MEETING OF THE LIVERPOOL CITY REGION AUDIT AND GOVERNANCE COMMITTEE To: The Members of the Audit and Governance Committee You are requested to attend a meeting of the Audit and Governance Committee to be held on Wednesday, 23rd September 2020 at 2.00 pm via Teams. The meeting will be live webcast. To access the webcast please go to the Combined Authority’s website at the time of the meeting and follow the instructions on the page. If you have any queries regarding this meeting, please contact Shauna Phillips on telephone number (0151) 330 1086. Yours faithfully Chief Executive WEBCASTING NOTICE This meeting will be filmed by the Combined Authority for live and/or subsequent broadcast on the Combined Authority’s website. The whole of the meeting will be filmed, except where there are confidential or exempt items. If you do not wish to have your image captured or if you have any queries regarding the webcasting of the meeting please contact the Democratic Services Officer on the above number or email [email protected]. A Fair Processing Notice is available on the Combined Authority’s website at https://www.liverpoolcityregion-ca.gov.uk/wp-content/uploads/Fair-Processing- Notice-CA-Meeting-Video-Recording.pdf (Established pursuant to section 103 of the Local Democracy, Economic Development and Construction Act 2009 as the Halton, Knowsley, Liverpool, St Helens, Sefton and Wirral Combined Authority) AUDIT AND GOVERNANCE COMMITTEE AGENDA 1. APPOINTMENT OF CHAIR FOR 2020-21 2. APPOINTMENT OF VICE CHAIR FOR 2020-21 3. APOLOGIES 4. DECLARATIONS OF INTEREST 5. MINUTES OF THE LAST MEETING To consider the minutes of the last meeting held on 11 July 2020. (Pages 1 - 8) GOVERNANCE 6. PROCESS FOR DEALING WITH COMPLAINTS AGAINST MEMBERS To consider the establishing of a working group to form a procedure on dealing with complaints against members to be recommended to the Liverpool City Region Combined Authority. 7. SAFEGUARDING PROTOCOL To consider a report of the Monitoring Officer providing an update on the work the Liverpool City Region Combined Authority is undertaking in relation to updating its Safeguarding Protocol and associated practices. (Pages 9 - 50) 8. INSURANCE CLAIMS REVIEW - JULY 2020 To consider a report of the Monitoring Officer providing details of insurance claims. (Pages 51 - 54) 9. AUDIT & GOVERNANCE ANNUAL REPORT To consider a report of the Monitoring Officer providing an overview of the Audit and Governance Committee’s work for 2019-20 and a proposed work programme for 2020-21. (Pages 55 - 70) INTERNAL AUDIT 10. HEAD OF INTERNAL AUDIT ANNUAL REPORT AND OPINION 2019-20 To consider a report of the Head of Internal Audit providing the Head of Internal Audit’s Annual Report and Opinion in respect of Liverpool City Region Combined Authority for the financial year 2019-20. (Pages 71 - 102) 11. INTERNAL AUDIT PERFORMANCE To consider a report of the Head of Internal Audit providing the Liverpool City Region Combined Authority (LCRCA) Audit and Governance Committee with an overview of the internal audit work completed in respect of the Combined Authority in the fourth quarter of 2019-20 and the first quarter of 2020-21, in accordance with the Internal Audit Plans 2019- 20 and 2020-21. (Pages 103 - 140) 12. INTERNAL AUDIT PLAN AND CHARTER 2020-21 To consider a report of the Head of Internal Audit providing the Liverpool City Region Combined Authority (LCRCA) Audit and Governance Committee with the updated Internal Audit Plan of work and Internal Audit Charter for 2020-21. (Pages 141 - 184) 13. RISK MANAGEMENT UPDATE To consider a report of the Head of Internal Audit providing an update in respect of the system of corporate risk management and the activity that has been undertaken in embedding this system during the fourth quarter of 2019-20 and first quarter of 2020-21. (Pages 185 - 226) FINANCE 14. EXTERNAL AUDIT PLAN 2019-20 To consider a report of the Director of Corporate Resources providing members of the Committee with details of the External Auditors, Mazars, proposed Audit Strategy for the audit of the 2019-20 annual statement of accounts. (Pages 227 - 250) Agenda Item 5 AUDIT & GOVERNANCE COMMITTEE At an inquorate meeting of the Audit & Governance Committee held in the Authority Chamber - No.1 Mann Island, Liverpool, L3 1BP on Wednesday, 11th March, 2020 the following Members were P r e s e n t: Councillor E Finneran Overview and Scrutiny Knowsley MBC Councillor L Whitley Overview and Scrutiny Halton BC Councillor P Hackett LCRCA Wirral BC Martin McDonagh Independent Member 35. APOLOGIES FOR ABSENCE Apologies were received from Councillors David Baines, Helen Cameron, Graham Morgan and Sir Ron Watson. 36. INQOURACY Deputy Monitoring Officer of the Liverpool City Region Combined Authority, Louise Outram, advised the Audit and Governance Committee that the meeting was inquorate as at least two thirds of the voting members needed to be present. Due to a disruption on the rail network a member had been prevented from attending the meeting. As a number of the reports on the agenda were for noting it was agreed that the meeting continue to allow discussion of the items though it was noted no decisions could be made. 37. DECLARATIONS OF INTEREST No declarations of interest were received for this meeting. 38. MINUTES OF THE LAST MEETING HELD ON 2 OCTOBER 2019 RESOLVED that the minutes of the last meeting held on 9 October 2019 were agreed as an accurate record. 39. RISK MANAGEMENT UPDATE Laura Williams, Head of Internal Audit provided an update on the organisation‟s risk management and the improvements that had been made since the last Audit and Governance Committee in October 2019. The report included the amended risk management policy and the updated corporate risk register as well as risk management activities during the third and fourth quarters. The Committee were advised that a risk had been removed from the corporate register relating to „Failure to establish an appropriate spatial Page 1 framework‟ as great progress had been made and the level of risk had reduced. There had also been the addition of risk 11 “Failure to deliver a medium-term financial strategy”, which had been transferred across from the Transport Risk Register so as to reflect the overarching nature of the risk regarding funding of the organisation‟s activities. Reference was also made in the register to the Metro Mayor‟s bus powers and their significance to the city region. Since the last update, the Internal Audit department had made progress in terms of articulating the organisation‟s risk appetite outlined in Section 3 of the report. Section 4 of the report portrayed how service risk registers had been established and kept up to date across the organisation by liaising with directors and reviewing their contents regularly. Laura Williams explained that the organisation had been successful in embedding effective risk management as a result of members‟ feedback at the last Audit and Governance Committee meeting. With regard to the risk register, it was noted that a section had been added to include the benefits of effective management and the report reflected a change in the group that considered risk matters across the organisation. Previously risk had been considered by the Performance, Assurance and Risk Group however a new group had been established with the terms of reference included in the appendices of the report. Martin McDonough queried whether COVID-19 was considered within the risk register and what the effect of a potential lockdown would be to the organisation if the offices were to close and if operations were to cease. It was explained that although it was not referenced specifically, risk 8 addressed responding to major incidents of this nature. Laura Williams provided assurance that if COVID-19 were to develop into a major incident, the contingency planning within the risk register would come into effect. Discussions had already taken place to ensure that the contingency plan was fit for purpose and it was incumbent on all services within the organisation to plan for unforeseen circumstances of this nature. Furthermore, it was noted that a national pandemic would be a risk for the organisation in terms of providing services for the public, but also a risk internally to the staff. The LCRCA provided transport services to the public as well as the Housing First programme and Households into Work programme that the public relied upon. It was therefore key that these services had contingency plans in place. Director of Corporate Resources, John Fogarty explained that the LCRCA were part of the Merseyside Resilience Forum which was led by Government Advice and other bodies in the city region. Internally there was also a Resilience Group within the Combined Authority comprising of Heads of Service and key officers. Current advice was that COVID-19 was not yet a major incident but the LCRCA were preparing for any escalation in the level of risk, whilst assuring the Committee that the organisation had evolved business continuity measures in place. Page 2 With regards to potential funding streams for 2020-21, the Committee heard that there had been a budget update from Government which included funding for „ambitious‟ Mayors though further details on this were needed on the amount and what was considered „ambitious‟. There was little detail with regards to combined authorities however, an announcement on transport infrastructure funding had been made. Notably the Comprehensive Spending Review (which was originally due before the last election) had been brought forward to July. Further clarity on funding and information on the CSR was expected over the coming weeks and would provide insight into how this would relate to the LCRCA.