Agenda and minutes

Governance and Audit Committee - Thursday, 11th November, 2021 5.00 pm

Contact: Pamela Tasker  Governance Officer

No. Item


Declarations of Interest




Minutes of the Last Meeting 29 July 2021 pdf icon PDF 279 KB



That the minutes from the 29 July 2021 were a true and accurate record.

The Chair noted that on page 7 of the minutes there were actions from the last meeting for the Senior Finance Business Partner.

The Assistant Head of Finance confirmed that the accounts had been adjusted.



Corporate Risk Register (Quarter 1 April to June) pdf icon PDF 469 KB

Additional documents:


The Council’s Corporate Risk Register monitors those risks that may prevent the Council from achieving its Corporate Plan or delivering services to its communities and service users in Newport.

The Corporate Director -Transformation & Corporate Centre presented the report to the committee and reiterated that the role of the committee was to monitor the arrangements in place and make recommendations to Cabinet based on those arrangements.

The Committee previously received a report regarding the Local Government Elections Act along with the changes to the remit of the Governance and Audit Committee but for this agenda item it remained unchanged, and it involved monitoring the Councils arrangements associated with the Corporate Risk Register and the way that risks were managed.


Main points of note:

·       There were 18 corporate risks that were carried into Quarter 1 of this year which remained unchanged from the previous quarter. The one risk that had changed was related to the Covid 19 pandemic and there was a reduction in risk due to the Council’s position in Quarter 1. That risk was subject to change that was outside the control of Newport City Council based on the epidemiological transmit of the virus and current mitigations in place from Welsh and Central Government.

·       There had been previous recommendations from the Committee around a ‘deep dive’ approach to some of the risks and the report picked up the first part of that deep dive from the Corporate Management Team into the risks around highway infrastructure.

The Chair mentioned that although there had been a reduction in risks it was still hitting the red zone. The Strategic Director agreed and said that it was being monitored through the Corporate Risk Register and the figures have increased again so the risk would increase in subsequent quarters.




The Committee endorsed the report.



Audit Wales Regulatory Bodies- 6 Month Update pdf icon PDF 305 KB


In May 2021, the Governance and Audit Committee had updated its Terms of Reference to align with the Local Government & Elections (Wales) Act 2021. In its Terms of Reference one of the Committee’s function is to receive and consider inspection reports from external regulators and inspectors and to make recommendations and where monitor implementation and compliance with agreed action plans. The Governance and Audit Committee was asked to consider the contents of this report of the regulatory activity completed in the first six months and the assurances that where recommendations have been raised the Council was taking necessary action.

The Corporate Director -Transformation & Corporate Centre presented the report to the Committee.

Main Points

·       This was the first report presented to the committee and covered the regulatory activity of Audit Wales, Estyn and Care Inspectorate Wales. On page 64 of the report contained a table which included Audit Wales activity on a national and local level with a series of recommendations and actions around local work in the report.

·       In subsequent meetings the Committee would be receiving updates on those actions to monitor progress.

·       In relation to Care Inspectorate Wales there have been two inspections on Childrens homes in the last 6 months with final reports yet to be finalised.

·       In relation to Estyn, they have undertaken a national thematic review detailed on pages 67-68 of the report.

The Chair stated that the report was for acceptance, and it could not be amended in any way.

The Corporate Director confirmed that the report was a log of inspections undertaken by the regulatory bodies and the actions associated with them. At the next meeting there would be an update so the Committee could query the progress against those actions.

Councillor Jordan observed the same that the report was a benchmark and further updates would be provided at the next meeting. 



The Committee endorsed the report.



Annual Report on Compliments, Comments and Complaints Management 2021 pdf icon PDF 1 MB


In May 2021 the Cabinet agreed the new Compliments, Comments and Complaints policy for the Council. As part of the requirements of the Governance and Audit Committee it was now responsible to Make reports and recommendations in relation to the authority’s ability to handle complaints effectively.

The report was presented to the Committee by the Complaint Resolution Manager. This was the first report to the Committee and provided an overview of how the Council managed compliments, comments and complaints and its performance in the period 2020-2021.

Main points

·       Other reports have been completed on the same matter for several years which have gone through Cabinet and all annual statistics have been passed to the Chief Internal Auditor.

·       Complaints to schools were reported separately as they were subject to a distinct statutory framework. However, complaints were included regarding education services e.g., administrative processes.

·       The policies and procedures in place for compliments, comments and complaints complied with the legislative requirements of the Welsh language measures and standards.

·       Social services statutory requirements remained in operation alongside the corporate policy.

·       As an overview, customers were able to raise a formal complaint over the phone, online, or using the app on their phone or face to face. Customers were able to submit a complaint 24/7 and it offered increased accessibility and convenience. Feedback and compliments could also be logged.

·       The Ombudsman was focused on ‘getting it right’ and having trained and competent staff, and free staff training was available through the Public Services Ombudsman Wales.

·       The Complaints team was in the process of creating their own training which was modular based and complimented with E-Learning linking in with organisational development which was compulsory training.

·       There were 174 compliments received, 3111 comments and 222 complaints and through the Councils process 208 complaints were resolved before going to the Ombudsman. Out of those complaints the Ombudsman only intervened with 5 complaints, so this was very low.

·       Across all 22 local authorities complaints were down by 12.5% compared with the previous year but were generally up from frontline services with the pandemic playing a role in this as the volume of complaints have gone up.

·       However, the Ombudsman’s focus was on feedback and having several accessible routes for customers to make a complaint as well as receiving feedback from complainers on how the complaint was dealt with.

·       A questionnaire was now sent to people who complained in the hope that feedback would be provided on how well the complaints team was performing.

The Chair asked was there any trends observed.

The Complaint Resolution Manager stated that for the last 12 months it was difficult to see any trends but the main one was that in relation to City Services who offered a lot of services, there was a lot of decision making and policies introduced to keep the public safe. A lot of people made complaints in relation to making appointments to attend the recycling centres.

A lot of complaints were also received in terms of accessibility  ...  view the full minutes text for item 5.


Statement of Accounts 2020/2021 pdf icon PDF 519 KB

Additional documents:


The Head of Finance requested that item 11 Audit of Financial Statements Report 2020/2021 be included in this item.

The Assistant Head of Finance stated that their colleague Mark Howcroft (Assistant Head of Finance) would go through the presentation 7b to give an overview of the accounts. The Audit Wales Manager from Audit Wales would go through the ISA260 report which was Audit Wales view on the accounts.

Then to conclude item 7 would be returned to as the report showed the teams responses to the issues identified within the ISA260 report and a list of misstatements that were identified and corrected.

Main Points

·       The Assistant Head of Finance stated that the presentation explained the summary position as the draft set of accounts were authorised for publication on the 2ndJuly 2021 which was delayed due to Covid, and staff sickness. The necessary notices were published on the website explaining the reason for delay as required by the legislation. The accounts went on display to the public between 26 July 2021 and 20th August 2021 with no responses received.

·       A separate paper referred to at the start of item 7 detailed the extent of queries raised in respect of the draft account presentations and this covered off the 4 points raised in the minutes of the last meeting by the Chair.

·       The final accounts reflected the amendments made during that exercise and in conjunction with the review by Audit Wales whose findings were detailed in the ISA260 report which was to be considered at the end of the presentation.

·       Audit Wales concluded that the accounts were a true and fair view.

·       The Committee were asked to approve the final accounts which would then result in them being certified by the Head of Finance and the Chair.

·       A new copy would be sent to the Acting Chair to be signed.

·       There were 5 key statements in the front half of the document that were the Council’s core document, and the income and expenditure captured all the revenue activities of the Council. The expenditure of funding analysis was important as members received management information during the year in terms of performance against the budget and this could be different to the comprehensive income and expenditure statement. It was explained that these technical documents included things like fixed asset movements etc, which was in the future of the quarterly monitoring, so that expenditure in funding analysis reconciled between the two documents.

·       The Movement in Reserves statement being the health of the organisation to deal with contingencies and unforeseen eventualities.

·       The Balance Sheet and fixed assets aspects was a key point as the Council had a lot of assets which auditors would look at because of the significance of the figures involved.

·       The Cash Flow statement showed the movements in cash and cash equivalents of the Authority during the year.


The key message was that there was an underspend of £40million as reported to Cabinet in June 2021 and this had not  ...  view the full minutes text for item 6.


Treasury Management Report pdf icon PDF 594 KB


This report is to inform Governance & Audit Committee of treasury activities undertaken during the period to 30 September 2021 and it confirmed that all treasury and prudential indicators have been adhered to in the first half of the financial year.

The Assistant Head of Finance presented the report to the committee and explained that this report was one of two compliance reports received by the Committee during the year regarding the Treasury Strategy that was set at the start of the financial year, and it was part of the role strategy document. It sought to reassure that performance measures have been met.

Main Points:

·       The bank base rate remained at 1%.

·       There was still a long-term borrowing need mitigated by internal borrowing.

·       Borrowing levels have decreased by £9million on the previous year end figure, due to a proportion of loans redeemed through equal instalments of principle and the principle reduced the loans outstanding.

·       There was also a large maturity loan that was redeemed which was not replenished.

·       Investments also increased by £4.1 million to £28.9 million against the equivalent year end position.

·       Regarding LOBOs, no loans were called during the period.

·       There was a revision to the financial code which constrained local authorities that use their treasury function to invest more yield or returns. This meant that they're no longer able to use the Public Works Loan Board as a cheap source of funding and that wherever the authority is in that condition that there were quite significant and punitive penalties.

·       This report would then go to Cabinet and Council.


Committee members did not wish to add any comments to the report.



The Governance and Audit Committee noted and endorsed the report.




Audit Wales Financial Sustainability Report pdf icon PDF 296 KB

Additional documents:


The Head of Finance presented the report to the Committee.

Main Points

·       This was the second year that Audit Wales report was completed and would now be an annual assessment.

·       Report was very positive and showed the Council was in a strong position.

·       Challenges were noted and the Council were starting to put in resources and

one is the development of a sustainable medium term financial plan. The Councils new Corporate Plan would also be developed with the new administration after next May 2022.

·       Another issue in the report was high levels of borrowing and the higher levels of commitment to borrow that the Council had with a potential future sustainability challenge that could bring if there was a downturn in funding.

·       The Audit Manager of Audit Wales added that these local reports were being issued to each of the 22 authorities and this fed into a national summary which was published in September 2021 and was available on the Audit Wales website. 




The Committee noted and endorsed the report.





Progress Against Internal Audit Plan 2021/22 Quarters 1 & 2 pdf icon PDF 352 KB


The Chief Internal Auditor presented this report to the committee.

Main points:

·       This reported related to the first 6 months of the year.

·       The report was in two parts in relation to the performance of the team and the opinions which were given to committee members to provide the assurance that there were adequate arrangements in place across all Council services in terms of internal control, governance, and risk management.

·       There were 8 staff members with 7 staff working at the moment supported by an external provider to help complete the plan.

·       Covid was still having an impact on audit delivery as site visits and school visits were on hold; discussions were being held with education management to revisit schools which would probably be in Quarter 4 of this financial year. This would be reported back to Committee in due course.

·       In terms of performance, the main indicators were that the team completed the agreed audit plan in accordance with the target. This was set out in paragraph 15 which showed that 30% of the plan was achieved as of the 30thof September.

·       Issuing of draft reports was 6 days against a target of 10 days and the issuing of finalisation reports was 4 days with a target of 5 days which was reassuring.

·       In terms of the outstanding reports that were in draft at the end of March 2021, 12 out of the 14 were finalised.

·       To give members reassurance the team were still promoting financial management across all service areas in the training they provided and raised awareness of the expectations of the financial regulation of the organisation.

·       There were 9 Audit opinions issued at the end of September: with 3 good, 6 reasonable and no unsatisfactory opinions.

·       There were 5 grant claim audits all of which were unqualified and compliant with the grant provider.

·       The team were also involved in the collation and publication of the Annual Governance Statement.

·       Members were referred to the appendices which set out a year-on-year comparison and a quarter-by-quarter comparison on the key performance indicators for information.

·       Audit work was limited as the team were occupied with counter fraud issues in relation to Welsh Government grants and TCP as a support, so the PI’s were not reported until 2021 and this would pick up in 2022.

·       30% completion of the plan was on track with the target of 30%.

·       Appendix D sets out some definitions of what audit opinions related to in terms of the level of assurance and what unqualified and qualified means in terms of the reports which the team were involved with.


The Chair asked whether the team were able to cover out the workload for the rest of the year and the Chief Internal Auditor confirmed that this would need to be reassessed as there was a long-term sickness in the team so management would be consulted in the next few weeks to see what could be achieved. This would be reported to Committee in January 2022.  ...  view the full minutes text for item 9.


Audit of Financial Statements Report 2020/2021 pdf icon PDF 381 KB


As discussed under item 7.



SO24/Waiving of Contract SOs: Quarterly report reviewing Cabinet/CM urgent decisions or waiving Contract SOs (Quarter 2, July to September) pdf icon PDF 245 KB

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The Chief Internal Auditor presented the report to the Committee.

This report was in relation to urgent reports which is Standing Order 24 or waiving of Contract SO’s. For the quarter July to September there was one report that went through as an urgent decision. This related to Post 16 home to school transport costs.

A Cabinet member made the decision and within the report there was an appropriate justification for the urgent decision that was recorded appropriately.

The Chief Internal Auditor was satisfied with that recording.


The Governance and Audit Committee noted and endorsed the report


Work Programme pdf icon PDF 147 KB


The Chair stated that there was a Committee in May 2022 during the next Council election and whether this committee would go ahead.

The Governance Support officer stated that future dates for all committees were agreed at Council AGM in May so this would be checked and confirmed as to whether the May committee would go ahead.

The Chief Internal Auditor stated that the Progress against the Internal Audit Plan (Quarter 2) would need to be removed for January 2022 as it was reported at this meeting.


The Governance and Audit Committee noted and endorsed the report.



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