The Chair gave a warm welcome to Councillor Philip Hackett, Alistair Ashworth and Chris Dobbs from Torridge District Council who would be observing how Plymouth City Council’s Audit Committee operated.

Members will be asked to make any declarations of interest in respect of items on this Agenda.

The following declarations of interest were made –

To confirm the minutes of the meeting held on 15 September 2016.

The committee agreed that the minutes of the meeting held on 15 September 2016 are confirmed as a correct record.

To receive reports on business which, in the opinion of the Chair, should be brought forward for urgent consideration.

There were no items of Chair’s urgent business.

The committee will receive the Mid-Year Treasury Management report 2016/17.

Chris Flower (Lead Accountant) presented the 2016/17 mid-year Treasury Management report and reported that the Local Government Act 2003 required the council to set out its Treasury Strategy for borrowing and to prepare an Annual Investment Strategy; the Council’s strategy for 2016/17 was approved by Full Council at its budget meeting on 16 February 2016; this report provided an update on the progress and outcomes against the Treasury Management Strategy for the six month period ended 30 September 2016; it was also a requirement of the  Chartered Institute of public Finance and Accountancy (CIPFA) Code of Practice on Treasury Management that a mid-year report, as a minimum, should be presented to Full Council.

In response to a question raised by the committee it was reported that the total investments (contained within the investment activity in 2016/17) should commence at £74m.

The committee noted the report.

The Committee will receive the Treasury Management Strategy 2017/18.

Chris Flower (Lead Accountant) presented the Treasury Management Strategy 2017/18 and reported that the (CIPFA) Code of Practice for Treasury Management in Public Services required local authorities to set a Treasury Management Strategy on an annual basis to include the Annual Investment Statement and the Minimum Revenue Provision Statement.

In response to questions raised by the committee, it was report that –

The committee agreed to recommend the Treasury Management Strategy 2017/18 (incorporating the authorised limits, operational boundaries and prudential indicators) to Cabinet for approval.

The committee will receive the Treasury Management Report – the Impact of Leaving the European Union.

Chris Flower (Lead Accountant) presented the Treasury Management report – the impact of leaving the European Union which provided a commentary on the effects on treasury management caused by the UK’s decision to leave the European Union.  The report also outlined the changes in the economy and markets and how these had affected the council’s treasury management.

In response to a question raised by the committee, it was reported that if there was an increase in the inflation rate this would have an impact on the council’s investments.

The committee noted the report.

The committee agreed to include any significant developments relating to the impact of leaving the European Union within the treasury management report (no separate report will be required).

The committee will receive the update report on Operational Risk and Opportunity Management update report.

Mike Hocking (Head of Assurance) presented the operational risk and opportunity management update report which supported the delivery of the City’s vision and enabled the provision of high quality services to the residents and communities of Plymouth; it was imperative that effective risk management arrangements were in place; a fundamental element of  corporate governance, risk managed approach to decision making would enable the council to achieve its objectives and deliver services more efficiently and cost effectively.

In response to questions raised by the committee, it was reported that –

The committee noted the report and endorsed the current position with regard to operational risk and opportunity management.

The committee will receive the Local Government Ombudsman report.

The following background papers can be accessed at the Council’s website Council and Democracy/Councillors and Committees/Library/Audit background papers or using the following hyperlinks –

Report of Local Government Ombudsman Investigation into Complaints Plymouth City Council:  http://tinyurl.com/hzucttw

Valuation Report District Valuer:  http://tinyurl.com/zgqhd49

Interim Report - John Grimes Partnership (including plans and sections and borehole monitoring data) -

Report: http://tinyurl.com/gpk5p75

Plans: http://tinyurl.com/go376gv

Borehole Monitoring Data:  http://tinyurl.com/h863jyh

Dave Shepperd (Head of Legal Services), Paul Barnard (Assistant Director for Strategic Planning and Infrastructure) and Peter Ford (Head of Development Management) presented the Local Government Ombudsman (LGO) report which reviewed the recommendations made by the Local Government Ombudsman regarding a complaint from residents of ‘D street’ (LGO ref 15015955 and 15015963) and to agree actions outlined in the report; the compliant related to a planning application ‘xyz’; it should be noted that the LGO report did retain the confidentiality of certain details and so the council’s report and background papers had followed this.

In response to questions raised by the committee, it was reported that –

The committee agreed that –

The committee will receive the issues arising from the Local Government Ombudsman investigation 15015955 and 15015963.

Robert Hutchins (Devon Audit Partnership) and Dominic Measure (Devon Audit Partnership) presented the issues arising from the Local Government Ombudsman investigation (15015955 and 15015963) which considered the events that had led to the Local Government Ombudsman’s findings, the recent procedural changes made and the effectiveness of these changes in reducing the risk of future occurrence of such issues.

In response to a question raised by the committee, it was reported that council officers had commissioned Devon Audit Partnership to review the internal procedures of the planning service area to ensure they were robust and effective.

The committee agreed that –

The committee will receive a report on the Impact of Workforce Changes.

Dawn Aunger (Assistant Director for HR and OD), Alison Mills (Head of HR and Specialist Services) and Malcolm Fieldsend (Senior Health, Safety and Wellbeing Advisor) presented the impact of workforce changes which highlighted the workforce and sickness trends and highlighted particular monitoring and measures in place in relation to work related stress.

In response to questions raised by the committee, it was reported that –

The committee noted the report.

The committee will receive the Internal Audit Half Year Report 2016/17.

David Curnow (Devon Audit Partnership) presented the 2016/17 Internal Audit half year report  which provided the position statement on the audit work carried out since April 2016 and based on work performed to date during 2016/17; Internal Audit was able to provide reasonable assurance on the adequacy and effectiveness of the Authority’s internal control environment.

In response to questions raised by the committee, it was reported that –

The committee agreed that the Devon Audit Partnership feedback information to the appropriate Strategic Director, the responsible Cabinet Member and the Chair of the Corporate Parenting Group regarding the safeguarding issues.

The committee noted the report.

The committee will receive the Audit Committee Progress Report.

Matthew Hepenstal (BDO) presented the progress report which provided an update on the progress in delivering the 2015/16 audit together with an update on the initial planning that had been undertaken in connection with the 2016/17 audit.

Andrew Hardingham (Assistant Director for Finance) advised that discussions had commenced regarding bringing forward the accounts preparation work and audit for 2016/17; this would be in preparation for 2017/18 when the statutory timetable would change requiring an earlier closedown and sign off process.

In response to a question raised by the committee, it was reported that work to evaluate the highways network assets had been deferred until 2017/18.

The committee noted the report.

The committee will receive the Annual Audit Letter.

Matthew Hepenstal (BDO) presented the Annual Audit Letter which summarised the key issues arising from the work that had been undertaken in respect of the financial year ended 31 March 2016.

The committee noted the report.

The committee will receive the Integrated Commissioning – Finance and Assurance Review Group – Annual Report 2015/16 and a verbal update on the ASW Audit Programme for the CCG.

Ben Chilcott (NEW Devon CCG) and Rob Loader (Audit South West) presented the Integrated Commissioning – Finance and Assurance Review Group – annual report 2015/16 including the ASW Audit Programme for the CCG which highlighted the work undertaken during the financial year, the success and risks and highlighted the key tasks for the forthcoming year.

In response to questions raised by the committee, it was reported that –

The committee noted the report.

The committee will review its work programme 2016/17.

Andrew Hardingham (Assistant Director for Finance) advised that in order to comply with future changes to the annual external audit of the statement of accounts process it would be necessary to bring forward the meeting dates of the Audit Committee.

The committee noted the current position of its work programme 2016/17 subject to the inclusion of the Director for Children’s Services assurance test review for March 2017 and the merger of the ‘Brexit’ report with the Treasury Management report when significant developments occurred.