Agenda and minutes

To approve, and sign as a correct record the Minutes of the meeting of the Overview and Audit Committee held on 10 November 2022 (Item 2)

RESOLVED –

That the Minutes of the meeting of the Overview and Audit Committee held on Wednesday 10 November 2021, be approved, and signed by the Chairman as a correct record.

The Chairman to invite officers to provide verbal updates on any actions noted in the Minutes from the previous meeting.

In respect of Minute OA23 – the Deputy Director of Finance and Assets advised that at the last meeting, Members had requested an information sheet regarding the asset management system Red Kite. The Director of Finance and Assets had been planning to present it today, on the basis that the Red Kite audit would have been completed. The field work had been finished, but the report was still to be finalised, so it was requested that this action be reviewed at the next meeting.

In respect of Minute OA27 – the Director of Legal and Governance advised that a question had been asked at the last meeting regarding whether the spike in complaints had been attributed to the Covid lockdown. A response had been sent to Members on 16 December 2021. There were only two complaints that appeared to be directly attributable to Covid-19 and these were two allegations against individual employees for alleged breaches of Covid regulations, in their personal capacity, neither were found to have any grounds whatsoever.

Members to declare any disclosable pecuniary interests they may have in any matter being considered which are not entered onto the Authority’s Register, and officers to disclose any interests they may have in any contract to be considered.

There were no disclosures of interest.

To note that there has been no covert surveillance conducted by officers since the last meeting of the Committee.

The Director of Legal and Governance advised Members that the Authority was the enforcing authority under the Regulation Investigatory Powers Act 2000 and confirmed that in the last reporting period no convert surveillance had been undertaken.

RESOLVED –

To note that there had been no covert surveillance conducted by officers since the last meeting of the Committee.

To consider Item 8

The External Auditor advised Members that they were now in the final logistics of concluding the audit, subject to Member’s considerations of the final set of accounts today. The External Auditor would be in a position, once he had received the final signed accounts and the signed letter of management representation, to issue the audit report, and the audit report would be an unqualified opinion on the Authority’s financial statements.

The External Auditor also advised Members that he had not identified any significant weaknesses, in the arrangements for economy, efficiency and effectiveness in the use of resources. Within three months of issuing the audit report, the Authority would receive an annual audit report which would summarise its understanding of the Authority’s arrangements across the three criteria set by the National Audit Office. As part of looking at the Authority’s value for money arrangements, External Audit had looked at financial resilience, the current budget, the medium term financial plan and strategy, the final position of the project for the Blue Light Hub, how the Authority had responded to the Inspectorates findings and recommendations, and taking all of those matters into account, there had been no significant weaknesses identified. The External Auditor was pleased with the way the Authority’s Finance team had responded to the audit process, by quality of work, explanations, and responsiveness to audit queries.

The External Auditor advised Members that he was anticipating issuing the audit report on Monday 21 March 2022.

RESOLVED –

That the content of the report be noted.

To consider Item 9

The Principal Accountant presented Members with an updated Letter of Management Representation for the financial year 2020-21 which captured an amendment made since the reports for this meeting were produced.  This amendment was within Section A 5, which required a reason for not adjusting the identified audit differences. The reason for not making the adjustments was due to the values presented being immaterial to the account as a whole. Furthermore, an Internal Audit on Core Financial Controls was carried out annually which audits the adequacy and effectiveness of the system of internal controls. The consistent substantive audit rating gave confidence and reassurance that the systems of controls in place to manage and mitigate financial and non-financial risks to the system did not warrant adjusting the immaterial differences identified by the Auditors. These differences can be seen within the Audit Results report. #

The Letter of Management Representation was a legislative requirement and a self-explanatory report.  Information contained within this letter contributes towards the auditors being able to form their final opinion as to whether the financial statements give a true and fair view of the Authority’s financial position. This letter would be signed off by the Director of Finance & Assets and the Chairman of the Overview and Audit Committee following the meeting.

Resolved –

That the Letter of Representation be approved for signature by the Chief Finance Officer and the Chairman of the Overview and Audit Committee.

To consider Item 10

The Principal Accountant presented to Members the Statement of Accounts for the year ended 31 March 2021. These show the financial detail of the services the Authority had provided, together with explanatory notes, the resources consumed and the financial position at the end of the year compared with the previous year. When putting together the Accounts, the Authority had followed the CIPFA Code of Practice on Local Authority Accounting in the UK 2020/21: Based on IFRS, the Code. The Accounts were drawn up in accordance with the accounting policies which were set out in detail within the Statement of Accounting Policies section.

The responsibility for the proper administration of the Authority’s financial affairs was vested in the Director of Finance and Assets who was required by law to confirm that the Authority’s system of internal controls could be relied upon to produce an accurate Statement of Accounts. The Accounts contain four main statements. Each of the four main statements were supported by disclosure notes providing additional detail to figures presented. The four main statements were; Movement in Reserves Statement - this statement showed the changes in the financial resources over the year; Comprehensive Income and Expenditure Statement - this statement showed the gains and losses that contributed towards the changes in resources shown in the Movement in Reserves Statement; Balance Sheet - this statement showed how the resources available were held in the form of assets and liabilities and the Cash Flow Statement - this statement showed how the movement in resources had been reflected in cash flows.

The Principal Accountant advised Members that the Accounts also contained information regarding the Firefighters’ Pension Fund Account. Along with a Narrative Statement which provided information about the Authority including Key Facts about the Authority, Financial Performance in 2020/21, Corporate Risks, the Pandemic, and a Going Concern Review. The auditor’s report would be added to the document before publication.

The Principal Accountant advised Members that there was a 16 percent decrease in the total of non-current assets, the reason for the reduction was Bletchley Fire Station being sold during the financial year, which included an investment property on this site,  and reporting Great Holm Fire Station as an asset held for sale, which was not shown separately in the Accounts due to details surrounding the sale being commercially sensitive.  Assets under construction related to the build of the Blue Light Hub that was completed during 2020/21 and following an independent valuation, the value of the property was now seen within Land and Buildings. The valuation of all other property had fallen slightly following the independent valuations and the market position at the time.

The Principal Accountant advised Members that there was a 22 percent decrease overall in the current liabilities compared to the previous year. The main reason for the difference was a decrease seen in short term creditors on business rates relief grant seen in 2019-20, but not 2020-21 and more noticeably a large decrease in provisions of £1.08m, which included a  ...  view the full minutes text for item 10.

To consider Item 7a

(Blue Light Hub - Post Project Evaluation Audit Report to follow)

The Internal Audit Manager advised that the purpose of this paper was to update Members on the progress of the annual Internal Audit Plan since the last meeting. Work had progressed according to the 2021/22 plan, and regular discussions had been held with the Director of Finance and Assets to monitor progress. The following 2021/22 internal audits have been finalised: Core Financial Controls (Substantial Opinion), HR People Management (Reasonable Opinion), Procurement Governance and Compliance (Reasonable Opinion), Portfolio Management Office Assurance (Reasonable Opinion), Blue Light Hub – Post Project Evaluations (Limited Opinion). Fieldwork for the Asset Management System Process Mapping was currently in progress and the final report for this review would be presented to Members at the next Overview and Audit Committee meeting.

The Internal Audit Manager took Members through the first four final audit reports. The Blue Light Hub – Post Project Evaluation, would be discussed at the end of the meeting in the exempt session.

RESOLVED –

That Members note the final audit reports, Core Financial Controls, HR People Management, Procurement Governance and Compliance and Portfolio Management Office Assurance for FY 2021/22.

To consider Item 7b

The Internal Audit Manager advised that the purpose of this paper was to update Members on the progress of the implementation of audit recommendations made as at 14 February 2022. In total there were 63 recommendations to report on the status of which were classified as follows: implemented – 49/63 (78%), in-progress - 2/63 (3%) and past due date (In-progress) – 12/63 (19%). Internal Audit continued to actively monitor implementation of all outstanding recommendations throughout the year.

A Member asked if one of the ‘high priority’ risks was an inability to account for some of the equipment or that the equipment had worn out.

The Head of Covid-19 Preparedness and Response advised that as Members could see, the project work following the audit had moved into Q1 of this year, the reason for this was because the scanners the Service purchased to make the process improvement were ordered and arrived October. Due to the Omicron wave, face to face training had to be delayed. The work was ongoing and would be completed in Q1 this year.

RESOLVED –

That the progress on implementation of recommendations be noted.

To consider Item 7c

The Internal Audit Manager advised that the purpose of this paper was to update Members on the progress of the annual Internal Audit Plan since the last meeting. Work had progressed according to the 2021/22 plan, and regular discussions have been held with the Director of Finance and Assets to monitor progress. The following 2021/22 internal audits had been finalised, Core Financial Controls (Substantial Opinion), HR People Management (Reasonable Opinion), Procurement Governance and Compliance (Reasonable Opinion), Portfolio Management Office Assurance (Reasonable Opinion) and the Blue Light Hub – Post Project Evaluations (Limited Opinion).

Fieldwork for the Asset Management System Process Mapping was currently in progress. The HR/Payroll Process mapping audit had been deferred to quarter one to allow the new officers to settle into their roles. The final reports would be presented to Members at the next Overview and Audit Committee meeting.

RESOLVED –

That Members note the progress on the Annual Internal Audit Plan.

To consider Item 7d

The Internal Audit Manager advised that the paper sets out the Internal Audit Strategy and the proposed Internal Audit Plan for 2021/22 for the approval of the Committee. Buckinghamshire Council’s Business Assurance Team were responsible for implementing the Authority's internal audit standard strategy through delivery of work programmes in accordance with an agreed service level agreement. This report details the internal audit strategy for the year and the proposed internal audit plan for approval. The Authority must undertake an effective internal audit to evaluate the effectiveness of its risk management control and governance processes taking into account Public Sector Internal Audit standards and guidance. Proper internal audit practices were defined in the Public Sector Internal Audit Standards 2017.

The Internal Audit Manager advised Members that this strategy sets out Internal Audit’s approach for the delivery of the internal audit plan and how they would approach each order assignment. Internal Audit had a partnership with the Apex Audit Framework hosted by the London Borough of Croydon. This partnership arrangement included an element of a call off contract should it be necessary to outsource specific technical audits such as IT and/or complex contract audits that may be on the plan. The key part of the strategy was to ensure right skill mixes and resource exist to deliver an effective service. For 2022/23 Internal Audit would aim to continue with the resource allocated for each assignment and oversee the program of work, ensuring work was delivered on time and to the correct quality.

The Internal Audit Manager advised Members that Internal Audit would continue to present the quarterly plans and progress to this Committee and subsequently qualified and experienced auditors would be allocated to each assignment. The draft internal audit plan had been developed in consultation with the Strategic Management Board and consideration of the Authority’s Corporate Plan, strategic risk and previous audit activity.

A Member asked what the contingency days were used for.

The Internal Audit Manager advised that contingency was the number of days that were allocated against the audit plan should a new risk area be identified. Internal Audit held regular meetings with the Director of Finance and Assets and through those discussions, would identify any new key risks or emerging areas that might want to be considered for inclusion in the plan during the year. So essentially, a number of days were set aside should they be needed for a particular piece of work.

RESOLVED –

That Members note the Internal Audit Strategy and approve the Annual Internal Audit Plan

To consider Item 11

The Corporate Planning Manager advised Members that this was the regular report on the status of corporate risks which was presented to every meeting of the Committee. This report reflected any changes and updates made since the last meeting in November 2021. Since then, the risk register had been subject to regular review by officers at the Performance Monitoring and Strategic Management Boards, and also by Lead Members where individual risks fall within their areas of reference. As Members would see, there had been some changes to the probability and impact scores and also, RAG statuses of some of the risks since the last report.

Firstly, in relation to the staff availability risk, 18 new wholetime firefighter recruits had joined the Service on 1 March 2022 and commenced training at the Fire Service College. However, it was decided to maintain the current risk score and red RAG status for this risk in light of the potential impact of London Fire Brigade’s current firefighter recruitment campaign.

The Deputy Chief Fire Officer advised Members that officers were monitoring the situation very closely around the London Fire Brigade recruitment campaign, as with the London weighting, it was quite an attractive proposition for firefighters to transfer across. The Service was in dialogue with London Fire Brigade to ensure they didn’t take everybody all at once, as there was some anecdotal evidence that a number of people had applied. Officers were also in dialogue with the training provider around additional recruit courses later in the year. There was also a Recruitment Board being set up to maintain the recruitment momentum moving forward to cover any gaps that may appear.

The Corporate Planning Manager advised that in relation to the funding and savings risk, Members would see that the risk score and RAG status had been lowered in light of the Authority’s decision in February to raise the Council Tax Precept by £5. However, it had only been reduced from red to the top end of the amber spectrum, as there were still some uncertainties in relation to central government funding and there was, of course, the impact of growing inflationary pressures to consider which were already manifesting themselves in terms of increasing costs for energy, fuel and other consumables.

In relation to the information security risk, viruses and malware remain a very live and potent risk to information, communication and operating systems, and ever more so, in light of current events. The latest advice from GCHQ’s National Cyber Security Centre in relation to the potential for Russia to use this medium to hit back at countries that have deployed economic sanctions and other trade related measures in response to its invasion of Ukraine. Officers continued to do everything possible to protect the Authority’s systems and Members would see from the risk update that the Authority was now a subscriber to the South-East Employers (SEE) sub-group South-East Government Warning, Advisory and Reporting Point (SEGWARP), which shared knowledge, resources and benchmarking amongst participating IT Security Specialists  ...  view the full minutes text for item 11.

To consider Item 12

The Corporate Planning Manager advised Members that the requirement to produce an annual Statement of Assurance was introduced by the 2012 Fire and Rescue National Framework for England and re-confirmed most recently in the 2018 Framework.

The format and content of the statement was based on government guidance published in 2013. The guidance had not been updated since then and therefore remains extant.

As Members would see, the Statement covered the period April 2020 – March 2021. The Round 2 HMICFRS inspection and outcome thereof which was reported to the Authority in February would be included in the 2021/22 Statement. However, the outcome of the HMICFRS Covid inspection, which was undertaken in November 2020 and reported to the Committee in March 2021, was included.

Usually, this Statement would be presented to Members at the November meeting of the Committee, however, due to the timing of the completion of the external audit of the financial statements, the Statement of Assurance was the last link in the governance chain and could not be finalised until all the other inputs were completed.

The Statement of Assurance serves as a precis and overview of the outcomes of the more detailed underlying assurance activities ranging across the financial, governance and operational functions and processes and that were reported to the Committee during the course of the 2020/21 financial year.

RESOLVED –

That the 2020/21 Statement of Assurance be approved for signature by the Chairman of the Overview and Audit Committee and the Chief Fire Officer.

To consider Item 13

The Principal Accountant presented to Members the Treasury Management Performance report 2021/22 Quarter 3. The accrued interest earned for 2021/22 Quarter 3 was £30k, which was £7.5k higher than the budget set for the same period. The Authority had achieved the budget set for the full financial year 2021/22 by Quarter 3 and was projected to achieve in the region of £38k interest in total by the end of the financial year.

In terms of investments, as at 30 December 2021, the Authority had £16.5m invested in various counterparties including, banks, buildings societies, money market funds and current accounts. It was anticipated by 31 March 2022 funds invested would be in the region of £14m plus the current account balance, approximately totalling £15m. The reason for the reductions in Quarter 4 was due to two deals maturing in February and March 2022 and not being re-invested, to ensure the Authority could meet its short-term expenditure requirements.

As Members would see from the Investment Chart, the Authority had deals maturing on frequent bases, again to ensure it could meet its short term expenditure requirements. In May 2022 the Authority had a PWLB loan due to be repaid. The value of this loan was £620k and cash had been made available to repay this loan when due. The repayment does not impact the revenue budget.

In terms of the next financial year, at the Authority meeting on 16 February 2022, Members approved the Treasury Strategy for 2022/23. This strategy had no significant changes compared to the strategy for this financial year. The Bank of England’s Monetary Policy Committee (MPC) had increased the base rate in February 2022 to 0.50%. However, the investment income budget set for 2022/23 would remain at £30k. The next review date on interest base rate was 17 March 2022. The reason for this was because the Authority had a number of investments that were made prior to the last two base rate increases and were maturing during 2022/23. Therefore, the Authority would not see the benefit of the base rate increases for the full year and it was also not prudent to rush into increasing the budget without knowing if the interest rates were going to continue at a stable rate. Any additional income above the set budget would be welcome and if the investment income was sustainable for future years, this would be reflected as part of the next MTFP.

Finally, the cashflow position would continue to be monitored on a regular basis to ensure the Authority could meet the short-term expenditure requirements and be able to maintain adequate liquidity.

A Member asked why a loan was being paid off this year.

The Deputy Director of Finance and Assets advised that the loan was actually coming to its maturity and needed to be paid back.

A Member asked for some clarity on the investment strategy and all the counterparties being low risk, should the Authority look at better performers to invest in although they may be higher  ...  view the full minutes text for item 13.

To consider Item 14

The Head of Covid-19 Response and Preparedness introduced the revised HMICFRS action plan, following the round two full inspection report which went to the February Authority meeting. The format had been refreshed, to align to the Portfolio Management Office Programme Register. Member’s would see that improvement findings had been linked to existing projects and programmes wherever possible and the vast majority of HMI findings did already fit into existing work, or BAU improvements. In future, the progress updates would draw directly from the PMO register which would be more efficient for reporting.

The Head of Covid-19 Response and Preparedness advised Members that a dashboard had been included to give a top level view of progress, and Members would see it was already demonstrating progress against many of the findings, with three areas completed and 19 on track. The plan had been split into the three tabs to reflect the inspection pillars of effectiveness, efficiency and people. There was also a column as to whether the finding had been accepted by the Authority.  Also included was a good practice tab, which was extracted from the narrative of the report. Officers felt it was important not to lose sight of all the good work that had been done since the round 1 inspection. This idea had been shared with HMICFRS and they were very enthused by this approach.

RESOLVED –

That the Committee note the revised HMICFRS - BFRS improvement plan.

To consider Item 15

The Head of Covid-19 Preparedness and Response advised Members that following the conclusion of Phase 1 of the Inquiry, there were 46 recommendations made that the Service had incorporated into an improvement plan.  This plan was coordinated through the Technical Team and sponsored by the Head of Protection and Assurance.  Of the 46 recommendations there were 45 actions identified. To date, the Service had been able to complete 17 and made significant progress on 27. There was now only one recommendation waiting to be implemented; ‘Responsible persons of high-rise residential building be required by law to include up-to-date information about persons with reduced mobility and their associated PEEPs in the premises information box’. The working group had been waiting for results on formal consultation from the Home Office on legislative requirements for PEEPs before progress was made against the recommendation. This was finally received in January and progress against this action would commence shortly.

The Phase 2 part of the Inquiry was currently ongoing. Many of the agreed modules had now concluded with module five and module six (firefighting) closing statements taking place on 24 January 2022. Module 6 (testing & government) was currently underway. It was anticipated that there would be additional recommendations for fire and rescue services to review and action once the Phase 2 report was published.

The Service continued to be proactive in implementing the learning from the Grenfell Tower Inquiry. This had been recognised in the HMICFRS report published in December 2021. The inspectorate team found that the Service had responded positively and proactively to the lessons learned from this tragedy. Highlighting that the Service delivered the high-rise audit programme ahead of schedule and suggested it was well positioned to improve its information about high-rise risk.

RESOLVED –

That the report is noted.

To note Item 16

The Chairman brought the Forward Plan for future Overview and Audit Committee meetings to the attention of Members.

RESOLVED –

That the Forward Plan be noted.

To note that the next meeting of the Overview and Audit Committee will be held on Wednesday 20 July 2022 at 10 am.

The Committee noted that the date of the next Overview and Audit Committee meeting would be held on Wednesday 20 July 2022 at 10.00am.

THE CHAIRMAN CLOSED THE MEETING AT 11:49 AM.