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North Ayrshire Council to Be Held in the Council Chambers, Cunninghame House, Irvine on MONDAY 23 MAY 2016 at 10.00 A.M

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North Ayrshire Council to Be Held in the Council Chambers, Cunninghame House, Irvine on MONDAY 23 MAY 2016 at 10.00 A.M Cunninghame House, Irvine. 19 May 2016 Audit Committee You are requested to attend a Meeting of the above mentioned Committee of North Ayrshire Council to be held in the Council Chambers, Cunninghame House, Irvine on MONDAY 23 MAY 2016 at 10.00 a.m. to consider the undernoted business. Yours faithfully Elma Murray Chief Executive 1. Declarations of Interest Members are requested to give notice of any declarations of interest in respect of items of business on the Agenda. 2. Minutes (Page 7) The accuracy of the Minutes of the meeting of the Committee held on 15 February 2016 will be confirmed and the Minutes signed in accordance with Paragraph 7 (1) of Schedule 7 of the Local Government (Scotland) Act 1973 (copy enclosed). 3. School Funds (Page 11) Submit report by the Executive Director (Education & Youth Employment) on the actions following the recent School Fund Internal Audit investigation (copy enclosed). North Ayrshire Council, Cunninghame House, Irvine KA12 8EE Reports for Approval 4. Internal Audit Reports issued (Page 15) Submit report by the Executive Director (Finance and Corporate Support) on the findings of Internal Audit work completed between 1 February and 30 April 2016 (copy enclosed). 5. Internal Audit and Corporate Fraud Action Plans: Quarter 4 update (Page 29) Submit report by the Executive Director (Finance and Corporate Support) on progress made by Council services in implementing the agreed actions from Internal Audit and Corporate Fraud reports as at 31 March 2016 (copy enclosed). 6. Annual Governance Statement 2015/16 (Page 39) Submit report by the Executive Director (Finance and Corporate Support) on the Council's Annual Governance Statement for 2015/16 which will be included within the Annual Accounts (copy enclosed). 7. Accounting Policies 2015/16 (Page 47) Submit report by the Executive Director (Finance and Corporate Support) on the accounting policies which will be adopted in the preparation of the Council's annual accounts for the year to 31 March 2016 (copy enclosed). Reports for Noting 8. Review of Housing Benefit subsidy certification 2014/15 (Page 61) Submit report by the Executive Director (Finance and Corporate Support) on the findings of the Audit Scotland review of Housing Benefit subsidy certification 2014/15 as set out at Appendix 1 (copy enclosed). 9. Audit Scotland report: Procurement in councils - Impact report (Page 93) Submit report by the Executive Director (Finance and Corporate Support) on the impact of the 2014 report 'Procurement in councils' (copy enclosed). 10. Audit Scotland report: Why the Accounts Matter (Page 121) Submit report by the Executive Director (Finance and Corporate Support) the findings of the recent Audit Scotland report entitled 'Financial Reporting and Scrutiny: Why the Accounts Matter' (copy enclosed). 11. Audit Scotland: Major Capital Investment in Councils - Follow Up (Page 129) Submit report by the Executive Director (Finance and Corporate Support) on the recent Audit Scotland follow up report on capital investment by local authorities (copy enclosed). North Ayrshire Council, Cunninghame House, Irvine KA12 8EE 2 12. Audit Scotland report: Health and Social Care Integration (Page 181) Submit report by the Director (Health & Social Care Partnership) on the overview of the recent national report by Audit Scotland on the integration of Health and Social Care services and to provide a local context for North Ayrshire (copy enclosed). 13. External Audit Plan 2015/16 (Page 237) Submit report by the Executive Director (Finance and Corporate Support) on the External Audit plan for 2015/16 (copy enclosed). 14. External Audit overview of Internal Audit (Page 261) Submit report by the Executive Director (Finance and Corporate Support) the outcome of the annual assessment of the Internal Audit function by the external auditor (copy enclosed). 15. Local Scrutiny Plan and National Scrutiny Plan 2016/17 (Page 265) Submit report by the Executive Director (Finance and Corporate Support) on the Local Scrutiny Plan (LSP) for 2016/17 prepared by the Local Area Network of external scrutiny bodies and the National Scrutiny Plan, which brings together all LSPs and is prepared by the Strategic Scrutiny Group (copy enclosed). 16. Internal Audit Annual Report 2015/16 (Page 289) Submit report by the Executive Director (Finance and Corporate Support) on the work of Internal Audit during 2015/16 and provide an opinion on the governance, risk management and internal control environment of the Council (copy enclosed). 17. Corporate Fraud Annual Report 2015/16 (Page 307) Submit report by the Executive Director (Finance and Corporate Support) on the annual overview of the work of the Corporate Fraud team during 2015/16 (copy enclosed). 18. External Audit Action Plans: Quarter 4 progress update (Page 311) Submit report by the Executive Director (Finance and Corporate Support) on progress made in implementing the agreed action plans arising from the external audit of the Council's 2014/15 accounts (copy enclosed). 19. Strategic Risk Register 2016/17 (Page 317) Submit report by the Executive Director (Finance and Corporate Support) on the strategic risks faced by the Council in 2016/17 (copy enclosed). North Ayrshire Council, Cunninghame House, Irvine KA12 8EE 3 20. Internal Controls update (Page 333) Submit report by the Executive Director (Finance and Corporate Support)Audit Scotland’s Annual Review of Systems of Internal Control (copy enclosed). 21. Urgent Items Any other items which the Chair considers to be urgent. EXEMPT INFORMATION 22. Exclusion of the Public Resolve in terms of Section 50(A)4 of the Local Government (Scotland) Act 1973, to exclude from the Meeting the press and the public for the following items of business on the grounds indicated in terms of Paragraph 9 of Part 1 of Schedule 7A of the Act. Non Disclosure of Information In terms of Standing Order 17 (Disclosure of Information) the information contained within the following reports is confidential information within the meaning of Section 50A of the 1973 Act and shall not be disclosed to any person by any Member or Officer. 22.1 Corporate Fraud Reports issued (Page 345) Submit report by the Executive Director (Finance and Corporate Support) on the findings of Corporate Fraud investigations completed between 1 February and 30 April 2016 (copy enclosed). North Ayrshire Council, Cunninghame House, Irvine KA12 8EE 4 Audit Committee Sederunt: Peter McNamara (Chair) John Ferguson Chair: Tom Marshall Catherine McMillan David O'Neill Robert Steel Joan Sturgeon Attending: Apologies: Meeting Ended: North Ayrshire Council, Cunninghame House, Irvine KA12 8EE 5 6 Agenda Item 2 Audit Committee 15 February 2016 Irvine, 15 February 2016 - At a meeting of the Audit Committee of North Ayrshire Council at 10.00 a.m. Present Peter McNamara, John Ferguson, Tom Marshall, Catherine McMillan, David O'Neill, Robert Steel and Joan Sturgeon. In Attendance L. Friel, Executive Director, P. Doak, Senior Manager (Internal Audit, Risk and Performance) and A.M. Fenton, Team Manager (Internal Audit) (Finance and Corporate Support); A. Sutton, Head of Service (Connected Communities) (Economy and Communities); R. McCutcheon, Head of Service (Commercial) and T.Reaney, Senior Manager (Streetscene) (Place); M. Davision, Senior Manager (Democratic Services) and M. Anderson, Committee Services Team Leader (Chief Executive's Service). Chair Councillor McNamara in the Chair. 1. Declarations of Interest In terms of Standing Order 10 and Section 5 of the Code of Conduct for Councillors, Councillor Steel, as a member of the community association in question, declared an indirect non-pecuniary interest in Agenda Item 4 (Internal Audit and Corporate Fraud reports issued) as it related to the Corporate Fraud Investigation in respect of Economy and Communities at Appendix 1. 2. Chair's Remarks The Chair, in terms of Standing Order 9.3, agreed to vary the order of business to allow earlier consideration of the Corporate Fraud Investigation in respect of a community centre, as referred to within Appendix 1 to Agenda Item 4 (Internal Audit and Corporate Fraud reports issued). Page 1 7 3. Internal Audit and Corporate Fraud reports issued Submitted report by the Executive Director (Finance and Corporate Support) on the findings of Internal Audit and Corporate Fraud work completed between 1 November 2015 and 31 January 2016. Appendix 1 to the report provided information on reviews which have been completed, including a Corporate Fraud Investigation in respect of a community centre. Members asked questions on the community centre Corporate Fraud Investigation, and were provided with further information, on the following:- the interview process undertaken in connection with the preliminary investigation in particular; the records retention arrangements with regard to lets; the extent to which key finding 2 might be read as relating to the whole community association, rather than to an officer bearer on behalf of the association; whether the community association should have been afforded a right of reply in this instance; and whether there was any substance to apparent concerns that the centre could be at risk of closure. The Committee agreed (a) to note the outcome of the Corporate Fraud Investigation carried out in respect of a community centre, as referred to in Appendix 1 to the report; and (b) that the Executive Director (Economy and Communities) submit a report to a future meeting of the Committee following completion of the actions identified as part of the investigation. 4. Minutes The Minutes of the meeting of the Committee held on 19 November 2015 were confirmed and the Minutes signed in accordance with Paragraph 7 (1) of Schedule 7 of the Local Government (Scotland) Act 1973. 5. Internal Audit and Corporate Fraud Action Plans: Quarter 3 update Submitted report by the Executive Director (Finance and Corporate Support) on the progress made by Council services in implementing the agreed actions from Internal Audit and Corporate Fraud reports as at 31 December 2015. Appendix 1 to the report provided details of the 12 actions not completed within the agreed timescales.
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