounts for 2023/24 ‘for information’ and review.

The Draft Accounts for 2023/24 had been prepared and were signed by the Section 151 Officer on 9 August 2024.  A copy was appended at Appendix A of the report.

It was confirmed that the Accounts had been formally presented to the Council’s auditors – Audit Wales, who had commenced the audit of the Accounts.  It was explained that as part of the audit process, the Accounts would be made available for inspection by the public for a four-week period.

Finance Department staff were thanked by the Director for their work on the accounts, which was echoed by the Chair and the Committee.

The Committee asked a number of technical questions of the Director of Finance / Section 151 Officer, which were responded to accordingly.

Responses would be circulated in respect of long-term debtors movement and consideration given to colour schemes used within reports to maximise inclusion for those with visual impairments, if possible.

Approved.

Jonathon Rogers, Corporate Fraud Team Manager presented a report which outlined the planned areas of activity for the Internal Audit Section’s Fraud Function for 2024/25 and was designed to provide a strategic view of the areas that would be subject to examination.

The report highlighted the Council’s obligation to and the principles to tackling fraud.  The Anti-Fraud Plan (AFP) represented the broad areas that would be covered and sets out to provide a balance between proactive and reactive counter fraud activity. It covered the activities of the Council that the Director of Finance and S151 Officer and the Chief Auditor considered to be the most likely to be subjected to fraud in some form, either from within the organisation or from external sources. It was hoped that there would be an increase in proactive activity when the planned expansion of resources had become embedded.

It was outlined that the AFP aimed to build on activities and outcomes identified, and also aimed to focus on ‘high risk’ areas where the most significant losses could occur.  Additionally, the AFP for 2024/2025 would continue to incorporate those work streams directly attributable to or supported by the Fraud Function.  The report also detailed the measuring the value of the fraud function and focussing fraud function resources.

The aim of the Plan was to demonstrate the Council’s ongoing commitment to tackle fraud, promote the highest levels of integrity, minimise the potential for reputational damage, and ensure transparency.

The Committee asked a number of questions of the officer, who responded accordingly.

The Chair commented upon the large number of capital programmes being managed by the Authority and the potential for fraud.

Resolved that the Anti-Fraud Plan for 2024/25 as provided at Appendix 3, be approved.

For Information.

The Corporate Fraud Team Manager presented a ‘for information’ report which provided a summary of the work completed by the Fraud Function of Internal Audit in 2023/24.

The report provided a summary of the activities of the Fraud Function for 2023/2024, the value of the function, deterrent value, strengthening procedures, workforce relationships, outcomes with financial implications, staff structure and an overview of activities. 

The volume of reports received by the team during 2023/24 decreased, details of which were shown in the appropriate tables within the report.  However, it was noted that the figure was still far higher in relation to comparable pre-Covid data and reflected the heightened awareness and visible profile of the team as the repository for external and internal allegations relating to the Councils functions.

The key activities in 2023/24 covered the following areas of work: -

·       Joint work with Department of Work & Pensions’ (DWP) Counter Fraud, Compliance and Debt Service.

·       National Fraud Initiative 2022.

·       Fraud Awareness.

·       Inter-Agency work and Data Exchange.

·       Employee related investigations.

·       Housing.

·       Review of outcomes against the Fraud Function Plan for 2023/2024.

The Review of outcomes against the Fraud Function Plan for 2023/24 reported that the team now operated hybrid working, spending time between the office, home and at other client departments and external agency buildings. 10 days were lost due to sickness in 2023/24.

Of the eight planned Fraud Function activities, all were fully achieved. Appendix 1 provided the commentary against these activities.

The only activity that was not fully achieved was ‘raising awareness, where no training was provided to the Members of Governance and Audit Committee.

It was noted that urgent employee investigations continue to be prioritised, and time critical responses and actions undertaken.

The Committee asked questions of the Officers, who responded accordingly.  Discussions centred around the following: -

·       Giving online training priority over statistics.

·       Review of the corporate fraud administrative management system.

·       Raising awareness throughout the Authority.

·       Where possible, the team being pro-active, given the small number of staff / varied workflow encountered by the Team.

·       Dealing with fraud while also helping people in need.

The Chair thanked the officer for the report and for the informative training session he had provided to the Committee on Monday, 2 September 2024.

For Information.

Nick Davies, Principal Auditor presented a detailed ‘for information’ report which showed the audits finalised and any other work undertaken by the Internal Audit Section during the period 1 April 2024 to 30 June 2024.

A total of 16 audits were finalised during the quarter. The audits finalised were listed in Appendix 1, which also showed the level of assurance given at the end of the audit and the number of recommendations made and agreed. Appendix 2 provided a summary of the scope of the reviews finalised during the period.  The levels of assurance were 7 – high, 8 – substantial and 1 – moderate.

A total of 86 audit recommendations were made and management agreed to implement all of the recommendations made.

It was highlighted that one full-time post became vacant in May 2024, following the resignation of one member of the team. One part-time post also continued to be vacant throughout the quarter and as a result, 68 days were lost in quarter one due to vacant posts. The vacant posts were due to be advertised shortly.

It was added that the Internal Audit Annual Plan for 2024/25 contained 120 separate audit activities. As at 30 June 2024, 16 audit activities (13%) had been completed, with one additional activity (1%) substantially complete with the audit report issued as draft.  As a result, 17 audit activities had been completed to at least draft report stage (14%). An additional 32 activities were in progress at the end of the quarter (27%). As a result, approximately 41% of the audit activities included in the 2023/24 Audit Plan had either been completed or were in progress.  A copy of the plan showing the status of the activities as at the 30 June 2024 was provided at Appendix 3. 

It was noted that one audit report with ‘Moderate’ assurance level was issued in the quarter and a report on Management of Absence would be provided to the Committee in November 2024.

The Committee discussed the following: -

·       The low completion rate of mandatory online training, the need to review procedures and an update to be provided in November 2024.

·       In relation to paragraph 2.6 - Could Internal Audit, in future reports, include actual available days to see the what the percentage split is in each quarter to get a comparison.

·       Schools still not complying with contract procedure rules.

·       The functionality of Oracle Fusion.

For Information.

Nick Davies, Principal Auditor and Kelly Small, Head of Education Planning and Resources presented a ‘for information’ report which provided a summary of the school audits undertaken by the Internal Audit Section during 2023-24 and identified some common issues found during the audits. 

It was outlined that an audit of each primary, secondary and special school in Swansea was undertaken every 3 years.  A standard audit programme existed for each school sector. Since the pandemic, Internal Audit had moved to yearly thematic reviews for the primary and special schools as agreed by the Director of Education and the Director of Finance & Section 151 Officer.

For a number of years, a report summarising the school audits undertaken each year had been prepared for the Director of Education and Governance & Audit Committee.  The report also identified the common themes which had been found during the audits.

The School Audits Annual Report 2023-2024 was attached at Appendix A.

It was noted that in 2023-24, Internal Audit continued with the ‘thematic’ review approach for primary and special schools, providing assurance across the following topics. Testing covered the key risk areas of Disclosure Barring Service (DBS) checks and the review of School Multi-pay Card spend.

Both planned thematic reviews were successfully completed across the primary and special schools that were scheduled to be included in the rolling programme. Furthermore, the team also finalised individual reviews for two primary schools and four secondary schools during the year.

The Committee discussed the following: -

·       Training provided to Headteachers, particularly surrounding internal audit.

·       Training provided to school Headteachers on procurement and multi-pay cards, noting that it was not mandatory.

·       Control Risk Self Assessments sent to schools and how audit review the questionnaires returned from the schools.

For Information.

The Director of Finance provided a ‘for information’ report which presented the Finance Directorate control environment, including risk management, in place to ensure that functions were exercised effectively; there was economic, efficient and effective use of resources, and effective governance to secure these arrangements.

It was explained that similarly to last year, the directorate’s continued approach to its own operations was based on how it operated as a major part of the former Resources Directorate. As the directorate had a bearing on the whole Council activity and finances it also leads on, as well as participates in, many of the common control processes.

The assurance framework including the key elements and key aspects of the Finance Directorate’s arrangements were outlined.  It was noted that the wider operational reach of the Directorate meant that its activities were highly geared and often complex. 

The scale of gross and net operations directly managed by the Directorate and balance sheet items in direct control were listed.

Details of risk management, business continuity, Performance management / KPI’s, planning, decision making, budget, fraud and impropriety, compliance with policies, rules and regulatory requirements and resources management were provided.

The Committee discussed the following: -

·       IFRS 16, staff capacity and the current full complement of staff within the Capital Team.

·       Medium Term Financial Plan and savings realised through the Achieving Better Together programme.

·       Risk ID 161 – Financial implications of any proposed actions and the assurance provided by the current control measures. 

The Chair thanked the Director of Finance for presenting his report.

For Information.

Lee Cambule, Tackling Poverty Service Manager presented a ‘for information’ report which provided a briefing to the Committee on the progress being made against the Auditor General’s report ‘Together We Can’ on community resilience and self-reliance.

It was outlined that since the report was published, the Council had undertaken a self-evaluation of its existing approach and identified actions to be taken. These actions were being delivered in the Enabling Communities Transformation Programme and an update on progress in delivering those actions through a Together We Can Action Plan and the recommendations of the Audit Wales report was provided.

It was added that with this progress being made, the Council was in a stronger position to begin implementing further steps and actions around community resilience and self-reliance.  This would be managed through the Transformation Programme and provided assurance through measurable outcomes.

The appointment of the Community Engagement Transformation Lead Officer post was confirmed, which would drive the improvements forward.

The Chair commented that the progress being made was very encouraging, particularly the collaborative working.

For Information.

The Tackling Poverty Service Manager presented a ‘for information’ report which provided a briefing to the Committee on the progress being made against the Auditor General’s report ‘A missed opportunity’ on Social Enterprises.

It was outlined that since the report was published, the Council had undertaken a self-evaluation of its existing approach and identified actions to be taken. These actions were being delivered in the Enabling Communities Transformation Programme, through the A Missed Opportunity Action Plan and the report provided an update on progress in delivering those actions and the recommendations of the Audit Wales report.

The analysis of the findings of Audit Wales’ report were detailed in the report at Appendix A. This included the first iteration of the completed self-evaluation checklist, which had been developed in collaboration with colleagues across the organisation and with oversight from the Enabling Communities Group and Swansea Council Poverty Forum.

It was added that based on the evaluation completed as part of the first recommendation, key actions had been identified at Appendix A.

The Chair commented that the report was very helpful and queried if a work plan would be developed.

It was confirmed that the Authority was awaiting regional progress in order for actions to be implemented locally in an action plan.  In addition, an officer appointment who would be tasked with implementing the actions, was in progress.

The Chair and Committee thanked the officer for his reports and it was proposed that Committee training be arranged within the next year on Social Enterprises / Community Resilience and Self-Reliance.

For Information.

Lee Wenham, Head of Communications & Marketing presented a ‘for information’ report which provided an overview of the status of the Council’s corporate risks to provide assurance to the Committee that they were being managed in accordance with the Council’s risk management policy and framework.

It was noted that all the corporate risks were recorded as having been reviewed at least once during the quarter.  Two risks, Risk ID 390 - CTU Fleet Management System and Risk ID 393 - PSN Certification were added to the Corporate Risk Register, no corporate risks were deactivated or de-escalated and no risks were escalated to the Corporate Risk Register.

Two corporate risks changed their RAG status, Risk ID 336 - Mandatory Training changed down from Amber to Green and Risk ID 360 - Development of New Waste Strategy - Transformation Programme changed up from Amber to Red.

It was queried why ID 336 – Mandatory Training had been moved from amber to green when only 21% had completed the Oracle Fusion training. The Head of Communications & Marketing would request that the risk owner provides an update to the Committee.

For Information.

The Head of Communications and Marketing presented the Audit Wales Recommendation Tracker report ‘for information’.

For Information.

The Governance & Audit Committee Action Tracker was reported ‘for information’.

For Information.

The Governance & Audit Committee Work Plan was reported ‘for information’.