Please Contact: Linda Yarham
Please email: linda.yarham@north-norfolk.gov.uk
Please Direct Dial on: 01263 516019
6 September 2013
A meeting of the Audit Committee of North Norfolk District Council will be held in the
Committee Room at the Council Offices, Holt Road, Cromer on Tuesday 17 September
2013 at 2.00 pm
Members of the public who wish to ask a question or speak on an agenda item are
requested to arrive at least 15 minutes before the start of the meeting. It will not always be
possible to accommodate requests after that time. This is to allow time for the Committee
Chair to rearrange the order of items on the agenda for the convenience of members of the
public. Further information on the procedure for public speaking can be obtained from
Democratic Services, Tel: 01263 516047, Email: democraticservices@north-norfolk.gov.uk
Sheila Oxtoby
Chief Executive
To: Mr N D Dixon, Mr B Jarvis, Mrs A Moore, Miss B Palmer, Mr R Reynolds and Mr D
Young
All other Members of the Council for information.
Members of the Management Team, appropriate Officers, Press and Public
If you have any special requirements in order to attend this meeting, please let us
know in advance
If you would like any document in large print, audio, Braille, alternative format or in a
different language please contact us
Chief Executive: Sheila Oxtoby
Strategic Directors: Nick Baker and Steve Blatch
Tel 01263 513811 Fax 01263 515042 Minicom 01263 516005
Email districtcouncil@north-norfolk.gov.uk Web site northnorfolk.org
AGENDA
1.
TO RECEIVE APOLOGIES FOR ABSENCE
2.
PUBLIC QUESTIONS
To receive public questions, if any
3.
ITEMS OF URGENT BUSINESS
To determine any items of business which the Chairman decides should be
considered as a matter of urgency pursuant to Section 100B(4)(b) of the Local
Government Act 1972.
4.
DECLARATIONS OF INTEREST
Members are asked at this stage to declare any interests that they may have in any
of the following items on the agenda. The Code of Conduct for Members requires
that declarations include the nature of the interest and whether it is a disclosable
pecuniary interest.
5.
MINUTES
(Page 1)
To approve as a correct record, the minutes of the meeting of the Audit Committee
held on 18 June 2013.
6.
APPOINTMENT OF VICE-CHAIRMAN
To appoint a Vice-Chairman of the Committee.
7.
AUDIT UPDATE AND ACTION LIST
(Page 8)
To monitor progress on items requiring action from the meeting of 18 June 2013,
including progress on implementation of audit recommendations.
8.
AUDIT COMMITTEE WORK PROGRAMME
(Page 10)
To review the Audit Committee Work Programme.
9.
BUSINESS CONTINUITY
To receive a verbal update from the Civil Contingencies Manager.
10.
PWC 2012/13 ANNUAL GOVERNANCE REPORT (ISA260)
(Page 11)
To consider the Annual Governance Report.
11.
ANNUAL REPORT OF THE MONITORING OFFICER 2012/13
(Page 33)
To consider the Annual Report of the Monitoring Officer.
12.
LOCAL GOVERNMENT OMBUDSMAN ANNUAL REVIEW LETTER
(Page 41)
To note the contents of the Local Government Ombudsman’s annual review letter.
13.
LOCAL CODE OF CORPORATE GOVERNANCE AND ANNUAL GOVERNANCE
STATEMENT 2012/13
(Page 43)
(Appendix A: page 46; Appendix B: page 63)
Summary:
The Corporate Governance framework is made up of
the systems and processes, culture and values by which
an organisation is directed and controlled. For local
authorities this includes how a council relates to the
community it serves. The Local Code of Corporate
Governance is a public statement of the ways in which
the Council will achieve good corporate governance. It
is based around six principles which were identified in
the joint publication by the Chartered Institute of Public
Finance and Accountancy (CIPFA) and the Society of
Local Authority Chief Executives (SOLACE). The
Annual Governance Statement is prepared following a
review of all the evidences available to the Council in
seeking compliance with its Local Code.
Conclusions:
The arrangements set out in the Local Code of
Corporate Governance and the Annual Governance
Statement will allow the Council to move ahead with its
corporate planning processes confident that it can
address the issues of governance and risk.
Recommendations:
Members are asked to review and approve the Annual
Governance Statement along with the updated Local
Code of Corporate Governance.
Cabinet Member(s)
Ward(s) affected
All
All
Contact Officer, telephone number and email:
Karen Sly, 01263 516243, Karen.sly@north-norfolk.gov.uk
14.
2012/13 STATEMENT OF ACCOUNTS
(Page 93)
(Copy of Appendix C enclosed for Committee Members only. Available for viewing
on the Council’s website)
Summary:
This report presents the Statement of Accounts for
2012/13 for review by the Audit Committee prior to
recommendation to Full Council for approval. The
outturn position for the year was reported to Members in
June and has been used to inform the production of the
statutory annual accounts for 2012/13.
Options considered:
Not applicable
Conclusions:
The Statement of Accounts for 2012/13 has been
produced
in
accordance
with
the
Code of Practice on Local Authority Accounting. The
draft accounts were produced by 30th June and since
then have been subject to external audit review.
Recommendations:
Members are asked to consider and review the
Statement of Accounts for 2012/13 and recommend
their approval to Full Council.
Reasons for
Recommendations:
To update Members on the Statutory Accounts position
as at 31st March 2013 and their subsequent external
audit review.
Cabinet Member(s)
Ward(s) affected
Contact Officer, telephone number and email: Karen Sly, 01263 516243,
karen.sly@north-norfolk.gov.uk
15.
AUDIT COMMITTEE SELF- ASSESSMENT OUTCOMES
(Appendix D: Page 99)
(Page 96)
Summary:
The Chartered Institute for Public Finance and Accountancy
(CIPFA) “Toolkit for Local Authority Audit Committees”
identifies that it is good practice for Audit Committees to
complete a regular self-assessment exercise and to assist
this process, provides a checklist of operational
requirements which it is recommended should be satisfied
to ensure the Committee is performing effectively. This
report comments on the outcomes of a self-assessment
exercise undertaken with members of the Audit Committee
on 18 June 2013 and responses canvassed to the final
section on Administration which were subsequently
provided after the Committee meeting, noting that the
findings made will be used to further inform the 2013/14
review of the Effectiveness of Internal Audit. The results of
the exercise are included at Appendix D to this report.
The completed checklist highlights where compliance with
recognised practice has been achieved, instances where
there has been deviation and why this has been case, and
also identifies those areas where additional enhancements
are to be pursued to improve upon existing operational
arrangements.
Conclusions:
Undertaking a review of its performance against good
practice has ensured that the Committee has properly
assessed the way in which it discharges its duties.
The recent review of its remit and effectiveness has
been comprehensively handled and where noncompliances have been realised, it has been
recognised why they have arisen and confirmation then
obtained as to how the Committee wishes to manage
these issues on a future basis.
16.
Recommendations:
Members of the Committee are requested to approve
the summary report, the detailed checklist that was
completed, and resulting agreed actions to be
progressed.
Cabinet member(s):
Wards:
Contact Officer,
telephone number, and
e-mail:
All
All
Sandra King, Internal Audit Consortium Manager
01508 533863
scking@s-norfolk.gov.uk
PROGRESS REPORT ON INTERNAL AUDIT ACTIVITY, APRIL TO AUGUST 2013
(Page 106)
(Appendix E: page 110; Appendix F: page 112)
Summary:
14.
This report examines progress made between 1 April and
31 August 2013 in relation to delivery of the Annual Audit
Plan for 2013/14, and includes abbreviated management
summaries in respect of the audit reviews which have been
finalised in the course of this period.
Conclusions:
Adequate assurance levels have been awarded to the three
audits completed in the first five months of the financial
year.
It is further noted that the Annual Audit Plan has been
subject to some minor rescheduling; the timing of two
assignments featuring in the plan has been revised.
Recommendations:
It is recommended that the Committee notes the outcomes
of the three audits completed between 1 April and 31
August, together with the minor amendment made to the
Annual Audit Plan for 2013/14.
Cabinet member(s):
Wards:
Contact Officer,
telephone number, and
e-mail:
All
All
Sandra King, Internal Audit Consortium Manager
01508 533863
scking@s-norfolk.gov.uk
EXCLUSION OF THE PRESS AND PUBLIC
To pass the following resolution, if necessary:
“That under Section 100A(4) of the Local Government Act 1972 the press and public
be excluded from the meeting for the following items of business on the grounds that
they involve the likely disclosure of exempt information as defined in
of Part I
of Schedule 12A (as amended) to the Act.”
Agenda item 5_
AUDIT COMMITTEE
Minutes of a meeting of the Audit Committee held on Tuesday 18 June 2013 in the
Committee Room, Council Offices, Holt Road, Cromer at 2.00 pm.
Members Present:
Committee:
Mr N D Dixon (Chairman)
Mrs A Moore
Mr R Reynolds
Mr B Jarvis
Miss B Palmer
Mr D Young
Officers in
Attendance:
Head of Finance, Chief Accountant, Internal Audit Consortium Manager,
Internal Audit Field Manager, Civil Contingencies Manager, Regulatory
Officer.
1. APOLOGIES
None received.
2. PUBLIC QUESTIONS
None received.
3. ITEMS OF URGENT BUSINESS
None
4. DECLARATIONS OF INTEREST
None.
5. MINUTES
The Minutes of the meeting of the Audit Committee held on 19 March 2013 were
approved as a correct record.
6. AUDIT UPDATE AND ACTION LIST
Members were updated on progress on actions arising from the minutes of the meeting
of 19 March 2013.
Constitution
Cllr Young considered that it was patronising to suggest that Members could not keep a
loose-leaf format up to date. Cllr Moore stated that agendas were required to be
supplied to Members in hard copy and she thought that this should also apply to the
Constitution. However, it was agreed to accept the situation as it stood.
Business Continuity
The Civil Contingencies Manager reported that six Team Business Continuity Plans
remained outstanding, but he was confident that they would be completed prior to the
next Audit Committee meeting. An extra column had been added to the progress table
to show target dates as requested.
Audit Committee
1
18 June 2013
There was some uncertainty as to the status of an audit recommendation regarding ABS
E-Financials. The Civil Contingencies Manager considered that this recommendation
had been completed. The Chairman requested confirmation of the status of this
recommendation at the next meeting.
The top level Plan had been signed off and published, and would be reviewed next year.
There may be a need for a capital bid for IT equipment to fit out the DR room.
A reflective debrief had been undertaken in respect of the severe weather event. Some
issues had been identified and lessons learned regarding notification of staff, home
working, ensuring correctly trained staff were available, Customer Services telephones,
and the waste contract. Steps were being taken to address these issues. The need for
a DR/WAR site had been highlighted.
The Chairman requested a verbal update from the Civil Contingencies Manager at each
meeting instead of a formal written report.
External Audit training
It had not been possible to deliver External Audit training at this meeting. There was a
significant cost implication attached to this training and therefore it would be more costeffective and efficient if it could be delivered when External Audit representatives were
present at the meeting.
The Head of Finance stated that training on the annual statement of accounts was
scheduled for delivery at the next meeting and she would try to arrange the training over
lunch. Both she and the Internal Audit Consortium Manager would need to discuss the
training programme and the possibility of External Audit contributing to discussions
rather than delivering specific training.
Cllr Reynolds considered that there were some grey areas and that training would help.
The priority for the September meeting would be training in preparation for the review of
the Annual Statement of Accounts.
7. AUDIT COMMITTEE WORK PROGRAMME
The Chairman stated that the Review of the Risk Register should be rolled on every six
months.
A note in italics had been included in error in the final column and would be deleted.
RESOLVED
That the Work Programme be noted.
8. ANNUAL REVIEW OF THE EFFECTIVENESS OF INTERNAL AUDIT FOR 2012/13
The Internal Audit Consortium Manager presented her report, which set out the results of
an annual review of the effectiveness of Internal Audit, undertaken to satisfy criteria in
the Accounts and Audit Regulations 2011. Internal Audit‟s performance and quality
assurance framework had been examined to enable the Audit Committee to confirm
whether Internal Audit Services were effective, and that the assurances provided in the
Audit Committee
2
18 June 2013
Internal Audit Annual Report and Opinion could be relied upon, and used to inform the
Council‟s Annual Governance Statement for 2012/13.
The Internal Audit Consortium Manager reported that the CIPFA Code of Practice for
Internal Audit in Local Government, with which the Internal Audit practices working
practices were required to comply, would be replaced by consolidated Public Sector
Internal Audit Standards (PSIAS) from 2013/14. The CIPFA code remained applicable
for the 2012/13 effectiveness review. The existing performance and quality assurance
framework predominantly met much of the new requirements, although there was an
obligation to carry out external assessments of the effectiveness of internal audit at least
once every five years.
A summary of the review outcomes was presented as an appendix to the report, in which
the service was benchmarked against a range of measures:
a) Delivering the Aims and Objectives of Internal Audit.
b) Complying with CIPFA‟s Code of Practice for Internal Audit in Local Government.
c) Complying with CIPFA‟s Statement on the Role of the Head of Internal Audit in Local
Government.
d) Quality Standards applying to the Internal Audit Service.
e) Strengthening the Council‟s Systems of Internal Control.
f) Improving Service Delivery and Adding Value.
g) Supporting an Effective Audit Committee.
Additional information generated during the course of the review had been supplied to
the Council‟s Section 151 Officer to afford independent verification of the detailed
processes followed by the Internal Audit Consortium Manager as the Authority‟s Head of
Internal Audit.
The Internal Audit Consortium Manager reported that only two deviations from the CIPFA
Code of Practice had been identified. One of these, Internal Audit‟s rights of access to
all records, assets, personnel and premises, had been removed in error from the
Council‟s Financial Regulations following a review of the Constitution and had not yet
been reinstated. The Monitoring Officer had given an assurance that these rights would
be reinstated without further delay under delegated powers. The other departure noted
from the Code of Practice concerned a need for the Committee to review its own remit
and effectiveness. It was intended to address this need for a Committee selfassessment following this meeting.
Some issues had been identified with regard to performance in respect of Quality
Standards applying to the Internal Audit Service. These were identified in the report.
Assurance levels for individual audits carried out in 2012/13 were 92% positive.
However, there were some limited assurances and more detail as to the areas affected
had been given in the Annual Report.
In conclusion, the outcomes of the Effectiveness Review confirmed that Internal Audit
indicated that reliance could be placed on the opinions expressed by the Internal Audit
Consortium Manager, which could then be used to inform the Council‟s Annual
Governance Statement.
The Internal Audit Consortium Manager answered Members‟ questions in relation to the
delivery of audit assignments. A contributory factor to the late completion of the Annual
Audit Plan and failing to meet targets for completing the individual stages of some audits
had been due in part to the scheduling of planned work into the second half of the
Audit Committee
3
18 June 2013
financial year, which had placed additional work pressures on the contractor. The
Effectiveness Report however, also reflected on issues with late responses from
management as well as the overrunning of fieldwork and an increase in review points
arising from contractor work. With reference to problems linked to the processing of draft
reports etc – it was noted that these problem areas would be examined in a workshop to
be held in July between the Audit Management Team and Deloittes which would revisit
audit working practices and explore how improvements to performance could be secured
in 2013/14. The Head of Finance had also been invited to this workshop. There was
clearly a need to consider whether Exit meetings with management would be helpful in
speeding up the conversion of draft reports to final reports, an arrangement which had
been introduced at another Consortium site with great success as timeframes involved
here had improved considerably as a result of this action taken.
RESOLVED
That the findings of the Annual Review and the evidence gathered in support of the
effectiveness of the Internal Audit Service be noted and taken into consideration when
receiving the Internal Audit Consortium Manager‟s Annual Report and Opinion, and the
Council‟s Annual Governance Statement.
9. INTERNAL AUDIT CONSORTIUM MANAGER’S ANNUAL REPORT AND OPINION
FOR 2012/13 IN RESPECT OF NORTH NORFOLK DISTRICT COUNCIL
The report had been developed to satisfy the mandatory requirements of the new Public
Sector Internal Audit Standards (PSIAS), effective from 1 April 2013, and specifically
Standard 2450, concerning the provision of an annual audit opinion on the overall
adequacy and effectiveness of the organisation‟s framework of governance, risk
management and control, and which should be used to inform the Council‟s Annual
Governance Statement.
The report also sought to confirm compliance with the Accounts and Audit (England)
Regulations 2011, whereby the Council was required to „undertake an adequate and
effective internal audit of its accounting records and of its system of internal control in
accordance with the proper practices in relation to internal control‟. The standards for
„proper practices‟ for internal audit applying to 2012/13 were detailed in CIPFA‟s Code of
Practice for Internal Audit in Local Government in the United Kingdom (2006), although
for 2013/14 onwards, the Code had been superseded by consolidated Public Sector
Internal Audit Standards.
The Annual Report and Opinion had been produced to demonstrate that the authority
had met its statutory requirements, drawing upon the outcomes of Internal Audit work
performed over the course of the year, to formulate an opinion concerning the overall
internal control environment which has been operating at the Council throughout
2012/13.
The Consortium Manager stated that the marginal increase in costs was as a result of a
much expanded Internal Audit Plan compared to the previous year. Assurance levels
awarded on conclusion of individual audits had shown noticeable improvement
compared to the previous year. A change of methodology together with a new reporting
template introduced in year, with reference to work undertaken in support of the
preparation of the Annual Governance Statement had generated a higher number of
audit opinions than previously, resulting in an extra 10 assurances being provided. In
terms of the overall adequacy and effectiveness of the Council‟s governance, risk and
control framework, the Internal Audit Consortium Manager was able to give the authority
Audit Committee
4
18 June 2013
an adequate assurance to arrangements in place. An adequate audit opinion equated
to a positive opinion.
The Internal Audit Consortium Manager then outlined the outcomes of review work
completed in relation to fundamental financial and non-financial systems, noting that
limited assurances had been given to Council Tax and National Non Domestic Rates,
and Housing and Council Tax Benefits. One high priority recommendation had arisen
from the audit of Housing and Council Tax Benefit, but additional resources had been
allocated to bring about a speedy resolution to the internal control issue originally
identified. Corporate Governance provisions had received a good assurance whereas
Risk Management had been given an adequate assurance, and these areas would in
future be reviewed on a two-yearly cycle instead of annually. There was also some
focus given to a number of adjustments made in respect of the Annual Audit Plan
approved on 6 March 2012, the reasons for which were outlined in the report.
Management Summaries and a briefing note had been issued as appendices to the
report in respect of nine pieces of work finalised since early December 2012.
Councillor D Young raised some questions concerning the Council‟s assurance
framework and requested a flowchart to aid understanding of the various sources used
to inform the organisation‟s Annual Governance Statement and how they interacted with
each other.
The Chairman commented upon disputed audit recommendations, referring to the
Management Summary for NN/13/08 Payroll and Human Resources, where a low priority
recommendation on Policy and Procedures had not been accepted by management. It
was felt that such items should be examined in greater detail, in so far as the Chairman
queried whether the recommendation was essential to the control environment or was
instead desirable in terms of enhancing existing arrangements to conform with best
practice. He considered there was some confusion around best practice and what the
organisation was able to deliver based on the resources available.
Deloittes‟ Field Manager explained that Internal Audit was required to comment on what
represented best practice. In the case of the Payroll recommendation that had been
disputed, there was no evidence to show that the policies and procedures were up to
date and the risk had therefore been flagged up. The management response had been
to accept the risk.
The Chairman next referred to the issues that had arisen around Revenues and Benefits
data migration to Kings Lynn and West Norfolk Borough Council, noted in the
Management Summaries for Council Tax and National Non Domestic Rates, and
Housing and Council Tax Benefit. In particular, he referred to concerns regarding the
use of the word “compromised” in respect of the control environment. He considered
that the impact of unforeseen circumstances should have been taken more into account
when deciding what descriptions to use and that instead of “compromise”, there should
have been an acknowledgement of this impact.
The concerns regarding the interpretation of “compromised” were discussed. There was
acknowledgement that substantial work had been undertaken to recover from a difficult
situation and the circumstances which had led to it.
In response to a question, the Head of Finance stated that the agreement between the
Council and the Norfolk Museums and Archaeology Service had now been agreed and
signed.
Audit Committee
5
18 June 2013
The Head of Finance stated that a meeting had been arranged with the Head of
Organisational Development to commence work on a review the Council‟s Risk
Management Framework.
RESOLVED to
1. Receive and note the contents of the Annual Report of the Internal Audit Consortium
Manager.
2. Note that an adequate audit opinion has been given in relation to the overall
adequacy and effectiveness of the organisation‟s governance, risk and control
framework (i.e. control environment) for the year ended 31 March 2013.
3. Note that good assurance has been awarded to Corporate Governance provisions
for the year ended 31 March 2013.
4. Note that an adequate audit opinion has been applied to systems of risk
management for the year ended 31 March 2013.
5. Note that the opinions expressed together with significant matters arising from
internal audit work and contained within this report should be given due
consideration, when developing and reviewing the Council‟s Annual Governance
Statement for 2012/13.
10. THE STATUS OF AGREED AUDIT RECOMMENDATIONS DUE FOR
IMPLEMENTATION BY 31 MARCH 2013
The report provided an overview of progress made in implementing the agreed audit
recommendations which had been due for completion by 31 March 2013. Good
progress had been achieved in relation to the completion of agreed Internal Audit
recommendations.
The Internal Audit Consortium Manager stated that Internal Audit had validated a much
higher number of completed recommendations than in previous years and the report was
a very pleasing one to present to the Committee.
RESOLVED
That the management action taken to date regarding the implementation of audit
recommendations be noted.
11. CORPORATE RISK REGISTER
The Head of Finance presented the Corporate Risk Register, which had been updated
since the meeting of the Performance and Risk Management Board in May 2013. The
PRMB had requested a further review of the risk register format, which was due to be
undertaken prior to the risk register being report in December 2013.
Ineffective implementation of the Localism Act was no longer a significant risk; it was
included on the register for completeness and transparency. The Head of Finance
confirmed that work to put in place the immediate requirements of the Act was complete.
RESOLVED
That the Corporate Risk Register be noted.
Audit Committee
6
18 June 2013
12. BUSINESS CONTINUITY
The Civil Contingencies Manager had given a verbal update on this matter under Minute
6 (Audit Update and Action List).
13. IT STRATEGY GROUP MEETING MINUTES 26 MARCH 2013
RESOLVED
That the minutes be noted.
The meeting ended at 3.30 pm.
______________________
Chairman
Audit Committee
7
18 June 2013
Agenda Item
7
AUDIT COMMITTEE 18 JUNE 2013 – ACTIONS ARISING FROM THE MINUTES
1. Business
Continuity
a) To check status of Audit recommendation
regarding ABS E-Financials and provide update at
next meeting.
Richard Cook
Update from Richard Cook: “The Financial BC team
plan issue has now been resolved and Head of
Finance has reported this to the auditors and I now
have the completed and review BC plan for the
Financial Team.”
b) Verbal updates to be given at each meeting
instead of formal written report.
Richard Cook will attend the next meeting.
2. Training
Karen Sly and Sandra King to discuss training
programme. Possibility that External Audit could
contribute to discussions instead of delivering
specific training.
Karen Sly/
Sandra King
Informal training sought from External Audit, possibly
in connection with Annual Audit letter in December,
plus a session from Internal Audit on Audit Planning
would also be appreciated in March 2014, prior to
considering 2014/15 Strategic and Annual Audit
Planning proposals.
3. Annual
Governance
statement
Flowchart to be produced to aid understanding of the
various sources used to inform the Annual
Governance Statement and how they interact.
Sandra King /
Karen Sly
An update will be forthcoming on presentation of the
September agenda item covering the Local Code of
Corporate Governance and Annual Governance
Statement. This report examines the framework in
place and the key sources of assurance feeding into
the Annual Governance Statement.
4. Annual Review of
the Effectiveness
of Internal Audit
for 2012/13
Internal Audit’s rights of access to all records,
assets, personnel and premises to be reinstated in
the Financial Regulations.
David
Johnson/Sandra
King
Rights of access were formally reinstated through an
amendment to the Constitution, initiated by the
Monitoring Officer in July 2013.
5. Annual Review of
the Effectiveness
of Internal Audit
for 2012/13
Issues highlighted in relation to Internal Audit quality
standards to be investigated at Workshop with
contractor and Section 151 Officer, and measures
identified to improve working arrangements in the
8
Sandra King
future.
Workshop has taken place and changes are
currently being introduced to working practices to
improve timeframes for processing audit
assignments.
NB: Vice-Chairman to be appointed at next meeting and ratified at Full Council
9
Agenda Item 8
AUDIT COMMITTEE WORK PROGRAMME 2013 - 2014
JUNE 2013
SEPTEMBER
2013
DECEMBER
2013
MARCH 2014
PWC
PWC 2012/13
Annual
Governance report
(ISA260)
Annual Audit
Letter (PWC)
Audit Plan (PWC)
Annual Grant
Certification Report
Protocol for liaison
between internal
and external
auditors
External Audit
training for
Committee
Internal Audit
training for
Committee
Half yearly
progress
reports on the
overall
performance of
the audit
contract
Quarterly
Summaries of
completed audits
Report on
follow-up work
Audit Plan
A verbal update
will be given.
Internal Audit
Annual Review of
the Effectiveness
of Internal Audit
Annual Report
and Opinion
Status of agreed
actions
Undertake selfassessment
NNDC
Corporate Risk
Register/ risk
management
framework
Business
Continuity Plan
Review
Quarterly
Summaries of
completed audits
Internal Audit
training
Statement of
Accounts (+
informal training)
Business
Continuity
Business
Continuity
Monitoring
Officer’s Report
Local Code of
Corporate
Governance and
Action Plan –
update and Annual
Governance
Statement 2012/13
– update
10
Corporate Risk
Register / risk
management
framework
Business
Continuity Review
www.pwc.co.uk
North Norfolk District
Council
Report to those charged with governance
Report to the Audit Committee of the authority on the audit for the
year ended 31 March 2013 (ISA (UK&I)) 260)
Government and
Public Sector
September 2013
11
Contents
Code of Audit Practice and
Statement of Responsibilities
of Auditors and of Audited
Bodies
Executive summary
1
Audit approach
2
Significant audit and accounting matters
4
In April 2010 the Audit Commission
issued a revised version of the
‘Statement of responsibilities of
auditors and of audited bodies’. It is
available from the Chief Executive of
each audited body. The purpose of
the statement is to assist auditors
and audited bodies by explaining
where the responsibilities of
auditors begin and end and what is
to be expected of the audited body in
certain areas. Our reports and
management letters are prepared in
the context of this Statement.
Reports and letters prepared by
appointed auditors and addressed
to members or officers are prepared
for the sole use of the audited body
and no responsibility is taken by
auditors to any Member or officer in
their individual capacity or to any
third party.
Risk of fraud
11
Fees update
11
Appendices
12
Appendix 1: Letter of representation
13
PwC  Contents
<North Norfolk District Council
12
An audit of the Statement of
Accounts is not designed to
identify all matters that may be
relevant to those charged with
governance. Accordingly, the
audit does not ordinarily identify
all such matters.
Executive summary
Background
This report tells you about the significant findings from our
audit. We presented our plan to you in March; we have
reviewed the plan and concluded that it remains appropriate.
Audit Summary


We have completed the majority of our audit work and
expect to be able to issue an unqualified audit opinion
on the Statement of Accounts by 30th September 2013.
The key outstanding matters, where our work has
commenced but is not yet finalised, are:

approval of the Statement of Accounts and letters
of representation;

receipt of pensions related information from the
auditors of the administering body of the pension
fund to which the Authority is party to;

completion of our value for money work; and

completion procedures including subsequent
events review.
Please note that this report will be sent to the Audit
Commission in accordance with the requirements of its
standing guidance.
We look forward to discussing our report with you on 17th
September. Attending the meeting from PwC will be
Engagement Manager, Aphrodite Antoniades and Team
Leader, Phil Beecher.
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The approach to our audit
work is tailored specifically to
address the nature and risks
faced by the Council while
striving to bring new
innovative approaches where
possible
Audit approach
Smart People
We continue to deploy quality people on your audit, supported Our team has been working side by side with the Centre of
Excellence to ensure we are executing the best possible audit
by a substantial investment in training and in our industry
approach.
programme.
We have worked to maintain as much continuity as possible
with Julian Rickett continuing as Engagement Leader for a
third year and the On-site Team Leader, Phil Beecher
returning for a second year while other staff have extensive
local government auditing experience.
Smart Approach
Data auditing
We use technology-enabled audit techniques to drive quality,
efficiency and insight.
Delivery centres
We use dedicated delivery centres to deliver parts of our audit
work that are routine and can be done by teams dedicated to
specific tasks; for the audit of North Norfolk District Council
this involved the technical review of the accounts and casting
checks of the Statement of Accounts.
Benefits for the audit
The key benefits of our approach for your audit have been

In 2013 the work included:



Testing manual journals through data analytics, so we
consider the complete population of manual journals
and target our detailed testing on the items with the
highest inherent risk;
We will also continue to explore ways to extend our use of
smart technology and data into other areas where we see an
opportunity to add value, as well as for quality and efficiency.
Centre of Excellence
We have a Centre of Excellence in the UK for Local
Government which is a dedicated team of specialists which
advises, assists and shares best practice with our audit teams
in more complex areas of the audit.

Use of automated approaches to assessing the audit
risks arising from manual journals;
Use of auditors’ experts to assess the valuation of
property, plant and equipment;
Proactive discussions about accounting treatment for
complex and material items; and
Use of a dedicated accounts review team to assess
compliance of your statement of accounts against the
CIPFA Code of Practice.
Smart Technology
We have designed processes that automate and simplify audit
activity wherever possible. Central to this is PwC’s Aura
software, which has set the standard for audit technology. It is
a powerful tool, enabling us to direct and oversee audit
activities. Aura’s risk-based approach and workflow
technology results in a higher quality, more effective audit and
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. the tailored testing libraries allow us to build standard work programmes for key local government audit cycles.
Smart people
Our risk assessment remains
the same as the audit plan we
presented to you in March
2013. We have summarised
our response to the significant
risks for your audit
Smart approach
Smart technology
The PwC Audit
We have summarised below the significant risks we identified in our audit plan and the audit approach we took to address
them.
Risk
Categorisation
Audit approach
Management Override of Controls
ISA (UK&I) 240 requires that we plan our
audit work to consider the risk of fraud,
which is presumed to be a significant risk
in any audit. This includes consideration
of the risk that management may
override controls in order to manipulate
the financial statements.
Significant Risk
We performed procedures to:
Revenue and Expenditure
Recognition
Significant Risk
 test the appropriateness of journal entries;
review accounting estimates for biases and evaluate whether
circumstances producing any bias, represent a risk of material
misstatement due to fraud;
evaluate the business rationale underlying significant transactions; and
perform ‘unpredictable’ procedures.
We have:
 placed reliance on internal audit work on key income and expenditure
controls;
Under ISA (UK&I) 240 there is a
(rebuttable) presumption that there are
risks of fraud in revenue recognition.
We extend this presumption to the
recognition of expenditure in local
government.
 tested key income and expenditure controls and confirmed they are
operating effectively;
 evaluated the accounting policies for income and expenditure
recognition;
 tested the appropriateness of journal entries and other adjustments;
 reviewed accounting estimates for income and expenditure, for
example, provisions; and
 performed analytical review on income and expenditure at year end and
reconciled your management information to the information presented in
the accounts on a gross basis.
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Your main accounting issues
relate to:

Disclosures

Property, plant and
equipment

Accounting estimates
Significant audit and accounting matters
Auditing Standards require us to tell you about relevant
matters relating to the audit of the Statement of Accounts
sufficiently promptly to enable you to take appropriate
action.
Accounts
We have completed our audit, subject to the following
outstanding matters:




approval of the Statement of Accounts and
letters of representation;
receipt of pensions related information from the
auditors of the administering body of the
pension fund to which the Authority is party to;
completion of our value for money work; and
completion procedures including subsequent
events review.
Accounting issues
Financial Statements and Disclosures
Our audit work on the draft financial statements to ensure
that balances are presented and disclosed appropriately in
accordance with the IFRS Code of Practice for Local
Authority Accounting identified a small number of technical
issues regarding presentation and disclosure. Overall the
draft financial statements provided to us were of a high
quality and we recognise the work of the finance team in
respect of this.
Property, plant and equipment
The Council has a significant property, plant and equipment
portfolio and a number of significant judgements are
required in order to generate the figures in the financial
statements.
Subject to the satisfactory resolution of these matters, the
finalisation of the Statement of Accounts and their approval
of them we expect to issue an unqualified audit opinion.
Your draft accounts include total fixed assets with a net book
value of £43.6 million, largely made up of land and buildings
(2011/12 net book value of £42.7 million).
As part of our work on the Statement of Accounts we are
required to examine the Whole of Government Accounts
schedules submitted to the Department for Communities and
Local Government and issue an opinion stating whether in
our view they are consistent with the Statement of Accounts.
At the time of writing the work on the WGA remains
outstanding due to the slippage in the timetable at the DCLG
for enabling Councils to prepare draft packs. We will provide
a verbal update to the Committee at its meeting on 17
September 2013 on the progress of this work.
The Council has a rolling programme to ensure that all
property, plant and equipment is revalued at least every five
years and that the fair value measurement is materially
accurate every year.
The revaluation work for the current year was undertaken by
the Council’s own internal valuer. The valuations were
carried out as at 31 March 2013 with the principal focus of
the rolling programme being car parks and investment
properties.
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Your pension liability is a
significant estimate in the
statement of accounts. This
page summarises the
movement over time.
Pensions liability
The most significant estimate in the Statement of Accounts is
in the valuation of net pension liabilities for employees in the
Norfolk County Council pension fund. Your net pension
liability at 31 March 2013 was £31.8 million (2012 - £26.4
million).
The 2013 triennial valuation is yet to be concluded and will
be reflected in the 2013/14 Statement of Accounts. The
deficit for the Local Government Pension Scheme nationally
as a whole is expected to have increased from £38bn to
£80bn since 2010. Although assets increased in value in this
period by 20%, the value of the liabilities has increased by
more than 40%.
The chart to the right shows the significant movement in
your net pension liability over the last few years.
Council Pension Liability between 2007/08 and 2012/13
40,000
Net Pension Liability ('000)
In estimating the fair value to be included in the 2012/13
accounts, management has utilised the expertise of the
Council’s internal valuers. The assumptions used by these
experts remain the responsibility of management. We
reviewed the work of the Council’s internal valuers and found
no significant matters to report.
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
Financial year
Note that as at 31/03/2011 the measure of inflation changed from RPI to
CPI which had the effect of reducing the pension liability.
We are currently awaiting receipt of the pension information
from the auditors of the administering body the Authority is
party to. We will need to consider the reasonableness of the
assumptions underlying the pension liability once this
information is received.
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Changes to IAS 19: Employee Benefits
From 2013/14 there will be changes to the accounting for
defined benefit schemes and termination benefits. For
defined benefit schemes the net finance cost will be used. The
net scheme liabilities/assets will be unwound using the
discount rate for the pension liability and the costs of
administering the scheme will be recognised directly in
expenses.
The definition of termination benefits has changed and does
not now include liabilities where there is a future service
element. They do not include any ‘voluntary’ element.
There were no significant
uncorrected misstatements
identified during the audit.
The 2012/13 accounts need to include disclosure of standards
issued but not adopted and estimates of their likely financial
effect. As a result, estimates of the impact of IAS 19 (Revised)
have been obtained from the actuary. The impact on the
Authority in the 2012/13 accounts is £329,000 which is not
material to the accounts.
Misstatements and significant audit
adjustments
We have to tell you about all uncorrected misstatements we
found during the audit, other than those which are trivial.
There were no significant uncorrected misstatements
identified during the audit.
Significant accounting principles and
policies
Significant accounting principles and policies are disclosed in
the notes to the Statement of Accounts. We will ask
management to represent to us that the selection of, or
changes in, significant accounting policies and practices that
have, or could have, a material effect on the Statement of
Accounts have been considered.
Judgments and accounting estimates
The following significant judgments or accounting estimates
were used in the preparation of the Statement of Accounts
 Property, Plant and Equipment - Depreciation
and Valuation: You charge depreciation based on an
estimate of the Useful Economic Lives for the majority
of your Property, Plant and Equipment (PPE). Your
total depreciation charge in 2012/13 was £1.74 million
(2011/12 £2.09 million). This involves a degree of
estimation. You also value your PPE in accordance with
your accounting policies to ensure that the carrying
value is true and fair. This involves judgement and
reliance on your internal valuers.
 Accruals: You raise accruals for expenditure where an
invoice has not been raised or received at the year end,
but you know there is a liability to be met which relates
to the current year. This involves a degree of estimation.
Accruals are not disclosed separately within the
statement of accounts.
 Pensions: See above. You rely on the work of an
actuary in calculating these balances.
We will ask you to represent to us that you are satisfied with
the assumptions made in arriving at these judgements and
estimates in the accounts.
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Management representations
We ask for representation
from you on a number of
matters including:

Valuation of property,
plant and equipment
The final draft of the representation letter that we ask
management to sign is attached in Appendix 1.
In addition to the standard representations we have
requested specific representations on the work of (valuation)
experts.
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Audit independence
We are required to follow both the International Standard on
Auditing (UK and Ireland) 260 (Revised) “Communication
with those charged with governance”, UK Ethical Standard 1
(Revised) “Integrity, objectivity and independence” and UK
Ethical Standard 5 (Revised) “Non-audit services provided to
audited entities” issued by the UK Auditing Practices Board.
Together these require that we tell you at least annually
about all relationships between PricewaterhouseCoopers LLP
in the UK and other PricewaterhouseCoopers’ firms and
associated entities (“PwC”) and the Authority that, in our
professional judgement, may reasonably be thought to bear
on our independence and objectivity.
For the purposes of this letter we have made enquiries of all
PricewaterhouseCoopers’ teams whose work we intend to use
when forming our opinion on the truth and fairness of the
Statement of Accounts.
Relationships between PwC and the Authority
We are not aware of any relationships that, in our
professional judgement, may reasonably be thought to bear
on our independence and objectivity and which represent
matters that have occurred during the financial year on
which we are to report or up to the date of this document.
Relationships and Investments
We have not identified any potential issues in respect of
personal relationships with the Authority or investments in
the Authority held by individuals.
Employment of PricewaterhouseCoopers staff by the
Authority
We are not aware of any former PwC partners or staff being
employed by, or holding discussions in respect of
employment with, the Authority as a director or in a senior
management position covering financial, accounting or
control related areas.
Business relationships
We have not identified any business relationships between
PwC and the Authority.
Services provided to the Authority
The audit of the Statement of Accounts is undertaken in
accordance with the UK Firm’s internal policies. The audit is
also subject to other internal PwC quality control procedures
such as peer reviews by other offices.
Fees
The analysis of our audit fees for the year ended 31 March
2013 is included on page 15. In relation to the non-audit
services provided, none included contingent fee
arrangements.
Services to Directors and Senior Management
PwC does not provide any services e.g. personal tax services,
directly to directors, senior management.
Rotation
It is the Audit Commission's policy that engagement leaders
at an audited body at which a full Code audit is required to be
carried out should act for an initial period of five years. The
Commission’s view is that generally the range of regulatory
safeguards it applies within its audit regime is sufficient to
reduce any threats to independence that may otherwise arise
at the end of this period to an acceptable level. Therefore, to
safeguard audit quality, and in accordance with APB Ethical
Standard 3, it will subsequently approve engagement leaders
for an additional period of up to no more than two years,
provided that there are no considerations that compromise,
or could be perceived to compromise, the engagement
leader’s independence or objectivity.
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Gifts and hospitality
We have not identified any significant gifts or hospitality
provided to, or received from, a member of Authority’s
Cabinet or senior management or staff.
Conclusion
We hereby confirm that in our professional judgement, as at
the date of this document:


we comply with UK regulatory and professional
requirements, including the Ethical Standards issued
by the Auditing Practices Board; and
our objectivity is not compromised.
We would ask the Audit Committee to consider the matters
in this document and to confirm that they agree with our
conclusion on our independence and objectivity.
Annual Governance Statement
Local Authorities are required to produce an Annual
Governance Statement (AGS), which is consistent with
guidance issued by CIPFA / SOLACE: “Delivering Good
Governance in Local Government”. The AGS was included in
the Statement of Accounts.
We reviewed the AGS to consider whether it complied with
the CIPFA / SOLACE “Delivering Good Governance in Local
Government” framework and whether it is misleading or
inconsistent with other information known to us from our
audit work. We found no areas of concern to report in this
context.
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Value for Money
Economy, efficiency and effectiveness
Our value for money code responsibility requires us to carry
out sufficient and relevant work in order to conclude on
whether the Authority has put in place proper arrangements
to secure economy, efficiency and effectiveness in the use of
resources.
The Audit Commission guidance includes two criteria:

The organisation has proper arrangements in place for
securing financial resilience; and
The organisation has proper arrangements for
challenging how it secures economy, efficiency and
effectiveness.

We determine a local programme of audit work based on our
audit risk assessment, informed by these criteria and our
statutory responsibilities.
We have completed our work, subject to the following
outstanding matters:

Completion of our internal review procedures,
including addressing any queries which may result
from this.
Subject to the satisfactory resolution of these matters we
anticipate issuing an unqualified value for money conclusion.
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Fraud is a risk in all
organisations. We ask you to
represent to us that you have
made us aware of all fraud
affecting the Council.
Risk of fraud
We discussed with you your understanding of the risk of fraud and corruption and any reported instances when presenting
our plan.
In presenting this report to you we ask for your confirmation that there have been no changes to your view of fraud risk and
that no additional matters have arisen that should be brought to our attention. A specific confirmation from management in
relation to fraud is included in the letter of representation.
Fees update
Fees update for 2012/13
We reported our fee proposals in our plan, presented to you in March, which total £110,350.
Our actual fees were £110,350.
Our fee for certification of grants and claims is yet to be finalised for 2012/13 and will be reported to those charged with
governance within the Grants Report to Management in relation to 2012/13 grants.
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Appendices
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Appendix 1: Letter of representation
The letter of representation
includes generic and specific
items that we require you to
represent to us as appropriate
in the compilation of the
Statement of Accounts
PriceWaterhouseCoopers LLP
2nd Floor
3 St James Court
Whitefriars
Norwich
Norfolk
NR3 1RJ
Dear Sirs
Representation letter – audit of North Norfolk District Council’s (the Authority) Statement of Accounts for
the year ended 31 March 2013
Your audit is conducted for the purpose of expressing an opinion as to whether the Statement of Accounts of the Authority
give a true and fair view of the affairs of the Authority as at 31 March 2013 and of its deficit and cash flows for the year then
ended and have been properly prepared in accordance with the CIPFA/LASAAC Code of Practice on Local Authority
Accounting in the United Kingdom 2012/13 supported by the Service Reporting Code of Practice 2012/13.
I acknowledge my responsibilities as Chief Financial Officer for preparing the Statement of Accounts as set out in the
Statement of Responsibilities for the Statement of Accounts. I also acknowledge my responsibility for the administration of
the financial affairs of the authority and that I am responsible for making accurate representations to you.
I confirm that the following representations are made on the basis of enquiries of other chief officers and members of the
Authority with relevant knowledge and experience and, where appropriate, of inspection of supporting documentation
sufficient to satisfy myself that I can properly make each of the following representations to you.
I confirm, to the best of my knowledge and belief, and having made the appropriate enquiries, the following representations:
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Statement of Accounts





I have fulfilled my responsibilities for the preparation of the Statement of Accounts in accordance with the
CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2012/13 supported by the
Service Reporting Code of Practice 2012/13; in particular the Statement of Accounts give a true and fair view in
accordance therewith.
All transactions have been recorded in the accounting records and are reflected in the Statement of Accounts.
Significant assumptions used by the Authority in making accounting estimates, including those surrounding
measurement at fair value, are reasonable.
All events subsequent to the date of the Statement of Accounts for which the CIPFA/LASAAC Code of Practice on
Local Authority Accounting in the United Kingdom 2012/13 requires adjustment or disclosure have been adjusted or
disclosed.
The effects of uncorrected misstatements are immaterial, both individually and in the aggregate, to the Statement of
Accounts as a whole.
Information Provided



I have taken all the steps that I ought to have taken in order to make myself aware of any relevant audit information
and to establish that you, the authority's auditors, are aware of that information.
I have provided you with:
 access to all information of which I am aware that is relevant to the preparation of the Statement of Accounts such
as records, documentation and other matters, including minutes of the Authority and its committees, and relevant
management meetings;
 additional information that you have requested from us for the purpose of the audit; and
 unrestricted access to persons within the Authority from whom you determined it necessary to obtain audit
evidence.
So far as I am aware, there is no relevant audit information of which you are unaware.
Accounting policies
I confirm that I have reviewed the Authority’s accounting policies and estimation techniques and, having regard to the
possible alternative policies and techniques, the accounting policies and estimation techniques selected for use in the
preparation of Statement of Accounts are appropriate to give a true and fair view for the authority's particular circumstances.
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Fraud and non-compliance with laws and regulations
I acknowledge responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud.
I have disclosed to you:

the results of our assessment of the risk that the Statement of Accounts may be materially misstated as a result of
fraud.

all information in relation to fraud or suspected fraud that we are aware of and that affects the Authority and involves:
– management;
– employees who have significant roles in internal control; or
– others where the fraud could have a material effect on the Statement of Accounts.
all information in relation to allegations of fraud, or suspected fraud, affecting the Authority’s Statement of Accounts
communicated by employees, former employees, analysts, regulators or others.
all known instances of non-compliance or suspected non-compliance with laws and regulations whose effects should
be considered when preparing Statement of Accounts.


I am not aware of any instances of actual or potential breaches of or non-compliance with laws and regulations which provide
a legal framework within which the Authority conducts its business and which are central to the authority’s ability to conduct
its business or that could have a material effect on the Statement of Accounts.
I am not aware of any irregularities, or allegations of irregularities including fraud, involving members, management or
employees who have a significant role in the accounting and internal control systems, or that could have a material effect on
the Statement of Accounts.
Related party transactions
I confirm that we have disclosed to you the identity of the Authority’s related parties and all the related party relationships and
transactions of which we are aware.
Related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the
requirements of Section 3.9 of the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom
2012/13.
We confirm that we have identified to you all senior officers, as defined by the Accounts and Audit Regulations 2011, and
included their remuneration in the disclosures of senior officer remuneration.
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Employee Benefits
I confirm that we have made you aware of all employee benefit schemes in which employees of the authority participate.
Contractual arrangements/agreements
All contractual arrangements (including side-letters to agreements) entered into by the Authority have been properly reflected
in the accounting records or, where material (or potentially material) to the statement of accounts, have been disclosed to you.
Litigation and claims
I have disclosed to you all known actual or possible litigation and claims whose effects should be considered when preparing
the statement of accounts and such matters have been appropriately accounted for and disclosed in accordance with the
CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2012/13.
Taxation
I have complied with UK taxation requirements and have brought to account all liabilities for taxation due to the relevant tax
authorities whether in respect of any direct tax or any indirect taxes. I am not aware of any non-compliance that would give
rise to additional liabilities by way of penalty or interest and I have made full disclosure regarding any Revenue Authority
queries or investigations that we are aware of or that are ongoing.
In particular:



In connection with any tax accounting requirements, I am satisfied that our systems are capable of identifying all
material tax liabilities and transactions subject to tax and have maintained all documents and records required to be
kept by the relevant tax authorities in accordance with UK law or in accordance with any agreement reached with such
authorities.
I have submitted all returns and made all payments that were required to be made (within the relevant time limits) to
the relevant tax authorities including any return requiring us to disclose any tax planning transactions that have been
undertaken the authority’s benefit or any other party’s benefit.
I am not aware of any taxation, penalties or interest that are yet to be assessed relating to either the authority or any
associated company for whose taxation liabilities the authority may be responsible.
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Pension fund assets and liabilities
All known assets and liabilities including contingent liabilities, as at the 31 March 2013, have been taken into account or
referred to in the Statement of Accounts.
Details of all financial instruments, including derivatives, entered into during the year have been made available to you. Any
such instruments open at the 31 March 2013 have been properly valued and that valuation incorporated into the Statement of
Accounts.
Bank accounts
I confirm that I have disclosed all bank accounts to you including those that are maintained in respect of the pension fund.
Subsequent events
Other than as described in the Statement of Accounts, there have been no circumstances or events subsequent to the period
end which require adjustment of or disclosure in the statement of accounts or in the notes thereto.
Accounting Estimates
Regarding the accrual for uncompensated absences, an accounting estimate that was recognised in the financial statements:
 The Authority has used appropriate measurement processes, including related assumptions and models, in
determining the accounting estimate in the context of the CIPFA/LASAAC Code of Practice on Local Authority
Accounting in the United Kingdom.
Using the work of experts
I agree with the findings of our valuation expert, experts in evaluating the value of our non-current assets and have adequately
considered the competence and capabilities of the experts in determining the amounts and disclosures used in the preparation
of the Statement of Accounts and underlying accounting records. The Authority did not give or cause any instructions to be
given to experts with respect to the values or amounts derived in an attempt to bias their work, and I am not otherwise aware
of any matters that have had an impact on the objectivity of the experts.
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Contractual arrangements/agreements
 The Authority has complied with all aspects of contractual agreements that could have a material effect on the Statement of
Accounts in the event of non-compliance. There has been no non-compliance with requirements of regulatory authorities
that could have a material effect on the Statement of Accounts in the event of non-compliance.
 I have disclosed all material agreements that have been undertaken by the Authority in carrying on its business.
Assets and liabilities
 The Authority has no plans or intentions that may materially alter the carrying value and where relevant the fair value
measurements or classification of assets and liabilities reflected in the Statement of Accounts.
 In my opinion, on realisation in the ordinary course of the business the current assets in the balance sheet are expected to
produce no less than the net book amounts at which they are stated.
 The Authority has no plans or intentions that will result in any excess or obsolete inventory, and no inventory is stated at
an amount in excess of net realisable value.
 The Authority has satisfactory title to all assets and there are no liens or encumbrances on the Authority’s assets, except for
those that are disclosed in the Statement of Accounts.
 I confirm that we have carried out impairment reviews appropriately, including an assessment of when such reviews are
required, where they are not mandatory. I confirm that we have used the appropriate assumptions with those reviews.
 Details of all financial instruments, including derivatives, entered into during the year have been made available to you.
Any such instruments open at the year-end have been properly valued and that valuation incorporated into the statement
of accounts. When appropriate, open positions in off-balance sheet financial instruments have also been properly
disclosed in the Statement of Accounts.
Financial Instruments

All embedded derivatives have been identified and appropriately accounted for under the CIPFA/LASAAC Code of
Practice on Local Authority Accounting in the United Kingdom 2012/13.

Where hedging relationships have been designated as either firm commitments or highly probable forecast transactions, I
confirm that our plans and intentions are such that these relationships qualify as genuine hedge arrangements.

Where fair values have been assigned to financial instruments, I confirm that the valuation techniques, the inputs to those
techniques and assumptions that have been made are appropriate and reflect market conditions at the balance sheet date,
and are in line with the business environment in which we operate.
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Retirement benefits
 All significant retirement benefits that the Authority is committed to providing, including any arrangements that are
statutory, contractual or implicit in the authority’s actions, wherever they arise, whether funded or unfunded, approved or
unapproved, have been identified and properly accounted for and/or disclosed.
 All settlements and curtailments in respect of retirement benefit schemes have been identified and properly accounted for.
 The following actuarial assumptions underlying the valuation of retirement benefit scheme liabilities are consistent with
my knowledge of the business and in my view would lead to the best estimate of the future cash flows that will arise under
the scheme liabilities:
Rate of Increase in Salaries
5.1% (1% until 2015)
Rate of Increase in Pensions
2.8%
Discount Rate
4.5%
Expected Return on Assets
Longevity at 65 for current pensioners
4.5%
Men
21.2 years
Women
Longevity at 65 for future pensioners
23.4 years
Men
23.6 years
Women
25.8 years
........................................
Chief Financial Officer
For and on behalf of
Date ……………………
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In the event that, pursuant to a request which North Norfolk District Council has received under the Freedom of Information Act 2000, it is required to disclose any information contained in this
report, it will notify PwC promptly and consult with PwC prior to disclosing such report. North Norfolk District Council agrees to pay due regard to any representations which PwC may make in
connection with such disclosure and North Norfolk District Council shall apply any
y relevant exemptions which may exist under the Act to such report. If, following consultation with PwC, North
Norfolk District Council discloses this report or any part thereof, it shall ensure that any disclaimer which PwC has included or may subsequentl y wish to include in the information is reproduced in
full in any copies disclosed.
This document
ent has been prepared only for North Norfolk District Council and solely for the purpose and on the terms agreed through our contract with the Audit Commission.
Commission We accept no
liability (including for negligence) to anyone else in connection with this document, and it may not be provided to anyone else.
© 2013 PricewaterhouseCoopers LLP. All rights reserved. In this document, "PwC" refers to the UK member firm, and m ay sometimes refer to the PwC network. Each member firm is a separate
legal entity. Please see www.pwc.com/structure for further details.
130610-142627-JA-UK
32
Agenda item ___11____
Monitoring Officer
Annual Report 2012/13
Section
Numbers
Contents
1
Introduction
2
The Monitoring Officer’s Work April 2012 – March 2013
3
Key Messages
4
Looking Forward
5
Overall opinion on the adequacy and effectiveness of the
Governance framework
33
1.
Introduction
1.1
The Monitoring Officer’s Annual Report summarises the more important
matters arising from the Monitoring Officer’s work for the District Council from
1 April 2012 to 31 March 2013 and comments on other current issues.
1.2
Corporate Governance is the system by which local authorities direct and
control their functions and relate to their communities. It is founded on the
fundamental principles of openness, integrity and accountability together with
the overarching concept of leadership. In this respect, North Norfolk District
Council recognises the need for sound corporate governance arrangements
and over the years has put in place policies, systems and procedures
designed to achieve this.
1.3
The Monitoring Officer is appointed under Section 5 of the Local Government
and Housing Act 1989 and has a number of statutory functions in addition to
those conferred under the Local Government Act 2000 and subsequent
regulations governing local investigations into Member conduct. These are
outlined in the next section of the report.
2.
The Monitoring Officer’s Work April 2012 – March 2013
2.1
The Monitoring Officer has undertaken the following work during the year
from April 2012 to March 2013.
Duties
(a) Report on contraventions or likely
contraventions of any enactment or
rule of law.
Work undertaken
None
(b)
There have been no such reportable
incidents.
(c)
Report any findings of
maladministration causing injustice
where the Ombudsman has carried
out an investigation.
Establish and maintain the Register
of Member’s interests and gifts and
hospitality.
Members have been trained in the
provisions of the new Code and have
been issued with Guidance.
The Register of Members’ Interests is
publicised on the Council’s website.
The Registers remain as a standing item
on the Standards Committee Agenda
and are available for Members or
members of the public to inspect.
Monitoring Officer Annual Report 2012/13
34
(
Duties
d) Maintain Register of Employees
gifts and hospitality and declaration
of officer’s interests in contract.
Work undertaken
The Registers have been updated
regularly and are open to inspection.
(e)
During the year between April 2012 and
March 2013 a total of 10 complaints have
been received, compared with 36 in
2011 / 12.
Investigate misconduct in respect of
District, Parish and Town
Councillors under the Code of
Conduct.
3 Cases were referred for investigation (8
in 2011/12) and none were referred for
other action (16 in 2011/12). Of the 3
referred for investigation, 1 was found to
have breached the Code of Conduct, 2
were found to have no breach.
Of the 10 complaints received, 1 related
to a District Councillor and 9 related to
Town or Parish Councillors.
Members have regularly sought advice in
order to comply with the Code of
Conduct, particularly in relation to
declaring interests under the Code.
(f)
Investigate breaches of the
Council’s own protocols.
There have been no alleged breaches of
the Council’s own protocols.
(g)
Provide advice to Town and Parish
Councils on the interpretation of the
Code of Conduct.
The Monitoring Officer has provided
advice to Parish Councils on the
Standards and Conduct Arrangements
during 2012/13 face to face, by letter,
telephone and email.
Monitoring Officer Annual Report 2012/13
35
Duties
(h) Promote and support high
standards of conduct through
support to the Standards
Committee.
Work undertaken
The Standards Committee have received
reports on a range of matters during
2012/13 including;
Regular reporting of outstanding
cases.
Reports requested by the
Committee.
Progress of other action.
Implementation of the Localism
Act 2011.
The Standards Committee has been
programmed to meet on a bi-monthly
basis with reserve dates for alternate
months. During the year to 31 March
2013, the Standards Committee actually
met on 6 occasions.
(i)
Compensation for
maladministration.
None.
(k)
Maintenance and review of the
Constitution.
A revised Constitution was adopted by
the Council at its December 2012
meeting
(l)
Responsibility for complaints made
under the Council’s Whistleblowing
and Anti-Fraud policies.
One reference was made under the
Whistleblowing and Anti-Fraud policies
and the Whistleblowing Panel was
convened. On investigation the matter
was found to be a complaint not about
the council but about an external
contractor. The Whistleblowing and AntiFraud process was discontinued and the
matter pursued under the contract
monitoring arrangements.
(m) Breaches of the Employee Code of
Conduct.
There have been no formal allegations of
breaches under the Employee Code of
Conduct.
Monitoring Officer Annual Report 2012/13
36
Duties
(n) Advice on vires issues,
maladministration, financial
impropriety, probity and policy
framework.
Work undertaken
The Monitoring Officer has been
consulted on new policy proposals and
on matters, which have potentially
significant legal implications.
The Monitoring Officer has attended
Council and other Committees as
necessary.
The report template has been updated
this year but continues to require authors
to forward reports to the Monitoring
Officer for review of the legal implications
prior to submission for agendas where
appropriate or to explain why this has not
been necessary.
The Monitoring Officer regularly advises
on the legality and/or appropriateness of
administrative procedures, in conjunction
with the Democratic Services Team.
3.
Key Messages
3.1
The key messages to note from the year are:
(i)
The systems of internal control administered by the Monitoring Officer
including compliance with the Council’s Constitution were adequate and
effective during the period for the purposes of the latest Regulations.
However, it is important that Members and Officers are regularly reminded
of their obligations and updated on any changes to ensure there is no
complacency.
(ii)
Following the revision of the Constitution, there will be a need to monitor
and review how any new aspects of the Constitution are working and
whether and what fine tuning may need to take place.
4.
Looking Forward
4.1
The key issues for 2013/14 are as follows;
4.2
Code of Conduct
4.2.2
In accordance with the resolution of Standards Committee to engage with
parish councils over their promotion and maintenance of high standards of
ethics and conduct.
Monitoring Officer Annual Report 2012/13
37
4.2.3
To consider the role and impact of the Council’s Independent Person and
whether any changes to the role and to the activities required of the
Independent Person.
4.3
Corporate Governance Framework
4.3.1
The Council will keep the Code of Corporate Governance under review,
taking into account any revisions to associated guidance and any
recommendations arising from audit reports.
4.3.2
The Monitoring Officer will continue to provide an assurance in respect of the
Code and the Annual Governance Statement by way of this Annual Report.
4.4
Constitution and Regulations
4.4.1
Following the review of the Constitution by the Constitution Working Party,
amendments have been made as agreed at Council in December 2012. The
Constitution Working Party will have an on-going role and responsibility for
the foreseeable future in monitoring the effectiveness of the Constitution and
identifying further amendments.
4.4.2
It will be appropriate to continue to remind Members and staff of the
importance of compliance with the Council’s regulations, as set out in the
Constitution and other policy framework documents, and the Monitoring
Officer and his staff will give advice accordingly.
5.
Overall opinion on the adequacy and effectiveness of the Governance
framework
5.1
That the systems of internal control administered by the Monitoring Officer
including the Code of Conduct and the Council’s Constitution, were adequate
and effective during the year between April 2012 and March 2013 for the
purposes of the latest regulations (subject to the areas outlined above).
David Johnson
Interim Monitoring Officer
27 June 2013
Monitoring Officer Annual Report 2012/13
38
List of procurement exemption requests
Section 9 of the Council’s Contract Procedure Rules deals with exemptions as
it is acknowledged that the market place or extenuating circumstances does
not always allow for the normal procedures to be followed. Where exemptions
have been approved there is a requirement for these to be reported as part of
the Monitoring Officer’s Annual Report in line with the Council’s Constitution
and Contract Standing Orders (9.1, pg 150).
Service
Description
Leisure
Consultancy
services for Dual
Use Centre
business case
Electoral
Supply of Postal
Services
Vote Packs and
Ballot Papers
Environmental 3 year extension
Health
to M3
Environmental
Health system
software contract
Coast
Happisburgh
Protection
steps
Payroll
5 year extension
to payroll system
software contract.
Housing
Locata housing
Services
system software
extension
Customer
Provision of
Services
franking machine
Property
Services
Property
Services
Urgent repairs to
Cromer pier
pavilion roof.
Public
convenience
urgent vandalism
repairs –
Sheringham East
prom
Estimated
Value over
contract life
£6,500
Exemption
Applied
Contact
Officer
9.1 (d)
Framework
Agreement
Karl Read
£8,812
9.1 (a)
Suzanne
Taylor
£55,715
9.1 (a)
James
Wilson
£25,000
9.1 (e)
Brian Farrow
£76,000
9.1 (d)
Framework
Agreement
9.1 (a)
Julie Cooke
Jane Wisson
£8,250
9.1 (d)
Framework
Agreement
9.1 (e)
£9,982
9.1 (a)
Russell
Tanner
£95,000
£23,794
Lisa Grice
Russell
Tanner
Exceptions (9.1)
It is acknowledged that the market place or extenuating circumstances do not
always allow the full procurement procedures to be followed. Subject to
Monitoring Officer Annual Report 2012/13
39
compliance at all times with European procurement rules, contracts can also
be entered into in the following circumstances:
(a)For the supply of goods or services where there is only one supplier and no
acceptable alternative, following consultation with the Procurement Officer.
(b) For the extension, addition to or maintenance of existing buildings, works
plant or equipment, where the Cabinet has decided that this can only be done
satisfactorily by the original supplier.
(c) As part of a consortium (where the Council is not the lead authority).
(d) A contract that has been tendered by a central government body (the
Office of Government Commerce) or Framework contracts such as the
Eastern Shires Purchasing Organisation (ESPO).
(e) Where there is an urgent Health and Safety requirement, subject to the
prior approval of the Council’s Health and Safety Officer and the relevant
Director.
(f) Where the Cabinet considers it desirable on commercial grounds to accept
a quotation from a supplier already engaged by the Council on a project
provided that further services have a connection with the original project and
that the price is not more than 50% of the original contract sum.
(g) For loans arrangements.
(h) On behalf of another authority where the agency agreement provides that
the procurement rules of that authority are to be followed.
Further information can be requested from Duncan Ellis, Head of Assets and
Leisure on ext 6330 or via email: Duncan.ellis@north-norfolk.gov.uk
Monitoring Officer Annual Report 2012/13
40
16 July 2013
By email
Ms Sheila Oxtoby
Chief Executive
North Norfolk District Council
Dear Ms Oxtoby
Annual Review Letter
I am writing with our annual summary of statistics on the complaints made to the Local
Government Ombudsman (LGO) about your authority for the year ended 31 March 2013.
This year we have only presented the total number of complaints received and will not be
providing the more detailed information that we have offered in previous years.
The reason for this is that we changed our business processes during the course of 2012/13
and therefore would not be able to provide you with a consistent set of data for the entire
year.
In 2012/13 we received 12 complaints about your local authority. This compares to the
following average number (recognising considerable population variations between
authorities of a similar type):
District/Borough CouncilsUnitary AuthoritiesMetropolitan CouncilsCounty CouncilsLondon Boroughs-
10 complaints
36 complaints
49 complaints
54 complaints
79 complaints
Future development of annual review letters
We remain committed to sharing information about your council’s performance and will be
providing more detailed information in next year’s letters. We want to ensure that the data
we provide is relevant and helps local authorities to continuously improve the way they
handle complaints from the public and have today launched a consultation on the future
format of our annual letters.
I encourage you to respond and highlight how you think our data can best support local
accountability and service improvements. The consultation can be found by going to
www.surveymonkey.com/s/annualletters
LGO governance arrangements
As part of the work to prepare LGO for the challenges of the future we have refreshed our
governance arrangements and have a new executive team structure made up of Heather
Lees, the Commission Operating Officer, and our two Executive Directors Nigel Ellis and
Michael King. The Executive team are responsible for the day to day management of LGO.
41
Since November 2012 Anne Seex, my fellow Local Government Ombudsman, has been on
sick leave. We have quickly adapted to working with a single Ombudsman and we have
formally taken the view that this is the appropriate structure with which to operate in the
future. Our sponsor department is conducting a review to enable us to develop our future
governance arrangements. Our delegations have been amended so that investigators are
able to make decisions on my behalf on all local authority and adult social care complaints in
England.
Publishing decisions
Last year we wrote to explain that we would be publishing the final decision on all complaints
on our website. We consider this to be an important step in increasing our transparency and
accountability and we are the first public sector ombudsman to do this. Publication will apply
to all complaints received after the 1 April 2013 with the first decisions appearing on our
website over the coming weeks. I hope that your authority will also find this development to
be useful and use the decisions on complaints about all local authorities as a tool to identify
potential improvement to your own service.
Assessment Code
Earlier in the year we introduced an assessment code that helps us to determine the
circumstances where we will investigate a complaint. We apply this code during our initial
assessment of all new complaints. Details of the code can be found at:
www.lgo.org.uk/making-a-complaint/how-we-will-deal-with-your-complaint/assessment-code
Annual Report and Accounts
Today we have also published Raising the Standards, our Annual Report and Accounts for
2012/13. It details what we have done over the last 12 months to improve our own
performance, to drive up standards in the complaints system and to improve the
performance of public services. The report can be found on our website at www.lgo.org.uk
Yours sincerely
Dr Jane Martin
Local Government Ombudsman
Chair, Commission for Local Administration in England
42
Agenda Item No___13______
LOCAL CODE OF CORPORATE GOVERNANCE AND ANNUAL GOVERNANCE
STATEMENT 2012/13
Summary:
The Corporate Governance framework is made up of
the systems and processes, culture and values by which
an organisation is directed and controlled. For local
authorities this includes how a council relates to the
community it serves. The Local Code of Corporate
Governance is a public statement of the ways in which
the Council will achieve good corporate governance. It
is based around six principles which were identified in
the joint publication by the Chartered Institute of Public
Finance and Accountancy (CIPFA) and the Society of
Local Authority Chief Executives (SOLACE). The
Annual Governance Statement is prepared following a
review of all the evidences available to the Council in
seeking compliance with its Local Code.
Conclusions:
The arrangements set out in the Local Code of
Corporate Governance and the Annual Governance
Statement will allow the Council to move ahead with its
corporate planning processes confident that it can
address the issues of governance and risk.
Recommendations:
Members are asked to review and approve the Annual
Governance Statement along with the updated Local
Code of Corporate Governance.
Cabinet Member(s)
Ward(s) affected
All
All
Contact Officer, telephone number and email:
Karen Sly, 01263 516243, Karen.sly@north-norfolk.gov.uk
1.
Introduction
1.1
Attached to this report are two documents for consideration by the Audit
Committee. These are;
• The Annual Governance Statement (Appendix A)
• The Local Code of Corporate Governance (Appendix B)
1.2
Both documents were considered by the Performance and Risk Management
Board (PRMB) in July and have been updated to reflect the comments made
at the meeting.
2.
Annual Governance Statement
2.1
Attached at Appendix A is the draft Annual Governance Statement (AGS) for
2012/13. This statement provides assurances as to the in-year operation of
43
the risk and governance arrangements adopted by the Council. It is prepared
after reviewing all of the evidences available to the Audit Committee,
Performance and Risk management Board, the Council‟s Corporate
Management Team, Head of Internal Audit, external audit and the statutory
officers of the Council.
2.2
The Annual Governance Statement (AGS) sets out how the Council ensures
that its business is conducted in accordance with the law and proper
standards and that public money is safeguarded and properly accounted for
and used economically, effectively and efficiently in the delivery of its
services.
2.3
North Norfolk District Council has adopted its own Local Code of Corporate
Governance which supports this AGS. The Local Code is compliant with the
recommendations of the CIPFA/SOLACE “Delivering good governance in
Local Government” and the recently published guidance on the review of
governance arrangements.
2.4
AGS is signed by the Leader of the Council and the Chief Executive. The
Audit Committee are asked to consider the draft report as attached and to
make recommendations to Council.
3.
The Local Code of Corporate Governance
3.1
The Local Code of Corporate Governance (the Local Code) is a public
statement of how the Council seeks to achieve good corporate governance. It
is best practice for each authority to adopt a Local Code of Corporate
Governance which demonstrates how the Council will achieve good
governance. The Code follows the six principles of good governance as
identified by CIPFA/SOLACE as is attached at Appendix B.
3.2
In December 2012 CIPFA and SOLACE published “Delivering good
governance in Local Government – Guidance note for English Authorities”
which is to be used to assist local authorities in reviewing the effectiveness of
their governance arrangements.
3.3
There are some key requirements that need to be met to demonstrate
compliance with the six principles and these are listed along with „evidences‟
and source documents. These evidences that must be reviewed regularly to
ensure that they are up to date and remain sufficiently current. Any gaps in
compliance are identified and form an action plan which is monitored
throughout the year.
3.4
There have been no changes to the six principles adopted from the
CIPFA/SOLACE framework in 2012/13. The elements that support the six
principles have also been examined to ensure that they continue to provide
adequate exemplification of the six principles for the Council.
4.
Review of Effectiveness
4.1
The Council is committed to a sound system of Governance that reflects:
openness, accountability and integrity
compliance with laws, policies and regulations
identified and monitors all strategic and operational risks
44
4.2
The key document for the Council is the Corporate Plan. The risks to its
achievement are outlined in the comprehensive risk registers maintained by
the Authority.
4.3
The review of the Governance arrangements is undertaken through a number
of mechanisms. The Monitoring Officers report, the report from the Head of
Internal Audit and the Heads of Service annual assurance certificates as well
as the various inspection regimes from the Audit Commission and the
External Auditors all provide elements of the overall review.
5.
Conclusion
5.1
The arrangements set out in the Local Code of Corporate Governance will
allow the Council to move forward with its corporate planning processes and
remain confident that it can address the issues of governance and risk.
6.
Recommendations
6.1
Members are asked to review and approve the Annual Governance
Statement along with the updated Local Code of Corporate Governance.
M:\Accountancy\Shared Information\Governance\Audit Cttee Sept 2013 AGS and Local Code\Audit
Cttee AGS & Local Code 12-13 REPORT.doc
45
APPENDIX A
Annual Governance Statement 2012/13
1. Scope of responsibility
1.1.
North Norfolk District Council (NNDC) is responsible for ensuring that its business is conducted in accordance with the law and proper
standards, that public money is safeguarded and properly accounted for and used economically, efficiently and effectively. NNDC also has a
duty under the Local Government Act 1999 to make arrangements to secure continuous improvement in the way in which its functions are
exercised, having regard to a combination of economy, efficiency and effectiveness.
1.2.
In discharging this overall responsibility, NNDC is responsible for putting in place proper arrangements for the governance of its affairs,
facilitating the effective exercise of its functions, which includes arrangements for the management of risk.
1.3.
NNDC has approved and adopted a local code of corporate governance, which is consistent with the principles of the CIPFA/SOLACE
Framework “Delivering Good Governance in Local Government” (2007) as well as the update “Guidance note for English Authorities” (2012).
A copy of the Council‟s local code is on our website at www.north-norfolk.gov.uk or can be obtained from the Head of Finance at Council
Offices, Holt Road, Cromer. This statement explains how NNDC has complied with the code and also meets the requirement of regulation 4[3]
of the Accounts and Audit (England) Regulations 2011 in relation to the publication of an annual governance statement, prepared in
accordance with proper practises in relation to internal control and is reviewed annually or more frequently as required.
2. The purpose of the governance framework
2.1.
The governance framework comprises the systems and processes, and culture and values, by which the authority is directed and controlled
and its activities through which it accounts to, engages with and leads the community. It enables the Council to monitor the achievement of
its strategic objectives and to consider whether those objectives have led to the delivery of appropriate, cost-effective services.
2.2.
The governance framework has been in place at NNDC for the year ended 31 March 2013 and up to the date of approval of the statement of
accounts.
3. The governance framework
3.1.
Our governance framework derives from six principles identified in a 2004 publication entitled “The Good Governance Standard for Public
Services”. This was produced by the Independent Commission on Good Governance in Public Services – a commission set up by the
Chartered Institute Of Public Finance and Accountancy (CIPFA), and the Office for Public Management. The commission utilised work done
by, amongst others, Cadbury (1992), Nolan (1995) and CIPFA/ Society of Local Authority Chief Executives (SOLACE) (2001). These
principles were adapted for application to local authorities and published by CIPFA/SOLACE in 2007.
3.2.
The six core principles are:
46
Annual Governance Statement 2012/13
3.2.1. focusing on the purpose of the authority and on outcomes for the community and creating and implementing a vision for the local area;
3.2.2. members and officers working together to achieve a common purpose with clearly defined functions and roles;
3.2.3. promoting values for the authority and demonstrating the values of good governance through upholding high standards of conduct and
behaviour;
3.2.4. taking informed and transparent decisions which are subject to effective scrutiny and managing risk;
3.2.5. developing the capacity and capability of members and officers to be effective; and
3.2.6. engaging with local people and other stakeholders to ensure robust public accountability.
3.3.
The system of internal control is a significant part of that framework and is designed to manage risk to a reasonable level. It cannot eliminate
all risk of not fully achieving policies, aims and objectives and therefore provides a reasonable rather than absolute assurance of
effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of
NNDC policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to
manage them efficiently, effectively and economically.
4. The Six Key Principles
4.1.
Focusing on the purpose of the authority and on outcomes for the community and creating and implementing a vision for the local area
4.1.1. The Council‟s aims and objectives are set out in the Corporate Plan “Small Government, Big Society” covering the period 2011-2015.
This contains a statement of the Council‟s vision for the area, priorities and business strategy over the same period.
4.1.2. The Corporate Plan identifies the key strategic priorities for the Council up to 2015 including clear statements of intent under each of
the following priority areas:
To boost employment and create more jobs
To enable the provision of new homes and the infrastructure that goes with them
To protect our coastline and the character of our countryside and built heritage
To empower individuals and local communities to have a greater say in their own futures
To reform the organisation to deliver high quality services that achieve our priorities in an efficient manner that represents good value
for local taxpayers
47
Annual Governance Statement 2012/13
4.1.3. The Corporate Plan contains details of what we want to achieve and the methods we will employ in delivering the key priorities and is
accompanied by a detailed work programme “Small Government, Big Society” setting out the details which underpin the Corporate
Plan. Additionally the Cabinet receives an annual Medium Term Financial Strategy which draws on other strategies, including ICT,
asset management and human resources covering a rolling four-year period, which is used to set initial parameters for the annual
budget process.
4.1.4. The Council has an effective performance management framework – utilising a dedicated IT system to record and report upon
performance management information. The system is driven by the Corporate Plan which focuses attention on Council priorities. This
is cascaded through departmental service plans, individual employee appraisals and action plans. It is clearly established in the
annual service and financial planning and performance management cycle.
4.1.5. The Annual Report and Performance Plan represents the culmination of the annual planning and reporting process. The report
evidences the compliance of the Council with its Performance Management Framework.
4.1.6. The Council‟s Cabinet and the Performance and Risk Management Board monitor and scrutinise progress against targets and
performance in priority areas affecting relevant service areas, and consider and approve corrective action on a quarterly basis where
necessary. These reports also include quarterly budget monitoring reports covering the General Fund, capital projects, key prudential
code indicators and certain specific budget areas regarded as particularly sensitive. The reporting process is under constant review in
order to develop its maximum potential, and we are conscious that the financial information needs to be closely linked to the service
performance information.
4.1.7. The Council maintains an objective and professional relationship with external auditors and other statutory inspectors, as evidenced
by the Annual Audit Letter.
4.1.8. Through reviews by external agencies, and Internal Audit, the Council constantly seeks ways of ensuring the economic, effective and
efficient use of resources, and for securing continuous improvement in the way in which its functions are exercised. The Council‟s
Asset Management Board oversees the property portfolio of the Council and monitors the implementation of the Asset Management
Strategy and capital programme.
4.1.9. The Council has reviewed its financial and contract rules as part of a comprehensive review of the Constitution which was completed
during 2010/11. This work has been revisited during 2012/13 to reflect the new management arrangements following the appointment
of a new Chief Executive and the subsequent changes to the Corporate Leadership and Senior Management Teams. The constitution
working party met twice during the year to review and recommend changes as applicable to the constitution.
48
Annual Governance Statement 2012/13
4.1.10. All budget heads are allocated to a named budget officer, who is responsible for controlling spend against a budget. This control is
reinforced by regular budget monitoring reports to Cabinet and Overview and Scrutiny Committee.
4.1.11. The Performance and Risk Management Board has defined terms of reference to develop a comprehensive performance framework
for risk management and to embed risk management across the Council. The Performance and Risk Management Board maintains
the risk register, and submits it to the Audit Committee on a regular basis. The Business Continuity Working Group continues to meet
regularly. Business Impact Assessments are now in place for critical areas and Business Continuity Plans have been strengthened
with critical services having complete documentation. Work is on-going with other non-critical services to develop their documentation
so that a comprehensive base is produced to assess staffing and equipment needs during a period of service disruption.
4.2.
Members and Officers working together to achieve a common purpose with clearly defined functions and roles
4.2.1.
The Council aims to ensure that the roles and responsibilities for governance are defined and allocated so that accountability for
decisions made and actions taken are clear.
4.2.2.
The Council has adopted a constitution which sets out how the Council operates, how decisions are made and the procedures which
are followed to ensure these are efficient, transparent and accountable to local people. It does this by electing a Leader and
appointing a Cabinet. The Leader then allocates executive responsibilities.
4.2.3.
The Council publishes a forward plan which contains details of key decisions to be made by the Cabinet. Each Cabinet member has a
specific portfolio of responsibilities requiring them to work closely with senior officers and other employees so as to achieve the
Council‟s ambitions. The Cabinet operates on the basis of collective responsibility.
4.2.4.
Additionally, the Council appoints a number of committees to discharge the Council's regulatory and scrutiny responsibilities. These
leadership roles, and the delegated responsibilities of officers, are set out in the Constitution. Further updates to the Constitution were
approved by Full Council in April 2012 and the work revisited to accommodate the changed management structures during the course
of 2012/13. These changes were approved by Full Council in December 2012.
4.2.5.
All Committees have clear terms of reference and work programmes to set out their roles and responsibilities. An Audit Committee
provides assurance to the Council on the effectiveness of the governance arrangements, risk management framework and internal
control environment.
4.2.6.
Meetings are open to the public except where personal or confidential matters are being discussed. Public speaking was introduced
to all Committees and Full Council some years ago to improve openness and accountability. In addition, senior officers of the Council
can make decisions under delegated authority, the extent of these delegations is set out in the Constitution.
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Annual Governance Statement 2012/13
4.2.7.
The Constitution also includes a Member/Officer protocol which describes and regulates the way in which Members and Officers
should interact to work effectively together.
4.2.8.
The Council's Chief Executive (and Head of Paid Service) leads the Council's officers and chairs the Corporate Leadership Team. All
staff, including senior management, have clear conditions of employment and job descriptions which set out their roles and
responsibilities.
4.2.9.
The Head of Finance has been appointed as the s151 Officer under the Local Government Act 1972, carrying overall responsibility for
the financial administration of the District Council and is member of the Management Team. The Council complies with the
requirements of the CIPFA statement on the Role of the Chief Financial Officer in Local Government. The corporate finance function
headed by s151 Officer, provides support to each service area of the Council in respect of budget preparation and financial
monitoring.
4.2.10.
The Monitoring Officer position is provided under contract with NP Law (from 12 June 2012) and carries overall responsibility for legal
compliance supported by a legal team. The Council employs two practising solicitors.
4.2.11. The Council‟s Corporate Leadership Team (CLT) is made up of the Chief Executive and two Corporate Directors who meet on a
weekly basis to develop policy issues commensurate with the Council‟s aims, objectives and priorities. CLT also considers other
internal control issues, including risk management, performance management, compliances, value for money and financial
management. CLT also meets with portfolio holders on a regular basis to review progress in achieving the Council‟s ambitions,
priorities for action, performance management and forward planning for major issues.
4.2.12. Below CLT the management structure is well defined in a hierarchical manner, comprising the following teams:
Title
Principal Objectives
Corporate Leadership Team
(CLT)
Weekly meetings that deal with forward workplan and media issues
(Consists of Chief Executive
and Corporate Directors)
Provides collective responsibility for:
•
Providing corporate leadership;
•
Employee development ;
•
Internal and external communications;
•
Performance management; and
•
Co-ordinating and delivering corporate objectives and priorities for action;
• Reviews corporate policy implementation;
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Annual Governance Statement 2012/13
•
•
Title
Agrees corporate standards; and
Considers key operational matters
Principal Objectives
Management Team (MT)
To work with the Corporate Leadership Team in the leadership of the Council so as to deliver the
Council‟s Corporate Plan and provision of high quality services to the District‟s residents,
(Consists of CLT and Heads of businesses and visitors.
Service)
To work as one team to deliver the Council‟s objectives and vision by
•
Leading by example - promoting the values and principles of the Council
•
Utilising collective skills, knowledge and experience
•
Creating a safe, collaborative and respectful environment where robust challenge and
informed and managed risk taking is acceptable
•
Keeping colleagues informed on matters which may impact on other service areas
•
Collectively updating CLT on matters of strategic or reputational importance
•
Providing consistent and regular communication to staff on key issues and activities
•
Listening to, sharing and reacting to feedback from staff, Councillors and service users
•
Deputising on generic management issues for other Heads of Service as required
•
Providing shared understanding of the changes the Council needs to take in order to gain „buy
in‟ from staff
•
Taking joint responsibility to empower and motivate staff to provide the best possible service
and be proud of their achievements
•
Continually challenging current working practices and identifying flexible and innovative ways
to maximise efficiency and effectiveness
•
Taking responsibility for implementing changes (within budget) to service delivery, including
across services
•
Driving a customer service ethos throughout the organisation
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Annual Governance Statement 2012/13
Title
Principal Objectives
•
Measuring and managing performance against key indicators
Title
Principal Objectives
Managers Group
•
(Consists of all Managers that •
Report to a Head of Service)
•
Quarterly meetings of all Managers that report to a Head of Service
Deliver consistent messages through the organisation
Keeping managers informed on matters which may impact on their teams and services
In addition there are specific groups established to progress issues on a corporate basis, examples being:
Group
Principal objectives
Asset Management Board
•
The Board meets on a quarterly basis, with additional meetings if required;
•
Provide a cross-departmental group within the Authority who operate at a sufficient level in
order to make a positive contribution to the strategic direction of the Council‟s capital
investment and asset management decisions;
•
Consider all proposals for asset disposal in line with the Council‟s Asset Disposal Policy
•
Advise on corporate strategic decisions on the management of the Council‟s assets, particularly
in relation to capital projects, disposals and acquisitions;
•
To agree an Asset Management Plan and capital strategy that supports the strategic direction
of the authority as articulated through its Corporate Plan and Financial Strategy;
•
To oversee the on-going review of assets, and set out an appropriate charging regime to
ensure the best possible return on investment is achieved and provides a strategy for asset
rationalization and asset transfer;
•
Identify and recommend new capital projects and resources, ensuring they are in line with the
Council‟s overall aims and objective, before they are considered by Members.
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Annual Governance Statement 2012/13
Group
Principal objectives
Coastal Management Board
•
The Board meets on a quarterly basis, with additional meetings if required;
•
To oversee coastal adaptation and policy and coast defence capital works;
•
Providing strategic steer for the overall management of the coastal issues at NNDC;
•
Provides an officer/member corporate group to ensure an integrated approach is taken to all
coastal issues and inform the development of an Integrated Coastal Management Plan;
•
Make recommendations to Cabinet as appropriate.
Performance and Risk
Management Board
Housing and Planning Policy
Board
To maintain a performance management framework that is understood and implemented by all;
•
To identify and manage the Council‟s strategic and operational risks and strengthen business
continuity;
•
To ensure that all staff and Members have a shared understanding of the council‟s priorities
and of what is needed to be done to realise those priorities;
•
To ensure that the commitment given to performance and risk management is commensurate
with the importance placed on embedding a successful performance and risk management
culture;
•
To ensure that services deliver the corporate objectives by challenging the measures and
targets put forward by service heads / managers; and
•
To ensure that management and Council decisions are based on valid, accurate and timely
information.
•
Provide a steer to the work of the Housing and Planning Policy Teams to ensure a strategic
approach to deliver the Council‟s Growth Agenda.
Big Society Board
•
•
Receive and determine applications for Big Society and Enabling funding;
Make recommendations to Cabinet on large grant applications.
Localism Board
•
The Board meets on a quarterly basis, with additional meetings if required;
•
The Board oversees the actions leading to the achievement of the Corporate Plan‟s localism
priority:
“to embrace the Government’s localism agenda to empower individuals and communities to
take more responsibility for their own futures and to build stronger civil society.”
•
The Board guides procedural matters (for example resulting from „Community Rights‟) and will
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Annual Governance Statement 2012/13
Group
4.3.
Principal objectives
provide a steer on the development and funding of community projects (from the Big Society
Enabling Fund);
•
Determines the nature and level of support to be given to the development of initiatives
undertaken in partnership with community or voluntary organisations;
•
Identify the allocation of resources from the Big society Enabling Fund;
•
Respond to expressions of interest, nominations and other applications and approaches to be
determined under the Community Rights enshrined in the Localism Act and related regulations;
•
Consider applications for funding referred from the Big Society Fund Grants Panel and
determine an appropriate course of action.
Promoting values for the community and demonstrating the values of good governance through upholding high standards of conduct and
behaviour.
4.3.1.
The Council has adopted a number of codes and protocols that govern both Member and Officer activities. These are:
Members Code of Conduct;
Officers Code of Conduct;
Planning Protocol;
Members‟ declarations of interest;
Member/Officer relations; and
Gifts and hospitality
4.3.2.
The Council takes fraud, corruption and maladministration very seriously and has the following policies in place which aim to prevent
or deal with such occurrences:
Anti-Fraud and Corruption Policy;
Whistle Blowing Policy; and
HR policies regarding the implications for staff involved in such incidents.
4.3.3.
It is part of the function of the Monitoring Officer to ensure compliance with established policies, procedures, laws and regulations.
After consulting the Chief Executive and Head of Finance, the Monitoring Officer can report to the Full Council if any proposal,
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Annual Governance Statement 2012/13
decision or omission would give rise to unlawfulness or maladministration. Such a report will have the effect of stopping the proposal
or decision being implemented until the report has been considered.
4.4.
4.3.4.
The financial management of the Council is conducted in accordance with the financial rules set out in the Constitution and with
Financial Regulations. The Council has designated the Head of Finance as its Chief Finance Officer in accordance with Section 151
of the Local Government Act 1972. The Council has in place a four-year Financial Strategy, updated annually, to support the mediumterm aims of the Corporate Plan.
4.3.5.
The Council maintains an externalised Internal Audit function, which operates to the standards set out in the „Code of Practice for
Internal Audit in Local Government in the UK” produced by the Chartered Institute of Public Finance and Accountancy (CIPFA). This
is the fifth year of the arrangement with South Norfolk District Council to provide internal audit services to a consortium of client
authorities under a contract with Deloitte Public Sector Internal Audit Ltd.
4.3.6.
Individual services have produced Service Plans. These Service Plans are updated each year so as to translate the Corporate Plan
requirements into service activities and to take into account available funding. In this way services identify and plan to achieve the
Council‟s priorities and ambitions. These plans also identify any governance impact.
4.3.7.
At employee level the Council has established an Employee Development Scheme so as to jointly agree employee objectives and
identify training and development needs. The Scheme provides for an annual appraisal for each member of staff at which past
performance is reviewed, work objectives are planned and also provides for regular monitoring of performance during the year.
Taking informed and transparent decisions which are subject to effective scrutiny and managing risk.
4.4.1.
The Council‟s Constitution sets out how the Council operates and the process for policy and decision making.
4.4.2.
Full Council sets the policy and budget framework. Within this framework, all key decisions are made by the Cabinet. Cabinet
meetings are open to the public (except where items are exempt under the Access to Information Act).
4.4.3.
The Leader‟s Forward Plan of key decisions to be taken over the next three months is published on the Council‟s website.
4.4.4.
All decisions made by Cabinet are made on the basis of reports, including assessments of the legal and financial implications, policy
and equalities assessments, and consideration of the risks involved and how these will be managed. The financial and legal
assessments are provided by named finance and legal officers.
4.4.5.
The decision-making process is scrutinised by a scrutiny function which has the power to call in decisions made, but which also
undertakes some pre-decision scrutiny and some policy development work.
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Annual Governance Statement 2012/13
4.4.6.
Other decisions are made by officers under delegated powers. Authority to make day to day operational decisions is detailed in a
departmental Scheme of Delegation.
4.4.7.
Policies and procedures governing the Council's operations include Financial Regulations, Contract Procedure Rules and a Risk
Management Policy. Ensuring the policies are up to date and complied with is the responsibility of managers across the Council. The
Internal Audit, Finance and Legal Services also check that policies are complied with. Where incidents of non-compliance are
identified, appropriate action is taken.
4.4.8.
The Council‟s Risk Management Policy requires that consideration of risk is embedded in all key management processes undertaken.
These include policy and decision making, service delivery planning, project and change management, revenue and capital budget
management and partnership working. In addition, a Corporate Risk Register is maintained and the Performance and Risk
Management Board meets monthly to review the extent to which the risks included are being effectively managed. The Audit
Committee oversees the effectiveness of risk management arrangements and provides assurance to the Council in this respect.
Financial Management processes and procedures are set out in the Council‟s Financial Regulations and include:
Comprehensive budgeting systems on a medium term basis;
Clearly defined capital and revenue expenditure guidelines;
Regular reviews and reporting of financial performance against the plans for revenue and capital expenditure;
Overall budgets and a clear Scheme of Delegation defining financial management responsibilities;
Regular capital monitoring reports which compare actual expenditure plus commitments to budgets;
Key financial risks are highlighted in the budgeting process and are monitored through the year by service and
corporately;
Robust core financial systems; and
Documented procedures are in place for business critical financial systems, and these are also checked on a regular
basis by Internal Audit.
4.4.9.
Containing spending within budget is given a high priority in performance management for individual managers. Monitoring reports
are submitted to the Cabinet on a quarterly basis linking finance and service delivery performance.
4.4.10. The Council has several committees which carry out regulatory or scrutiny functions. These are:
Development Control Committee to determine planning applications and related matters;
Standards Committee which promotes, monitors and enforces probity and high ethical standards amongst the Council‟s
Members, and this extends to having the same responsibility for all town and parish councils within the District;
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Annual Governance Statement 2012/13
Audit Committee to obtain assurance about the adequacy of internal controls, financial accounting and reporting
arrangements, and that effective risk management is in place. Its work is intended to enhance public trust in the
corporate and financial governance of the council;
A Licensing Committee is responsible for policy issues regarding licensing and will consider licensing applications;
Overview and Scrutiny Committee, which review and/or scrutinise decisions made or actions taken in connection with
the discharge of any of the Council‟s functions.
4.5.
Developing the capacity and capability of Members and Officers to be effective
4.5.1.
The Council aims to ensure that Members and managers of the Council have the skills, knowledge and capacity they need to
discharge their responsibilities and recognises the value of well trained and competent people in effective service delivery. All new
Members and Officers undertake an induction to familiarise them with protocols, procedures, values and aims of the Council.
4.5.2.
All Council services are delivered by trained and experienced people. All posts have a detailed post profile and person specification.
Training needs are identified through the Employee Development Scheme and addressed via the Human Resources service and/or
individual services as appropriate.
4.5.3.
The Council currently holds a Bronze Standard under Investors in People and it is proposed that the Council will be reassessed in
2013.
4.5.4.
Environmental Health has achieved accreditation under the ISO 9001:2000.
4.5.5.
In respect of Members, the Council has established a Member Training, Development and Support Group which has continued to
meet to support the Member induction programme. As part of the arrangements for developing and supporting elected Members the
Council has committed itself to achieving the Members Charter which will provide a structured approach to building elected Member
capacity.
Members who have not undertaken training are not permitted to sit on the regulatory committees. This, along with the Scrutiny role
provides important developmental opportunities for Members.
4.5.6.
4.5.7.
4.6.
The Council is concentrating on delivering improved service for its customers through an information management strategy designed
to enhance the value and usefulness of the corporate resource that information, data and knowledge represents.
Engaging with local people and other stakeholders to ensure robust public accountability
4.6.1.
The Council approved the Communication Strategy 2011 – 2015 along with a new Web Development Strategy, in September 2010
which will be reviewed in 2013/14. The Communication Strategy ensures that the work of the Council is and will continue to be open,
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Annual Governance Statement 2012/13
honest and transparent and will enhance inclusion by building on our understanding of all residents‟ needs and perceptions, through
improved customer service and community engagement. An annual action plan is agreed and implemented in conjunction with the
strategy.
4.6.2.
In line with the implications and opportunities arising from the Localism Act 2011, the Council is currently developing a Customer
Services Strategy and a separate Consultation Strategy is also being developed.
4.6.3.
The Communication Strategy sets the framework for both conveying messages and seeking residents‟ views, and supports the need
for further improvement with clear aims and a set of specific actions.
4.6.4.
The Council has continued to engage with local people and stakeholders in the following ways on a range of issues;
Surveys;
Community workshops;
Interviews;
Public meetings;
Road shows;
Area Forums; and
Attendance at parish and Town Council meetings.
4.6.5.
The results of this engagement continue to be used to shape and inform the Council‟s policies and strategies.
4.6.6.
The Council has tried to engage “harder to reach” groups through varying the way in which it conducts consultation so that the views
of a broad spectrum of the community can be well represented.
4.6.7.
The Council has recognised the opportunities provided by the Localism Act 2011 to engage with local communities. The Corporate
Plan (Small Government – Big Society), and its associated action plan, sets out how the Council proposes to embrace the Localism
agenda. In addition the Council provides support and funding (from the Big Society Fund) for community oriented projects, building on
the successful approach operated in 2012/13.
5. Review of effectiveness
5.1.
NNDC annually reviews the effectiveness of its governance framework including the system of internal control. The review of effectiveness is
informed by managers within the Council who have responsibility for the development and maintenance of the governance environment, the
work of the internal auditors and from comments made by the external auditors and other inspection agencies.
5.2.
Both during the year and at year end, reviews have taken place. In year review mechanisms include:
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Annual Governance Statement 2012/13
5.2.1.
The Cabinet is responsible for considering overall financial and performance management and receives comprehensive reports on a
quarterly basis. It is also responsible for key decisions and for initiating corrective action in relation to risk and internal control issues.
5.2.2.
The Monitoring Officer has a duty to monitor and review the operation of the Constitution to ensure its aims and principles are given
full effect.
A further review and amendment to the Constitution took place during the early part of the financial year 2012/13 reflecting the new
management structures implemented at the start of the year. These amendments were approved by Full Council in December 2012.
5.2.3.
5.2.4.
The current Members‟ Allowance scheme was adopted by the Council following an independent review panel being established to
make recommendations.
5.2.5.
The Council has a Scrutiny Committee can establish „task and finish‟ groups, which can look at particular issues in depth, taking
evidence from internal and external sources, before making recommendations to the Cabinet. Scrutiny can “call-in” a decisions of the
Cabinet which are yet to be implemented, to enable it to consider whether the decision is appropriate. In addition the Scrutiny
Committee can exercise its scrutiny role in respect of any Cabinet function, regardless of service area or functional responsibility, and
will conduct regular performance monitoring of all services, with particular attention to areas identified as under-performing.
5.2.6.
The Local Government and Public Involvement in Health Act 2007 include powers to enable Councillors to formally champion local
issues where problems have arisen in their ward. North Norfolk has embedded the “Councillor Call for Action”. This allows Councillors
to ask for discussion at Overview and Scrutiny Committee on issues where other methods of resolution by the District member have
been exhausted.
5.2.7.
The development of the procurement function across the public sector has led to the establishment of a number of framework
agreements for purchasing where the detailed work on price and quantity with suppliers has already been carried out. Contracts for
supply are only established when goods works or services are called off under the agreement.
5.2.8.
The Equality Framework builds on the work already undertaken in this area. It is based on three levels of “developing, achieving and
excellent”.
5.2.9.
The Standards and Conduct provisions of the Localism Act 2011 came into force on 1st July 2012. The authority has appointed an
Independent Person pursuant to the Act and has decided to have a Standards Committee (which is now not mandatory). This
committee met five times during the year to consider and review issues relating to the implementation of the Act and the conduct of
Members. The Committee has received a number of items during the year including, reports detailing complaints received by the
Monitoring Officer and the status of such complaints. It has held one full hearing to hear and decide on a recommendation in the case
of a complaint against two parish councillors.
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Annual Governance Statement 2012/13
5.2.10. The Audit Committee met four times during the year to provide independent assurance to the Council in relation to the effectiveness
of the risk management framework and internal control environment. The Committee received regular reports on, internal control and
governance matters in accordance with its agreed work programme. Of the 16 internal audit assignments completed during 2012/13
the level of assurance achieved was adequate overall.
5.2.11. Internal Audit is an independent and objective assurance service to the management of the District Council. It completes a
programme of reviews throughout the year (16 reviews completed during 2012/13) to provide an opinion on the internal control, risk
management and governance arrangements. In addition, Internal Audit undertakes fraud investigation and proactive fraud detection
work which includes reviewing the control environment in areas where fraud or irregularity has occurred. All significant weaknesses in
the control environment identified by Internal Audit are reported to senior management and the Audit Committee. It should be noted
that there was only one high risk recommendation received in relation to the Housing and Council Tax Benefit audit. This was in
relation to the time taken to process new claims and amendments at the time of the testing for the audit, the reason for the increase
was due to the system migration and the impact of the data link. The processing times had already been improved by the year end.
5.2.12. The External Auditor‟s Annual Audit Letter is considered by the Audit Committee and the Performance and Risk Management Board.
5.2.13. The Performance and Risk Management Board monitor Performance Indicators on a quarterly basis and recommend improvements
to the Cabinet. They also continually review corporate risks and ensure that actions are being taken to effectively manage the
Council's highest risks.
5.2.14. The Council continues to review its treasury management arrangements in line with best practice and in response to regular updates
and advice from the Council‟s Treasury advisors, Arlingclose.
5.3.
The year-end review of the governance and the control environment arrangements by the Performance and Risk Management Board
included:
5.3.1.
Obtaining assurances from Directors and Heads of Service that key elements of the control framework were in place during the year
in their departments.
5.3.2.
The statement itself was considered by CLT and is supported by them as an accurate reflection of the governance arrangements in
place for the year.
5.3.3.
Obtaining assurances from other senior management, including the Monitoring Officer that internal control and corporate governance
arrangements in these essential areas were in place throughout the year.
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Annual Governance Statement 2012/13
5.3.4.
Reviewing any high level audit recommendations that remained outstanding at the year end and taking appropriate action if
necessary.
5.3.5.
Reviewing external inspection reports received by the Council during the year, the opinion of the Head of Internal Audit in her annual
report to management and an evaluation of management information in key areas to identify any indications that the control
environment may not be sound.
5.4.
The Audit Committee received assurances from the Head of Internal Audit that standards of internal control, corporate governance
arrangements and systems of risk management were all operating to an adequate standard.
5.5.
The Audit Committee review the effectiveness of the governance framework as part of an annual review of the Local Code of Corporate
Governance, and an improvement plan to address weaknesses and ensure continuous improvement of the system is in place.
6. Significant governance issues
6.1.
The review process has highlighted a number of significant issues regarding the governance and internal control environment and these
together with improvement/action proposed are described briefly in the tables below along with the outcomes from the action points for the
previous year.
Action Points arising from 2011/12
Ref
Action
Officer / Target
Date
11/12 a
Following the implementation of the new management Chief Executive /
structure the Council‟s Constitution and governance December 2012
structures that support the management structure will
both be reviewed.
11/12b
Limited assurance internal audit reviews to be reported Head of Finance / Implemented
to the Performance and Risk Management Board along December 2012
with an update on progress of implementation of
recommendations.
61
Outcome
Completed
Annual Governance Statement 2012/13
Ref
Action
Officer / Target
Date
11/12c
To ensure adequate arrangements are in place for the
Council to respond to civil contingencies and provide
business continuity and to ensure all recommendations
from the 2011/12 Internal Audit Review are
implemented in accordance with the agreed timescales.
Head
of Implemented
Environmental
Services
/
December 2012
11/12d
Review of the governance arrangements for significant Chief Executive / Completed
partnerships and the policies and procedures for October 2012
evaluating the effectiveness of partnerships.
6.2.
Outcome
Following from the review of the Annual Governance Statement for 2012/13 it is considered that there are no significant issues that require
action points. Issues that have arisen in the year as part of Internal Audit reviews are adequately covered within the respective report
recommendations and are monitored by the Performance and Risk Management Board and the Audit Committee during the year.
7. Certification
7.1.
To the best of our knowledge, the governance arrangements, as defined above, have been effectively operating during the year with the
exception of those areas identified above. We propose over the coming year to take steps to address the above matters to further enhance
our governance arrangement. We are satisfied that these steps will address the need for improvements that were identified during the review
of effectiveness and will monitor their implementation and operation as part of our next annual review.
Leader of the Council:
Tom FitzPatrick
Chief Executive:
Date:
Sheila Oxtoby
62
Date:
Appendix B
1 Focusing on the purpose of the Council and on outcomes for the community and creating and
implementing a vision for the local area.
1.1
Exercise strategic leadership by developing and clearly communicating the authority‟s purpose and vision and its intended outcomes for
citizens and service users.
Requirement :
Develop and promote the
Council‟s purpose and vision
Review on a regular basis the
Council‟s vision for the local area
and its impact on the authority‟s
governance arrangements
Compliance can be demonstrated by:
Source documents
Publishing a Corporate Plan, which details the
vision and priorities the Council has for North
Norfolk and its citizens.
Publishing Annual Action Plans for all service
units, detailing the objectives and performance
targets and reflecting Corporate Plan priorities.
Providing clear and comprehensive information
on the Council‟s website.
 Norfolk Action: Norfolk‟s Local Area Agreement
(LAA),
Maintaining a Communications Strategy to
underpin the exchange of views with citizens,
service users and other stakeholders.
Attending regular Parish and Town Council
meetings
 Corporate Plan “Small Government, Big Society”
 Corporate Plan “Small Government, Big Society
 Annual Action Plans
 Council‟s Website
 Annual Action Plans
 Medium Term Financial Strategy,
 Corporate Planning Framework
 Annual Governance Statement
Ensure that partnerships are
underpinned by a common vision
of their work that is understood
and agreed by all parties
 Constitution
Governance arrangements are established at
the outset.
63
 New partnerships reported to Cabinet for
approval
Requirement :
Publish an annual report on a
timely basis to communicate the
authority‟s activities and
achievements, its financial
position and performance
1.2
Compliance can be demonstrated by:
Publishing an Annual Report and Performance
Plan which includes information on relevant
performance indicators including forward
targets, and regularly reporting on progress.
Source documents
 Annual Report and Performance Plan,
 Council‟s Website
The Council will ensure that users receive a high quality of service whether provided directly or in partnership.
Requirement
Compliance can be demonstrated by;
Decide how the quality of service
for users is to be measured and
make sure that the information
needed to review service quality
effectively and regularly is
available
Applying the principles of the Customer Charter
and meeting the specified service standards.
Conducting citizen and service user surveys
and publishing and using the results
appropriately.
Put in place effective
arrangements to identify and deal
with failure in service delivery
Providing a complaints and compliments
procedure and learning from the resulting
information to take action and bring about
improvement.
Taking action on weaknesses identified through
the performance management framework and
from reviews by the External Audit and others.
Source documents
 Performance Management Framework
supported by on-line system,
 Performance and Risk Management Board
(Agenda/Minutes),
 Customer Charter,
 Resident and User Surveys,
 on-line feedback
 Performance Management Framework
supported by on-line system,
 Performance and Risk Management Board
(Agenda/Minutes),
64
1.3
The Council will ensure it makes the best use of resources and that the council tax payers and service users receive excellent value for
money
Requirement :
Decide how value for money is to
be measured and make sure that
the authority or partnership has
the information needed to review
value for money and performance
effectively. Measure the
environmental impact of policies,
plans and decisions
Compliance can be demonstrated by:
Following the Council‟s strategy for securing
value for money that is contained in the
Corporate Plan and centres upon building
organisational structures and processes that
promote continuous improvement.
Implementing an on-going organisational
development plan based around core
improvement themes.
Benchmarking with other Local Authorities, e.g.
neighbouring authorities and comparative group
Publishing a Medium Term Financial Plan
(Financial Strategy) linked to the Corporate Plan
that details planned efficiencies and sets out
spending plans on a rolling basis.
Adopting best practice in commissioning and
procurement.
65
Source documents
 Corporate Plan “Small Government, Big Society”
 Organisational Development Plan,
 Procurement Strategy,
 Medium Term Financial Plan includes planned
efficiencies,
 VFM Assessment
2 Members and officers working together to achieve a common purpose with clearly defined functions
and roles.
2.1
The Council will ensure that there is effective leadership with clearly defined roles and responsibilities for executive, non-executive and
scrutiny functions.
Requirement :
Set out a clear statement of the
respective roles and
responsibilities of the executive
and executive members
individually and the authority‟s
approach towards putting this into
practice.
Compliance can be demonstrated by:
Maintaining a Constitution, including a Scheme of
Delegation, that is updated on a rolling basis and
sets out the roles and responsibilities of both
Members and Officers.
Appointing committees to discharge the Council‟s
regulatory and scrutiny responsibilities.
Providing all Committees with clear terms of
reference and agreeing work programmes to set
out their roles and responsibilities.
Source documents
 Constitution,
 Cabinet / Committee Terms of Reference,
 Scheme of Delegation, (updated by the
Constitution WP)
 Record of decisions and supporting
materials,
 Member / Officer Protocol,
 Member Training and Development Group
Set out a clear statement of the
respective roles and
responsibilities of other authority
members, members generally
and of senior officers
Appointing a Chief Executive (and Head of Paid
Service) and other Chief Officers who form the
Corporate Leadership Team, and ensuring all
staff have clear conditions of employment and job
descriptions which set out their roles and
responsibilities.
Maintaining a range of Protocols to guide
Members and Officers in the discharge of their
respective roles and responsibilities.
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 Constitution
 Scheme of Delegation, (Updated by the
Constitution WP)
 Member / Officer Protocol,
 Planning Protocol,
 Committee & Board Terms of Reference,
Requirement :
Compliance can be demonstrated by:
Source documents
 Committee Work Plans,
 Report Template (information quality for
decision taking),
 Conditions of Employment,
 Job Descriptions
2.2
The Council will ensure that a constructive working relationship exists between Council Members and Officers and that the
responsibilities of Members and Officers are carried out to a high standard
Requirement :
Determine a scheme of
delegation and reserve powers
within the constitution, including a
formal schedule of those matters
specifically reserved for collective
decision of the authority taking
account of relevant legislation
and ensure that it is monitored
and updated when required
Make a chief executive or
equivalent responsible and
accountable to the authority for
all aspects of operational
management
Compliance can be demonstrated by:
Maintaining a Protocol on Member/Officer
relations which describes and regulates the way
in which Members and Officers should interact to
work effectively together.
Determining, and regularly reviewing, powers that
are reserved and a Scheme of Delegation,
thereby providing clear direction to Members and
Officers of the scope of their responsibilities.
Regular meetings between the Cabinet and the
Corporate Leadership Team, and engagement of
senior managers with the scrutiny function
Production of forward plan for key decisions
Making the Chief Executive responsible for all
aspects of operational management which is
clearly defined within the Council‟s constitution.
Source documents
 Constitution (reviewed on a regular basis
through-out the year),
 Member/Officer Codes of Conduct,
 Forward Plan
 Constitution (reviewed on 6-month rolling
basis),
 Chief Executive Appointment,
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Requirement :
Compliance can be demonstrated by:
Source documents
 Annual Governance Statement,
 Scheme of Delegation, (Updated by the
Constitution WP)
 Conditions of Employment,
 Job Descriptions,
 Employee Appraisal Scheme,
 Member/Officer Codes of Conduct,
 Scrutiny Committee (agenda/minutes),
 Member Training and Development Group
Develop protocols to ensure that
the leader and chief executive (or
equivalent) negotiate their
respective roles early in the
relationship and that a shared
understanding of roles and
objectives is maintained
Maintaining an Employee Appraisal Scheme for
all staff including both the Corporate leadership
and Senior management Teams
Adopting Codes of Conduct for Members and
officers, to which all must adhere.
Maintaining a Standards Committee with
responsibility for overseeing the behaviour of
Members.
Maintaining a Scrutiny Function, that provides
overview and scrutiny of all Council activities and
operates a call in facility.
Providing Members with adequate training and
development opportunities in order for them to
fulfil their roles and responsibilities.
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 Constitution (reviewed on 6-month rolling
basis), Member/Officer Protocol,
 Corporate Leadership Team
(agenda/minutes),
 Employee Appraisal Scheme,
 Member/Officer Codes of Conduct,
 Standards Committee (agenda/minutes),
 Scrutiny Committee (agenda/minutes),
 Member Training and Development Group
Requirement :
Make a senior officer (usually the
section 151 officer) responsible to
the authority for ensuring that
appropriate advice is given on all
financial matters, for keeping
proper financial records and
accounts, and for maintaining an
effective system of internal
financial control
Compliance can be demonstrated by:
S151 Officer appointed and a member of the
Management Team
Chief Finance Officer protocol adopted
Standard report template requires sign-off by
S151 Officer
Source documents
 Constitution (reviewed on 6-month rolling
basis),
 CFO/S151 appointment (including protocol),
 Report Template (information quality for
decision taking),
 Employee Appraisal Scheme,
 Member Training and Development Group
Make a senior officer (other than
the responsible financial officer)
responsible to the authority for
ensuring that agreed procedures
are followed and that all
applicable statutes, regulations
are complied with (usually the
monitoring officer)
Monitoring Officer appointed reports the Chief
Executive
Monitoring Officer Protocol adopted Standard
report template requires sign-off by Monitoring
Officer
 Constitution (reviewed on 6-month rolling
basis),
 Monitoring Officer Appointment (including
protocol),
 Report Template (information quality for
decision taking),
 Employee Appraisal Scheme,
 Member Training and Development Group
2.3
The Council will ensure relationships between the authority, its partners and the public are clear so that each knows what to expect of
the other.
Requirement :
Compliance can be demonstrated by:
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Source documents
Requirement :
Develop protocols to ensure
effective communication between
members and officers in their
respective roles
Set out the terms and conditions
for remuneration of members and
officers and an effective structure
for managing the process
including an effective
remuneration panel (if applicable)
Compliance can be demonstrated by:
Adopting Codes of Conduct for Members and
Officers, to which all must adhere.
Communications Strategy
Staff and Members Bulletins form part of agreed
communications strategy
Scheme of delegation details consultation and
notification requirements
The establishment of an independent
remuneration panel to review Member
allowances
A job evaluation scheme is in operation for officer
remuneration
A pay and grading review group established to
review the Job Evaluation scheme
Ensure that effective
mechanisms exist to monitor
service delivery
Comprehensive performance management
framework and electronic performance system for
recording and reporting performance and service
planning.
Performance and Risk Management Board
comprising CLT and Members of the Cabinet
including the Leader.
Source documents
 Member/Officer Protocol,
 Planning Protocol,
 Outside Bodies Advice to Members,
 Member/Officer Codes of Conduct
 Pay and Conditions Policies and Practices,
 Job Evaluation Scheme,
 Scheme of Allowances
 Pay Policy Statement
 On-line Performance Management System,
 Performance and Risk Management Board
(agenda/minutes),
 Budget Monitoring,
 Complaints and Compliments Procedure,
 Annual Action Plans Annual Report
 Annual Financial Statements,
70
Requirement :
Compliance can be demonstrated by:
Source documents
 Annual Governance Statement
Ensure that the organisation‟s
vision, strategic plans, priorities
and targets are developed
through robust mechanisms, and
in consultation with the local
community and other key
stakeholders, and that they are
clearly articulated and
disseminated
 On-line Performance Management System,
Performance targets are reviewed annually and
incorporated within service plans
 Performance and Risk Management Board
(agenda/minutes),
Consultation with stakeholders on the Corporate
Plan Action Plan
 Budget Monitoring,
The Performance and Risk Management Board
reviews performance and assesses corporate
risk on an ongoing basis
Corporate planning and service/resource
prioritisation is informed by community
consultations, stakeholder and key
partner consultative events, staff
consultation and local
political/democratic mandate.
 Annual Action Plans
 Annual Report
 Annual Statements of Accounts
 Annual Governance Statement,
 Corporate Plan “Small Government, Big
Society”
 Medium Term Financial Strategy,
 Communications Strategy,
 Council Website,

When working in partnership
ensure that members are clear
about their roles and
responsibilities both individually
Appointments on outside bodies are made by
the Full Council.
Annual reports are required from appointees on
71
 Outside Bodies Advice to Members,
 Council‟s Website,
Requirement :
and collectively in relation to the
partnership and to the authority
When working in partnership: ensure that there is clarity about
the legal status of the partnership
- ensure that representatives or
organisations both understand
and make clear to all other
partners the extent of their
authority to bind their
organisation to partner decisions
Compliance can be demonstrated by:
Source documents
the work of the body or partnership
 Constitution,
Further guidance and protocols will be produced
for Member appointments on outside bodies and
a corporate database of all partnerships and
appointments maintained.
 Procurement Strategy,
Reports to Cabinet to assess the risks associated
with partnerships
The governance arrangements of significant
partnerships are subject to annual review
 Individual Partnership / Service Level
Agreements
 Outside Bodies Advice to Members,
 Council‟s Website,
 Constitution,
 Procurement Strategy,
 Individual Partnership / Service Level
Agreements
72
3 Promoting values for the authority and demonstrating the values of good governance through
upholding high standards of conduct and behaviour.
3.1
The Council will strive to ensure its members and officers exercise leadership by behaving in a way that exemplifies high standards of
conduct and effective governance.
Requirement :
Ensure that the authority‟s
leadership sets a tone for the
organisation by creating a climate
of openness, support and respect
Compliance can be demonstrated by:
The authority‟s leadership style underpinned by
the Constitution, Policies, Protocols and Codes of
Conduct.
The values of the organisation are documented
within the Corporate Plan
The Council has introduced and encourages
public speaking at Committees.
The Council has invested in upgrading its
website and actively manages its content to
ensure easy access to information.
Source documents
 Constitution,
 Standards Committee
 Articles in „The Briefing‟ / Members Bulletin
 Employee Appraisal Scheme,
 Member/Officer Codes of Conduct,
 Member/Officer Protocol,
 Whistle blowing policy,
 Anti-Fraud and Corruption Policy,
 Freedom of Information (statement and
publication scheme),
 Planning Protocol,
 Officer Register of Gifts and Hospitality,
 Member / Officer Registers of Interests
73
Requirement :
Ensure that standards of conduct
and personal behaviour expected
of members and staff, of work
between members and staff and
between the authority, its
partners and the community are
defined and communicated
through codes of conduct and
protocols
Compliance can be demonstrated by:
Codes of conduct are included within the
Council‟s constitution
 Employee Appraisal Scheme,
 Member/Officer Codes of Conduct,
The whistleblowing policy is in place and
understood
 Member/Officer Protocol,
The Standards Committee provides the
framework for dealing with member complaints
 Whistle blowing policy,
A register of interests, gifts and hospitality is
maintained and promoted amongst staff and
Members
 Anti-Fraud and Corruption Policy,
Third party interest declarations are completed
each year for Members and Chief Officers
Standards Committee annual report
Ethical audits completed on a 3 yearly basis
Put in place arrangements to
ensure that members and
employees of the authority are
not influenced by prejudice, bias
or conflicts of interest in dealing
with different stakeholders and
put in place appropriate
processes to ensure that they
continue to operate in practice
Source documents
Internal audit reviews annually the Council‟s
internal control and governance arrangements
which are reported to the Audit Committee
 Member / Officer Register of Gifts and
Hospitality,

Performance Management Framework,
 Complaints and Compliments Procedure,
 Information and Communication Technology
(ICT) Security Policy
 Constitution,
 Member/Officer Codes of Conduct,
 Whistle blowing policy,
 Anti-Fraud and Corruption Policy,
 Planning Protocol,
 Member / Officer Register of Gifts and
Hospitality,
74
Requirement :
Compliance can be demonstrated by:
Source documents
 Member / Officer Registers of Interests,
 Financial Regulations,
 Contract Procedure Rules,
 Combined Equalities Scheme,
 Intranet (Ethics and Governance Section),
 Member / Officer Induction and Training
 Audit Committee terms of reference
3.2
The Council will ensure its values are put into practice and are effective.
Requirement :
Develop and maintain shared
values including leadership
values both for the organisation
and staff reflecting public
expectations and communicate
these with members, staff, the
community and partners
Put in place arrangements to
ensure that procedures and
operations are designed in
Compliance can be demonstrated by:
Shared values have been developed and are
documented within the Corporate Plan
Source Documents
 Briefings
 Leadership training between the Corporate
Leadership Team and the Cabinet to reinforce
these values
 Policies and Protocols are in place
 Ethical audits completed on a 3 year cycle
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 Internal Audit Reports
Requirement :
Compliance can be demonstrated by:
Source Documents
conformity with appropriate
ethical standards, and monitor
their continuing effectiveness in
practice
Develop and maintain an
effective standards committee
 An annual report of the Monitoring Officer is
presented to the Standards Committee for
Council.
 On-going monitoring of the application and
effectiveness of the local standard regime
Use the organisations shared
values to act as a guide for
decision making and as a basis
for developing positive and
trusting relationships within the
authority
 The training programme for leadership and
management training has been driven by the
values of the organisation and in preparing and
conducting staff appraisals
In pursuing the vision of a
partnership, agree a set of values
against which decision making
and actions can be judged. Such
values must be demonstrated by
partners‟ behaviour both
individually and collectively
 Individual partnership assessments ensure that
partnerships are evaluated before being
established and once in operation.
76
 Monitoring Officer Report
4 Taking informed and transparent decisions which are subject to effective scrutiny and managing
risk.
4.1
The Council will ensure good quality information, advice and support is provided to ensure that services are delivered effectively and are
what the community wants/needs.
Requirement :
Develop and maintain an
effective scrutiny function which
encourages constructive
challenge and enhances the
organisation‟s performance
overall and of any organisation
for which it is responsible
Compliance can be demonstrated by:
 The Scrutiny Committee work plan is developed
alongside the Cabinet work plan
 Members are trained on effective scrutiny and
attend other Council‟s scrutiny committees to
develop and learn from others
 The development of a task and finish approach
in certain areas of Council activity
Source documents
 Constitution,
 Scrutiny Committee (Work Plan, Agenda,
Reports and Minutes),
 Scrutiny Questioning of Cabinet Members,
 Annual Scrutiny Report,
 On-going Training (through Norfolk Scrutiny
Network)
Develop and maintain open and
effective mechanisms for
documenting evidence for
decisions and recording the
criteria, rationale and
considerations on which
decisions are based
Committee template requires specific
information in support of recommendations
Scheme of delegation has standard pro forma
 Decision making protocols,
 Record of decisions and supporting
materials,
 Report Template (information quality for
decision taking),
 Availability of Professional Advice
(attendance list),
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Requirement :
Compliance can be demonstrated by:
Source documents
 Decision list published
Put in place arrangements to
safeguard members and
employees against conflicts of
interest and put in place
appropriate processes to ensure
that they continue to operate in
practice
Members and Officers are advised of the codes
of conduct and the need to register interests
and/or make declarations of interest
 Report Template (information quality for
decision taking),
 Member/Officer Codes of Conduct,
 Member / Officer Registers of Interests
 Declarations of Interest,
 Member/Officer Codes of Conduct and
Guidance, Articles in „The Briefing‟ /
Members Bulletin
 Officer / Member Training,
 Standards Committee (Agenda / Minutes),
 Monitoring Officer‟s Annual Report
Develop and maintain an
effective audit committee ( or
equivalent ) which is independent
or make other appropriate
arrangements for the discharge
of the functions of such a
committee
An annual review of the effectiveness of the
audit committee is undertaken
The audit committee monitors an improvement
plan prepared against its own self-assessment
 Constitution,
 Audit Committee (Membership, Terms of
Reference, Work Plan, Agenda, Reports and
Minutes),
 Audit Committee Reports to Full Council,
 Annual Governance Statement,
78
Requirement :
Compliance can be demonstrated by:
Source documents
 Audit Committee Training
Put in place effective transparent
and accessible arrangements for
dealing with complaints
All complaints and compliments are recorded on
a corporate database.
 Complaints and Compliments Procedure
Summary of complaints and compliments is
published on a quarterly basis.
4.2
The Council will ensure good quality information, advice and support is provided to ensure that services are delivered effectively and are
what the community wants/needs.
Requirement :
Compliance can be demonstrated by:
Ensure that those making
decisions whether for the
authority or partnership are
provided with information that is
fit for the purpose – relevant,
timely and gives clear
explanations of technical issues
and their implications
Committee templates and sign off forms, ensure
all relevant information is included and Corporate
Leadership Team and Members review
documents prior to agenda publication
Ensure that professional advice
on matters that have legal or
financial implications is available
and recorded well in advance of
decision making and used
appropriately
The report template requires prior „sign off‟ of
reports by statutory officers ahead of pre
meetings with relevant Officers and Members.
Source documents
 Members‟ induction and training,
 Report template
 Data Quality Policy
S151 Officer and Monitoring Officer receive
advance copies of reports
Publication of key decisions in the forward plan
 Report Template requiring input from
Monitoring Officer and S151 Officer
(information quality for decision taking) /
Positive Sign Off,
 Legal advice to Licensing and Planning
Committees
79
Requirement :
4.3
Compliance can be demonstrated by:
Source documents
The Council will ensure that an effectiveness risk management system is in place.
Requirement :
Ensure that risk management is
embedded into the culture of the
organisation , with members and
managers at all levels
recognising that risk
management is part of their job
Compliance can be demonstrated by:
Adopting and maintaining a risk framework and
striving to embed risk management into all
aspects of decision taking, corporate and service
planning, and service delivery.
Making the Audit Committee responsible for
overseeing the effectiveness of the risk
management arrangements and providing
assurance to the Council in this respect.
Maintaining a strategic risk register which is
reviewed and updated by the Performance and
Risk Management Board and Audit Committee
Annual completion of self assessments by all
Managers
Source documents
 Risk management framework,
 Financial Standards and Regulations,
 Corporate Plan “Small Government, Big
Society”
 Medium Term Financial Strategy,
 Budget Monitoring,
 Corporate Risk Register,
 Performance and Risk Management Board
(Agenda / Minutes),
 Auditors‟ Reports / Action Plans,
 Report Template (information quality for
decision taking),
 Risk and Control self-assessment completed
by all managers,
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Requirement :
Compliance can be demonstrated by:
Source documents
 Audit Committee (Work Plan, Agenda,
Reports and Minutes),
 Audit Committee Reports to Full Council,
 Annual Governance Statement,
 Health & Safety Training & Assessments
Ensure that arrangements are in
place for whistle blowing to which
staff and all those contracting
with the authority have access
Whistleblowing promoted to staff and a wider
audience using posters and the web.
 Whistle blowing policy,
 Register of whistle blowing reports and
actions taken,
 Information for Contractors,
 Leaflets,
 Note on invoices,
 Publicity externally and internally,
 Posters
4.4
The Council will strive to ensure that it uses its legal powers to the full benefit of the citizens and communities in North Norfolk.
Requirement :
Actively recognise the limits of
lawful activity placed on them by,
Compliance can be demonstrated by:
Clearly documenting the roles and responsibilities
of Members and the scope of their activities within
81
Source documents
 Constitution,
Requirement :
for example the ultra vires
doctrine but also strive to utilise
powers to the full benefit of their
communities
Compliance can be demonstrated by:
the Constitution.
Appointing a Monitoring Officer responsible for
the maintenance of the Constitution and for
guiding members on the information contained
therein.
Having available appropriate legal advice both on
the specific requirements of legislation and the
general responsibilities placed on local authorities
by public law.
Recognise the limits of lawful
action and observe both the
specific requirements of
legislation and the general
responsibilities placed on local
authorities by public law
Integrating the key principles of good
administrative law into its procedures and
decision making processes including the
provision of appeals/complaints systems and
regularly reviewing
Source documents
 Report Template requiring input from
Monitoring Officer and S151 Officer
(information quality for decision taking) /
Positive Sign Off,
 Legal advice to Licensing and Planning
Committees
 Statutory Provisions
 Constitution
 Monitoring Officer Provisions / Protocol,
 Report Template requiring input from
Monitoring Officer and S151 Officer
(information quality for decision taking) /
Positive Sign Off,
 Availability of legal advice to Licensing and
Planning Committees
Observe all specific legislative
requirements placed upon them,
as well as the requirements of
general law, and in particular to
integrate the key principles of
good administrative law –
rationality, legality and natural
justice into their procedures and
decision making processes
Ombudsman and external audit reports to
identify areas where improvements should be
made.
 Monitoring Officer Provisions / Protocol,
 Report Template requiring input from
Monitoring Officer and S151 Officer
(information quality for decision taking) /
Positive Sign Off,
 Standing Orders,
82
Requirement :
Compliance can be demonstrated by:
Source documents
 Complaints and Compliments Procedures,
Investigations,
 Planning protocol
83
5 Developing the capacity and capability of members and officers to be effective.
5.1
The Council will ensure that Members and officers have the skills, knowledge and experience and resources they need to perform well
in their roles.
Requirement :
Provide induction programmes
tailored to individual needs and
opportunities for members and
officers to update their knowledge
on a regular basis
Compliance can be demonstrated by:
Providing tailored induction programmes for new
Members and regular briefings for all Members
supported by the Members bulletin.
Implementing a training and development plan
which provides Members with opportunities to
develop and strengthen their capacity as
confident and effective political and community
leaders.
Implementing a Workforce Development
Strategy which covers all aspects of
appointment, induction, appraisal and training of
staff.
Source documents
 Member Training and Development Group,
 Members Induction / Update Workshops,
Members Bulletin,
 Workforce Development Strategy (currently
Our People Strategy and Development Plan),
 Staff Induction,
 Employee Appraisal Scheme,
 Personal Development Plans,
 Training and Development Plan,
 The Briefing
Ensure that the statutory officers
have the skills, resources and
support necessary to perform
effectively in their roles and that
these roles are properly
understood throughout the
organisation
Ensuring that the responsibilities and duties of
Statutory Officers such as the Monitoring Officer
and the s151 Officer are clearly set out and
supported by protocols.
Requiring managers to consider resource
implications in their service plans.
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 Employee Appraisal Scheme,
 Personal Development Plans,
 Training and Development Plan,
 Service Plans,
Requirement :
Compliance can be demonstrated by:
Source documents
 Staff Handbook,
 Monitoring Officer Protocol,
 S151 Officer Protocol
5.2
The Council will develop the capabilities of people with governance responsibilities and evaluating their performance as an individual
and as a group.
Requirement :
Assess the skills required by
members and officers and make
a commitment to develop those
skills to enable roles to be carried
out effectively
Develop skills on a continuing
basis to improve performance
including the ability to scrutinise
and challenge and to recognise
when outside expert advice is
needed
Compliance can be demonstrated by:
Assessing the skills required by members and
officers through appraisal and personal
development plans and demonstrating
commitment to develop these skills through the
work of the Member Training and Development
Group and through implementation of the
Workforce Development Strategy.
Prioritising training and development needs and
developing skills on a continuing basis to
improve performance including use of outside
advice/provision when considered necessary.
Budget provision for specialist work is made
available within certain service budgets on an
annual basis
Source documents
 Employee Appraisal Scheme,
 Personal Development Plans,
 Member Training and Development Group,
 Workforce Development Strategy (currently
Our People Strategy and Development Plan)
 Employee Appraisal Scheme,
 Personal Development Plans,
 Member Training and Development Group,
 Workforce Development Strategy (currently
Our People Strategy and Development Plan),
 Training and Development Plan,
85
Requirement :
Compliance can be demonstrated by:
Source documents
 Standards Committee Assessment

Annual Report
 Audit Committee Assessment
Ensure that effective
arrangements are in place for
reviewing the performance of the
authority as a whole and of
individual members and agreeing
an action plan which might for
example aim to address any
training or development needs
Performance and Risk Management Board
reviews organisational performance and
recommends actions to address underperformance which may include training
 Performance Management Framework,
 Improvement Plan
 Quarterly performance reports
Electronic Performance Management system
updated quarterly.
5.3
The Council will encourage new talent for membership of the Authority so that best use can be made of individuals' skills and resources
in balancing continuity and renewal.
Requirement :
Compliance can be demonstrated by:
Ensure that effective
arrangements designed to
encourage individuals from all
sections of the community to
engage with, contribute to and
participate in the work of the
authority
Developing a strategy that recognises and
supports all of the mechanisms that allow for
effective community engagement as well as
specific targeting of hard to reach groups.
Ensure that career structures are
in place for members and officers
to encourage participation and
Ensuring that career structures are in place for
members and officers to encourage participation
and development.
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Source documents
 Area Forums,
 Coastal forums/groups
 Succession Planning,
Requirement :
development
Compliance can be demonstrated by:
Larger teams operate career graded structures to
recognise development needs
Source documents
 Project Groups and member/officer boards.
 Appraisal / development scheme
6 Engaging with local people and other stakeholders to ensure robust public accountability.
6.1
The Council will exercise leadership which effectively engages local people and all local institutional stakeholders, including
partnerships, and develops constructive, accountable relationships.
Requirement :
Members communicate to all staff
and the community, areas for
which they are accountable and
for what reasons.
Compliance can be demonstrated by:
Source documents
 Constitution
Providing the citizens of North Norfolk with
information about the Council and its spending
through the distribution of a leaflet with their
Council Tax bill .
Publication of plans and progress reports on the
web site
 Stakeholder Identification,
 Performance Management Framework,
 Communications and Consultation Strategy
 Satisfaction Surveys,
 Councillor Call to Action,
 Council Tax Information Leaflet,/online
87
Requirement :
Compliance can be demonstrated by:
Source documents
information
 Norfolk Crime and Disorder Partnership,
 Web site
Consider those institutional
stakeholders to whom they are
accountable and assess the
effectiveness of the relationships
and any changes required
Establishing and supporting a range of forums
and partnerships that add value through
encouraging district-wide and local engagement
and participation.
 Stakeholder Identification,
 Communications and Consultation Strategy,
 Statutory Provisions,
 Council‟s Website,
 Corporate Plan “Small Government, Big
Society”
 Forums and Partnerships
 Direct communication with Parish & Town
Councils
Produce an annual report on
scrutiny function activity
Producing a scrutiny report that covers the
activities of the Committee and its relationship
with stakeholders which is reporting on annually
to Council.
 Annual Report on Scrutiny activity
6.2
The Council will take an active approach to dialogue with, and accountability to, the public to ensure effective and appropriate service
delivery whether directly by the Authority, in partnership or by commissioning.
88
Requirement :
Ensure that clear channels of
communication are in place with
all sections of the community and
other stakeholders including
monitoring arrangements to
ensure that they operate
effectively
Hold meetings in public unless
there are good reasons for
confidentiality
Compliance can be demonstrated by:
Source documents
 Communications and Consultation Strategy,
Developing and implementing a wide range of
strategies which together provide a framework for
consultation, engagement and participation.
 Parish and Town Council minutes,
Parish and Town Council forums
 Norfolk Crime and Disorder Partnership,
Measuring the effectiveness of the Council‟s
communications strategy
 Local Development Framework Consultation
Council stakeholder meetings are held in public
unless there are good reasons for confidentiality.
 Area Forums,
 Constitution,
 Meetings Protocol,
 Access to Information Rules,
 Corporate Plan “Small Government, Big
Society”
Ensure arrangements are in
place to enable the authority to
engage with all sections of the
community effectively. These
arrangements should recognise
that different sections of the
community have different
priorities and establish explicit
processes for dealing with these
competing demands
Community empowerment strategy
Supporting the youth forum and older people‟s
forum
Adoption of the combined equalities scheme
and action plan and support for marginalised
and disadvantaged groups in the community.
 Communications and Consultation Strategy,
 Combined Equalities Scheme and
Framework
 Parish and Town Council meetings,
 Business Forums,
 Norfolk Crime and Disorder Partnership,
 Service Plans,
89
Requirement :
Compliance can be demonstrated by:
Source documents
 Budget Consultation Meeting
Establish a clear policy on the
types of issues they will
meaningfully consult on or
engage with the public and
service users including a
feedback mechanism for those
consultees to demonstrate what
has changed as a result
To be more clearly developed alongside the
Community Empowerment Strategy
 Communications and Consultation Strategy,
 Parish and Town Council Forums,
 Business Forums,
 Norfolk Crime and Disorder Partnership,
 Budget Consultation Meeting,
On an annual basis, publish a
performance plan giving
information on the authority‟s
vision, strategy, plans and
financial statements as well as
information about its outcomes,
achievements and the
satisfaction of service users in
the previous period
Each year the Council produces an Annual
Report
Ensure that the authority as a
whole is open and accessible to
the community, service users and
its staff and ensure that it has
made a commitment to openness
and transparency in all its
dealings, including partnerships
subject only to the need to
preserve confidentiality in those
specific circumstances where it is
Organisation values are documented within the
Corporate Plan, which in turn influence the
development of policy, codes and protocols
within the organisation
 Corporate Plan “Small Government, Big
Society”
 Annual Report
 Annual Financial Statements,
 Annual business plan
 ICT Security Policy,
 Communications and Consultation Strategy.
 Constitution,
 Customer Charter and Standards,
 Freedom of Information Act
90
Requirement :
Compliance can be demonstrated by:
proper and appropriate to do so
Source documents
 Publication Scheme
 Officer / Member Codes of Conduct,
 Partnerships Protocol / Toolkit,
 Whistle blowing Policy,
 Anti-\fraud and Corruption Policy,
 Monitoring Officer Protocol,
 Data Protection Policy,
 ICT Security Policy
6.3
The Council will make the best of human resources by taking an active and planned approach to meeting responsibilities of staff.
Requirement :
Develop and maintain a clear
policy on how staff and their
representatives are consulted
and involved in decision making
Compliance can be demonstrated by:
Maintaining comprehensive consultation
arrangements with staff representatives.
Maintaining an effective staff appraisal scheme
that includes key performance targets and
personal development plans.
Preparing a Workforce Development Strategy
including an action plan against which progress is
monitored.
91
Source documents
 Joint Staff Consultation Committee,
 Employee Appraisal Scheme,
 Personal Development Plans,
 Workforce Development Strategy (currently
Our People Strategy and Development Plan),
 Investors in People,
Requirement :
Compliance can be demonstrated by:
Maintaining Investors in People accreditation.
Accessing staff opinions through regular staff
surveys.
Maintaining comprehensive and effective HR
policies linked to the Combined Equalities
Scheme.
Source documents
 Staff Surveys,
 HR Policies,
 Combined Equalities Strategy
 Staff Focus Group minutes
Staff Focus Group
\\nasdell\cecoprfin\Accountancy\Shared Information\Governance\Audit Cttee Sept 2013 AGS and Local Code\Apx B - Local Code of
Governance 12-13 V1.2.doc
92
Agenda Item No__14__
2012/13 STATEMENT OF ACCOUNTS
Summary:
This report presents the Statement of Accounts for
2012/13 for review by the Audit Committee prior to
recommendation to Full Council for approval. The
outturn position for the year was reported to Members in
June and has been used to inform the production of the
statutory annual accounts for 2012/13.
Options considered:
Not applicable
Conclusions:
The Statement of Accounts for 2012/13 has been
produced
in
accordance
with
the
Code of Practice on Local Authority Accounting. The
draft accounts were produced by 30th June and since
then have been subject to external audit review.
Recommendations:
Members are asked to consider and review the
Statement of Accounts for 2012/13 and recommend
their approval to Full Council.
Reasons for
Recommendations:
To update Members on the Statutory Accounts position
as at 31st March 2013 and their subsequent external
audit review.
LIST OF BACKGROUND PAPERS AS REQUIRED BY LAW
(Papers relied on the write the report and which do not contain exempt information)
Cabinet Member(s)
Ward(s) affected
Contact Officer, telephone number and email: Karen Sly, 01263 516243,
karen.sly@north-norfolk.gov.uk
2012/13 Statement of Accounts
1.
Introduction
1.1
The Council’s Statement of Accounts must be produced and audited by
30th September each year.
1.2
The outturn report for 2012/13 was presented to Cabinet and Overview
and Scrutiny in June 2013. That report provided details of the variances
on the revenue account in expenditure and income compared with the
revised budget and allowed for a number of underspends to be rolled
93
forward within earmarked reserves to fund ongoing and identified
commitments. The report also detailed the year end position in respect of
the capital programme and the updated capital programme for 2013/14
onwards.
1.3
The Code of Practice on local Authority Accounting in the United
Kingdom 2012/13 (the code) prescribes the form of the statutory accounts
to be presented and published. Consequently the format is very
prescriptive and areas of non-compliance are reported by the External
Auditors as part of their audit of the accounts (ISA 260 report also
included on this agenda). Whereas the outturn report to Cabinet and
Overview and Scrutiny provides information on the actual expenditure and
income compared to budget, the statement of accounts shoes the
financial position of the Council and transactions in the year compared to
the previous financial year.
1.4
There have been minimal changes to the reporting requirements within
the accounts compared to the previous year in terms of reporting
requirements, changes are detailed within section 3 of the explanatory
foreword.
1.5
Since the production of the draft accounts, they have been subject to
external audit review for which the auditors report (ISA 260) is included as
a separate item on this agenda.
2
Statement of Accounts
2.1
A copy of the financial statements has been provided to members as an
appendix to this agenda (bound separately as Appendix C). It is an
audited version and has been updated for recommendations
made by
the auditors. The final external audit review process is yet to be finalised
and whilst there are not expected to be any significant changes to the
accounts now presented, any changes will be reported verbally at the
meeting.
2.2
The main focus of Members should be on the financial statements i.e.:
I.
II.
III.
IV.
V.
2.3
The Movement of Reserves Statement
Comprehensive Income and Expenditure Account
Balance Sheet
Cash Flow Statement
Collection Fund
Each of the statements are supported by a number of notes to the
accounts. Other key areas to consider at the end of the financial year
are the level of reserves, both earmarked and general balances. All
balances will be reviewed as part of the update to the revised Medium
term Financial Plan.
94
3
Conclusion
3.1
The final version of the Statement of Accounts for 2012/13 is presented
to the Audit committee for review prior to recommendation to Full
Council for approval. The statements have been produced based on
the information contained in the outturn report for 2012/13 as reported
in June 2013 and in accordance with statutory guidance.
4. Sustainability - None as a direct consequence from this report.
5. Equality and Diversity - None as a direct consequence from this report.
6. Section 17 Crime and Disorder considerations - None as a direct consequence
from this report.
95
Audit Committee
17 September 2013
Agenda Item No___15______
Audit Committee Self- Assessment Outcomes
Summary:
The Chartered Institute for Public Finance and Accountancy
(CIPFA) “Toolkit for Local Authority Audit Committees” identifies
that it is good practice for Audit Committees to complete a
regular self-assessment exercise and to assist this process,
provides a checklist of operational requirements which it is
recommended should be satisfied to ensure the Committee is
performing effectively. This report comments on the outcomes
of a self-assessment exercise undertaken with members of the
Audit Committee on 18 June 2013 and responses canvassed to
the final section on Administration which were subsequently
provided after the Committee meeting, noting that the findings
made will be used to further inform the 2013/14 review of the
Effectiveness of Internal Audit. The results of the exercise are
included at Appendix D to this report. The completed checklist
highlights where compliance with recognised practice has been
achieved, instances where there has been deviation and why
this has been case, and also identifies those areas where
additional enhancements are to be pursued to improve upon
existing operational arrangements.
Conclusions:
Undertaking a review of its performance against good practice
has ensured that the Committee has properly assessed the way
in which it discharges its duties. The recent review of its remit
and effectiveness has been comprehensively handled and
where non-compliances have been realised, it has been
recognised why they have arisen and confirmation then obtained
as to how the Committee wishes to manage these issues on a
future basis.
Recommendations:
Members of the Committee are requested to approve the
summary report, the detailed checklist that was completed, and
resulting agreed actions to be progressed.
Cabinet member(s):
All
All
Wards:
Contact Officer,
telephone
number, and
e-mail:
Sandra King, Internal Audit Consortium Manager
01508 533863
scking@s-norfolk.gov.uk
96
Audit Committee
1.
17 September 2013
Background
1.1
The Chartered Institute for Public Finance and Accountancy (CIPFA) advocates
that it is good practice for Audit Committees or their equivalent to undertake
regular self assessments against a checklist of measures designed to test
whether they are suitable equipped to perform their role on behalf of their
organisations.
1.2
The CIPFA Audit Committee Self Assessment, appended to this report, was
discussed following the formal meeting of the Audit Committee held on 18 June
2013, in order to re-emphasise to members what affords recognised operational
best practice and then to confirm the level of compliance that was currently
being achieved, whilst also identifying any areas where there is potential for
further enhancements to be made to existing arrangements.
1.3
Prior to performing the Audit Committee Self-Assessment, members were made
aware that new consolidated Public Sectors Internal Audit Standards (PSIAS)
came into force from 1 April 2013, whereas previously, public sector
organisations were subject to a host of different internal audit standards, with
local government provisions being required to mirror a published Code of
Practice for Internal Audit produced by CIPFA.
1.4
Having reviewed the new Standards, there are implications for the role of Audit
Committees and reporting arrangements to be observed going forward.
Basically, the new PSIAS continue to call for Audit Committees to assess their
remit and effectiveness in keeping with Standard 1000 – Purpose, Authority and
Responsibility, in order to facilitate the work of such Committees.
1.5
Before embarking on the Audit Committee Self-Assessment exercise (attached
at Appendix D), it was confirmed that 66 individual aspects of operations would
be examined across 6 sub-headings as listed below:
Establishment, Operation and Duties;
Internal Control;
Financial Reporting and Regulatory Matters;
Internal Audit;
External Audit; and
Administration.
1.6
The Audit Committee did not undertake a review of its own effectiveness in
2012/13, although previously there had been annual scrutiny of terms of
reference and operational provisions. The checklist completed in June 2013 has
therefore reinstated the process for annual self-assessments going forward.
2.
Issues of non compliance with the Audit Committee Self Assessment
Checklist
2.1
The recent self-assessment work conducted has confirmed that there were
some deviations to good practice guidance and these have been highlighted in
Appendix D which contains a full set of responses, whilst this report seeks to
summarise the anomalies noted and any other comments received, with action
points included where members have acknowledged that further improvements
should be introduced to the way the Committee functions.
97
Audit Committee
17 September 2013
2.2
There is no current mechanism for providing formal annual reports on the
Committee‟s work and performance. The consensus view of the membership
was that detailed minutes adequately provide comment on Committee
throughput, and the level of debate and challenge given to agenda items.
Moreover, these minutes are presented to Full Council over the course of the
year, thus appropriate information is already generated, obviating the need for
annual reports to be reintroduced.
2.3
It was also appreciated that induction training for new members is not
automatically arranged and added to this, no process has been put in place to
review members‟ skills and experience, using this information to then develop
targeted training to plug any gaps identified in consequence. Members
therefore agreed to forward details of their backgrounds and skill sets to the
Internal Audit Consortium Manager, who was tasked with evaluating this and
liaising with the Head of Finance as to where future training sessions would be
most beneficial.
2.4
In the course of working through the checklist, there was agreement that the
Audit Committee does not currently assess the performance of External Audit
but instead, the Head of Finance fulfils this duty. Thus, in this respect, it was
considered that no further action was required in relation to the deviation to best
practice that had been noted.
2.5
Other points raised during the self-assessment exercise concerned private
discussions with the Internal and External Auditors. Here, there was an
acknowledgement that the Committee has delegated responsibility for this to
the Chair, who undertakes this interaction on an annual basis. Some comments
were additionally made in relation to „Agenda Administration‟ and „Actions
Arising‟. It was recognised that „Any Other Business‟ items are not applicable
to Audit Committee agendas. Reference to the length of reports and their
content was subject to some feedback too, and the Internal Audit Consortium
Manager will be exploring how to respond to these items in due course.
3.
Conclusion
3.1
Participation in the self-assessment exercise has permitted the Committee to
verify the extent to which it has been complying with good practice advocated
by CIPFA. Where there have been deviations recorded, members have taken
a view on how they wish these matters to be managed from this point onwards,
as recorded in Section 2 of this report.
4.
Recommendation
4.1
That members note the content of this report and approve the actions identified
to enhance operational arrangements.
Appendices attached to this report:
Appendix D – Audit Committee Self Assessment Checklist
98
Appendix D
North Norfolk District Council - Audit Committee Self Assessment Checklist
No.
Priority
Issue
1. ESTABLISHMENT, OPERATION AND DUTIES
Yes
No
√
√
Comments
Role and Remit
1.1
1
1.2
1
1.3
1
1.4
1
1.5
1
1.6
1
1.7
2
1.8
2
Does the audit committee have written terms of
reference?
Do the terms of reference cover the core functions
of an audit committee as identified in the CIPFA
guidance?
Are the terms of reference approved by the council
and reviewed periodically?
Has the audit committee been provided with
sufficient membership, authority and resources to
perform its role effectively and independently?
Can the audit committee access other committees
and full council as necessary?
Does the authority's Annual Governance Statement
include a description of the audit committee's
establishment and activities?
Does the audit committee periodically assess its
own effectiveness?
Does the audit committee make a formal annual
report on its work and performance during the year
to full council?
√
√
√
Terms of Reference are revisited when the Constitution is reviewed/updated.
√
It was noted that there is not currently a Vice Chair appointed, but it was resolved
that a member would be appointed to this role as and when needed.
√
√
√
√
Annual Reports were produced until 2010/11.Thereafter, it was considered
inappropriate as Minutes of the Committee are relatively detailed and these are
presented to Full Council 4 times per year.
99
No.
Issue
Yes
Has the membership of the audit committee been
formally agreed and a quorum set?
Is the chair independent of the executive function?
√
Has the audit committee chair either previous
knowledge of, or received appropriate training on,
financial and risk management, accounting
concepts and standards, and the regulatory
regime?
Are new audit committee members provided with
an appropriate induction?
√
Priority
No
Comments
√
There is not currently a mechanism in place ensuring that new members to the
Committee automatically receive induction training. However, recent new joiners
were provided with a guide to working arrangements, provided by the Chair of the
Audit Committee.
It was agreed that consideration should be given to developing a training
programme for adoption in the future.
Members' skills and experience have not been fully evaluated to identify where
there might be gaps, which need to be addressed going forward. It was therefore
agreed that members would submit information regarding their skills and
experience to the Head of Internal Audit, who would then summarise these
particulars, and determine where future training sessions would be most
beneficial.
Membership, Induction and training
1.9
1
1.10
1
1.11
1
1.12
1
1.13
1
Have all members' skills and experiences been
assessed and training given for identified gaps?
1.14
1
√
1.15
2
Has each member declared his or her business
interests?
Are members sufficiently independent of the other
key committees of the council?
Meetings
1.16
1.17
1
1
√
√
1.18
1
1.19
1
1.20
1
1.21
1
1.22
1
Does the audit committee meet regularly?
Do the terms of reference set out the frequency of
meetings?
Does the audit committee calendar meet the
authority's business needs, governance needs and
the financial calendar?
Are members attending meetings on a regular
basis and if not, is appropriate action taken?
Are meetings free and open without political
influences being displayed?
Does the authority's S151 officer or deputy attend
all meetings?
Does the audit committee have the benefit of
attendance of appropriate officers at its meetings?
√
√
√
√
√
√
√
√
100
No.
Issue
Yes
Does the audit committee consider the findings of
the annual review of the effectiveness of the
system of internal control (as required by the
Accounts and Audit Regulations) including the
review of the effectiveness of the system of internal
audit?
Does the audit committee have responsibility for
review and approval of the Annual Governance
Statement and does it consider it separately from
the accounts?
Does the audit committee consider how meaningful
the Annual Governance Statement is?
√
Does the audit committee satisfy itself that the
system of internal control has operated effectively
throughout the reporting period?
Has the audit committee considered how it
integrates with other committees that may have
responsibility for risk management?
Has the audit committee (with delegated
responsibility) or the full council adopted "Managing
the Risk of Fraud - Actions to Counter Fraud and
Corruption?"
Does the audit committee ensure that the "Actions
to Counter Fraud and Corruption" are being
implemented?
Is the audit committee made aware of the role of
risk management in the preparation of the internal
audit plan?
Does the audit committee review the authority's
strategic risk register at least annually?
Does the audit committee monitor how the authority
assesses its risk?
Do the audit committee's terms of reference include
oversight of the risk management processes?
√
Priority
No
Comments
INTERNAL CONTROL
2.1
1
2.2
1
2.3
1
2.4
1
2.5
1
2.6
1
2.7
1
2.8
2
2.9
2
2.10
2
2.11
2
√
√
√
√
√
√
√
√
√
101
No.
Priority
Issue
Yes
No
Comments
FINANCIAL REPORTING AND REGULATORY MATTERS
Is the audit committee's role in the consideration
and/or approval of the annual accounts clearly
defined?
Does the audit committee consider specifically:
- the suitability of accounting policies and
treatments;
- major judgements made;
- large write-offs;
- changes in accounting treatment;
- the reasonableness of accounting estimates;
- the narrative aspects of reporting?
√
1
Is an audit committee meeting scheduled to receive
the external auditor's report to those charged with
governance including a discussion of proposed
adjustments to the accounts an other issues arising
form the audit?
√
3.4
1
√
3.5
2
3.6
2
3.7
2
Does the audit committee review management's
letter of representation?
Does the audit committee annually review the
accounting policies of the authority?
Does the audit committee gain an understanding of
management's procedures for preparing the
authority's annual accounts?
Does the audit committee have a mechanism to
keep it aware of topical legal and regulatory issues,
for example by receiving circulars and through
training?
3.1
1
3.2
1
3.3
√
√
√
√
102
No.
Priority
Issue
Yes
No
Comments
INTERNAL AUDIT
4.1
1
Does the audit committee approve annually and in
detail, the internal audit strategic and annual plans
including consideration of whether the scope of
internal audit work addresses the authority's
significant risks?
√
4.2
1
√
4.3
1
4.4
1
4.5
1
Does internal audit have an appropriate reporting
line to the audit committee?
Does the audit committee receive periodic reports
from the internal audit service including an annual
report from the Head of Internal Audit?
Are follow-up audits by internal audit monitored by
the audit committee and does the committee
consider the adequacy of implementation of
recommendations?
Does the audit committee hold periodic private
discussions with the Head of Internal Audit?
4.6
1
√
4.7
1
4.8
1
4.9
2
4.10
2
Is there appropriate co-operation between the
internal and external auditors?
Does the audit committee review the adequacy of
internal audit staffing and other resources?
Has the audit committee evaluated whether its
internal audit service complies with CIPFA's Code
of Practice for Internal Audit in Local Government
in the United Kingdom?
Are internal audit performance measures monitored
by the audit committee?
Has the audit committee considered the information
it wishes to receive from internal audit?
√
√
√
The Committee as a whole has nominated the Chair to hold periodic private
discussions with both the Head of Internal Audit and the External Audit Manager.
Such discussions take place on an annual basis.
√
√
√
√
103
No.
Priority
Issue
Yes
No
Comments
EXTERNAL AUDIT
5.1
1
Do the external auditors present and discuss their
audit plans and strategy with the audit committee
(recognizing the statutory duties of external audit)?
√
5.2
1
Does the audit committee hold periodic private
discussions with the external auditor?
√
5.3
1
√
5.4
1
Does the audit committee review the external
auditor's annual report to those charged with
governance?
Does the audit committee ensure that officers are
monitoring action taken to implement external audit
recommendations?
5.5
1
√
5.6
1
Are reports on the work of external audit and other
inspection agencies presented to the committee,
including the Audit Commission's annual audit and
inspection letter?
Does the audit committee assess the performance
of external audit?
5.7
1
Does the audit committee consider and approve
the external audit fee?
√
The Committee as a whole has nominated the Chair to hold periodic private
discussions with both the External Audit Manager and the Head of Internal Audit.
Such discussions take place on an annual basis.
√
√
The Head of Finance and Section 151 Officer reviews the performance of
External Audit and completes a customer satisfaction survey commenting on the
quality of their work.
√
This is not strictly applicable to the Audit Committee.
ADMINISTRATION
Agenda administration
6.1
1
6.2
1
6.3
2
6.4
2
Does the audit committee have a designated
secretary from Committee/Member Services?
Are agenda papers circulated in advance of
meetings to allow adequate preparation by audit
committee members?
Are outline agendas planned one year ahead to
cover issues on a cyclical basis?
Are inputs for Any Other Business formally
requested in advance from committee members,
relevant officers, internal and external audit?
√
√
√
104
No.
Priority
Issue
Yes
No
Comments
Papers
6.5
1
Do reports to the audit committee communicate
relevant information at the right frequency, time,
and in a format that is effective?
√
6.6
2
Does the audit committee issue guidelines and/or a
proforma concerning the format and content of the
papers to be presented?
√
Are minutes prepared and circulated promptly to
the appropriate people?
Is a report on matters arising made and minuted at
the audit committee's next meeting?
Do action points indicate who is to perform what
and by when?
√
It was recognised that the Audit Committee has a work programme which is clear
in confirming when different reports will be made available. There were some
comments received however regarding the length of some reports and their
repetitive nature, and a request received to make them more succinct in the
future.
For the most part, Audit Committee reports follow the Council's approved
Committee reporting template. The Committee reserves the right, however,on
occasions, to revise the format when requesting ad-hoc reports.
Actions arising
6.7
1
6.8
1
6.9
1
√
√
Committee agendas recognise Action Points arising from the minutes of previous
meetings. Specific target dates are not added but the Action Points are revisited
each time the Committee is convened.
105
Audit Committee
17 September 2013
Agenda Item No___16_____
Progress Report on Internal Audit Activity, April to August 2013
Summary:
This report examines progress made between 1 April and 31
August 2013 in relation to delivery of the Annual Audit Plan for
2013/14, and includes abbreviated management summaries in
respect of the audit reviews which have been finalised in the
course of this period.
Conclusions:
Adequate assurance levels have been awarded to the three
audits completed in the first five months of the financial year.
It is further noted that the Annual Audit Plan has been subject to
some minor rescheduling; the timing of two assignments
featuring in the plan has been revised.
Recommendations:
It is recommended that the Committee notes the outcomes of
the three audits completed between 1 April and 31 August,
together with the minor amendment made to the Annual Audit
Plan for 2013/14.
Cabinet member(s):
All
All
Wards:
Contact Officer,
telephone
number, and
e-mail:
1.
1.1
Sandra King, Internal Audit Consortium Manager
01508 533863
scking@s-norfolk.gov.uk
Background
The Accounts and Audit Regulations 2011 require that the Council must
undertake an adequate and effective internal audit of its accounting records and
of its system of internal control in accordance with the proper practices in
relation to internal controls. To assist the authority with fulfilling this
responsibility, this Activity Report, the first to be generated in year, comments
on the results of our work for the period April to the end of August 2013, in
relation to the approved Annual Internal Audit Plan for 2013/14, this was
endorsed by the Audit Committee on 19 March 2013.
106
Audit Committee
17 September 2013
1.2
The Public Sector Internal Audit Standards which came into effect on 1 April
2013 also require that this committee receives regular communications
regarding the activity’s performance in relation to the plan. This report seeks to
meet this requirement and ensure that independence and objectivity (Standard
1100) is maintained.
2.
Amendments to the Annual Audit Plan
2.1
Since the approval of the Annual Audit Plan there have been two minor
revisions to the timing of audits:
The Document Imaging audit (NN/14/13) has been slightly postponed from July
to September, to enable the audit to run concurrently with the review of the
Revenues and Benefits Application (NN/14/14), due to the intrinsic links
between the two applications. The rescheduling was discussed and agreed with
management in advance of the audit starting.
The Tourism and Economic Development audit (NN/14/05) has been postponed
from September to January. The audit has been initially scoped to cover two
initiatives; Enterprise Norfolk and Destination Management Organisation
(DMO). The DMO initiative is in the early stages and it was felt best to review
this area in quarter 4 thus ensuring a review is taken place after the first year of
operation. The rescheduling was discussed and agreed with management.
2.2
The rescheduling of the work within the current year and the updated timetable
for undertaking 2013/14 audit assignments is noted in Appendix E to this
report.
3.
Delivery of Programmed Audit Work in accordance with the Revised
Annual Audit Plan
3.1
As demonstrated in Appendix E, 59 days of programmed work had been
completed at the time of writing this report. This figure equates to 28% of audit
planned days earmarked for completion in 2013/14. The status of individual
audits can be summarised thus:
Three assignments have been completed and final reports issued (Audit
Nos. NN/14/01 Environmental Health Services, NN/14/02 Private Sector
Housing – Disabled Facilities Grants and NN/14/03 Car Parking and
Markets).
The audit fieldwork is under way for NN/14/04 Waste Management.
We have circulated the audit briefs for: NN/14/13 Document Imaging Civica
(Revenues and Benefits), with the fieldwork scheduled to start on 2
September and NN/14/14 Revenues and Benefits Application Civica, with
the fieldwork scheduled to start on 12 September.
4.
Outcomes of Work Undertaken
4.1
With reference to work completed between 1 April and 31 August 2013, as
mentioned above, we have been able to finalise three audits during this period
and their respective management summaries are attached at Appendix F to
the report.
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Audit Committee
17 September 2013
4.2
In the case of the Environmental Health Services audit (Audit No. NN/14/01),
we have been able to give an adequate assurance level to operational
arrangements, which is consistent with the audit opinion provided the last time
this area was examined. Three medium recommendations have been raised in
the areas of assisted burials and private water supplies & sampling.
4.3
With reference to the Private Sector Housing – Disabled Facilities Grants audit
(Audit No. NN/14/02) an adequate assurance opinion was provided. The audit
was carried out in conjunction with Broadland District Council, these being two if
the three district councils where the Integrated Housing Adaptation Team
(IHAT) structure was rolled out as part of a countywide initiative aimed at
streamlining the DFG process. The audit found that the introduction of the IHAT,
to date, has had the largest impact on the triage stage of the process. The main
recommendation involves ensuring that consistent performance measures are
agreed across the county. Work has started on this and strategic and local
measures have been identified, however this work needs to be finalised to
enable benchmarking in the future.
4.4
In relation to the Car Parking and Markets audit (Audit No. NN/14/03) an
adequate assurance opinion has been provided; the level of assurance has
improved since the last audit in 2011/12, when a limited assurance opinion was
awarded. In relation to Car Parking the recommendations centred on the shared
service agreement with Kings Lynn and West Norfolk Borough Council
(KL&WNBC). Firstly to ensure that complete income information is received to
enable reconciliations. To ensure that the quarterly meetings are held as per the
Service Level Agreement and that the annual performance information is
received both enabling monitoring of the agreement. The recommendation for
markets was to ensure that the risk assessment reflects the current practices.
4.5
Members should note that an adequate assurance level is a positive assurance.
All audit reports finalised to date in the 2013/14 financial year, have resulted in
positive assurances being awarded, which emphasises that the systems of
internal control evaluated to date, have been found to be working effectively and
efficiently.
5.
Conclusion
5.1
Good progress has been made with the delivery of the Audit Plan to date;
positive assurances have been awarded and all other work scheduled is on
track as expected.
6.
Recommendation
6.1
That members note the outcomes of the three completed audits and the minor
amendment made to the Annual Audit Plan for 2013/14.
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Audit Committee
17 September 2013
Appendices attached to this report:
Appendix E – Review Work delivered in accordance with the Annual Audit Plan for
2013/14
Appendix F – Abbreviated Management Summaries of Completed Audit Assignments
Appendix F (1) NN/14/01 Environmental Health Services
Appendix F (2) NN/14/02 Private Sector Housing – Disabled Facilities Grants
Appendix F (3) NN/14/03 Car Parking and Markets
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Appendix E
Review Work delivered in accordance with the Annual Audit Plan for 2013/14 plus Ad-Hoc Work requested by Management
Audit No.
Description of Audit
PLANNED SYSTEMS AUDIT WORK
Environmental Health Services
NN/14/01
Frequency of
Audit Coverage
Original Days
Planned
Revised
Days
Planned
Days
Delivered
Scheduling
Status
Complete
Final report issued 16 July 2013
Complete
Final Report issued 8 August 2013
Complete
Final Report issued 20 August 2013
Audit brief issued 8 August 2013.
Revised Brief circulated 20 August
2013.
Fieldwork to start 12 August 2013 and
to finish 6 September 2013.
Draft report to client by 20 September
2013
3-yearly
19
19
19
April
3-yearly
8
8
8
June
NN/14/03
Private Sector Housing - Disabled
Facilities Grants
Car Parking and Markets
2-yearly
16
16
16
July
NN/14/04
Waste Management
2-yearly
18
18
14
August
NN/14/05
Tourism and Economic Development
3-yearly
10
10
NN/14/06
Freedom of Information and Data
Protection
Accountancy Services
Revenues and Benefits Services - Data
Transfer, Governance and Risk
Sundry Debtors
Work to Support the AGS
Receipt, handling and banking of
remittances and tourist information
centres
3-yearly
8
8
September
January
October
2-yearly
Ad-hoc
17
5
17
5
October
October
2-yearly
Annually
2-yearly
10
15
12
10
15
12
November
January
January
3-yearly
Annually
22
8
168
22
8
168
57
34%
4-yearly
10
10
1
July
September
Audit brief issued 31 July 2013
Fieldwork to start 2 September 2013
and to finish 18 September 2013
Draft report to client by 2 October 2013
3-yearly
13
13
1
September
Audit brief issued 31 July 2013
Fieldwork to start 12 September 2013
and to finish 30 September 2013
Draft report to client by 14 October
2013
2-yearly
13
13
3-yearly
Annually
5
4
45
5
4
45
2
4%
213
213
59
28%
NN/14/02
NN/14/07
NN/14/08
NN/14/09
NN/14/10
NN/14/11
Development Management
Systems Audit Follow Up
TOTAL PLANNED SYSTEMS AUDIT WORK
NN/14/12
PLANNED COMPUTER AUDIT WORK
Document Imaging - Civica (Revenues
NN/14/13
and Benefits)
NN/14/14
Revenues and Benefits Application Civica
IT Security, Procurement and End User
Controls
Computer Audit Needs Assessment
NN/14/16
Computer Audit Follow Up
TOTAL PLANNED COMPUTER AUDIT WORK
NN/14/15
TOTAL PLANNED WORK
February
2 x 6-monthly validation
October
October
2 x 6-monthly validation
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Assurance
Level
applicable
Summary Report
Details presented to
Members
Adequate
17 September 2013
Adequate
17 September 2013
Adequate
17 September 2013
Comments
Audit No.
Description of Audit
Frequency of
Audit Coverage
Original Days
Planned
Revised
Days
Planned
Days
Delivered
Scheduling
Status
Assurance
Level
applicable
EXTRA WORK REQUESTED
TOTAL OF EXTRA WORK UNDERTAKEN
GRAND WORK TOTAL
0
0
0
213
213
59
28%
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Summary Report
Details presented to
Members
Comments
Appendix F(1)
Report No. NN/14/01 – Final Report issued 16 July 2013
Audit Report on Environmental Health
Audit Scope
The scope of the audit covered:
Local Authority Pollution Prevention and Control (LAPPC);
Assisted Burials;
Food Safety; and
Private Water Supplies Sampling and Risk Assessments.
Assurance Opinion
Unsatisfactory
Assurance
Limited Assurance
Adequate
Assurance
Good Assurance
Rationale supporting the award of the opinion
The system of internal control is, overall, deemed adequate in managing the risks associated
with Environmental Health that fall within the scope of this audit. The level of assurance
remains the same as the previous audit undertaken for this area. The assurance opinion has
been derived as a result of three medium, and six low priority recommendations being raised
upon conclusion of our work concerning Environmental Health provisions. The scope of the
audit focused upon four areas within two distinct teams and the recommendations are divided
among each area.
The three medium priority recommendations related to the risk of misappropriation of monies
found at deceased properties for which the Council has undertaken an inspection in support
of the assisted burials process, the risk that large facilities are not undertaking water supply
sampling in line with requirements and the risk that the Council has not met its responsibilities
of notifying external authorities of public health concerns over private water supplies.
Furthermore, it is noted that the Council is not currently undertaking risk assessments on
Private Water Supplies in line with regulations. This is due to the prioritisation of sampling
due to limited resource availability. Risk assessment programmes are expected to have
commenced prior to the end of Quarter two 2013/14. A recommendation has not been raised
over this area although it has been considered as part of the assurance rating provided.
Positive Findings
We have acknowledged the following areas where sound controls are in place and operating
consistently.
Policies, procedures and guidance are in place regarding all areas of the service.
These are available to Environmental Health staff via the shared drive. Minor issues
were noted with regards the requirement to refresh procedural guidance for Food
Safety. However, it is acknowledged that guidance in place is extensive.
The M3 system is used as a tool to schedule and document inspections. The system
is used within a consistent manner and only minor issues were identified over the
scheduling and completion of inspections.
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Inspections are being conducted in a consistent manner in line with regulations and
guidance.
Segregation of duties is in place where appropriate, particularly in relation to the
Assisted Burials process for which there are cash security risks.
Control weaknesses to be addressed
During our work we have identified the following area(s) where we believe that the processes
/ arrangement within Environmental Health would benefit from being strengthened, and as a
result of these findings medium priority recommendations have been made.
Assisted Burials
Where inspections are carried out of properties, inspecting officers do not sign to
confirm both their presence on site and that the accounts submitted are an accurate
reflection of items found.
Private Water Supplies and Sampling
Two large water supply holders within the district undertake self-monitoring of their
water supply quality. The Council does not obtain assurance over whether this is
completed in line with regulations.
Notifications made to external bodies regarding public health concerns are currently
made by phone. As a consequence, a formal record is not retained to confirm that
the Council has met its requirements in notifying these issues.
Summary of the adequacy and effectiveness of controls
Area of
Scope
Adequacy and
Effectiveness
Assessments
Local Authority
Pollution
Prevention
and Control
Assisted
Burials
Food Safety
Private Water
Supplies and
Sampling
Adequacy
of
Controls
Effectiveness
of Controls
Recommendations
Raised
High
Medium
Low
Green
Green
0
0
0
Green
Amber
0
1
3
Green
Amber
0
0
3
Green
Amber
0
2
0
0
3
6
Total
High Priority Recommendations
No high priority recommendations have been raised as a result of this audit
Management Responses
Management have accepted the recommendations raised.
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Appendix F(2)
Report No. NN/14/02 – Final Report issued 8 August 2013
Audit Report on Private Sector Housing – Disabled facilities Grants
Audit Scope
The scope of the audit covered:
Governance for New Structure;
Policies and Procedures; and
Disabled Facilities Grants.
Assurance Opinion
Unsatisfactory
Assurance
Limited Assurance
Adequate
Assurance
Good Assurance
Rationale supporting the award of the opinion
The system of internal control is, overall, deemed adequate in managing the risks associated
with Private Sector Housing (Housing (Health and Wellbeing) that fall within the scope of this
audit. The level of assurance remains the same as the previous audit undertaken for this
area. The assurance opinion has been derived as a result of one medium, and four low
priority recommendations being raised upon conclusion of our work concerning Disabled
Facility Grant (DFG) provisions.
This audit was carried out in conjunction with Broadland District Council, these being two of
the three district councils (which included South Norfolk District Council) where the Integrated
Housing Adaption Team (IHAT) structure was rolled out as part of a countywide initiative
aimed at streaming the DFG process, by bringing Social Care staff into the Council’s housing
team to form an IHAT. The initiative is co-ordinated by the County Disabled Facilities Grant
Project Officer; (hosted by Broadland District Council funded by the DCs and seconded from
Norwich City Council), and the IHAT structure has now been rolled out across the county from
th
April 2013. Funding for County DFG position currently ceases on 30 September 2013.
Throughout the joint audit we have established that the introduction of the IHAT, to date, has
had the largest impact on the triage stage of the process, whereby the formation of IHAT
teams has placed the relevant organisations involved in the assessment stage in one central
office location (although some assessments are still undertaken by the OTs in the locality
teams). By doing this the IHAT has reduced the various hand-off steps and reduced moving
the duplication of work that was prevalent between organisations under the previous
structure. In terms of the administration and processing of a DFG application i.e. completing
an application through to approval process, the internal controls have remained in place, after
formation of the IHAT. No issues were identified through this review regarding the processes
concerning the administration and processing of DFGs applications.
The remit of the County Disabled Facilities Grant Project Officer includes establishing and
monitoring performance measures which effectively assess the success of the new IHAT
structure, with the intention of facilitating service enhancements to the process where
applicable. In addition, the remit includes implementing contractor lists at each district
authority for DFG adaptation works as well as streamlining the customer feedback process.
Concerns have been raised by the County Disabled Facilities Grant Project Officer and both
IHAT Managers (for Broadland and North Norfolk Districts Council’s) as to whether all of the
project objectives will be achieved prior to the date funding for the County Disabled Facilities
Grant Project Officer post in due to cease. Further concerns were raised by the IHAT
114
Managers as to whether the district will have sufficient resources to complete these tasks
should they not be achieved.
Although performance measures have been set to assess performance of the IHAT team
across the County, throughout all of the various DFG stages e.g. referral, visits etc. these had
not been formally monitored by the end of our fieldwork. Concerns have also been raised by
the IHAT Managers as to the large number of measures being monitored and the necessity to
monitor certain measures. Although work has been undertaken to distinguish between
strategic measures (compulsory to report against) and local measures (discretionary), it is
evident that further work needs to be undertaken to achieve buy in from the districts to
monitoring these measures.
Fundamentally, it remains unclear as to how performance measures and therefore the
success of achieving project objectives; as well as how learning from performance outcomes
is to be monitored and co-ordinated between district council’s after funding for the County
th
Disabled Facilities Grant Project Officer role ceases as expected on 30 September and
justifying the need to continue administering scheme arrangements as now established into
the future.
Through the joint audit we have also identified an area of potential over control at the Council
regarding annual reminders relating to land charges for DFGs. The key control in operation is
the charge being placed with Local Land Charges upon award of a grant; this was found to be
operating as expected through the audit testing. The additional control involves sending
annual reminders to the recipients of the grants; this appears to add little value.
The segregation of duties between the officers undertaking the reconciliation between M3 and
e-Financials should also be documented, to provide a full audit trail.
In addition, the overall assurance opinion is affected by the one medium priority
recommendation remaining outstanding from the previous audit of Private Sector Housing review and approval of the Home Renewal Policy which is set for approval by Cabinet in
September 2013.
Positive Findings
We found that the Council has demonstrated the following points of good practice as
identified in this review and we will be sharing details of these operational provisions with
other member authorities in the Consortium:
We were advised that the structure of the IHAT has had a positive impact on reducing
waste during the referral stage of the project with the structure of the IHAT having
been consistently applied, in line with a clearly agreed mandate. This was detailed in
st
a report to the IHAT Peer Group on 1 February 2013 from the three IHAT Managers
from the pilot schemes at Broadland, South Norfolk and North Norfolk District
Councils. Despite the removal of waste from the system we note that the internal
controls regarding the DFG processing from application through to approval have not
been subject to change and are working effectively.
Procedures and guidance are in place regarding the service. In addition we note that
the IHAT has access to the IHAT Handbook for guidance of referral routes and
workflow systems are set within M3 to process a DFG application.
We have acknowledged the following areas where sound controls are in place and operating
consistently.
Grants had been awarded in line with relevant legislation to eligible applicants, with
works subject to appropriate approval and verification prior to payment of a grant.
115
Control weaknesses to be addressed
During our work we have identified the following area(s) where we believe that the processes
/ arrangement within Private Sector Housing (Housing (Health and Housing)) - DFGs would
benefit from being strengthened, and as a result of these findings a medium priority
recommendation has been made in relation to the following:
Although performance measures to monitor the effectiveness of the IHAT structure
across the County have been set, there is uncertainty as to whether the Council’s
systems currently hold this information and whether it is necessarily beneficial to the
Council in terms of all the measures set. Furthermore, once funding for the County
th
Disabled Facilities Grant Project Officer position ceases on 30 September there is
uncertainty over the co-ordination of the DFG Project countywide and monitoring of
performance measures thereafter, including all aspects of the process from initial
contact, assessment and delivery of the adaptation and that the Council’s IT system
is not designed to hold information about the assessment stage. Information will need
to be provided from the Care First system which only social care staff currently has
access to.
Summary of the adequacy and effectiveness of controls
Area of
Scope
Adequacy and
Effectiveness
Assessments
Governance
for New
Structure
Policies and
Procedures
DFGS
Adequacy
of
Controls
Effectiveness
of Controls
Recommendations
Raised
High
Medium
Low
Green
Amber
0
1
0
Green
Amber*
0
0
0
Green
Amber
0
0
4
0
1
4
Total
*- One medium priority recommendation raised within the previous audit of Private Sector
Housing (NN1102) remains outstanding and impacts on the effectiveness of controls rating for
this area.
High Priority Recommendations
No high priority recommendations have been raised as a result of this audit
Management Responses
Management have accepted the recommendations raised.
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Appendix F(3)
Report No. NN/14/03 – Final Report issued 20 August 2013
Audit Report on Car Parking and Markets
Audit Scope
The scope of the audit covered:
Car Parking, in particular the shared service arrangement monitoring
arrangements with KL&WNBC.
Markets, including trading terms and licences and income collection.
Assurance Opinion
Unsatisfactory
Assurance
Limited Assurance
Adequate
Assurance
Good Assurance
Rationale supporting the award of the opinion
The audit covered Car Parking and Markets, which are managed within the Assets and
Leisure Service.
Work on Car Parking focused predominantly on the monitoring
arrangements in place over the contract and service provision. We also reviewed the
arrangements for the issue of season tickets for parking within NNDC. The Markets work
focused upon the issue and monitoring of licences and operations within the market.
The system of internal control is, overall, deemed adequate in managing the risks associated
with Car Parking and Markets that fall within the scope of this audit. The level of assurance
has improved since the previous audit undertaken for this area. The assurance opinion has
been derived as a result of three medium priority recommendations being raised in relation to
Car Parking and one medium priority recommendation being raised within the area of
Markets.
The recommendations in relation to Car Parking centre on the monitoring of the shared
service arrangement with Kings Lynn and West Norfolk Borough Council (KL&WNBC). The
information provided to the Property Business Manager does not enable a complete
reconciliation of income to be undertaken, quarterly liaison meetings are not being held and
performance information is not being received as per the Service Level Agreement. There is
also an issue with the late receipt of invoices from KL&WNBC with regards the quarterly
management fees. However, risks to the Council with regards payment of these invoices is
mitigated through robust budget monitoring by profiling expected costs. As such, no
recommendation is considered necessary.
The recommendation for Markets indicates that the risk assessment for cash handling of
markets income needs updating to reflect current practices.
The assurance opinion also reflects the one medium priority recommendation that remains
outstanding as a result of our work within the review of the Work to Support the preparation of
st
the Annual Governance Statement (NN/13/11 – issued 21 May 2013) in relation to Car
Parking reconciliations.
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Positive Findings
It is acknowledged there are areas where sound controls are in place and operating
consistently.
Car Parks
A Service Level Agreement (SLA) has been signed between NNDC and
st
KL&WNCBC which was last revised on 1 April 2012 through an approved
variation order.
Issue and stock of season tickets is tightly controlled and access restricted to
authorised personnel.
Income received from season tickets is correctly accounted for and reconciled.
Markets
Trading licences are issued correctly to traders and fees are correctly levied.
Income is promptly paid and accounted for.
Terms and conditions for trading are adhered to.
Control weaknesses to be addressed
During our work we have identified the following key areas where we believe that the
processes / arrangements within Car Parking and Markets would benefit from being
strengthened, and as a result of these findings four medium priority recommendations have
been made.
Car Parks
Payments made from customers regarding PCNs are not reported in detail to the
Council. A detailed report on payments needs to be submitted from KL&WNBC which
will act as a guide for the Property Business Manager to correctly estimate and
monitor the income expected by KL&WNBC.
Meetings between the Council and KL&WNBC regarding contract monitoring were
st
last held on 21 November 2012. These should be held on a quarterly basis in line
with the SLA between the two parties.
The Annual Performance Report should be received each April for the preceding
financial year. The report for 2012/13 had not been received at the time of our review
in July 2013.
Although no recommendation has been raised, due to robust budget monitoring
arrangements, including profiling of expenditure, KL&WNBC have been late in submitting
quarterly invoices for their 17% management fee under the terms of the SLA. At the time
of our fieldwork in July 2013, invoices had not been provided for quarters three and four
for 2012/13 or quarter one for 2013/14.
Markets
A risk assessment has been undertaken in relation to cash handling within Markets.
The risk assessment was found not to cover all controls which either are in place or
should be in place. This includes the need for officers to vary the markets they attend
when collecting market fees.
In addition, one recommendation reported in the Work to support the preparation of the
Annual Governance Statement 2012/13 remains outstanding, i.e. car parking ticket machine
income should be reconciled to the PARKEON database figures. This had been agreed with
th
an implementation date of 30 June 2013. Progress with implementing this recommendation
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will continue to be monitored through our six-monthly cyclical follow up checks, which is next
th
due in October 2013 to report on the status as at 30 September 2013.
Summary of the adequacy and effectiveness of controls
Adequacy and
Effectiveness
Assessments
Area of
Scope
Car Parking
Season
Tickets
Markets
Adequacy
of
Controls
Effectiveness
of Controls
Amber
Amber
High
0
Medium
3
Low
0
Green
Green
0
0
0
Green
Amber
0
1
0
0
4
0
Total
Recommendations
Raised
High Priority Recommendations
No high priority recommendations have been raised as a result of this audit
Management Responses
Management have accepted the recommendation raised.
119