Agenda and draft minutes

To note any changes in membership of the Committee made in accordance with Part 4B paragraph 5 of the Constitution.

Apologies had been received from Cllr Claire Critchison and Cllr Karen Lucioni.

To confirm as a true record the Minutes of the meeting held on 29 April 2024.

RESOLVED:

THAT the minutes of the meeting held on 29 April 2024 be confirmed as a true record.

To invite councillors to declare any interest they might have in the matters on the agenda.

Cllr Chris Jarman declared a non-pecuniary interest in Minute item 6(a) (External Audit Plan 2023-24) as the chairman of Isle of Wight Pension Fund Committee.

Cllr Chris Jarman declared a non-pecuniary interest in Minute item 13 (Review of the Constitution) as a member of constitution working group.

Cllr Vanessa Churchman declared an interest in Minute item 6(a) (External Audit Plan 2023-24) as vice-chairman of the Isle of Wight Pension Fund Committee.

Cllr Vanessa Churchman declared an interest in Minute item 12 (Future Governance Update) as a member of the former working group.

To elect a vice chairman.

Cllr Vanessa Churchman was nominated, which was seconded and subsequently declined. Cllr Chris Quirk was nominated, it was duly accepted, seconded, and following a vote, it was:

RESOLVED:

THAT Cllr Chris Quirk be elected as vice-chairman of the Audit and Governance Committee.

Questions may be asked without notice, but to guarantee a full reply, a question must be put (including the name and address of the questioner) in writing or by email to Democratic Services democratic.services@iow.gov.uk, no later than two clear working days before the meeting. The deadline for submitting a written question is Wednesday, 24 July 2024.

No public questions had been received.

To receive and consider the report of the External Auditors:

The External Auditors presented the report which provided the committee with a basis to review the proposed approach and scope for the 2023-24 external audit of the Isle of Wight Council. The committee received an update on the Government proposals to clear the national backlog of local government audits.

Discussion took place regarding the threshold for materiality on audit differences (£422k), and whether this could be reduced to £50k. It was advised that this was possible, however it would take significant additional resources and would therefore increase fees.

It was suggested that the committee may benefit from a training session on materiality and reporting levels, and with regards to the internal controls around identification of fraud.

Questions were raised in relation to the basis of the changes in regulations, consideration of debt transfers, and operational assets and investment properties. Questions were raised around the changes to the private finance initiative accounting model during the current year, and the Strategic Manager for Corporate and Technical Finance clarified that this was due to a change in information gathering as a result of the council’s savings exercise over the last few years.

Discussion took place regarding value for money assurances as it related to the sale of land and the disposal of council-owned assets, as the details were considered commercially sensitive during negotiations and were therefore exempt from public disclosure.

RESOLVED:

i)                 THAT the committee confirmed its understanding of, and agreement to, the materiality and reporting levels.

ii)               THAT the External Audit Plan 2023-24 (Isle of Wight Council) be received and noted.

To receive and consider the reports of the Chief Internal Auditor:

The Chief Internal Auditor presented the report which summarised the results of the audits finalised between March 2024 and June 2024. Attention was drawn to the reports which had been rated as ‘limited assurance’, including two in Children’s Services (key financial controls, and direct contact and supervision) and one in Adult Social Care (homelessness).

The Strategic Directors of both areas were invited to make comment. Discussion took place regarding financial transactions throughout Children’s Services and the committee suggested that additional context be provided when reporting on the value of staff recognition and team building activities.

Questions were raised around the internal audit work which considered how the process of achieving the budget savings proposals had been managed (the robustness of the arrangements to identify the savings and the oversight process). The committee sought additional narrative around the instances of a departure from the budget, where a saving was being made elsewhere or additional revenue was being generated to mitigate this. 

RESOLVED:

THAT the Internal Audit Progress Report be received and noted.

The Chief Internal Auditor presented the internal audit annual report and opinion for 2023-24. It was confirmed that the overall annual opinion remained rated as 'reasonable assurance'. Comments were made with regards to the presentation of the data and the level of additional narrative provided.

Questions were raised and discussion took place around the ability of the Internal Auditors to close agreed actions at the point of follow-up audits with departments. It was clarified this was mainly due to visibility and capacity issues within the areas responsible, and new arrangements had been put in place to support this.

RESOLVED:

THAT the Internal Audit Annual Report be received and noted.

The committee received the report which presented the policy which had been developed to ensure that the council had fit-for-purpose arrangements to respond to fraud, bribery, and corruption. Comments were made in relation to the register of gifts and hospitality for planning officers.

RESOLVED:

THAT the Anti-Fraud, Bribery and Corruption Policy be received and noted.

To receive and consider the report of the Chief Executive.

Consideration was given to the report which summarised the current position with regards to the council’s strategic risks. The chairman extended his thanks to the Chief Executive for inviting him to attend another meeting of the Corporate Management Team to observe the discussion around risk amongst senior management.

Questions were raised regarding Strategic Risk 3 (insufficient staffing capacity and skills), with regards to staff sickness levels and the internal Mental Health Champions network. The Strategic Director of Adult Social Care and Housing outlined the mental health and wellbeing support available to staff across the council.

Questions were raised regarding Strategic Risk 5 (failure to improve educational attainment), particularly the workforce pressures around driving and delivering the complex Safety Valve programme. Discussion took place regarding specialist schools and the number of pupils with SEN placed inappropriately within mainstream schools. The Strategic Director of Children’s Services confirmed that this formed part of the emerging Education Strategy which was being developed to improve education standards across the Island.

Concerns were raised that the quarter one financial risk updates within the Strategic Risk Profile were not presented to the committee, due to the schedule of meetings and as the report had not yet been presented to the Cabinet. It was suggested that that this information should be disclosed to the committee as soon as possible. Following discussion, it was:

RESOLVED:

i)                 THAT the quarter one financial risk updates within the Strategic Risk Profile be released to members of the Audit and Governance Committee without further delay (not awaiting the next meeting of the committee and not dependent on any other committee or cabinet meeting to discuss it).

ii)               THAT the report be noted, and the strategic risks of the council as set out in Appendix 1 of the report be approved.

To receive and consider the report of the Director of Corporate Services.

The committee received the report which presented the annual review of the effectiveness of the council’s system of internal controls, and the committee were asked to approve the draft statement for publication in readiness for the final sign-off and submission within the council’s annual report and accounts. Comments were made around equality and diversity, and it was noted that in the view of some councillors the Full Council had recently approved a policy which did discriminate based on a protected characteristic within the Equality Act 2010.

RESOLVED:

THAT the content of the draft Annual Governance Statement 2023-24 be confirmed as the final version for publication, subject to the final accounts being signed off.

To receive and consider the report of the Director of Corporate Services.

Consideration was given to the report which provided a high-level summary of the council’s procurement and contract monitoring activities for the period 1 October 2023 to 31 March 2024. Discussion took place regarding the fleet vehicle replacement programme and the introduction of electric cars, particularly in relation to the higher replacement costs, the impact on insurance, and the mitigations in place to minimise accidents. Questions were raised around the expense of the mitigation and examination measures for the A3055 (Freshwater Bay to Shanklin), and committee members requested an interim up-to-date record of those costs.

RESOLVED:

THAT the Procurement Half-Yearly Report be received and noted.

To receive and consider the report of the Director of Corporate Services.

The committee received the report which provided an update on the four mainland property investments that were purchased in 2018. The committee were asked to note the current position of property investment portfolio, including the total income that had been accrued by the council.   It was confirmed that there were no vacant units, and the portfolio value had increased. Comments were made with regards to the return on investments and overall asset value.

RESOLVED:

THAT the Property Investment Portfolio Annual Report be received and noted.   

To receive and consider the report of the Director of Corporate Services.

Consideration was given to the report which presented the project initiation document and the high-level project plan which had been developed to deliver Full Council’s decision to introduce a committee system of governance with effect from Annual Council in May 2025.

It was noted that the report had already been considered by committee members in-depth at an informal meeting, and it was agreed that the committee should continue to hold additional informal meetings to provide project oversight and direction.

RESOLVED:

i)                 THAT the proposed project initiation document (Appendix 1) and the high-level project plan (Appendix 2) be agreed.

ii)               THAT the Audit and Governance Committee agrees to identify any additional elements for inclusion in the project initiation document or high-level project plan, as considered necessary to deliver a successful outcome in the implementation of a committee system of governance.

iii)              THAT the Audit and Governance Committee agrees to hold informal meetings with committee members (with the support of officers) in-between formal meetings, to afford project oversight and direction on key work activities to be completed.

To receive any verbal update from the Chairman.

The chairman advised that he had attended the meeting of the Policy and Scrutiny Committee for Neighbourhoods and Regeneration for their discussion of the work on the LGA peer review of the Planning service. He encouraged them to bring forward recommendations for amendments to the current constitution, noting also that preparations were underway to introduce a committee system of governance with effect from Annual Council in May 2025.

RESOLVED:

THAT the update be received and noted.

To consider and note the committee’s workplan.

Consideration was given to the committee’s workplan. No comments or questions were raised at this stage.

RESOLVED:

THAT the workplan be received and noted.

Questions may be asked without prior notice, but to guarantee a full reply, a question must be submitted to Democratic Services no later than 10.00am, Thursday, 25 July 2024.

No members’ questions were received.