Joint Audit Committee – Thursday 10 February 2022
Joint Audit Committee
Meeting Minutes
Date: Thursday 10 February 2022
Time: 1pm
Location: Due to Covid-19, the meeting used ‘Teams’ for participants to dial-in.
Committee Members:
Melvyn Neate (MN) Chair
Liz Mackenzie (LM) Vice-chair
Peter Lloyd (PL)
Katherine Pears (KP)
Gordon Manickam (GM)
In Attendance:
Andrew Lowe (AL) Chief Finance Officer, Office of the Police and Crime Commissioner
Richard Croucher (RC) Chief Finance Officer, Hampshire Constabulary
Mike Ottaway (MO) Head of Estate, OPCC
Ben Snuggs (BS) DCC, Hampshire Constabulary
Gemma Farley (GF) Principle Accountant, HCC
Karen Shaw (KS) Chief Internal Auditor, OPCC and HC
Neil Shovell (NS) Chief Internal Auditor, Thames Valley Police
Ace Dann (AD) Strategic Risk Manager, Hampshire Constabulary
Matthew Watson (MW) Head of Organisational Learning, Hampshire Constabulary
Sarah Croft (SC) Manager, Ernst and Young
Richard Andrews (RA) Head of Standards and Compliance (OPCC)
Shirley Semke (SS) Executive Office Manager, OPCC (Minutes)
DECLARATION OF INTERESTS
Members were mindful that, where they believed they had a personal or prejudicial interest in any matter to be considered at the meeting, they should at the time of the debate, declare their interest and consider whether to leave the meeting whilst the matter was discussed. There were no declarations of interest.
APOLOGIES
Jason Kenny, Luke Stubbs, Tim Metcalfe, Lucy Hutson
- CHAIR’S REPORT (ITEM 3)
The Chair had no items to report.
- MINUTES, MATTERS ARISING AND ACTION LOG (ITEM 4)
The minutes of the meeting on 25 November 2021 were agreed as a true and proper record.
Action Log
There were no outstanding actions to review.
- ANNUAL REVIEW OF THE EFFECTIVENESS OF THE JOINT AUDIT COMMITTEE (ITEM 5)
The Chair presented the Annual Report. The Committee members have approved the report and there were no additional questions.
- TREASURY MANAGEMENT STRATEGY (ITEM 6)
GF presented the paper and outlined the key points of the report:
- A new liability benchmark section is the lowest level of debt the PCC could hold.
- External borrowing should be sufficient until 2035 but borrowing may be expected between 2035 -2044.
- There is a decrease in loans of £5 million in the year.
- The investment limit for the year has been increased to £20million.
- A one-year pre-payment contribution to the LGPS (Local Government Pension Scheme) in 2021 resulted in gross saving of £257,000. The plan is to repeat this in 2022.
PL asked how the pre-payment of pension contributions generates savings. A discount of 2% is applied by Pension Savings team with levelling up at the end of the year.
PL referred para to 5.8, where it states there is no requirement to borrow anything more during this period. GF confirmed this is correct.
PL asked for an explanation of the Borrowing Strategy, para 6.1. GF responded.
GM asked what happens in the short-term future with increased costs and inflation. AL confirmed this is all taken in to account in this year’s budget, approved by PCC this week, with a pay increase for police officers, staff and OPCC staff included in the figures.
MN referred to para 4.3, where it states an expectation of inflation peaking at 6% in April 2022. This is now likely to be higher and MN asked about the impact. AL explained that the impact would be positive as we are a net investor.
- INTERNAL AUDIT PROGRESS REPORT 2021/2022 (ITEM 7)
KS presented the progress report. All work assigned to the quarter has been allocated and is in the process of being scoped, and some quarter three reviews are ongoing. Overdue management actions are reducing. A report later in the agenda gives further detail.
MN referred to the outstanding actions in the paper later in the agenda. The Safeguarding audit is not included and he will raise this.
KP asked about the Vetting audit. KS advised this was a variation in to the plan and replaced the Review of Uplift in view of recent national issues.
PL questioned how Members are advised of changes when an item is removed from Audit Plan and if the PCC and CC can decline an audit recommendation for inclusion. KS advised of the risk based approach to annual audit planning. There is a robust planning protocol and open and honest relationships with the OPCC and CC with regular reviews of the plan throughout the year. Changes to the plan are reported in a table at the end of each Progress Report giving an opportunity for JAC attendees to comment. KS added that removing items from the Annual Audit Plan requires justification. AL supported this. MN noted that Members would know if audits had been cancelled through the good relationship with KS and she would liaise if issues arose. KS has a direct reporting line to the JAC Chair and other senior officers meaning checks and balances are in place and emphasised that she is independent.
MN referred to page 9 of report and the TVP collaboration audits removed or postponed due to lack of resources. MN will question NS during the second part of the meeting.
- INTERNAL AUDIT PLAN 2022/2023 (ITEM 8)
KS presented the standard report covering the Internal Audit Charter and Plan for 2022/2023. The Charter meets the requirements of the Public Sector Internal Audit Standards and the Plan is in three sections, OPCC, Shared Services and Collaboration. There has been consultation with key officers to confirm the plan, which remains fluid and is subject to regular review to accommodate new and emerging risks.
LM noted that the SIAP (Southern Internal Audit Partnership) client portfolio is getting longer, asking how work is managed if more clients and partners are added. KS advised the Partnership, hosted by HCC, with key stakeholder partners and a governance structure with seats on a key partnership Board. SIAP do not seek new clients but organisations approach them to take on new partners. There is careful management and a survey of stakeholders to ensure work is effectively managed. Senior Auditors have assigned portfolios; there is then a management level and a pool of staff who rotate through the team with best practice shared across the organisations.
PL referred to the two risk management audits, one for the PCC and one for HC and asked whether it is appropriate to run two separate audits or if they should be looked at together. KS advised of the need for two different processes. These are two distinct registers and reporting structures, therefore it is beneficial to keep them separate.
PL asked about a vetting audit and if it could be expanded to look at all aspects of monitoring and dealing with misconduct of all kinds. KS advised the Professional Standards Department (PSD) is a contributor and there is nothing further planned at this stage. BS outlined the work of PSD and the work to come in future, emphasising that Hampshire has a rigorous vetting process, including links to social media etc. that other forces do not have. PL acknowledged the solid leadership from the top. He still feels this audit would be useful and suggested reviewing this in the next audit plan.
RC suggested a training session for Committee on PSD to include the role of the team and their obligations. Standards and safeguard checks are part of this role.
MW requested a vetting audit be considered after the Sarah Everard case. The outcome of a national inspection is not known until later this year, pending the results it would be good to get reassurance from HMICFRS. There are further inspections on vetting later this year for Hampshire, though no date has been set. A PEEL inspection this year will inform how well arrangements are set up within force.
LM would like to hear how and why things go wrong and lessons learned as part of the training session.
KP welcomed the focus on estates later in the year and the scrutiny of the Health and Safety risk. KP questioned the High number of audit days in the plan – 256, asking if this is likely to reduce. KS confirmed audit days are planned according to risk and need and this figure may reduce.
MN asked about the six days included for the National Fraud Initiative audit. RC confirmed we are required by regulation to contribute to this initiative, with data processed centrally then referred back for investigation. There is no saving in terms of money but it is important to take part.
MN asked who is responsible for sign-off of the Audit Plan. KS confirmed the plan comes to the JAC for information and comments. The CFOs own the plan and have statutory responsibility for sign-off.
Action 99 (RC): to arrange a future training session on the powers and responsibilities of the Professional Standards Department PSD.
- EXTERNAL AUDIT – ANNUAL AUDIT REPORT 2021 (ITEM 9)
SC presented the report showing an unqualified opinion, and advising this concludes the audit work for 2021. The report includes a new section this year with commentary on Value for Money (VFM). The certificate for 2020/2021 is still outstanding. Procedures on the Whole of Government Accounts submission have not been performed yet as the guidance for 2020/2021 is yet to be issued.
MN thanked SC for the unqualified report, and asked if the National Audit Office (NAO) late response will have an effect. SC confirmed it would have no effect.
PL asked about Ernst and Young (EY) fees. SC confirmed the appointment by is by the Public Sector Audit Authority (PSAA). The scale fee is set by the PSAA, with discussion if a variation in fees is required. EY have undertaken additional procedures due to changes in regulations since the fees were set and are in the process of talking with the PSAA around the fee for 2021. AL added that fees are discussed with EY and the PSAA and that an increase is fully expected when they are next tendered. AL added his thanks to SC for the report.
GM asked if EY are providing any services other than audit work. SC advised that non-audit services were provided during 2020/2021, but none during the 2021/2022 period. The approval process for this is fully documented.
The meeting closed at 14.15pm