Agenda a Chofnodion

The Chair welcomed the attendees to the hybrid meeting of the Governance and Audit Committee and apologies for absence were received from County Borough Councillor J Edwards and S Powell.

Derbyn datganiadau o fuddiannau personol gan Aelodau, yn unol â gofynion y Cod Ymddygiad.

Nodwch:

1.    Mae gofyn i Aelodau ddatgan rhif a phwnc yr agendwm mae eu buddiant yn ymwneud ag ef a mynegi natur y buddiant personol hwnnw; a

2.   Lle bo Aelodau'n ymneilltuo o'r cyfarfod o ganlyniad i ddatgelu buddiant sy'n rhagfarnu, rhaid iddyn nhw roi gwybod i'r Cadeirydd pan fyddan nhw'n gadael.

In accordance with the Council’s Code of Conduct, there were no declarations made pertaining to the agenda.

Derbyn cofnodion o gyfarfod blaenorol y Pwyllgor Archwilio a gafodd ei gynnal ar 13 Medi 2021.

It was RESOLVED to approve the minutes of the XXXX as an accurate reflection of the meeting.

Derbyn diweddariadau ar y materion canlynol:

·         Cynaliadwyedd Ariannol Llywodraeth Leol - Effaith Covid-19, Adferiad a Heriau'r Dyfodol 

·         Asesiad Cynaliadwyedd Ariannol - Cyngor Bwrdeistref Sirol Rhondda Cynon Taf

·         Y Diweddaraf am y Rhaglen Reoleiddio - Chwarter 2

Ms S Byrne, Audit Wales, provided the Governance and Audit Committee with an update in respect of the Financial Sustainability Assessment report in relation to Rhondda Cynon Taf County Borough Council.

Members were informed that the findings of the report overall were positive and the Council continues to be well placed to manage its financial sustainability. The Audit Wales Officer informed Members that the report also covers the impact that Covid-19 has had to date on the Council’s financial position noting that the majority of additional expenditure and income losses incurred as a result of the pandemic had been supported through additional funding from Welsh Government. The Officer went on to refer to examples of how the Council has taken account of the impact of the pandemic in its 2021/22 budget strategy and that the Council is very aware of the need to consider the medium to long term implications of the pandemic as part of its strategic planning.

The Audit Wales Officer continued the update by referring Members to the section of the report covering financial planning and noted the overall finding that the Council’s financial planning has served it well to date, which it can build upon to consider how it manages its budget gap over the medium term. The Officer also outlined from the report findings how the Council has modelled the budget gap on a range of assumptions and noted the ongoing discussions in respect of the Council’s estate, workforce and digital strategies.

The Audit Wales Officer indicated to Members that the report sets out 2 proposals for improvement, firstly in respect of the Council needing to be assured that it has contingency plans in place to manage less positive funding settlement scenarios that it has planned for as part of its medium term financial planning and, secondly, around the need for the discussions that are on-going in respect of the Council’s estate, workforce and digital capabilities to be formalised in the Council’s financial planning arrangements.

Mr C Rees – Audit Wales continued the presentation. He referred Members to the section of the report outlining the use of financial reserves and the trend over the past 5 financial years. The Officer indicated that, in line with most local authorities in Wales, there had been an increase in the level of reserves during 2020/21, primarily as a result of additional funding made available to support the impact of the pandemic, and noted the importance for the Council to continue to effectively manage its reserves as it recovers from the pandemic.

The Audit Wales Officer went on to indicate that the Council has a track record of delivering its services within its overall revenue budget, noting that there are overspends in some service areas and the Council understands the causes of these. The Officer also indicated that the Council has identified and achieved savings early and has built these into its base budget requirements, and highlighted the challenge of continuing to deliver significant efficiencies without impacting on front-line  ...  view the full Cofnodion text for item 26.

The Service Director – Finance and Improvement Services presented Members with the Council’s updated Strategic Risk Register for 2021/22.

Members were referred to Section 4 of the report outlining the relevant extracts from the Committee’s Terms of Reference and the CIPFA publication ‘Audit Committees – Practical Guidance Note for Local Authorities & Police, 2018 Edition’.

The Service Director – Finance and Improvement Services highlighted Table 1, Risk Management related information reported to the Governance and Audit Committee, and referred Members to the specific reference for the Committee to be kept up to date with the risk profile and the effectiveness of risk management actions, this having particular relevance to the report being presented to the Committee.

The Service Director went on to draw Members attention to Section 5 of the report which set out the work undertaken to review and update the 2021/22 Strategic Risk Register, with updates being reviewed, challenged and signed off by the Senior Leadership Team and included in the Council’s Quarter 1 performance report presented to Cabinet and the Finance and Performance Scrutiny Committee. The Service Director also provided an overview of the updates incorporated into the 2021/22 Strategic Risk Register as a result of the review process, and Members were directed to the latest Strategic Risk Register position statement, for the Committee’s consideration of the arrangements in place, as set out at Appendix 1 of the report.

The Chair thanked the Service Director for the presentation and the Governance and Audit Committee RESOLVED:

1.    That assurance was in place around the review and update process for the 2021/22 Strategic Risk Register; and

2.    To receive Strategic Risk updates in line with the Committee’s Workplan and Terms of Reference.

Cyflwyniad Trosolwg o Reolau Gweithdrefn Ariannol y Cyngor

The Service Director Finance & Improvement Services introduced the presentation and outlined the purpose of the update was to raise awareness of the content of the Council’s Financial Procedure Rules and to support the role of the Governance and Audit Committee to effectively fulfil its terms of reference. The Service Director also set the context for the update in relation to the scheme of delegation framework in place within the Council.

Members were reminded that the purpose of the Financial Procedure Rules is to provide a framework for managing the Authority’s financial affairs and the key roles were outlined along with an overview of the 5 areas included within the Rules: Financial Management; Financial Planning; Risk Management and Control of Resources; Financial Systems and Procedures; and External Arrangements.

At this point in the presentation, Members of the Governance and Audit Committee were provided with the opportunity to ask questions.

In response to a query regarding the management of reserves being invested in areas that would maximise profit and also investment in fossil fuel companies, the Service Director Finance & Improvement Services fed back that with regard to the Council’s use of specific reserves, the aim is to ensure best value and to maximise the positive impact from the utlisation of the funds in line with the purpose that they have set aside for. The Service Director added that with regard to investment in fossil fuel companies, this is an area of responsibility for the Rhondda Cynon Taf Pension Fund, outside of the remit of the Governance and Audit Committee, and assured Members that as part of the Pension Fund’s governance arrangements, the Fund is committed to responsible investment factors in terms of environmental, social and governance, as part of the overriding principle of obtaining the best possible financial return.

The Group Audit Manager continued the presentation by providing some examples of how the Financial Procedure Rules are linked to audit assignments. The examples discussed were divided into systems based audit assignments and establishment based audit assignments.

The following key headlines were presented during this section:

Systems Based Audit Assignments– Examples

o    Budgetary Control

o    Asset Management

o    School Budgets

o    Pensions / Payroll

Establishment Based Audit Assignments – Examples

o    Primary Schools

o    Comprehensive / All Through Schools

o    Leisure Centres

o    Day Centres / Homes for the Elderly

The Group Audit Manager also outlined some general principles and good practice in relation to the Financial Procedure Rules.

Members were invited to ask questions related to this section of the presentation and positive comments were made regarding the process of segregation of duties amongst officers as part of strengthening checking processes. One Member queried the Asset Register and asked Officers for details of any procedure in place to account for changes in the value of the Council’s assets. The Service Director Finance & Improvement Services advised Members that the assets within the Council’s Asset Register are reviewed on a rolling and scheduled basis, for example, every 5 years, by an external and independent  ...  view the full Cofnodion text for item 28.