Agenda, decisions and minutes

To approve the minutes of the meeting held on 13 July 2016 (AG3) and to receive information arising from them.

Councillor Hallchurch asked if the expenses compliance process referred to under 41/16 had been adopted.  Mr Dyson reported that a scheme will be piloted shortly to see if it is necessary or adds any value to the process.

Councillor Bartholomew asked if there was a report on the phishing attack as promised under item 46/16.  Mr Graham gave a verbal report.  He had checked the incident with ICT and confirmed that this was a planned attack to test the system.  Very few people knew about the attack in advance which is why staff may initially have denied that it was a planned attack.  There was a high volume of reaction from staff and the exercise was judged to be successful.

The minutes of the meeting of 13 July 2016 were approved and signed.

2.10 pm

Presentation by the Director for Transformation.

Mark Stone, Interim Director for Transformation, made a presentation on the Transformation programme with the slides to be circulated to Members afterwards.

He described how the process is focusing on outcomes and the most cost-effective way to achieve them.  The discussions on unitary proposals had actually helped the Transformation process.  The aim is to have detailed proposals to deliver the required savings in 2017/18 followed by a three year programme of activity.  He proposed quarterly public reporting.

Councillors supported the proposal for quarterly reporting.  Mr Stone confirmed that a quarterly report would show the monthly steps.

Councillor Bartholomew questioned if savings could be made without widespread public dissatisfaction and gave the current high rate of complaints about pot holes and grass cutting as examples.  Mr Stone responded that other Local Authorities had managed to make savings without incurring too much negative response and we should learn from their example.

Councillor Hards asked if the Transformation process had been disrupted by recent staff changes at Deputy Director level.  Mr Stone stated that one of his observations was that the Council was currently over reliant on individuals rather than sound process and one of the opportunities from the transformation programme was to develop a more devolved model of accountability and staff changes were often helpful in this.

RESOLVED: that the Director for Transformation will report to this Committee quarterly.

2.50 pm

Report by the Chief Finance Officer (AG6)

The Accounts and Audit Regulations 2015 require the Chief Finance Officer to sign the Statement of Accounts 2015/16 no later than 30 June 2016 and certify that they give a true and fair view of the County Council’s financial position and income and expenditure for the year. The Regulations require the Statement of Accounts to be considered by a committee of the Council by 30 September 2016 and, following that consideration, to be approved by a resolution of that committee.

The Committee is RECOMMENDED to:

a)            Note the Summary Accounts 2015/16 at Annex 1;

b)           Consider and approve the Statement of Accounts 2015/16 at Annex 2;

c)            Consider and approve the Letter of Representation 2015/16 for the Oxfordshire County Council accounts;

d)           Consider and approve the Letter of Representation 2015/16 for the Oxfordshire Pension Fund accounts;

e)            Agree that the Chief Finance Officer, in consultation with the Chairman of the Committee, can make any further changes to the Statement of Accounts 2015/16 and/or the letters of representation that may arise during completion of the audit.

The Committee had before them a report (AG6) which presented the final accounts 2015/16.

Mrs Skivington introduced the report and confirmed that the draft accounts had been signed off by the Chief Finance Officer on 29 June 2016 in accordance with the Accounts and Audit Regulations 2015.  The audit of the accounts was nearly finished.  The Narrative Report is a new aspect of the accounts since last year.

In response to questions Mrs Skivington and Mrs Baxter made the following points:

·         Depreciation is recorded annually in the accounts and is a measure of the wear and tear on buildings whereas revaluations take place at least every 5 years.

·         The soft loans referred to on Page 57 of the agenda pack are given for policy reasons such as adaptations to homes to accommodate foster children.

·         A question was raised in relation to the interest rate payable on the Council’s LOBO loans referred to on Page 120. The average borrowing rate for the Council’s LOBO loans, is less than the average borrowing rate for loans from the PWLBThe LOBO with Barclays of £5m has now changed to a fixed rate loan.  The only impact for the Council will be greater certainty.

·         Materiality (Page 244, point 4) is not based on a fixed amount and may vary according to the sensitivity of the item involved.

·         Deposits with overseas banks are with their UK branches and are denominated in sterling so there would be no windfall if sterling strengthened against other currencies.

·         OxLEP loans from the Growing Places Fund are decided by the Partnership itself and are expected to be repaid to allow for further support to business.

The Chairman proposed that point e) in the recommendation be amended to include consultation with the Spokesperson for the Opposition.  This was agreed.

RESOLVED: to

a)            Note the Summary Accounts 2015/16 at Annex 1;

b)            Consider and approve the Statement of Accounts 2015/16 at Annex 2;

c)            Consider and approve the Letter of Representation 2015/16 for the Oxfordshire County Council accounts;

d)            Consider and approve the Letter of Representation 2015/16 for the Oxfordshire Pension Fund accounts;

e)            Agree that the Chief Finance Officer, in consultation with the Chairman of the Committee and the Spokesperson for the Opposition, can make any further changes to the Statement of Accounts 2015/16 and/or the letters of representation that may arise during completion of the audit.

3.10 pm

A representative from the external auditors, Ernst & Young will attend to present the following item:

·         Final Accounts Audit

·         Oxfordshire Pension Fund Annual Audit Results Report (Supplementary Report)

Under the provisions set out in Section 100B(4) of the Local Government Act 1972 (as amended) the Chairman of the meeting is of the opinion that the following report Oxfordshire Pension Fund Annual Audit Results Report can be taken under Agenda Item 7 as urgent business by reason of the requirement for the Committee to consider the report by 30 September 2016.

Mr King updated the Committee on the Final Accounts Audit.  He stated that they were focussing on expenditure.  So far there have been no misstatements detected.

The Auditors are considering an objection received from a local elector in relation to LOBO loans.  About 24 other Local Authorities have received similar objections.

Ms Baxter responded that the objections are mostly focused on the interest rate.  OCC’s rate is quite favourable.  She stated that she was confident that the related decisions were in line with procedures and strategies.

Mr King drew the Committee’s attention to a key finding on Page 257 in relation timeliness of reporting.

Mr Witty introduced the Oxfordshire Pension Fund Audit Report and apologized for the delay in sending the report which led to its late circulation for the meeting.

Ms Baxter stated that the delays in issuing statements referred to on Page 8 were due to two other employers and not the IBC.

RESOLVED: that the Committee noted the reports.

3.30 pm

The Chief Legal Officer reports as follows:

The County Council has approved and adopted a code of corporate governance, which is consistent with the principles of the CIPFA/SOLACE Framework ‘Delivering Good Governance in Local Government’.  Corporate Governance is the framework of accountability to users, stakeholders and the wider community, within which organisations take decisions and lead and control their functions, to achieve their objectives.  The quality of corporate governance is a key determinant of the quality of the services that we provide.  The Annual Governance Statement explains how the County Council has complied with the Code in 2015/16 and meets the requirement of the Accounts and Audit Regulations 2015 to produce such a Statement.  

The Annual Governance Statement includes an update on actions that were to be carried out during 2015/16.  It also lists new actions for 2016/17.  The separate statement of assurance needed by the Fire and Rescue service is also mentioned.  

As previously reported to the Committee, the timing of the Committee receiving the Annual Governance Statement (AGS) has changed as a result of the requirement to publish the Annual Governance Statement alongside the draft statement of accounts prior to the start of the public inspection period. Consequently, the Audit Working Group considered the AGS on 26 May 2016 to ensure a version could be published with the accounts.  Therefore the Committee is now receiving the published version in September and not a draft version in July as was the previous practice before the 2015 Regulations took effect.

To avoid duplication, the Annual Governance Statement has only been included once within the agenda, under the item on the Statement of Accounts.  Consideration of the Statement under this item will therefore require cross-reference to those papers.

The Committee is RECOMMENDED to approve the Annual Governance Statement 2015/16, subject to the Chief Legal Officer making any necessary amendments in the light of comments made by the Committee, after consultation with the Leader of the Council, Chief Executive and Section 151 officer.

The Statement was presented by Mr Graham.  It ensures our compliance with relevant codes.  It lists new actions for 2016/17 and has already been before the Audit Working Group.

Councillors asked about this Committee’s previous proposal to have a scrutiny committee on adult social care.  Mr Graham responded that it had been discussed by the political group leaders and they believed that it was not a good time to make such a change with a new Council due to be elected next year.  They also thought it would be better to have a more general review of scrutiny.

The Chairman asked if the report from the review can come to this Committee before it goes to Cabinet.  Mr Graham said that he would ask the relevant officers.

RESOLVED: to approve the Annual Governance Statement 2015/16, subject to the Chief Legal Officer making any necessary amendments in the light of comments made by the Committee, after consultation with the Leader of the Council, Chief Executive and Section 151 officer.

3.50 pm

Report by the Chief Finance Officer (AG9)

In July 2016 the Committee received a report outlining the Financial Control Improvement Plan established to address weaknesses previously identified and to provide efficient financial management systems, policies and procedures that will support the Council in delivering effective services to our customers. This paper provides the first progress report to the Committee.

The Committee is RECOMMENDED to

a)               Note the report;

b)              Request the Audit Working Group routinely review the actions taken; and,

c)               Receive a further progress report at the next Committee meeting on 9 November 2016.  

The update was introduced by Mr Dyson.  He emphasised that the improvement plan ran in conjunction with Transformation.  A key aim was to ensure that controls were proportionate to risk.  The plan was already highlighting inefficiencies.

In response to questions Mr Dyson made the following points:

·         There will be many different interfaces with the SAP.  A three-month roll out will begin in November.

·         IBC exposed a number of poor practices on the part of the Council.

·         All feedback is studied to identify the biggest problems.

·         Currently a lot of resources are taken up in reporting.  Improved systems can free up time for managers and finance staff.

Dr Jones reported that he was happy with the information being provided in reports to the Working Group.

RESOLVED: to

a)        Note the report;

b)        Request the Audit Working Group routinely review the actions taken; and,

c)         Receive a further progress report at the next Committee meeting on 9 November 2016.

4.10 pm

Report by the Chief Internal Auditor (AG10)

This report provides an update on the Internal Audit Service, including resources, completed and planned audits and an update on counter-fraud activity.

The committee is RECOMMENDED to note the progress with the 16/17 Internal Audit Plan and 16/17 Counter Fraud Plan and the outcome of the completed audits.

Ms Cox presented the progress report.  There have been no changes to resources since the last update in July.  The audit of E&E ICT has been removed and replaced with an audit of Website Management & Security.

Ms Cox made the following points in responding to questions:

·         The Early Years Payments Audit was still flagged as amber, as in the last report, due to issues regarding reconciliation and data matching.  There was no material error.  She is confident that this problem will be tidied up.

·         The red flag on the Mental Health audit is as a result of significant weaknesses.  The report will be finalised for the 27 October meeting of the Audit Working Group.

·         Dealing with problems with BDU is a significant part of the Financial Control Improvement Plan.

·         Some sessional workers were suspected of making dual claims with other local authorities.  Unfortunately, the evidence was not sufficient for police to prosecute.

RESOLVED: to note the progress with the 16/17 Internal Audit Plan and 16/17 Counter Fraud Plan and the outcome of the completed audits.

4.30 pm

Report by the Chief Legal Officer (AG11)

Each year, the Local Government Ombudsman (LGO) issues an Annual Review Report about each council in relation to the complaints made to the Ombudsman about that Council in the previous financial year. The report to this Committee therefore informs members about the LGO’s Annual Review Report for Oxfordshire County Council for the year 2015/16. 

In short, fewer complaints about the Council have been upheld by the Ombudsman in 2015/16, compared to the previous year, even with slightly more complaints being referred to her.  Put into the context of county council performance generally, the Council is the third lowest in the number of complaints submitted to the Ombudsman per 100,000 residents and has the fifth lowest number of upheld complaints per 100,000 residents. This remains encouraging and continues to suggest that the Council’s system of control expressed through its own complaints processes is working well.

This is not a case for complacency however and this report sets out the LGO’s findings, the wider context and also details the complaints upheld by her office.

The Committee is RECOMMENDED to note and comment upon this report and on the Local Government Ombudsman’s Annual Review of Oxfordshire County Council for 2015/16.

Mr Graham summarised the report as follows:

·         553 complaints received by the Council

·         59 complaints received by the Ombudsman about OCC

·         15 were investigated

·         7 were upheld

This compares favourably with other county councils - OCC being third lowest in the number of complaints submitted to the Ombudsman and fifth lowest in the number of upheld complaints proportional to population.

Councillor Smith asked if the Council budgeted for claims against OCC.  Mr Graham responded that claims were not counted as complaints although some people can make a claim as well as lodging a formal complaint.  Mr Dyson stated that the insurance team collects information on claims and this is be examined by the Performance Scrutiny Committee for any trends.

RESOLVED: to note this report and the Local Government Ombudsman’s Annual Review of Oxfordshire County Council for 2015/16.

4.50 pm

Report by the Chief Legal Officer and Monitoring Officer (AG12)

Each year the Council needs to set a scale of election fees and expenditure for the holding of elections of county councillors.  The Committee are requested to approve the proposed Scale of Expenditure as set out for any by-elections of County Councillors that may be held during 2016/17.

The same scale of expenditure will be used for any local referendums e.g. a council tax or mayoral referendum.

The Committee is RECOMMENDED to approve the Scale of Expenditure for the financial year 2016/2017, as shown in Annex A to this report, for the election of County Councillors and any other local referendums.

Mr Graham introduced the report.  He explained that this report dealt with election expenditure for the 2016/17 council year.  There will be another report for 2017/18 which will cover the next Council election.  District councils have reported difficulty in recruiting staff for elections.  This may need to be considered in terms of ensuring that the fees are attractive.

Councillor Hards suggested that the search for election staff could be widened.  He was of the view that many potential candidates don’t know about the opportunity.

RESOLVED: to approve the Scale of Expenditure for the financial year 2016/2017, as shown in Annex A to this report, for the election of County Councillors and any other local referendums.

5.00 pm

Report by the Chief Legal Officer (AG13)

The Regulation of Investigatory Powers Act 2000 ('the Act') regulates the use of covert activities by Local Authorities. It creates the statutory framework by which covert surveillance activities may be lawfully undertaken. Special authorisation arrangements need to be put in place whenever a Local Authority considers commencing covert surveillance or considers obtaining information by the use of informants or officers acting in an undercover capacity.

Codes of Practice issued under the Act provide guidance to authorities on the use of the Act. The Code of Practice relating to covert surveillance specifies that elected members should review the authority's use of the Act and set the policy at least once a year. They should also consider internal reports on the use of the Act periodically.

This paper provides an overview of the use of activities falling within the scope of the Regulation of Investigatory Powers Act 2000 by Oxfordshire County Council in the period from April 2015 to March 2016. The report also provides an overview of the authority's Policy and the full policy is provided as an annex for committee members to review.

The Committee is RECOMMENDED

a)            to consider and note the use of activities within the scope of RIPA by Oxfordshire County Council, and

b)           to comment on any changes to the Policy for Compliance with the Regulation of Investigatory Powers Act 2000 that the committee would wish the Monitoring Officer to consider.

Mr Graham presented the report.  It is a legal requirement that the Council publishes its policy on covert surveillance.  The main use recently has been to check for under age sales of tobacco or alcohol.  Such cases are required to be authorised by a magistrate.

Dr Jones stated that he understood that reports of surveillance were to go to him as the Chair of the Audit Working Group.  He recalled receiving one report.  Mr Graham responded that he would discuss this with the officer who drafted the policy.

RESOLVED: to note the use of activities within the scope of RIPA by Oxfordshire County Council.

5.10 pm

Report by the Chief Finance Officer (AG14)

This report presents the matters considered by the Audit Working Group Meeting of 1 September 2016.

The Committee is RECOMMENDED

a)               to note the report; and

b)              to review and confirm the membership of the Audit Working Group in line with the agreed terms of reference.

Ms Cox introduced the report of the Working Group meeting on 1 September 2016.  The Group’s Terms of Reference require that the Committee Chairman be a member so the Group requested the Committee to review its membership following the change of Committee Chairman.

RESOLVED:

a)            to note the report; and

b)            to confirm the following membership of the Audit Working Group

·                     Dr Geoff Jones (Chairman)

·                     Cllr Sandy Lovatt

·                     Cllr Nick Hards

·                     Cllr Roz Smith

·                     Substitute: Cllr Alison Rooke

·                     Substitute: Cllr David Wilmshurst

5.20 pm

To review the Committee’s Work Programme (AG15)

The Committee agreed the Committee’s work programme, subject to the following additions:

Add for 11 January 2017:

·         Internal Audit Plan Progress Report (Sarah Cox)

·         Ernst & Young Audit Plans

Add under “Standing Items”:

·         Report from the Director for Transformation (Quarterly)