The Chair welcomed the new Members to the Committee and gave an introduction as to how he wanted the Committee to run and how they could all work together apolitically to make things run smoothly and efficiently during their time as Committee Members. Each of the Members and officers present also gave an introduction of who they were and their ward/job title.

The Head of Audit & Counter Fraud Shared Services appreciated that the Members were new to the Committee and informed them that that he would send out the Annual Workplan document, which was approved by the Committee in March 2019, and other various significant documents after the meeting which would help with their understanding of Audit & Counter Fraud reports.

The Audit & Counter Fraud Shared Service has provided update reports to Members at three meetings of the Finance & Audit Committee in 2018-19. The Annual Report reproduced the findings reported in those Update reports along with the results of work carried out since the last update, to provide Members with a summary of all the work delivered by the team in the year.

The Head of Audit & Counter Fraud Shared Services informed Members of the Audit & Counter Fraud work completed during 2018-19 and presented them with his opinion, as Chief Audit Executive, on the council’s internal control environment.

The opinion and the reasoning behind it was listed on page 16 of the report; the opinion stated that: ‘It is therefore my opinion that Gravesham Borough Council’s framework of governance, risk management and system of internal control is adequate and effective, and contributes to the proper, economic, efficient and effective use of resources in achieving the council’s objectives.’

The Head of Audit & Counter Fraud Shared Services drew Members attention to key areas highlighting that:

• For the year year 2018/19, the Audit & Counter Fraud Plan for Gravesham was prepared with a resource budget of 660 days. As of 31 March 2019, the net staff days available for Gravesham for 2018-19 amounted to 583 days and 503 days (86%) were spent on productive audit and counter fraud work
• Non-productive work was classified as 'non-chargeable’ time spent such as doing general admin work, timesheets and meetings etc
• The internal audits which were listed in the report from pages 19-42 use a traffic light rating system for their final opinions. In their simplest terms; green meant good overall, amber meant generally okay with some areas that needed reviewing  and red meant there were significant issues that needed addressing
• The Audit & Counter Fraud Team have 24 performance measures which are detailed in the Quality and Assurance Improvement Programme on page 43; the programme is approved by the Committee during the year 
• The cost of the Audit & Counter Fraud Shared Service to Gravesham was £193,242 which contributed to the overall cost of £536,785
• The total value of fraud losses identified totalled £166,760 which meant the service was almost completely self-financing through their work
• The service delivered 95% of its agreed Workplan which was on target and the proportion of recommended actions implemented by the agreed date was 91.6% which equated to very high performance
• With regard to the follow up of agreed recommendations; Management Team receive quarterly reports advising them on the progress of the audit recommendations and if a recommendation is still outstanding after six months then it is brought to the Committees attention. Management Team provided an update on page 54 of the report the two recommendations that were outstanding
• The external audit of the service was undertaken by Tonbridge & Malling Council and vice versa; they used a five tier traffic light system

The officers of the Committee fielded questions and comments from Members, explaining that:

• The Finance & Audit Committee is not a decision making body but it can make recommendations to Full Council; many reports ask for Members endorsement of the work that is carried out through the year which meant that Members effectively confirm that they have received sufficient assurances from officers to fulfil their governance role. Additionally by Members giving their endorsement, they state that they are happy with the results and findings of the reports they have been given
• When Members ‘Note’ a report, they recognise and are happy with the work undertaken by the service
• The Assistant Director (Corporate Services) confirmed that a one page executive summary listing the greens, ambers and reds of all the internal audit recommendations could be listed at the start of the report to make it easier for Members
• The Head of Audit & Counter Fraud Shared Services stated that if any individual audit with a red opinion would be discussed with the Section 151 Officer and Chair of the Finance & Audit Committee to determine whether it presented a financial risk exceeding £25K or affected the achievement of the core objectives, , in which case the full report for that audit would be brought to the Committee. Not all red audits were deemed significant issues to the Council and the previous Chair felt that the 2 red audits stated in the report did not meet the criteria to bring them to the Committee
• When recommendations are made for improvements in controls, the Audit & Counter Fraud Team go back to the audited service on an agreed upon date to check to see if the recommendations have been implemented rather than doing a full audit again the following year as this means the same services could be audited frequently with some others not being picked up
• The Council used to have six petty cash flows which, after being audited, were identified as not being controlled very well; as of 31 March 2019 four have been closed down and in the Civic Centre there is now only one petty cash float which is held by Finance. The last remaining petty cash float is at Brookvale due to them being located away from the Civic Centre however a review will be conducted in the summer to see what they use their petty cash for and if they still require a petty cash float

Resolved that Members:

• Endorsed the work undertaken by the Audit & Counter Fraud Shared Service for Gravesham during 2018-19 in providing an effective service to the council

• Considered and endorsed the opinion on the council’s internal control environment provided by the Head of Audit & Counter Fraud Shared Service