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APOLOGIES To receive apologies for absence. Minutes: An apology was received by Councillor Sion W. Jones |
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DECLARATION OF PERSONAL INTEREST To receive any declaration of personal interest. Minutes: No declarations of personal interest were received from any members present. |
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URGENT ITEMS To note any items which are urgent business in the opinion of the Chairman so they may be considered. Minutes: None to note |
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The Chairman shall propose that the minutes of the meeting of this committee, held on February 13th 2020, be signed as a true record. Minutes: The Chair
confirmed the minutes of the meeting of this committee, held on 13 February
2020, as a true record. |
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GWYNEDD COUNCIL'S ANNUAL GOVERNANCE STATEMENT FOR 2019/20 PDF 391 KB To consider the
report Additional documents: Decision: To approve the Statement, subject to amending the fourth clause in the 'Accountability' section to delete the reference to a lack of aspiration by the public to hold the Council accountable, and recommend that the Council Leader and the Chief Executive sign it. Minutes: The statement was presented by the Assistant Head - Revenue and Risk who
explained that the statement, although not part of the accounts, was a
statutory document which needed to be published with
the accounts. In accordance with the Accounts and Audit
(Wales) Regulations and the CIPFA Code of Practice, all Local
Authorities must ensure that a statement of internal management is in place. It
was reported that it was the Chief Executive and the
Council Leader who were required to sign the document, although the Audit and
Governance Committee's approval was needed. Some background was given to the report, noting
that all Local Authorities had a duty to present an annual statement, and that
although the format or method had changed, that the content of these documents
was very similar. In Gwynedd, it was the Governance Arrangement Assessment
Group, led by the Chief Executive, who reviewed the risk register. The group
would discuss risks within 22 different governance fields, noting the controls
the Council had in place in order to mitigate the risks. This was done in
response to the CIPFA framework which identified core
principles for good governance. It was reported that the group had concluded that there was no field of
extremely high risk; and that there was one high risk
field, 11 medium risk fields, and 10 low risk fields. It was noted that
'Culture' was the high risk field, the reasoning
behind this being that an inappropriate culture within the Council could hinder
all aspects of governance. Despite this, it was emphasised that the Ffordd Gwynedd Vision showed very good examples with
generally significant progress; although this was not consistent across the
Council as yet. It was added
that the schedule had slipped somewhat due to the Covid-19 pandemic, but that
there were examples of Ffordd Gwynedd culture helping
matters in some areas during the response to the crisis. Attention was drawn to the fact that only one
risk score had changed over the year, namely Reviewing Outcomes, due to a
failure to learn lessons from experience, and continuing to do the same things
incorrectly. During the ensuing discussion, the following
observations were made by Members: ·
Concern regarding the Council's accountability and
a clause in the report which expressed that there was
'no great aspiration amongst the public to hold the Council accountable'. This
wording was considered insulting, and it was considered
that there was an aspiration amongst the public but that there was a lack of
trust due to difficult decisions made in the past. Although it was Members who represented the public, regular members had no powers
as they were not involved in discussions, and so it was possible that the
public were losing their connection due to this. ·
Contact with Members had been poor during lockdown.
A lack of communication with the Chairs of 'small' committees · Lack of input into decisions - had received information regarding decisions but it would have been good to have been aware of what was ... view the full minutes text for item 5. |
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FINAL ACCOUNTS 2019/20 - REVENUE OUTTURN PDF 192 KB To consider the
report Additional documents:
Decision: - to accept the situation and the
relevant risks in the context of the Council’s budgets and its departments - to accept the Cabinet's decisions (16/6/20) Minutes: The Cabinet Member
for Finance noted that the report had been submitted
to the Cabinet on 16 June 2020 and that the Cabinet had approved all the
recommendations and financial transactions. He emphasised that the Cabinet
Members were all aware of their responsibility to keep to the budget. He noted
that the situation in Adult Care and theoverspend in
the Children and Families Department highlighted cause for concern. The Senior Finance
Manager set out the context and elaborated on the content of the report.
Reference was made to a department by department
summary of the situation, which highlighted the sums to be carried forward at
the end of the year. It was highlighted that the Children and Families
Department had an overspend of £3.4m at the end of the
financial year, and that the Highways and Municipal Department had an overspend
of £547k. Attention was drawn to the further details
(appendix 2) and the evident and significant pressure facing the fields of care
and waste management in attempting to reduce the impact on the people of
Gwynedd by avoiding cutting services. Evidence was seen
that there were difficulties in achieving savings. It was shown that
the Adults Department had seen an improvement in the financial situation by the
end of the financial year, as a result of receiving
and re-directing late grants and using one-off finance of 420k. Without these
additional contributions, the department would have overspent by £1.5m;
however, additional bids to the value of £1.8m had been
received for 2020/21. It was reported
that there had been a further increase in the overspend tendency on operational
services, placement and post-16 in the Children and Families Department; and so
overspend of £3.4m was reported. It was reiterated
that the situation was not unique to Gwynedd but rather a familiar situation
across all authorities. Despite this, the situation continued to be one of
concern and despite the further allocation of almost £2m to the Department's
2020/21 budget to address the increasing pressure, the failure to realise
savings was a matter which needed to be solved - it was intended for this to be
addressed in a further report to the Cabinet. Further
observations: ·
Highways and Municipal showed a reduction but waste
had been a problematic area this year ·
Schools' balances had increased from £4m to £4.3m ·
Education and YGC had performed better than
expected during the year ·
The Environment Department had seen underspend, and
there had been one-off underspend on several corporate headings ·
Following a review of the adequacy of the Council's
specific provisions and reserves at the closure of accounts, £825k of resources
had been collected. In response to a comment regarding the fact that several departments had included staff turnover as a problem, it was noted that, in general, if capital expenditure was not taken into account, ¾ of expenditure would be staff expenditure and that it was therefore inevitable that staff issues would arise. It was added that bids had been approved in certain departments to ... view the full minutes text for item 6. |
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STATEMENT OF ACCOUNTS 2019/20 PDF 125 KB To consider the
Head of Finance’s Report Additional documents: Decision: To accept the Statutory Statement of Accounts (pre audit draft) for information Minutes: The Cabinet Member for Finance took the opportunity to thank all staff
at the Finance Department for ensuring that the Council's Accounts Statement had been prepared by 15 June. It was noted
that since then, Welsh Government had extended the submission date to November
as a number of Councils had confirmed that it would not be possible for them to
complete the task by June. The Cabinet Member took great pride, under all the
circumstances, in the fact that the Council had managed to complete the
statement due to the commitment of department staff during a highly challenging
time. He
added that the Council's priority since March had been to protect vulnerable
people in our communities. The Head of Finance added that the statement had been completed in the
statutory manner, and noted that the pension figures had skewed the overall
figures - these were referred to as paper figures and
in order to provide somewhat better understanding of the situation, he referred
to the information regarding movements in the reserves (page 79). It was felt
that it would be necessary to submit the statement, as it would have dated by
the Committee's next meeting (14/09/20). As it would not be possible for
Deloitte to complete its audit of the accounts until September, it was considered that the Committee could, at that meeting,
focus on the external auditors' audit. The Senior Finance Manager added that
six sets of accounts had been completed and in the statement's context, it was
noted that it was a complex and lengthy statement which
adhered to the CIPFA standard form. Attention was drawn
to the narrative report and to the main issues contained within the report. RESOLVED to accept the Statutory Statement of Accounts (pre audit draft) for information |
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GWYNEDD HARBOURS' FINAL ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2020 PDF 218 KB To consider the
report Additional documents: Decision: To accept and approve the information - Income and
Revenue Expenditure Account 2019/20 - Statement of Accounts form for the period ending 31 March 2020 (subject to audit) Minutes: The Senior Finance Manager submitted the report and it was explained that Gwynedd, in accordance with the statutory
requirements under the Harbours Act 1964, as a harbour authority, was required
to provide an annual accounts statement relating to the activities of Barmouth, Aberdyfi, Pwllheli and Porthmadog harbours.
Due to the
turnover of the harbours being below £2.5m, Gwynedd Harbours was considered to be a small local government body, and therefore
completion of an accounts statement form provided by Wales Audit satisfied the
statutory requirements. Reference was made to the income and expenditure account and it was
highlighted that despite the income being below target, there was an underspend of £10.5k (maintenance staffing). Attention
was drawn to the external auditors' standard form and it was noted that the
accounts had already been the subject of an internal audit and, since May, the
subject of an external audit undertaken by Deloitte. It was added that an
amended version would only be presented to the Committee's next meeting on 14
September 2020 if there was a need to implement
changes following audit. RESOLVED to accept and approve the
information - 2019/20
Income and Revenue Expenditure Account - Statement of Accounts form for the
period ending 31 March 2020 (subject to audit) -
Chair of the Committee to sign the statements (electronically) |
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TREASURY MANAGEMENT 2019/20 PDF 289 KB To consider the
report Decision: To accept the report for information. Minutes: The
Investment Manager submitted a report in relation to the actual results of the
Council's treasury management during 2019/20, compared with the strategy
established for that financial year. It was noted that
the Council's borrowing activity was within the limits originally set, and
£546,000 of interest had been received on investments, which was higher than
the £406,000 within the budget. It was confirmed that
none of the banks the Council had used for investments had failed to pay. Attention
was drawn to the detail of the borrowing activities, highlighting the fact that
long term loans had remained consistent but that the greatest difference was to
be seen in the short term loans that had been taken
out. It was noted that it would be usual to ask for
cash flow towards the end of the year, but with the implications of the
Covid-19 pandemic creating uncertainty in terms of how to safely pay out grants
to business, the decision was made to take out shout term loans in order to pay
the grants. It was reported that £15m had already been
repaid, with a further £4m yet to be paid. It
was reported that in terms of investments, this had been a quiet period, with
the investment options giving fairly low returns. It
was noted that the value of the £10m invested in the property fund in February
2019 had reduced significantly by the end of March 2020, and that this was due
to the damaging impact of Covid-19. It was added that
the value was low, but that there had been a recovery of around 20% in market
values since then. The intention was to continue with the investments for the
medium / long term, and to have regular discussions with Arling
Close to keep an eye on the portfolio. It was highlighted
that the rate for returning empty property into use was 4% and turned over a
revenue income of approximately £400k per year; and it was therefore an
excellent tool to have in a portfolio. RESOLVED
to accept the information. |
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2020 AUDIT PLAN - GWYNEDD COUNCIL PDF 319 KB To consider the
report Additional documents: Decision: To accept the Wales Audit report Minutes: The report was submitted by Alan Hughes
(Wales Audit Office) and Ian Howse (Deloitte) It was noted that the accounts would be
available to the public until September, with the external auditors submitting
their final audit of the accounts after that time. Attention was drawn to the significant risks
which had been identified for investigation by the Council, including the
overriding of regulations by managers (which is a common risk to all
Authorities), the impact of the national Covid-19 crisis, the completeness of
expenditure accrued, GwE income and grant
expenditure, looking into the provision made in relation to the McCloud
(Pensions) case judgement and initial work to review readiness to submit
leases. In the context of Auditing Performance for the forthcoming year, it was noted that Covid-19 had affected some of the plan's
contents. A decision was made to cancel the audit of
the Wellbeing Act, and to focus on following the Council's recovery procedure.
It was highlighted that the rest of the plan remained the same, and that the
Auditors continued to collect assurance and assess risk, undertake work on
financial sustainability, and complete the regional review of residential and
nursing care commissioning (with scoping work and discussions to commence in
September). Attention was drawn to the intention to
undertake local work on 'our way of working', but it was noted that it would be
necessary to have discussions with officers to determine whether the subject
remained appropriate. RESOLVED to accept the Wales Audit Office report |
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FINANCIAL SUSTAINABILITY ASSESSMENT - GWYNEDD COUNCIL PDF 403 KB To consider the
report Decision: To accept the Wales Audit report Minutes: The
report was submitted by Alan Hughes (Wales Audit Office). It was noted that although the report had been written prior to
the arrival of Covid-19, the key findings, concepts and principles remained
appropriate. Reference was made to the summary of the
audit's findings, highlighting the fact that the main finding was that the
Council's financial situation remained strong at present, with financial
strategy supporting financial resilience. Despite this, a risk was highlighted around the significant overspending of some
services, and the fact that not all savings were being realised. The findings were presented one by one, with attention drawn to the
risks. In response, the
Head of Finance expressed gratitude for the report, noting that it was a fair
reflection of the situation, but that the report had dated somewhat by now. An verbal update of the current situation was provided: ·
Gwynedd had been the first authority to report on
the Impact of Covid-19 on the 2020/21 Budget, and this had been presented to
Cabinet on 19/05/20. ·
Since then, several authorities had received
reports from their treasurers, and the common factor in all the reports was the
uncertainty - a) regarding
the continuation of crisis restrictions, and b) regarding
the amount of support to be expected from Welsh Government. ·
Gwynedd Council's likely situation had not seen any
fundamental changes since reporting in May. ·
During the first quarter, the additional
expenditure was approximately £2m, which was slightly higher than projected,
but a large portion of this had been compensated. ·
The additional cost reported did not include
Council Tax Reduction payments. It was expected that Welsh Government would
also compensate for this, with discussions to be held on 30/07/20 ·
The Council's loss of income had been slightly
lower than anticipated, and there was hope that this amount would
also be compensated during Q.1. ·
In May, an income loss of £5m in Q.1., and a
further £5m in Q.2., had been discussed. The true loss
of income in Q.1. was £4.9m, and it was likely that
Welsh Government would compensate authorities for a considerable amount of this
(application submitted 27/07/20). ·
The Welsh Local Government Association (WLGA) were
to present a case for Welsh Government to set aside a fund for Q.2., but there
was no certainty regarding this. ·
The Council's assessment of loss of income did not
include the situation in terms of Council Tax collection. This was a concern
and impossible to measure at present. ·
However, there was reason to expect that Q.2. income would be at a considerably nearer level to the budget
as businesses reopened, visitors paid for parking, etc. ·
The reserves would take a knock, but there was
enough available to cope with the situation for the current year. · There would be a need to plan forward for 2021/22, as there was no guarantee that the Local Government grant would keep up with inflation - prior to the crisis, the 2020/21 settlement was one of the best in a decade and more, which suggested that ... view the full minutes text for item 11. |
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OUTPUT OF THE INTERNAL AUDIT SECTION PDF 532 KB To consider the
report of the Audit Manager Decision: To accept the report and support the agreed actions which have already been submitted to the managers of the relevant services. GwE (regarding travel costs) and Highways and Municipal (regarding overtime) to be called in to the Controls Improvement Working Group Minutes: The report of the
Audit Manager was submitted for information, which
provided the Committee with an update on the internal audit work for the period
between 3 February and 31 March 2020. It was noted
that 10 of the plan's audits had been completed. It was explained that new arrangements had been established for
follow-up audits. In 2018/19, agreement had been reached
on 88 action steps to be completed by 31 March 2020. Following
a request for information and evidence from the relevant Units/Services on
action progress, it was shown that on 31 March
2020, there was acceptable implementation on 100% of the agreed actions to
mitigate high/very high risks, i.e. 11 from 11, and 72.73% of the agreed
actions to mitigate medium/low risks, i.e. 56 from 77. It was added that acceptable action had been taken on 76.13% of
agreed steps, i.e. 67 from 88 agreed actions with progress made on 12.5%, i.e.
11 agreed actions. However, no response had been received
in relation to 11.36% of the actions, despite a request for information having
been submitted. Reference was made to the audit of the GwE
travel cost claims process, which had received a 'limited' assurance level. The
purpose of the audit was to ensure that an efficient and effective process was
in place to claim travel costs via the self-service system, which reduced the
administrative load and kept the risk of loss by mistake or fraud at acceptable
levels. A Member
highlighted concern, as the procedure for submitting applications via
self-service had reduced the administrative work considerably, that managers
were forgetting to check their staff's claims for travel costs. It was confirmed
that GwE management had committed to remind managers
to check claims in order to mitigate the risk highlighted. Furthermore, it
was considered uncertain whether there had been consideration of value for
money in changing the official work locations of some GwE
staff. It was emphasised that there was
no flaw in the self-service arrangement in general, that managers had a
responsibility to check applications for travel costs, and that it was not an
administrative role. Regarding GwE specifically,
following Gwynedd Cabinet's decision to change the procedure for claiming
travel costs, GwE decided to change the work
locations of some staff. It was added that Internal
Audit was not convinced that remote work locations for staff provided assurance
of value for money. It was reported that discussions had been held between GwE and Corporate Support at the time of changing the work
locations, and that GwE had justified the changes
before they were approved. In response to the
above, it was suggested that GwE
should review the changes to work locations again. In response to a question as to whether it was commonplace to overturn / change the Cabinet's decision, the Head of Finance noted that the Cabinet had established a travel claims procedure based on work locations, and that GwE had separately re-designated the working location of some staff. It was noted that the Cabinet's decision ... view the full minutes text for item 12. |
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HEAD OF INTERNAL AUDIT ANNUAL REPORT 2019/2020 PDF 594 KB To consider the
Audit Managers Report Decision: To accept the annual report in accordance with the requirements of the Public Sector Internal Audit Standards for the 2019/20 financial year. Minutes: The report of the Audit Manager was submitted,
expressing Internal Audit's view of the general management environment within
the Authority during 2019/20. It was reported that, based on the work completed
by Internal Audit, Gwynedd Council had a robust framework of internal
management. It was reported that 49 pieces of work had been
included in the final revised audit plan for 2019/20. It was noted that 45 of
those assignments had been completed by 31 March 2020, which represented 91.84%
of the plan. Of the relevant reports
which were given an assurance level, 77.77% received an 'adequate' or 'high'
assurance level. Reports were submitted regularly to the Audit and Governance
Committee, and in the context of follow-up work, from the 88 agreed actions set
in 2018/19, there had been acceptable implementations on 76.14% by 31 March
2020. It was added that progress had been made on 12%, and that no response had
been received for 11.36%. The service would revisit these during the current
financial year. It was noted that there had been a decrease in the
number of productive days available for Gwynedd Council audits, from 913 days
between 1 April 2018 and 31 March 2019, to 681 days for the same period in
2019/20. It was explained that this was due to a maternity absence, assisting
Snowdonia National Park Authority in its end of financial year arrangements,
and providing an audit service for Byw'n Iach Cyf. It was reported that since
April 2020, there had been 7 full-time members of the Internal Audit Team and
one Temporary Auditor to cover for a maternity leave and the absence of Senior
Auditors to attend College in order to obtain professional qualifications. In response to a member’s question regarding the
use of an apprenticeship scheme as a way of ensuring the continuation of the
service and its high standard, the Audit Manager noted that she encouraged
individuals to gain professional qualifications and take advantage of
opportunities within the field. In response to a question regarding Gwynedd
Council's agreement to provide financial support to the Byw'n Iach company
despite there being no overview of the situation, the Head of Finance reported
that it was a condition that Gwynedd was to compensate Byw'n Iach. Appreciation of the Audit Manager's work was
expressed. RESOLVED to accept the annual report in accordance with the requirements
of the Public Sector Internal Audit Standards for the 2019/20 financial year |
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DRAFT INTERNAL AUDIT PLAN 2020/21 PDF 422 KB To consider the
report of the Audit Manager Decision: To approve the Revised Audit Plan for the period 1 April 2020 to 31 March 2021. Minutes: Submitted – the amended draft plan of Internal
Audit work for the 2020/21 financial year for comment and approval by the
Committee. It was highlighted that, in accordance with
best practice and the Public Sector Internal Audit Standards, the Internal
Audit plan was subject to continuous review in order to ensure that it remained
up to date and reflected changes in the business. It was explained that the plan had been updated in
light of the Covid-19 pandemic and the fact that Internal Audit had been unable
to conduct work as usual in the first quarter of the year. It was reported that Internal Audit officers had been
redeployed to assist and support the Council by checking and processing Welsh
Government Grants for Businesses, administrated by the Revenue Service. It was added that the projected expenditure of these grants was
£63m, making Gwynedd the second highest council in Wales in terms of
expenditure and transactions - with provision for the work reflected in the
amended plan. Attention was draw to one of the
key priorities in the first quarter, as in the two previous financial years,
namely to provide an Internal Audit service to approximately 70 community, town
and city councils. In order to achieve this and to assist the councils in
meeting their statutory timescale in terms of submitting their accounts by 30
June 2020, documentation was received via e-mail where possible, and meetings
were conducted by using Zoom or Microsoft Teams, as well as by phone call. The
Service received positive feedback from the Clerks/Responsible Financial
Officers on the smooth transformation of conducting these audits. It was reported that the amended
Internal Audit plan for 2020/2021 would give appropriate consideration at all
times to the possibility of fraud or corruption occurring. It was explained
that the service would take advantage of the National Fraud Initiative (NIF)
and undertake proactive fraud prevention work with Audit Wales; the decision
had also been made to extend the Initiative to target the fraud risks
associated with Covid-19 grants or payments made by local authorities. It was added that the Audit officers who had been involved with
the work of processing grant payments would not be undertaking this work, in
order to ensure independence and appropriate separation of duties. The Service
would also continue to give attention to specific grants, especially where the
conditions of the grant asked for a review by Internal Audit. Attention
was drawn to the key changes in the amended plan, and it was noted that the
plan would provide flexibility, allowing the Service to support the Council
with any matters which became apparent, and to act
promptly on any risks arising from those matters. The
Head of Finance thanked the staff for their willingness to transfer in order to
assist with the high level of grant payments. RESOLVED to approve the Revised Audit Plan for the period 1 April 2020
to 31 March 2021. |