Agenda and minutes

To confirm the minutes of 14 February 2022.

The minutes of the meeting of 14 February 2022 were confirmed and signed subject to the following comments:

• Councillor Booth queried that there had been no fraudulent cases and suggested that it would be more accurate to say that no cases of fraud had been identified. He explained that he was surprised that there were no cases of fraud found due to the scale found nationally but recognised that the pre-checks had been undertaken and asked how many cases had been rejected as the result of this. Kathy Woodward stated that she would provide the information to the Committee either after the meeting via email or at the next meeting.
• Councillor French noted that she had attended an Anglian Revenues Partnership meeting the previous week and that there were still no cases of fraud at that time.    

To approve the internal audit plan and resources for the forthcoming year.

Members considered the Risk Based Internal Audit Plan 2022/23 presented by Kathy Woodward.

Members made comments, asked questions, and received responses as follows:

• Councillor Mrs J French asked how much revenue the external work that the audit function were completing would bring into the Council. Kathy Woodward informed the Committee that they would be completing seven days work bringing in just under £3,000.

• Councillor Wicks asked for clarification on the timelines between audits noting that there had been a 7-year gap since the last development delivery processes audit. He also asked what the highways audit encompassed. Kathy Woodward explained that the contract monitoring highways audit was based around the engineering team and the work they were undertaking with County along with some street lighting work. She agreed that the last development audit in 2015-16 was too long ago and explained that it was meant to be audited in 2020-21 but was delayed due to the pandemic. She stated that the audit team attempt to look at everything within a 5-year period and that they were trying to get this back on track now that the pandemic period had abated.  
• Councillor Mrs J French noted that with the Highways audit most of the streetlights were County owned. She asked whether they were undertaking the audit on Fenland owned streetlights or both. Kathy Woodward explained that the audit would be on the contractual arrangement and delivery on the lights. She stated that it was hard to give a direct answer as they had not defined the whole scope yet. She informed the Committee that they could incorporate other areas into the audit if there were any concerns.
• Councillor Yeulett asked for clarification over what substantial, adequate, and limited meant. Kathy Woodward informed him that they have 5 levels of audit results and assurance levels. She explained that the first level was full assurance which was reserved for areas where there was no room for improvement. The second level was substantial which was allocated to areas with no major weaknesses and only a few minor weaknesses based on best practices. The third was adequate assurance which is where there are some weaknesses but none that put major system objectives at risk. The fourth was limited assurance which was reserved for areas where there were major weaknesses identified that could put system objectives at risk and the fifth was no assurance which denoted that there was catastrophic failure of service delivery.
• Councillor Yeulett thanked Kathy for the explanation and asked where Councillors could see the corrective actions from the audits. Kathy Woodward explained that whenever an audit was completed they are issued with an assurance rating and a number of recommendations. These are then used to draw up a management action plan and the recommendations are given a time frame for completion. She noted that progress reports are brought before the Committee quarterly which contain the audits completed, recommendations and any outstanding actions.
• Councillor Booth highlighted that it would be useful to get more  ...  view the full minutes text for item ARMC48/21

To review and note the progress on the Annual Governance Statement action plan.

Members considered the Annual Governance Statement update presented by Kathy Woodward.

Members made comments, asked questions, and received responses as follows:

• Councillor Yeulett recognised the situation in Ukraine and the impact this would have on the UK regarding the number of refugees seeking shelter. He asked whether this was an area that needed to be flagged or whether this would be tackled later. Kathy Woodward explained that the issues raised would be picked up as part of the risk register and informed the Committee that the Cambridgeshire and Peterborough Local Resilience Forum were also discussing the matter. She explained that they were keeping a watching brief as it was unclear as to the effect it would have on the Council. Regarding the Annual Governance Statement, she informed him that they would include a watching brief on the area in this.
• Councillor Booth identified the shortfall predictions and variances and raised that there was a wide variance in the figures of around £600,000. He explained that this was not good practice and asked whether they could do anything to avoid this in future. Peter Catchpole explained that there were many unknowns in the budget and changes they could never have envisaged. He reasoned that they had performed very well in the situation and hoped that they would continue to outperform the budget going forward. He stated that the only certainty in the budget was Council Tax and that everything else had a level of uncertainty around it noting that the budget was compiled relatively early and lots changed between November and when it was published. He stated that he was happy to see the drop of £600,000 and hoped that it would drop by more.
• Councillor Booth recognised that it was not the best year for predictions due to the situation and stated his hope that it would be more stable going forward. He reiterated that having such wide variances in the budget should be avoided wherever possible and asked how the Council could manage finances responsibly when they are half a million out. Peter Catchpole informed him that he had analysed the neighbouring Council’s budgets and found that no one came as close to Fenland’s predictions and outcomes. He recognised that putting an accurate budget forward did have key decision making implications on areas such as Council tax rates and stated they try to be as accurate as possible but reiterated that there were many variables that change from one year to the next including government funding and grants which made the task difficult.    
• Councillor Benney recognised that they were looking at one of the worst years possible due to Covid-19 and identified that they did not have to pull heavily from the reserves despite this. He stated that Councillor Boden had set up the Equalisation Fund which had wiped out nearly £243,000 of the deficit. He expressed that he felt the Council had done very well considering the impact of the crisis and that this had shown good management  ...  view the full minutes text for item ARMC49/21

To consider and note the annual review of risk management and corporate risk register.

Members considered the Risk Based Internal Audit Plan 2022/23 presented by Stephen Beacher.

Members made comments, asked questions, and received responses as follows:

• Councillor Booth asked whether it was necessary to bring the policy back every year or whether it could be looked at on a tri-annual basis. He expressed that it was important to look at the risk register quarterly but the policy was unlikely to change dramatically. He stated that it would be useful to use track changes in future. Councillor Booth identified section 9.3 which stated that there were three options for managing risk. He challenged this stating that there were five with risk acceptance and risk sharing being missed off. He argued that risk sharing was an important area as the Council conducts this in several ways through their relationship with areas such as ARP and the Shared Planning Service. He also asked who set the risk appetite and risk strategy as the document stated that it was senior management when it should be the Councillors. Stephen Beacher explained that they did have the tracked changed document if Councillor’s wished to see it and stated that they would take the other comments on board.
• Councillor Wicks stated that the risk register should identify emerging risks with the mitigations for them along with an ultimate fallback position if the mitigations fail. Stephen Beacher explained that they do review risks and identify any emerging ones on a quarterly basis with the Corporate Risk Management Group who then pass it through Corporate Management Team before it is brought before the Committee. Peter Catchpole clarified that the risk register was presented quarterly which contained all the information Councillor Wicks had outlined. Councillor Booth noted that this was set out in the policy document. 

Members APPROVED the latest Risk Management Policy and Strategy as attached at Appendix A.

For information.

Councillor K French presented the Audit and Risk Management Committee Work Programme 2021/22 for information.

• Councillor K French informed the Committee that there were no definitive dates yet and that these would be circulated in due course.

Members made comments, asked questions, and received responses as follows:

• Councillor Booth recognised that Committee training still had an amber status despite the Committee now receiving regular training and asked whether this should now be green. Kathy Woodward agreed to amend this and stated that if Councillors had any suggestions for further training she would be happy to consider these and provide training at appropriate times.
• Councillor Booth identified the Independent Member Appointment due in July and asked whether any steps were being taken to deliver on that. Peter Catchpole confirmed they were taking steps and informed him that there would be a paper coming before the Committee in July which would outline the process and be driven by the Committee. Councillor Booth asked if they needed to amend the due date as they would not be in place by July. Peter Catchpole clarified that the due date was for the paper to be brought before the Committee and explained that there would be a process after that.

The Audit and Risk Management Committee Work Programme was noted for information.

Peter Catchpole informed the Committee that he had accepted the offer from the PSAA to opt in allowing them to handle the appointment of external auditors.