Agenda and minutes

The Chairman welcomed those present to the meeting and introductions were made.

SCRUTINY BUSINESS

2.1       There had been circulated copies of an extract from the Audit and Scrutiny Committee Petitions procedure. The Clerk to the Council explained the Petitions Procedure to be followed and highlighted the main points.  The Chairman then welcomed Christine Irvine, Lead Petitioner, who was in attendance to present a petition on Nursery Place Discrimination in Peebles and who was accompanied by Judith Currie.  Ms Irvine commenced her presentation by explaining further the information in the supporting statement.  The petitions submission form had been submitted along with a link to the on-line Petition.  Ms Irvine went on to explain that the decision by Scottish Borders Council to roll out increased provision of nursery hours by catchment area was discriminatory.  As of August 2019, children entering placements in Peebles were facing postcode lottery as to whether they would be able to access the additional funded allocation of 600 hours or 1140 hours.  Scottish Borders Council had been asked to roll out the extended hours to those children whose families lived in ‘more deprived’ areas.  The few streets of more deprived families were included but so too were some of the most affluent streets, rendering the target deprived areas first directive as meaningless.  Ms Irvine reported that in a small community such as Peebles, the roll out would have been fairer to offer all nursery children a partial increase in 2019 rather than a full increase to 1140 hours based on catchment area.  The current increase meant that some children were losing out on one extra year of education and given the proven benefits to children, it was unacceptable to deny the rest of the children in Peebles this opportunity.  Ms Irvine went on to explain that the figures from the Scottish Index Multiple Deprivation from 2014 had not taken into account all the new developments within Peebles, so was not a robust enough measure.  A provision should also be in for all eligible 2 year olds to receive this provision and to target the children in need of it most.  The main point raised for concern was that Peebles had been split into two from the north and south side of the town.  A point was also raised that Kingsmeadows Nursery on the south side of the town may already be fully subscribed.  The Chairman summarised the main points of the petitioners:  the allocation had been unfair; concern over the nursery provision filling up; this was not just about Priorsford but the availability of private provision; and concern that the use of 2014 SIMD as a measure of deprivation.  Members asked various questions of the petitioners to gain clarification on the catchment area, the availability and cost of the nursery provision at the moment and in future, the division of the town, and to establish an understanding on what could have been done better. 

2.2       There had been circulated copies of a briefing note by the Chief Officer for Education responding to the Petition who reported that currently all 3 and 4  ...  view the full minutes text for item 2.

Minute of Meeting of the Audit and Scrutiny Committee held on 14 February 2019 to be approved and signed by the Chairman. (Copy attached).

There had been circulated copies of the Minute of the Audit & Scrutiny Committee held on 14 February 2019.

DECISION

APPROVED for signature by the Chairman.

To note progress made on the Action Tracker. (Copy attached).

With reference to paragraph 3 of the Minute of 14 February 2019, there had been circulated copies of the Action Tracker for the Audit and Scrutiny Committee.  It was noted that the Property Assurance report, in connection with issues raised within National Performance Reports by Audit Scotland had been deferred due to further information required.  With regard to the progress made on the Cove Car Park Petition, the Chairman had been advised by the Networks Manager that good progress had been made since 1 November 2018.  It was reported that the order for the introduction of the new TRO restriction on vehicle size to under 3.5 tonnes and the time limit for 48 hours parking came into operation on 21 January 2019.  The proposed review of speed limits, aimed at reducing the speed limit on the Cove road to 30mph, was due to be considered.  The signage “Unsuitable for HGV/buses and “No Through Road” had been manufactured in February 2019 and would be erected.  A further review found that the current layout was optimum in terms of the provision of spaces. The creation of a formal turning circle within the car park for larger vehicles would result in the loss of several spaces.  It had been confirmed by the Estates Section that the car park was owned by the Council.  With regard to the erection of a “Slow Pedestrian” sign, this was currently under consideration as part of the ongoing survey.  It was agreed, in the interim, that the existing informal signing of resident’s spaces would remain.  Network staff would undertake ad hoc surveys of the car park and the access road which had shown no issues with car park occupancy and no pedestrian use of the route.  However, they would continue to observe the Spring and Summer usage.  Ms Stacey advised that following today’s meeting any items marked as completed would be removed from the action tracker.

DECISION

NOTED the:-

(a)       Action Tracker; and

(b)       progress made with the Cove Car Park recommendations

AUDIT BUSINESS

Minute of Meeting of the Special Audit and Scrutiny Committee held on 26 February 2019 to be approved and signed by the Chairman. (Copy attached).

There had been circulated copies of the Special Audit & Scrutiny Minute of 26 February 2019. 

DECISION

APPROVED for signature by the Chairman.

Consider a report by Chief Officer Audit & Risk on findings from recent work carried out by Internal Audit, including the recommended audit actions agreed by Management to improve internal controls and governance arrangements, and Internal Audit work currently in progress.  (Copy attached).

6.1       With reference to paragraph 3 of the Minute of 14 February 2019, there had been circulated copies of a report by the Chief Officer Audit and Risk which provided details of the recent work carried out by Internal Audit and the recommended audit actions agreed by Management to improve internal controls and governance arrangements. The work Internal Audit had carried out during the period 15 December 2018 to 22 February 2019 was detailed in the report.  During the period a total of six Final Internal Audit reports had been issued.  There had been one recommendation made which related to one of the reports which had been accepted by Management for implementation.  An Executive Summary of the final Internal Audit reports issued, included audit objective, findings, good practice, recommendations (where appropriate) and the Chief Officer Audit and Risk’s independent and objective opinion on the adequacy of the control environment and governance arrangements within each audit area, was shown in Appendix 1 to the report.  The SBC Internal Audit function conformed to the professional standards as set out in Public Sector Internal Audit Standards (PSIAS) (2017) including the production of this report to communicate the results of the reviews. 

6.2       Ms Stacey highlighted some aspects of the Internal Audit Assurance Work In Progress: the programme of work showed that the Winter Service timescale, as part of the transformation programme, had moved and had been built into the audit plan 2019/20; and the engagement in the design, development and delivery of the Contract Management Framework by the Contract Management Working Group, incorporating the ICT Contract, would be launched in 2019 and a report would be produced in 2019/20.  Reference was made by Ms Stacey to each of the Internal Audit Final Assurance Reports detailed in the Appendix to the report: Capital Investment; Financial Planning; Private Sector Landlord Registration; Adult Social Care Self-Directed Support; Protective Services; and Information Governance.  In response to a question on how SBC compared to other Councils with regard to workforce issues raised, Ms Stacey stated that the issues were amplified in rural areas and Protective Services Management were liaising with other Councils and national bodies to consider actions to address the challenges which would continue to be recorded through the people planning process. Mr Robertson advised that the financial planning process 2019/20 lessons learned results would be reviewed by Corporate Management Team and would be brought back to this Committee for review.  In response to a concern about lack of progress with implementing some audit recommendations by Management, and after a full discussion on the Internal Audit follow-up process, Members requested a further recommendation be added to reflect the discussion on the escalation process of overdue audit recommendations to Corporate Management Team. The Chief Financial Officer stated that this recommendation would be highlighted to Corporate Management Team.

DECISION:

(a)        NOTED:-

(i)      the final assurance reports issued in the period from 15 December 2018 to 22 February 2019 associated with the delivery of the approved  ...  view the full minutes text for item 6.

Consider overview report and plan by Audit Scotland on how they will deliver their external audit for Scottish Borders Council for the year ended 31 March 2019. (Copy attached).

There had been circulated copies of overview report by Audit Scotland for the year ended 31 March 2019 providing an overview of the planned scope and timing of the external audit of Scottish Borders Council which was carried out in accordance with the International Standards on Auditing Code of Audit Practice and other relevant guidance.  The Plan identified Audit Scotland’s work to provide an opinion on the financial statements and related matters and met the wider scope requirements of public sector audit, including the new approach to Best Value.  The wider scope of public audit contributed to conclusions on the appropriateness, effectiveness and impact of corporate governance, performance management arrangements and financial sustainability.  Ms Woolman, Audit Scotland explained that a number of risks to the Council had been identified and that these had been categorised into either financial or wider dimension risks along with the planned audit work for each and were detailed in the report.  Ms Woolman went on to summarise the 2018/19 audit outputs, materiality values and referred to the financial statements timetable which took account of submission requirements and planned Audit and Scrutiny Committee dates.  Ms Woolman advised that the review of Internal Audit had concluded that the Internal Audit function operated in accordance with the Public Sector Internal Audit Standards and had sound documentation standards and reporting procedures in place.  Ms Woolman highlighted that their planned work for Scottish Borders Council this year would focus on the Council’s arrangements for demonstrating Best Value in vision and leadership, partnership and collaborative working, progress with its transformation programme, performance, outcomes and procurement. The results of this would be reported in the Annual Audit Report.  Ms Woolman answered a question on clarification of materiality, explaining that the concept of materiality in planning and performing was applied and the calculation of materiality values for Scottish Borders Council were detailed in Exhibit 3 to the report.  The Chairman thanked Ms Woolman for the input from and advice given on behalf of Audit Scotland.

DECISION

NOTED the report.

Consider overview report and plan by Audit Scotland on how they will deliver their audit for Scottish Borders Pension Fund for the year ended 31 March 2019 including the opinions on the financial statements.  (Copy attached).

There had been circulated copies of a report by Audit Scotland providing an overview of the planned scope and timing of the external audit of Scottish Borders Pension Fund which was carried out in accordance with the International Standards on Auditing Code of Audit Practice and other relevant guidance.  The Plan identified Audit Scotland’s work to provide an opinion on the financial statements and related matters and met the wider scope requirements of public sector audit.  The wider scope of public audit contributed to conclusions on the appropriateness, effectiveness and impact of corporate governance, performance management arrangements and financial sustainability.  Ms Woolman explained that a number of risks to the Scottish Borders Pension Fund had been identified and that these had been categorised into either financial or wider dimension risks along with the planned audit work for each and were detailed in the report. Ms Woolman went on to summarise the 2018/19 audit outputs and advised that the Audit Scotland fee for 2018/19 in relation to the Scottish Borders Pension Fund was £20,580 whilst noting that a supplementary fee could be added as detailed in paragraph 8 of the report.  Materiality values and a financial statements timetable were detailed in the report, which took account of Audit and Scrutiny Committee dates.  Mr Robertson responded to a question relating to the Pension Fund and advised that the asset allocation strategy is a maturing fund and investments were increasing to pay pensions and performance would be under regular review by the Committee.  The Chairman thanked Ms Woolman for the input from and advice given on behalf of Audit Scotland.

DECISION

NOTED the report.

Consider a report by Chief Officer Audit & Risk on the updated Internal Audit Charter for approval that defines the terms of reference for the Internal Audit function to carry out its role and to enable the Chief Officer Audit & Risk to prepare an annual internal audit opinion on the adequacy of the Council’s overall control environment.  (Copy attached).

With reference to paragraph 7 of the Minute of 19 March 2018, there had been circulated copies of a report by the Chief Officer Audit and Risk providing the Committee with the updated Internal Audit Charter for approval.  The Charter defined the terms of reference for the Internal Audit function to carry out its role to enable the Chief Officer Audit and Risk to prepare an annual internal audit opinion on the adequacy of the Council’s overall control environment.  The definition of Internal Auditing within the Public Sector Internal Audit Standards (PSIAS) was “Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations.  It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes”.  In accordance with the PSIAS, the purpose, authority and responsibility of the Internal Audit activity must be formally defined in an Internal Audit Charter, consistent with the Definition of Internal Auditing, the Code of Ethics and the Standards.  The Chief Officer Audit and Risk, as the Chief Audit Executive at Scottish Borders Council, must periodically review the Internal Audit Charter and present it to senior management (Corporate Management Team) and the board (Audit and Scrutiny Committee) for approval.  The Internal Audit Charter was shown in Appendix 1 to the report and had been updated by the Chief Officer Audit and Risk in conformance with the PSIAS for approval by the Audit and Scrutiny Committee to ensure that Internal Audit was tasked to carry out its role in accordance with best Corporate Governance practice.  Ms Stacey advised that the Internal Audit Charter had been updated to explicitly emphasise the application of the Code of Ethics to fulfil a quality improvement action which had arisen from the internal self-assessment 2018/19.  In response to questions, Ms Stacey advised that Internal Audit had access to all records (both paper and electronic) of the Council, Pension Fund, SB Cares and Integration Joint Board (IJB) to comply with the audit standards.  Monthly meetings were also held with the Chief Financial Officer to discuss any relevant matters.

DECISION

AGREED the updated Internal Audit Charter as shown in Appendix 1 to the report attached to the agenda.

Consider a report by Chief Officer Audit & Risk on proposed strategic direction to deliver Internal Audit assurance and support services to the Council, the Pension Fund, SB Cares and the Health and Social Care Integration Joint Board, and on proposed Internal Audit programme of work 2019/20 to enable preparation of the annual opinions on the adequacy of each organisation’s overall control environment.  (Copies attached).

10.1     With reference to paragraph 8 of the Minute of 19 March 2018, there had been circulated a report by the Chief Officer Audit and Risk seeking approval to the proposed Internal Audit Strategy and Internal Audit Plan 2019/20 to enable the preparation of the annual opinions on the adequacy of the overall control environment for Scottish Borders Council, SB Cares, Scottish Borders Pension Fund, and Scottish Borders Health and Social Care Integration Joint Board.  Ms Stacey explained that the Internal Audit function followed the professional standards as set out in Public Sector Internal Audit Standards (PSIAS) effective 1 April 2013 (updated 2017) which required the establishment of risk based plans to determine the priorities of the Internal Audit activity and that these plans were sufficiently flexible to reflect the changing risks and priorities pertaining to each organisation.  The Internal Audit function also included the requirement to provide senior management and members with independent and objective assurance which was designed to add value and improve the organisation’s operation. In addition, the Chief Officer Audit and Risk was also required to prepare an Internal Audit annual opinion on the adequacy of the organisation’s overall control environment.  The background to the Internal Audit Strategy was set out in Appendix 1 to the report.  Ms Stacey explained that the Internal Audit Annual Plan 2019/20, detailed in Appendix 2, set out the range and breadth of audit areas and sufficient work within the audit programme of work to enable the Chief Officer Audit and Risk to prepare an Internal Audit annual opinion.  Key components of the audit planning process included a clear understanding of the organisation’s functions, associated risks, and assurance framework.  There were staff and other resources currently in place to achieve the Internal Audit Annual Plan 2019/20 and to meet its objectives.  

10.2     The Committee discussed the report and Ms Stacey advised that there had not been significant changes in terms of the Internal Audit Strategy with the compliance of the code of ethics being more explicit and confirmed that the proposed coverage in the Internal Audit Annual Plan would enable assurance to be provided to the Committee and Corporate Management Team though the plan should be considered to be flexible and will be periodically reviewed, and amended as required, to reflect any new arrangements or changing risks and priorities.  In response to a question on any changes from previous years on consultancy work, Ms Stacey advised that Internal Audit has increasingly been involved as a ‘critical friend’ in various change and transformation projects on request by members of Corporate Management Team whilst maintaining clarity on the statutory role of Internal Audit to fulfil its provision of independent and objective assurance as has been reflected in the Internal Audit Strategy. 

DECISION

AGREED:-

(a)       the Internal Audit Strategy as detailed in Appendix 1 to the report; and

(b)       the Internal Audit Annual Plan 2019/20 detailed in Appendix 2 to the report.

MEMBER

Ms Barnett left the meeting during consideration of the above item  ...  view the full minutes text for item 10.