To submit
the report of the Audit Manager.
Minutes:
Submitted - the report of the Audit Manager
outlining the Internal Audit section’s work for the period. It was noted that 19 reports on audits from the action plan had
been completed. Attention was drawn in terms of follow-on audits,
that acceptable action had been taken on 94.48% of the agreed steps,
namely 154 out of 163. It was highlighted that no
response had been received to requests to receive information and evidence from
the relevant Units/Services on the progress of actions for the following audits:
·
Small
holdings (3 actions)
·
Arrangements
for Children who are Leaving Care (1 action)
·
Recycling
Targets (5 actions)
It was
noted that after receiving information, the reports of the audits below
had been released in final form:
·
Care
and Support (Children) Plans under Part 4 SSA (Wales) 2014 (Children and
Families)
·
Flood
Management (Gwynedd Consultancy)
A member referred to the
lack of response from Units/Services to requests for information and evidence.
The member noted that the attention of the relevant Cabinet Members should be drawn to this or that the relevant officers should
be summoned to the Committee. In
response, the Audit Manager stated that if the Committee wished, the relevant
officers could be summoned before the Controls
Improvement Working Group. It was proposed to call the relevant officers to the audits
before the Controls Improvement Working Group. A member noted that the relevant
Cabinet Members should be called before the Working
Group as well. The Audit Manager
confirmed that a date had been determined for a meeting of the Controls
Improvement Working Group where a discussion would be held
on audits referred to the Working Group at the Committee's previous meeting.
The proposal was seconded, a vote was taken on the
proposal and it was carried.
Consideration was given to the reports individually and during the
discussion, reference was made to the following main matters -
Whistleblowing Policy - Gwynedd Schools
A number of members noted their
disappointment that 34% of the schools had not replied to confirm that the
schools had a current policy in place and that it had been
adopted formally by the Governing Body, and that every member of staff
had easy access to the policy, considering the importance of the policy.
In response, the Audit Manager noted that the
percentage of the schools that had responded was quite good. She noted that the
fact that some schools had not replied did not mean that the policy had not been adopted. She explained that the Education
Department had committed to re-send the Whistleblowing Policy template to the
schools that did not use the current version and to those that had not
responded. She noted that since the audit had been completed,
that confirmation had been received from additional schools noting that the
Governing Body had adopted the policy.
A member noted that the policy was very
important in the context of schools and although schools had adopted the
policy, staff's understanding of the policy was another matter. In response,
the Audit Manager explained that the purpose of the investigation was to ensure
that the current policy had been adopted by school
Governing Bodies, staff awareness of the policy was not included within the
scope of the audit, although it was a matter to consider in the context of
risk.
A member emphasised that it was important to
receive confirmation from all schools that the current policy was adopted when follow-up work was done by the Internal Audit Service.
Employment Status - GwE
A member drew attention to the fact that GwE,
following the audit, had identified eight individuals from a sample of 12 where
the status of their employment needed to be changed. The member added that there appeared to be a
problem, considering the size of the sample.
The member enquired whether the Controls Improvement Working Group
should consider the audit.
In response, the Head of Finance Department
explained that there was a questionnaire on HMRC's website to help employers to
identify the employment status of individuals as employed or self-employed, in
accordance with the 'IR35: Countering avoidance in the Provision of Personal
Services' taxation rules. He elaborated that the questions could
be interpreted to give different answers and that discussions had been
held with GwE. He explained that the matter had been
addressed by the GwE Joint-Committee with GwE officers acting with
support from Council officers. He noted that the matter had
been considered at the appropriate forum.
A member noted that he was happy that the
matter had been addressed at the appropriate forum but
the Committee needed to receive information after the follow-up work of the
Internal Audit Service. In response, the Audit Manager noted that if there
would be a lack of action, a report would be submitted
to the Committee and the matter would be referred to the GwE Joint-Committee.
A member highlighted that an individual's
employment status depended on the work done and that the rules could be
arbitrary and difficult to interpret. A member added that if an individual
worked for an organisation on a permanent basis, they should be on the payroll.
Purchasing Equipment Through the School
A member referred to a case where a school
had purchased three iPhones on behalf of staff members by means of a loan
arrangement, noting that it was a case of taking advantage of the VAT savings
scheme. In response, the Audit Manager explained that the audit was a responsive
audit following a referral from the Education Department's Finance Unit in
relation to a case in one school and that the audit attempted to establish how
widespread the practice was, in discussions with a Value Added Tax expert. She
elaborated that there were clear guidelines and that it was appropriate for the
school to sell goods on to pupils so that they could save on the VAT element, provided that the goods were to be used regularly in the
classroom and that these goods included portable musical instruments and
devices such as iPads. She noted that sales to teachers and other staff did not
comply with HMRC rules. She confirmed that this had only been
identified in this specific case, and that it was not a common practice
across Gwynedd schools.
Licensing Arrangements
The Audit Manager confirmed that the Gambling Policy Statement had been adopted by the Full Council at
its meeting on 7 March 2019.
Maintenance – Property
A member noted that the Property Maintenance
Unit had gone through the Vanguard process
and that it was disappointing that duplicate payments had
been processed. The member asked
whether the payments were substantial.
In response, the Audit Manager noted that she
was unable to confirm the exact amounts.
She explained that a concern had been raised during the audit in terms
of a lack of distribution of duties within processes and an explanation had
been given, noting that as a result of Ffordd Gwynedd, they would not implement distribution of
duties within their processes. She elaborated that the Unit was striving to
restrict the procedure in terms of processing and paying invoices by only using
the Techforge interface in the future, in
order to avoid the risk of duplicate payments. She noted that some distribution
of duties was now taking place, and individuals who only had administrator
rights had permission to establish new contractors on the system for payment.
In response to an enquiry by a member about
choosing a sample, the Audit Manager noted that the way in which a sample was chosen varied for audits. She elaborated that in
relation to the audit in question noting that transactions and invoices were considered, information was extracted from the
financial ledger and attention was given to trends and substantial payments.
Cyber Security
A member asked whether the training on Cyber
Security was also relevant to members. In response, the Audit Manager noted
that the Information Technology Service had published videos that highlighted
the cyber risks to staff on the Council's intranet. The Head of Finance
Department noted that he was of the opinion that the training on cyber security
was relevant for members, and that he would look into the matter with a view to
offering access to the videos.
Children - Out-of-County Placements
In response to a member’s observation, the
Audit Manager noted that Social Services visited children who were placed out-of-county with care plans, risk assessments
and support in place.
She highlighted that the costs of children's
placements remained high. The member asked about any action being
taken to reduce the costs. In
response, the Audit Manager noted that expenditure on out-of-county placements
contributed to the overspend in the Children and
Supporting Families Department. She
elaborated that overspending in this field was not unique to Gwynedd. She
explained that it had been highlighted, as part of the audit,
that the field was eligible to be on the Department's risk register, and
the Council's corporate risk register. She noted that confirmation had been
received that the field was now included on the risk register.
Street Enforcement
A member noted that the Communities Scrutiny
Committee had addressed the waste enforcement field and that consideration should be given to referring the audit to the attention of
the Scrutiny Committee. In response, the Head of Finance Department noted that
the audit could be referred to the Communities
Scrutiny Committee; however, the work programme and matters to consider was a
matter for the Scrutiny Committee.
RESOLVED:
(i) to accept the report on the work of the Internal Audit for the period of
4 February 2019 to 31 March 2019 and to support the agreed actions that have
already been submitted to the managers of the relevant services;
(ii) to call the officers and relevant Cabinet Members involved with the
follow-up audit, listed below, before the Controls Improvement Working Group:
Ø
Smallholdings
Ø
Arrangements for Children
who are Leaving Care
Ø
Recycling Targets
(iii) that the members appointed
to serve on the Controls Improvement Working Group at the meeting of the
Committee on 14 February, along with Councillor Berwyn Parry Jones and Sharon
Warnes (substitute), serve on the Working Group;
(iv) to refer the Street
Enforcement audit to the Communities Scrutiny Committee for consideration.
Supporting documents: