Agenda item

Members were informed that this was a 6 month update and Members were assured that improvements had been made. Members of the Committee were advised that

-During 2016/17 5 audit opinions were Unsatisfactory and the Head of Streetscene and City Services had been called into the Audit Committee to respond to concerns.

-During 2017/18 40 audit opinions were issued and 6 were Unsatisfactory. A follow up on the audit of Agency/Overtime –Refuse which resulted in a second unfavourable audit opinion.

-During 2018/19 48 audit opinions had been issued, 10 were Unsatisfactory and 1 was Unsound. A furtherfollow up of Agency/Overtime-Refuse in March 2019 resulted in a Good Audit opinion.

-It was proposed for the report to be noted by the Audit Committee and for the Committee to be advised that the follow up of Trips and Visits within Education Services resulted in a second consecutive Unsatisfactory Audit opinion. As a result the agreed protocol was for the Chief Education Officer and Education management team to be called in to provide assurances that improvements would be made. 

-It was noted that where Llanwern High previously had an unsatisfactory Audit opinion it was now reasonable.

-SGO and Kinships were now reasonable.

The Key Areas that warranted an Unsatisfactory Audit Opinion were as follows:

-Adoptions Allowances were given an unsatisfactory audit opinion. 

-Highways received an unsatisfactory audit opinion due to a number of issues. In relation to City Services it was suggested that the relevant managers needed to be called in to explain what action would be taken to give assurances regarding the level of improvement needed.

-Caerleon Comprehensive received an unsatisfactory audit opinion due to significant issues.

-Bridge Achievement Centre received an unsound audit opinion.

Questions:

An update was requested on the CIPFA Norse report status and it was confirmed that a Draft report was available now, with the final version being reviewed by officers and Cabinet. Hopefully it would be finalised by the next Audit Committee.

Caerleon Comprehensive School was discussed and it was considered as to whether the Head of Education was to be called in to discuss the Unsatisfactory Audit Opinions as it was commented that the forecasted £1.6M budget deficit seemed drastically wrong. It was also commented that it was the Head teacher of the school and Governors who were responsible, not the Head of Education.

The Chair stated that it was now a decision for members as to whether the Committee should call in the Head Teacher and Governors and Head of Education would also have an opinion.

A question was asked by a Member as to what impact this large deficit had on other schools as Bassaleg Comprehensive School had to contribute £30,000 to bail Caerleon School out previously and it was a concern that this would happen again.

The Head of Finance explained that schools have surplus and deficit budgets and that there were schools that do have negative reserves. It had been reported to Cabinet. The Head of Finance also confirmed that another secondary school apart from Caerleon Comprehensive was currently struggling.

It was then discussed how Human Resources and Finance support would be put in place as resources needed to be put in place to work with the school to reverse the situation over the medium term. It was not going to be sorted out over a single year.

The Head of Finance also clarified for the Committee that no school had never been requested to bail out another. Another school could not be asked to bail out Caerleon Comprehensive and Caerleon Comprehensive would be expected to engage in plans to reverse their financial position.

It was also confirmed that financial assistance was not being provided directly to the school, but assistance would be in the form of resources; extra people to support the school. Bailing out the school was not an appropriate message.

The Chair commented on whether the Audit Committee should call in the Head Teacher and Governors as Caerleon Comprehensive had received one unsatisfactory audit opinion so far. It was noted that the school wanted to work towards reversing the current situation which was positive.

The Chief Internal Auditor stipulated that there were significant issues present apart from the financial issues and the Chair enquired as to whether an earlier call into the Audit Committee was appropriate in this case and was there enough to warrant investigation.

The Chief Internal Auditor confirmed that the unsatisfactory audit opinion needed to be followed up and it was justifiable to call in management of the school at present. .

A Member commented that the report showed that things were not being done and it was agreed that a management action plan was in place that addressed the weaknesses but could not be followed up until the 2019/2020 quarter. 

The Member stated that there were significant concerns such as no minutes recorded from the clerk which were not available at the school as required and should be available at all times.

Agreed:

• For the Head Teacher and Governors of Caerleon Comprehensive School to be called in to the next Audit Committee regarding the Unsatisfactory Audit opinion.
• In relation to the follow up of Trips and Visits within Education Services which resulted in a second consecutive Unsatisfactory Audit opinion, it was agreed for the Chief Education Officer and Education management team to be called in to provide assurances that improvements would be made. 
• The Chief Internal Auditor to make the appropriate actions for the above agreed points.

On Page 48 the Committee were asked to view paragraph 23-24 regarding the National Fraud Initiative (NFI) where numerous data had been gathered and investigated.

The Internal Audit Department was responsible for coordinating the process for the Council and this provided assurance as to whether the data was a correct match or was fraudulent.

It was noted that for the 2016/17 exercise a total of 5,123 matches were returned to the Council for investigation which was a significant financial result.

In relation to Housing Benefit, Council Tax Reduction Scheme and Private Residential Care Homes further errors were discovered and investigations found that fees of almost £70,000 had been paid to a residential care placement after the client had died. This overpayment was subsequently recovered.