Agenda and minutes

Agenda and minutes

Audit Committee - Tuesday, 12th April, 2022 10.00 am

Venue: Council Chamber, Level 2, Town Hall Extension. View directions

Contact: Donna Barnes 


No. Item


Minutes pdf icon PDF 156 KB

To approve as a correct record the minutes of the meeting held on 15 February 2022.




To approve the minutes of the meeting held on 15 February 2022 as a correct record.



Accounting Concepts and Policies, Critical Accounting Judgements and Key Sources of Estimation Uncertainty pdf icon PDF 352 KB

The report of the Deputy Chief Executive and City Treasurer is enclosed.


The Committee considered a report of the Deputy Chief Executive and City Treasurer which discussed the Authority’s accounting concepts, conventions, policies and requirements, critical accounting judgements and key sources of estimation uncertainty to be used in the preparation of the 2021/22 Annual Accounts. The details of a recent emergency Code consultation were also provided for comment.


The report set out a narrative around:


  • The basis of accounting policy
  • Requirements around disclosure in respect of the application of critical accounting policy judgements
  • A list of key sources of estimation uncertainty, including useful lives and valuations of properties which are estimated by qualified valuers, provision for business rate appeals based on claims received and previous experience of the outcome of appeals, the amount of arrears that will not be collected which is estimated based on expectations of the collection of different types of debt and the liability for future pension payments which is estimated by qualified actuaries (provided in an appendix); and
  • The details of a consultation on emergency proposals for an update of the 2021/22 and 2022/23 Codes of Practice on Local Authority Accounting in the UK, largely driven by 91% of Local Government Accounts being submitted after the statutory deadline. The outcome of the consultation resulted in a deferral of the implementation of IFRS 16 Leases for a further year and reversed the planned changes to the 2022/23 code. Whilst this outcome would not reduce the burden on Local Authorities, there would be no further complication of the leasing treatment.


The key lines of enquiry discussed in the meeting were:


  • The impact of changing interests rates and inflationary factors on matters such as pension liability, asset valuation, collections rates of council tax / business rates etc
  • The impact of the cost of living crisis on arrears arising from short term / sundry debtors such as housing rent, council tax and business rates debtors


In respect of changing interest rates on pension liability, the Deputy City Treasurer confirmed that a wide range of variables were routinely monitored and kept under close consideration through a mixture of formulaic measures and actuarial assessments in order to ensure effective management. In view of the complexity within those wide-ranging factors (eg life-expectancy, pay awards, inflationary factors, investment returns) a professional judgement call was necessary to address those uncertainties. In terms of how Local Government pensions were externally audited, Karen Murray (Mazars) explained that the National Audit Office commissioned an external expert to evaluate the approach taken by the five actuaries that are in place with a focus on the assumptions that are made across numerous factors to be satisfied that those assumptions are consistently applied, are within a reasonable range and align with the national position in terms of the approach taken.


With regard to arrears from sundry debtors, the Deputy City Treasurer explained that where the Council is seeking to recovery monies, inevitably there would be those who would default which resulted in the need for an estimate of those that would doubtfully  ...  view the full minutes text for item 9.


Annual Internal Audit Plan 2022/23 pdf icon PDF 556 KB

The report of the Head of Audit and Risk Management is enclosed.


The Committee considered a report of The Head of Audit and Risk Management which in line with Public Sector Internal Audit Standards (PSIAS) and a Local Government Application Note from the Chartered Institute for Public Finance and Accountancy presented a risk-based plan of Internal Audit activity that is designed to support an annual opinion on the effectiveness of the systems of governance, risk management and internal control. The Head of Internal Audit and Risk Management is required to communicate internal audit plans and resource requirements, including significant interim changes, to Strategic Management Team and the Audit Committee for review and approval. The audit plan for 2022/23 set out areas of proposed audit coverage for the year and the delivery of this plan would be reported to SMT and Audit Committee as part of regular audit reporting.


The report set out information about


  • Basis for the Plan
  • Characteristics of the Audit Plan, including its Context, Timeframe and Structure
  • Resourcing of the Plan; and
  • Planned Areas of Focus


The key points of discussion in the meeting were:


  • The length of time taken to implement the service restructure
  • Resourcing and capacity within the team to deliver
  • The classification of risk within the Corporate Risk Register
  • Staff welfare and wellbeing, noting the impact of the pandemic and other workforce developments


With regard to the time taken to implement the service restructure, the Head of Audit and Risk Management spoke about the complexities about health and safety aspects of the service review which had caused unavoidable delays. In terms of timescales, consultation with staff was expected to commence in early June following which appointments to posts could be made and recruitment progressed to fill vacancies in the new roles expected in July 2022.


There was a discussion about capacity to deliver more complex areas of audit activity once COVID grant related work had ceased. Members commented that they were keen to see those vacancies filled and sought assurance that there was adequate capacity to deliver the comprehensive range of audits scheduled for completion this year with sufficient flexibility to respond to currently unplanned work. The Deputy Chief Executive and City Treasurer said that COVID grant related work and more recent government schemes would remain a feature of audit activity as part of a planned lengthy programme of work. Therefore efforts had been made to ensure that there was sufficient capacity with the service to complete this work alongside the programme of scheduled work as part of the Audit Plan. The Head of Audit and Risk Management added that the Plan had been developed based on current staffing levels therefore allowing an element of capacity to respond to risks that could emerge during the year.


There was a discussion about the classification of risk within the Corporate Risk Register, with particular reference to the rating allocated for ‘housing needs not being met’ (defined as medium risk). The Head of Audit and Risk Management described  the process involved for consideration of the Register with the Senior Management  ...  view the full minutes text for item 10.


Annual Audit Opinion 2021/22 pdf icon PDF 765 KB

The report of the Head of Audit and Risk Management is enclosed.


The Committee considered a report of the Head of Audit and Risk Management which discussed the delivery of the annual programme of audit work designed to raise standards of governance, risk management and internal control across the Council, in accordance with Public Sector Internal Audit Standard 2450.


The report provided Members with the Head of Audit and Risk Management’s annual assurance opinion and report on the Council’s system of governance, risk management and internal control for 2021/22.


In addition to the scope, purpose and context of the opinion, the report also included information about:


  • The overall opinion for the year to March 2022 (cited as ‘Reasonable’), including key strengths, risks and issues arising from audit work
  • The delivery of the Audit Plan
  • Audit assurance, risks and issues
  • Children’s Services and Education Directorate Opinions
  • Adults Services and Public Health Directorate Opinions
  • Corporate Core Directorate Opinions, including Information and ICT, Financial Systems, Capital Programme, Commercial Governance, Our Town Hall and the Estates Services Review
  • Procurement, Contracts and Commissioning Directorate Opinions, including Carbon Reduction in Procurement, Waivers and Contract Extensions, and Follow Up Review – Children’s Placements, Supplier Due Diligence
  • Neighbourhoods Directorate Opinions including Governance and Oversight Housing Operations Service, Governance and the Oversight, Management of Void and Empty Properties, Grant Certifications, Highways Compensation Events
  • Growth and Development Directorate including the AVRO Hollows Tenant Management Organisation
  • Counter-Fraud and Investigations
  • Proactive and Reactive Work; and
  • An overview of the current position of earlier Audit Recommendations


The key points of discussion in the meeting were:


  • The scope and scale of the local audit framework
  • Avro Hollows Tenant Management Organisation (AHTMO)
  • The Management of void and empty former Northwards properties


The Committee thanked officers for the comprehensive and detailed report and a discussion followed on the changing scope of governance arrangements within local government audit in reflection of the increasing move towards the partnership delivery model.


A member asked for further information about the information provided on the limited assurance opinion issued for the AHTMO, noting that there had been an issue over the logging of requests for minor repairs and fundamental differences in expectations between the Council’s Strategic Housing Service and AHTMO regarding basic elements of service delivery. The importance of ensuring local  ward members on such issues was also cited. The Head of Audit and Risk Management explained that this largely related to quality assurance measures for service delivery which had resulted in a number of actions being put forward in respect of refining the Modular Management Agreement (MMA) which set out the respective responsibilities of the Council and the TMO.  He agreed to liaise with the Strategic Housing Service  concerning the request to ensure that local ward members are advised of such issues as a matter of routine.


There was a discussion about the management of void and empty former Northwards properties and the associated actions issued alongside the ‘Limited’ assurance opinion. A member sought further information on likely timescales for the completion of the audit of void properties, and the implications for  ...  view the full minutes text for item 11.


External Audit Progress Update pdf icon PDF 381 KB

The report of the External Auditors (Mazars) is enclosed.


The Committee considered a report of the External Auditors (Mazars) which discussed progress towards completion of the external audit of 2020/21 accounts.


Karen Murray (Mazars) reported that there had been a considerable amount of progress, such that Mazars were very close to completion of the work. Three particular areas were yet to be completed, namely the completion of 2020/21 Financial Statements work; the valuation of Property, Plant & Equipment (PP&E) Value for and work around cash balances. Mazars were in the process of working through a recently received set of accounts which it was hoped would help to resolve the small number of outstanding queries. Mazars were also awaiting soon to be announced guidance from the Chartered Institute of Public Finance and Accountancy (CIPFA) on the consideration of infrastructure assets. Ms Murray indicated that a number of recommendations would be put forward at the point that the audit is completed, in respect of the Councils measures of internal control to help streamline future external audits and facilitate completion more easily.


The Deputy Chief Executive and City Treasurer confirmed that the audit process had been a particular challenge this year and made reference to no local authority having signed off their accounts at time of the meeting. This was attributable to a number of factors, the most significant of which included changes to the accounting treatments around highways which had been a particular cause of the delay. In addition, the remote close down during the pandemic; single points of failure within the Finance team (due to an unavoidable staff absence); an increased focus on valuations and changes to audit and accounting standards had culminated in issues for all parties. She referred to a piece of work led by the Deputy City Treasurer focussing on lessons learnt which would, in particular, streamline future reporting around cash flow statements.


Discussions moved to whether there would be a knock on effect on the following year’s external audit completion. The Chief Accountant provided an overview of the steps necessary to progress the closure of the 2021/22 accounts and the challenges this presented in view of the planned submission date of September 2022. The Committee therefore noted that a delay on completion of the audit was indeed very likely. In respect of capacity within the Finance team to assist with its completion, the Deputy City Treasurer advised that additional resource had been provided within the Council’s Finance team, with added support from wider Finance Directorate colleagues. Additionally more input was planned around quality assurance measures prior to submission to the external auditors to ease the process. Ms Murray also referred to capacity issues from the perspective of the external auditors, which was largely attributed to their scheduled programme of work with other entities meaning that pauses in progress were, at times, unavoidable.




1.    To note the progress of the external audit of accounts 2020/21


2.    To note that the finalisation of the external audit of 2021/22 accounts was unlikely to meet the September 2022 completion  ...  view the full minutes text for item 12.


Risk Review Item: Adults Assurance Update pdf icon PDF 277 KB

The report of the Director of Adult Social Services is enclosed.


The Committee considered a report of the Executive Director of Adult Services which provided an update on the actions taken to address risk in respect longstanding and partially implemented audit recommendations in relation to Adults Mental Health safeguarding and transitions from Children’s to Adults social care.


The report therefore focussed on:


  • Actions Taken to Develop the Social Work Transitions in Care Service and a summary of Next Steps; and
  • Actions to support the reconciliation of mental health casework records across the Adult Service function and the Greater Manchester Mental Health Trust (GMMHT), as well as additional measures taken to provide added assurance


With regard to Social Work Transitions, significant progress across the system in respect of planning and preparation for the transition to adulthood was reported, which formed part of a wider programme of improvement activity. This included the development of new practice forums, an invigorated multi-agency focus to deliver an impactful and joined up approach to referrals and care delivery. Additionally, a service delivery improvement in respect of Care Act assessments for young people before or within their 18th year instead of at or following a young person’s 18 birthday was reported. The Committee was also invited to note external assurance had been provided for the service following an OFSTED inspection of Special Educational Need and Disability (SEND) services in November 2021. The inspection had found leaders’ clear vision for improving outcomes for children and young people with SEND; that appropriate and timely interventions were provided and good oversight of delivery including priorities for action had been maintained. Further priorities were also outlined in the meeting regarding earlier identification of young people approaching the transition to adult services and earlier assessment and review functions of young people with an Education Health and Care Plan to support the management of future demands on services. An expansion of the team was also reported in the form of two additional staff members who would be specifically recruited to deliver person focused planning arrangements.


With regard to the reconciliation of mental health casework and safeguarding referrals between social work and health colleagues, reference was made to the challenges of infection control measures arising from the pandemic on service delivery and the impact of GMMH’s COVID business continuity plans to manage significantly increased demands on services. The Deputy Director of Adult Services spoke about time that had been invested in actions and resources to mitigate the complexities of reconciling records across two different recording systems, which was at the heart of the issue and was a common feature nationally across integrated health and care forums. Weekly and monthly reporting arrangements outlined in the report underpinned the process of record reconciliation, resulting in confidence that there were no gaps in the data and that the risks of omissions or errors had been addressed. In addition, further steps were being introduced around GMMHT staffing, which included additional training input with regard to case-management recording as well as the development of the Council’s own systems processes  ...  view the full minutes text for item 13.


Work Programme and Recommendations Monitor pdf icon PDF 292 KB

The report of the Governance and Scrutiny Support Unit is attached.


The Committee considered a report of the Governance and Scrutiny Support Unit which set out  its future Work Programme for the forthcoming municipal year.




To agree the Committee’s Work programme for the forthcoming municipal year.