For the Committee to note the appointment of Councillor Dr Mahony as Chair, and Councillor Lowry as Vice Chair for the municipal year 2021/22.

Members noted the appointment of Councillor Dr Mahony as Chair, and Councillor Lowry as Vice Chair for the forthcoming municipal year 2021/22.

For the Committee to consider the appointment of an independent member of the Audit and Governance Committee.

Members agreed the appointment of Annette Benny as Independent Member of the Audit & Governance Committee for a term of four years, to be reviewed on an annual basis.

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

The following declarations of interest were made by councillors in accordance with the code of conduct in respect of items under consideration at the meeting -

To confirm the minutes of the meeting held on  22 March 2021.

The minutes of 22 March 2021 were agreed as an accurate record of the meeting.

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

The Chair advised Members of an item of urgent business which related to agenda item 7, ‘Grant Thornton: Plymouth City Council Governance Review’.

Giles Perritt (Assistant Chief Executive) advised Members that concerns had been raised regarding the potential commercial confidentiality of details contained within the report, specifically the naming of contractors and associates with whom the original transactions had taken place as well as fees involved. Advice sought encouraged the Council in the short term to continue to discuss the report at the committee meeting but also advised the Council to seek independent legal advice as to whether it should publish the report in its entirety. On this basis the report was restricted on the Council’s website and it was suggested that the item be discussed in part 2 (private) session.

Members discussed the status of the minutes and what information would be contained within the public minutes, and raised concerns that the approach of moving into a private session potentially lacked transparency and accountability, specifically as this linked to tens of millions of pounds.

Geri Daly (Grant Thornton) highlighted that the preference was that the report was discussed in public session in order to support transparency however were content that the session moves into private session in order to enable the opportunity for a detailed discussion of the contents of the reports.

Members agreed to move into private session.

Brendan Arnold (Service Director for Finance) and Geri Daly (Grant Thornton) presented the Grant Thornton: Plymouth City Council Governance Review item to Members.

Members discussed the report in detail in a closed session.

The Audit and Governance Committee:

Geri Daly (Grant Thornton) presented the Plymouth City Council Audit Progress Report and Sector Update and immediately moved to questions.

Members raised questions and observations in the following key areas:

The Audit and Governance Committee agreed:

Paul Looby (Head of Financial Planning and Reporting) presented the Audit Actions Review report which was designed to set out the monitoring process for reviewing recommendations made by Grant Thornton (the Council’s external auditors) and Devon Audit Partnership (DAP) (the Council’s internal auditors) in order to improve controls, minimise exposure to risk and provide ongoing assurance to senior management and Members.

Members raised questions in the following key areas:

The Audit and Governance Committee agreed to note the content of the report and the process for monitoring recommendations of the Council’s external and internal auditors.

Brenda Davis (Audit Manager) presented the Internal Audit Annual Report 2020/21 and advised Members that the Council had revised its assurance ratings and definitions for 2021/22 in line with CIPFA Guidance (as detailed within the report). Directors had been provided with details of Internal Audit’s opinion on each audit review to assist them with the compilation of their individual annual governance assurance statements. Overall, based on work performed during 2020/21 the Head of Internal Audit’s Opinion was of “Reasonable Assurance” on the adequacy and effectiveness of the Authority’s internal control framework.

Members raised the following key areas of questioning:

The Audit and Governance Committee:

Rob Hutchins (Devon Audit Partnership) presented the Internal Audit Charter and Strategy 2021/22 report. Members were advised that the Audit and Governance Committee approved the Internal Audit Charter and the Internal Audit Strategy in July 2020 however the documents had since been merged into one document to avoid duplication. The wording contained within the report was largely unchanged however the report was added with visible track changes to assist Members in identifying what changes had been made.

It was queried by Members if the charter was a standard charter and if it differed with charters in other organisations; it was confirmed that this was a standard charter and the essence and content met public standards.

The Audit and Governance Committee agreed the Internal Audit Charter & Strategy 2021/22.

Ken Johnson (Counter Fraud Services Manager) presented the Counter Fraud Services Annual Report 2020/21 and advised Members that Counter Fraud work continued throughout 2020/21 and that there had been a general upturn in fraudulent activity during the current pandemic. Cases with the Counter Fraud Services Team, specifically linked to the Covid19 Grant, included three cases with the Police for potential money laundering, two cases which included refused payment after investigation, and nine cases where the investigation had completed and no further action was taken. The importance of raising the awareness of fraud in order to minimise fraud risk and aid in investigations was highlighted.

Key areas of questioning highlighted by Members included:

The Audit and Governance Committee agreed to:

Andrew Loton (Head of Risk, Governance and Performance) presented the Committee Training Programme. Members were advised that the committee provided a key source of assurance on the Council’s audit and corporate governance arrangements. Due to the complexity and broad nature of agenda items and in order to maximise the effectiveness of the committee, a programme of training had been developed to equip members with essential knowledge to support them in their review and scrutiny of items.

The following key areas of questioning was highlighted by Members:

The Audit & Governance Committee agreed:

Chris Flower (Finance Business Partner) presented the Annual Report on Treasury Management Activities 2020/21. The Committee was advised that the Council was required to formally report on its treasury management activities for the year providing information upon progress against the strategy in order to comply with the Code of Practice for Treasury Management. The report focused upon the Council’s borrowing activity, investments, Treasury Management Outturn, Prudential Indicators, Interest Rate Swaps and loans.

The following key areas of questioning was highlighted by Members:

In response to Members questions regarding the interest rate swap and associated benefits and risks, it was highlighted that the council was required to ensure that all decisions were legal and that risks were reasonable; innovative actions needed to be proceeded with caution.

The Audit & Governance Committee agreed:

Andrew Loton (Head of Risk, Governance and Performance) presented the Strategic Risk and Opportunity Register. The Committee was advised that two strategic risks had a risk rating of red and these related to the Council’s finances and education attainment; two further risks relating to the demands on children’s social care and the economic impact of Covid 19 had been reduced from a red to an amber rating. Two new risks has been added to the register regarding the failure to meeting carbon reduction targets to reach net zero by 2030, and the risk of the financial impact pf delivering proposed changes to waste services as set out in the Government’s draft Environment Bill.

The following key areas of questioning was highlighted by Members:

The Audit & Governance Committee approved the current position with regard to the Strategic Risk and Opportunity Register and noted the report.

Kim Brown (Service Director – HROD) and Clare Cotter (Head of Health, Safety and Welfare and Assurance) presented the Health, Safety and Wellbeing Annual Report 2020/21 to the Committee.

Members were advised that the report identified actions taken in 2020/21 to improve the Council’s management arrangements for health, safety and wellbeing and planned steps for continuous improvement. Key highlights included enforcement activity, specifically regarding the control of exposure to vibration and if the Health and Safety Executive would seek to prosecute following their intervention in 2017 – 2019, as well as the impact of Covid 19 and the council’s response to the pandemic to ensure infection control standards were implemented effectively.

The following key areas of questioning was highlighted by Members:

The Audit & Governance Committee agreed to note the contents of the Health, Safety and Wellbeing Annual Report 2020/21.

Members noted the draft work programme for 2021/22.

Under this item the date of the next meeting scheduled for 20 September 2021 was discussed; it was agreed that the date would be changed in order to accommodate the attendance of the Independent Member.