Agenda item

P Cuttle presented the update, noting that external auditors provide outputs in the year on financial statements and the auditor's annual report, which covers the responsibility to provide commentary around value for money arrangements. Statutory recommendations tend to be more serious and these can be issued at any time. The report largely focuses on any key recommendations where significant weaknesses are identified or any improvements are raised.

P Cuttle confirmed that no statutory recommendations were raised for the year and no key recommendations were identified. The document is for information and provides the Committee with assurances on messages that should be received through other forums and sources. Areas highlighted are around financial sustainability and that DBC is well placed despite the challenging environment with a good level of reserves and saving plans are lower than some other councils. The Council are urged to not be complacent regarding its financial position.

P Cuttle advised that none of the 3 recommendations were significant and that not acting upon the first 2 recommendations would not impact the Council's ability to deliver its services. On the third recommendation regarding procurement, this should be implemented to help with transformation and savings programmes that the Council is looking to deliver.

The Chair stated that it would be beneficial for the agenda to state if documents are for information or approval.

Cllr Douris commented on councils that have had financial issues and noted that these were due to a failure of the Audit Committee to challenge what has been presented by officers. Cllr Douris noted that they are receiving the validation of the work completed by officers over the years and that the action is therefore to be aware of what is said in the report. On the internal audit, Cllr Douris suggested that if a manager objected to a recommendation to the report then they would be summoned to the Committee to explain this further.

Cllr Birnie advised that the audit is historic and can't look forward to what the new administration may look to do. P Cuttle commented that there is a degree of forward-looking work in terms of financial statements.

N Howcutt explained that all internal reports come with a recommendation on what the Committee will do and this can also be included on external reports. N Howcutt noted that most reports that come to the Committee are for review, scrutiny and challenge to gain assurance. On looking ahead, N Howcutt noted that auditing is carried out on an annual basis and part of the audit is to review the medium-term financial strategy, which is the sustainable strategy for the next 3-5 years, and the auditors have assessed whether this is robust, and the governance structure in place should provide assurance that decisions are in the right governance framework.

Cllr Stevens commented that he would hope N Howcutt, as the Section 151 officer, would be able to raise if he was not comfortable signing off a report. N Howcutt confirmed that all reports that go to Cabinet have Section 151 comments included and that if he felt actions were making the Council financially unsustainable then there are other measures that he would be duty bound to put in place.

Cllr Freedman referred to comments on the external report, noting that whilst it contains positive news, it should be critiqued where necessary. Cllr Freedman noted the procurement arrangements and monitoring of contract terms, as highlighted in both the external report and internal report recommendations. Cllr Freedman agreed that these areas should be improved.

The Chair commented that questions could be submitted ahead of the meeting to allow officers to prepare and suggested that they not page-turn the report during the meeting. N Howcutt advised that the previous committee had discussed having as many questions raised ahead of the meeting, particularly those of a more technical nature, to allow officers to prepare their answers, and he recommended that they find a balance between pre-submitted questions and organic scrutiny and challenge during the meeting. N Howcutt suggested that this would likely evolve and that the Chair could take a lead on how he would like to proceed.

The Chair referred to the recommendation as detailed in the previous minutes regarding submitting questions before meetings and that he would like to see some discipline around questions to ensure that officers can arrive prepared.

Cllr Douris advised that most overview and scrutiny committees have a coversheet to the agenda that includes a recommendation and key highlights. Cllr Douris noted that this was not included in the meeting's agenda coversheet and recommended that the coversheet be provided going forward. N Howcutt confirmed that all internal reports will use an identical template and that a coversheet can be provided for the internal and external audit reports. Cllr Douris suggested that this would be helpful, particularly given the new members of the Committee.

The Chair queried who owns the recommendations made within the external report and if any other scrutiny committees would cover these. F Jump advised that a number of recommendations relate to reports that will go to other scrutiny committees so there will be further follow-up.

Cllr Elliot noted that the external report is an unqualified report and that the Committee did not need to spend further time going into it in detail.

Cllr Douris proposed that the Committee accept the auditor's report and note the comments made within. The Committee approved the proposal.

The Chair asked if there was any other business.

F Jump commented on the next meeting, noting that the deferred items will be included in the agenda and it was recommended that there also be a focus on training, roles and responsibilities and the Committee's terms of reference. The Committee approved the recommendation.

Cllr Douris suggested that any training be flagged to Cllr Taylor, Chair of the Member Development Steering Committee. N Howcutt advised that it has already been highlighted in the member induction that training will take place as part of the Audit Committee in addition to providing other training sessions.

There being no further business, the meeting was formally closed.

Agreed actions

- To bring Committee terms of reference to July meeting for discussion. (F Jump)

- To bring proposal on independent appointees to July meeting. (F Jump)

- To update 'suggested' recommendations to 'should'. (P Lazenby)

- To discuss publishing of final internal report and receiving 2 final outstanding reports. (P Lazenby & N Howcutt)

- To ensure all reports have a coversheet. (N Howcutt)

- Update to the format of the agenda – when submitting reports, explain what is required of the committee (e.g., For Information – please acknowledge receipt and provide clarification questions only. For Review – please review and provide comments and corrections for consideration. For Acceptance – please sign off this document as acceptable or otherwise provide corrections.)

 - Include a question sheet with each document asking committee members to provide written questions for consideration. Assuming documents are issued 10 working days before the meeting then questions need to be returned 3 working days before the meeting, for officers and agents to be able to prepare replies. Question Sheet to include:

·         Document title

·         Date of Meeting

·         Reviewers name

·         Table with 4 columns: Page number plus paragraph number; Question; Response; Responder name