Present : Councillor Garth Collier (Chair)

COUNTY BOROUGH OF BLAENAU GWENT

REPORT TO: THE MAYOR & MEMBERS OF THE COUNCIL

SUBJECT: AUDIT COMMITTEE – 25 TH MARCH, 2014

REPORT OF: EXECUTIVE / SCRUTINY OFFICER

PRESENT : COUNCILLOR GARTH COLLIER (CHAIR)

Councillors M. Cross (Vice-Chair) M.B. Dally N.J. Daniels J.J. Hopkins J. Morgan, J.P. J. Morgan D.J. Owens L. Winnett

Mr. Peter Williams – Lay Member

Executive Member – Financial Management and Strategy Councillor J. McIlwee

WITH : Head of Revenues, Benefit and IT Head of Financial Service Head of Internal Audit Chief Accountant Corporate Services Constitution Officer Head of Service Development & Commissioning Head of Children Services Audit Manager

AND : Wales Audit Office (WAO) Mr. Philip Pugh

(Apologies for absence were received from:- Councillors M. Bartlett, K. Bender, D. Coughlin, M. Holland, A. Lewis; and Mr. Mike Usher – WAO) ITEM SUBJECT ACTION

No. 1 APOLOGIES

Apologies for absence were received and noted accordingly:

Councillors M. Bartlett, K. Bender, D. Coughlin, M. Holland, A. Lewis; and Mr. Mike Usher – WAO

No. 2 DECLARATIONS OF INTEREST AND DISPENSATIONS

No declarations of interest or dispensation were reported.

No. 3 AUDIT COMMITTEE

Consideration was given to the Minutes of the Meeting held on 28th January, 2014, whereupon: -

A Member wished to thank the Auditors, on behalf of the Governing Body, for their help above and beyond the support required and expressed her appreciation.

The WAO Representative highlighted an amendment to Item 6, second paragraph, page 8:

. Ms. Jackie ‘Jenkins’, to read Jackie Joyce.

RESOLVED, subject to the foregoing, that the Minutes be received as a true record of proceedings.

No. 4 ACTION SHEET

There were no outstanding actions to be pursued from the previous Audit Committee held on 28th January, 2014. No. 5 CORPORATE CHILD PROTECTION POLICY / EDUCATION AND LEISURE SAFEGUARDING POLICY

Consideration was given to the report of the Corporate Director Social Services.

The Head of Children’s Services spoke to the report, which outlined both the Corporate Child Protection Policy, and the Education and Leisure Safeguarding Policy in place, and being implemented across the Authority.

. Appointment of Education Safeguarding Officer – the process had commenced with the advertisement of the post being released.

RESOLVED that the report be accepted and Safeguarding be supported, as part of the internal audit planning cycle.

No. 6 AUDIT PLAN PROGRESS REPORT – JANUARY / FEBRUARY 2014

Consideration was given to the report of the Chief Finance Officer.

The Audit Manager spoke to the report, which outlined progress against the Internal Audit Plan for the period 1st January, 2014 to 28th February, 2014. The Officer highlighted that since writing the report, the staff member on long-term sickness absence had returned to work and the Section now had a full complement of staff.

Leisure Services (Appendix A)

. Members’ Special Levy Fund – a Member expressed concern in respect of the proposal, relating to the Members’ Special Levy, that Members make all requests in writing, to include the recipient and nature of donation. He strongly urged the Audit Section to further consider this proposal, as many of the organisations were operated on a voluntary basis and provided a great deal of support to sports, leisure and the arts, and club secretaries continually changed.

Also, he said that Members should be informed if this service would be retained by the Authority on transfer of leisure functions in respect of Alternative Service Delivery.

In response, the Head of Internal Audit clarified that the integrity of Officers and Members was not being questioned; the recommendations presented related to the audit trail of funds as, if terms and conditions of the fund were not met, then monies could be recovered. She emphasised the importance of transparency and accountability even in respect of small amounts of money. Therefore, the recommendations had been made based on auditing principles.

A Member expressed concern that every audit listed relating to Leisure had been deemed unsatisfactory.

Councillor D.J. Owens joined the meeting at this juncture.

A number of Members supported concerns raised in respect of the Members’ Special Levy, whereupon a lengthy discussion ensued in respect of issues arising from the proposal. The Executive Member – Financial Management and Strategy supported the issues and recognised the difficulty in naming a recipient due to the inter- changeable membership of club personnel. However, he said consideration had to be given to the proposals, as a result of the recommendations presented by Officers in respect of an audit trail, and highlighted the expertise of Officers in advising what the Special Levy could be utilised for.

In response to a question raised, Members considered that, due to the small amount of funding involved in the Special Levy, the donations were self-regulatory.

A Member highlighted that, as custodians of public money, each individual had to be accountable and fully supported that a process be in place to ensure transparency. He had therefore contacted organisations within his Ward informing them of the process required when applying for funding. A number of Members clarified that they also provided requests in respect of Members’ Special Levy in writing.

The Executive Member – Financial Management and Strategy said that, in terms of the recommendation by Audit, it appeared that a written record had been absent and suggested that a standard proforma could be completed by the Member to satisfy the audit trail in respect of any request to the Special Levy.

The WAO Representative said that Members were accountable for every penny of money spent and there should be an audit trail of what that money had been used for. He advised that the process, therefore, would ensure Members were covered in respect of the appropriate use of the funding given. The Chair suggested that a report was needed from Alwyn Officers within Leisure in respect of the proposal, which Holland was agreed accordingly. Members also considered that this report should be presented to the Education and Skills Scrutiny Committee also, for consideration.

The Head of Internal Audit highlighted that the recommendations related to the audit, as it stands, and the fine detail of how the process was implemented was the remit of the Department through their standard processes.

The Executive Member – Financial Management and Strategy said that it was the responsibility of each elected Member to allocate funding via their Special Levy. He suggested, therefore, the audit recommendations be accepted with an understanding that proposals be presented for consideration as to how the practicalities would be implemented.

. Systems Audit - Additional Learning Needs Ceri (ALN) – this element was deferred to the next Edwards- meeting, it was agreed that the appropriate Officers Brown be instructed to attend the next meeting to answer the Members’ questions.

. Establishment Audit – Ebbw Vale Sports Ceri Centre – this element was deferred to the next Edwards- meeting, it was agreed that the appropriate Officers Brown be instructed to attend the next meeting to answer the Members’ questions.

In response to a question raised in respect of CRB / DBS checks required, the overall grading of the report was queried. The Audit Manager said that it was found that not all staff CRB / DBS checks were valid and this had been deemed high risk. However, some areas were working well and the internal grading had therefore been assessed as ‘unsatisfactory’, rather than ‘unsound’ as suggested by the Member. Another Member highlighted that any reporting in respect of DBS checks and Additional Learning Needs should be presented to the Education and Skills Scrutiny Committee also to be scrutinised. Members supported this concern and said that all reports arising from audits should be presented to the appropriate Scrutiny Committee to be considered in- depth, which was agreed accordingly.

In response to a suggestion by the Chair that a ‘spot check’ could be made, the Head of Internal Audit said that unfortunately the resources were currently unavailable. The Executive Member – Financial Management and Strategy said he was satisfied that the Audit Section would be overseeing the recommendations made and accepted by the Leisure Department to be carried out.

A Member enquired if that would negate appropriate Officers being instructed to attend the meeting. Members were referred to the report of the Wales Audit Office that recommended that appropriate Officers attend various Committees to respond to questions raised. The Member highlighted that the Sports Centre Manager should be invited to attend.

In response to a question raised, the Head of Internal Audit clarified that all recommendations had been accepted by the Leisure Department and a follow-up audit would normally be undertaken after a six-month period to allow sufficient time for improvements to be made. Managers were aware of the severity of recommendations and had a responsibility to act accordingly.

. Leisure Trust – the Trust would have a legal responsibility to ensure that DBS checks were valid. On transfer of leisure functions, each member of the Board would have a corporate responsibility in respect of operations and procedures and would adhere to legal requirements. The Trust would consider all previous audits and ensure that all recommendations made had been implemented. A Member referred to completion of the Audit Plan being below target and enquired of the action plans in place. The Head of Internal Audit said that the target percentage would not be recovered for the current year, however difficulties encountered had been reported to the Audit Committee throughout the year; these had mainly been due to the Section not having a full complement of staff. Going forward, the audit plan would be developed against current numbers of staff with more realistic targets from the outset.

The Executive Member – Financial Management and Strategy commended staff within the Audit Section for the excellent work undertaken.

The Constitution Officer asked therefore that Members accept the recommendations presented, subject to the decisions made, whereupon:

RESOLVED, subject to the foregoing, that the report be accepted and the Appendices, and progress made during the period from January to February 2014, be noted.

No. 7 2012 – 2013 LOCAL GOVERNMENT ACCOUNTS – WALES AUDIT OFFICE

Consideration was given to the report of the Chief Finance Officer.

The Chief Accountant Corporate Services spoke to the report, which outlined the findings of a recent report by the Auditor General for Wales into how well local authorities managed the preparation of their statutory accounts for the 2012 / 2013 financial year, with specific reference to the relative performance of the Authority. The Officer drew Members’ attention to an amendment on page 71, point 5.3 in auditing the 2012 / 2013 Accounts, not 2011 / 2012 as recorded.

. ‘ Unadjusted Error’ Statement of Accounts – this had resulted from an error between the Asset Register and accounting records, which had been identified at a later date. Processes had now been put in place to ensure entries were made correctly.

. Voluntary Aided and Voluntary Controlled Schools – this was subject to review as guidance had been issued that would change treatment of all these schools in Blaenau Gwent. This would be included in the 2014 / 2015 Accounts in a different way to the current format.

The WAO Representative clarified that, with regard to the unadjusted error, the report of the Auditor General highlighted that accounting for plant and equipment was an area with complex, technical accounting aspects.

The Executive Member – Financial Management and Strategy thanked the Officer and his Team for completing this work under extremely strict timescales and wanted to ensure that, even in these difficult times, the process continued to be staffed with the appropriate number of qualified and experienced staff.

RESOLVED that the report be accepted and the Appendix (WAO 2012-13 Local Government Accounts), the Council’s performance, and its contribution to effective corporate governance be noted.

The Chair thereupon thanked Members and Officers for attending and declared the meeting closed.

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