Apologies were received from Councillors CNH Attwood and P Rone.

None.

To receive any declarations of interest by Members in respect of items on the agenda.

During consideration of agenda item 9, Councillor EMK Chave declared a non-pecuniary interest due to David Williams MBE QFSM being Chairman of Herefordshire Advanced Motorists and the Councillor was a member of that organisation.

To approve and sign the Minutes of the meeting held on 13 May 2013.

The minutes of the meeting held on 13 May 2013 were received.  The following matters arising were noted:

Minute 65 - Internal Audit 2012/13, Food Hygiene

Referring to a front-page article in the Hereford Times (27 June 2013 refers), a Committee Member commented that concerns remained about compliance with statutory duties in this area.  The Chairman noted that the Committee had discussed the issues at its previous two meetings, with concerns being raised about Food Hygiene Inspections and resourcing issues.  He added that the Regulatory Committee had recently considered related matters (25 June 2013 refers).

Minute 69 - Internal Audit Plan 2013/14

A Committee Member, referring to the audit arrangements for the Council and for Hoople, commented on public concerns about private companies doing Council work with public money.

RESOLVED:  That the minutes of the meeting held on 13 May 2013 be approved and signed as a correct record.

To consider a summary provided for Herefordshire Council, of the internal audit work undertaken in 2012/13, and the overall internal audit opinion based on this work. 

The Head of Internal Audit reported that the timetable for the Annual Internal Audit Report had been brought forward, with this report submitted two months earlier than in the previous year.  The report provided the overall internal audit opinion, with commentary on internal audit activity and matters arising from the completion of the 2012/13 Annual Internal Audit Plan.  The principal points are summarised below.

Section 2 - Opinion

1.       The internal audit opinion was that ‘the Council has adequate and effective risk management, control and governance processes to manage the achievement of its objectives, except for those area highlighted as limited in Appendix 1.  In these areas agreed improvements are in place.’  The Head of Internal Audit advised that this was the same outcome as the previous year but there was a positive direction of travel in that there had been four areas highlighted as limited in 2012/13, compared to seven in 2011/12; he added that the areas highlighted in 2011/12 had also been more fundamental to the systems of control and governance.

Section 3 - Summary of Our Work and Significant Control Issues

2.       It was reported that many reviews graded the Council’s arrangements as ‘adequate assurance’, with ‘substantial assurance’ for Debtors, Treasury Management, Benefits (Council Tax and Housing), and NNDR and Council Tax Collection.  The four areas with significant control issues and ‘limited assurance’ were Data Protection, Legal Services, Income Collection - Industrial Lets, and Food Licensing.  It was noted that the issues in these areas had been reported to the Committee during the year.

3.       Attention was drawn to the statement that ‘the controls within the Adult Social Care function require strengthening to ensure that the system can meet its objectives in terms of the service it delivers and the financial resources being managed.’  It was reported that, although no explicit work had been undertaken as part of the Annual Internal Audit Plan, this comment was informed by assistance and guidance work undertaken by Internal Audit and from other sources.

Section 4 - Detailed Findings

4.       With a further report recently finalised for Creditors, it was reported that 22 audit reviews had been completed or were in draft, with seven reviews in progress.

5.       Referring to the graph showing the number and priority of audit recommendations (agenda page 31), the Head of Internal Audit reported that seven priority one (high priority) recommendations had been raised in 2012/13, with 29 priority two and 17 priority three recommendations.  In comparison, there had been 27 priority one recommendations in 2011/12.

6.       Referring to the results of follow up work on recommendations made in 2012/13, the Head of Internal Audit said that Internal Audit was satisfied that management had taken action where it was needed.

Section 5 - The Internal Audit Function

7.       This section set out the performance of the Internal Audit function and feedback from management.  Attention was drawn to the performance measure ‘Management responses received within 10 working days of draft issued’, with only 38% achieved.  The Head  ...  view the full minutes text for item 5.

To receive an update on the progress of internal audit work and to bring to the Committee’s attention any key internal control issues arising from work recently completed.

The Head of Internal Audit introduced the report which summarised progress against the Audit Plan 2012/13.  It was noted that the key considerations had been discussed as part of the Annual Assurance Report 2012/13 report (minute 5 above).

RESOLVED:  That the report be noted.

·         To update Audit and Governance Committee Members formally, on the actions and improvement undertaken, and those proposed to be undertaken, by the Knowledge and Information Service in response to the KPMG internal audit report dated 26th April 2013. 

·         To update the Committee formally on the initial findings of the Information Commissioner’s Office consensual data protection audit 30th April – 2nd May 2013.

Further to minute 67 of the last meeting, the Committee received a report that provided a formal written response to the Internal Audit review of Data Protection dated 26 April 2013.  The report also highlighted the findings of the Information Commissioner’s Office (ICO) consensual Data Protection audit of 30 April - 2 May 2013.

The Equality, Human Rights and Partnership Manager, having recently taken on the management of this area, presented the report of the Knowledge and Information Services Manager.  The Committee was advised that the Information Governance Team had undertaken substantial work following the Internal Audit review, both in advance of the ICO audit and subsequently.  A number of recommendations overlapped and an action plan and programme of work had been developed.  Attention was drawn to the following areas:

1.       Personal data audit: An overview was provided of the actions undertaken and in progress, including the compilation of an Information Asset Register.

2.       Security breach incidents: It was noted that 80 Data Protection incidents had been logged since June 2012, with a further five reported since agenda publication.  The ICO had commented that the level of reporting was encouraging, as this reflected the high visibility of the new Information Governance Team and the fact that appropriate systems were in place to capture incidents.

It was reported that generic mandatory training was being developed, with further bespoke training for specific teams.  In particular, high priority would be given to training for Section 75 staff prior to their return into the Council from Wye Valley NHS Trust.

3.       Downloading sensitive and confidential data: A key piece of work was being undertaken to address both device and software security issues.

4.       Communication of Data Protection Act issues:  The Information Governance Team continued to develop relationships with management teams and representatives to develop broader understanding and points of contact for support.

In response to a question from a Committee Member, the Assistant Director People, Policy and Partnerships (hereafter ‘Assistant Director’ in these minutes) commented that two issues arose from staff movements and turnover.   Firstly, there was a need to ensure that individuals only had access to those systems they needed to use as part of their current roles, this would be addressed through strengthened HR processes.   Secondly, there was a need to ensure that mandatory training was completed within a short time of commencing a new role, this would be delivered and recorded through online modules.  It was acknowledged that further work was required on the eLearning platform.

A Committee Member commented that Councillors had to register as data controllers with the ICO for an annual fee and questioned whether this should be borne by Councillors themselves or by the authority.

A Committee Member said that managers had to take responsibility for their areas and staff needed to be brought to account if they failed to fulfil their duties.  The Assistant Director said that the lack of mandatory training in this area was a significant issue for the authority but this was being  ...  view the full minutes text for item 7.

To approve the draft Annual Governance Statement for 2012/2013. 

The Chief Officer: Finance and Commercial presented the report of the Head of Governance which sought approval for the draft Annual Governance Statement for 2012/13

The draft statement was appended to the report and Members’ attention was drawn to the following points:

i.        Section 3:  This set out the Council’s principles of good governance and the related activities that had been carried out during 2012/13.

ii.       Paragraphs 3.16 and 3.17: These paragraphs should be omitted, as they referred to standards complaints during 2011/12.

iii.      Paragraph 4.16: For the last two years, the Council had decided not to follow the financial management arrangements prescribed by CIPFA in relation to the Section 151 role.  However, from April 2013, the reporting lines had been amended and there would be compliance going forward.

The Chairman advised that the Annual Governance Statement needed to be considered and approved by the Committee prior to its inclusion within the Council’s Statement of Accounts.

A Committee Member made a number of comments, including:

a.       Paragraph 1.1:  In view of the statement  that ‘Herefordshire Council is responsible for ensuring that… public money is safeguarded, properly accounted for and used economically, efficiently and effectively’, the authority should be aware of the significant public concerns about Hoople and other companies undertaking work on behalf of the Council.

b.       Paragraph 3.2:  Referring to Principle 4, ‘Take sound decisions on the basis of good information’, the Member said that a request for information had not been responded to after a number of months and, in view of the comments of the Chairman of General Overview and Scrutiny (see minute #, paragraph 11 above), felt that more work was needed on this topic.

c.       Paragraph 3.4: It was noted that the authority had ‘identified substantial savings during the year’ but it was questioned whether these were actually being made.

d.       Paragraph 3.10: It was commented that consideration could be given to rolling out the ‘…formal staff performance review requirement..’ to Councillors.

e.       Paragraph 3.15: It was questioned whether standards complaints about ‘bullying, failure to show respect’ were an increasing trend.

f.       Paragraph 3.38: Referring to the statement that ‘Further information about services can be found on the Council’s website…’ it was commented that, as identified in the Understanding Herefordshire 2013 report, many people did not want to be online, regardless of cost.

g.       Further clarification was sought about the reporting lines for the Section 151 role.

h.       Paragraph 4.40: There appeared to be a discrepancy between the figures given in the statement and in the Annual Internal Audit Report 2012/13 for the number of Internal Audit reports and recommendations.

i.        Signatories:  It was questioned why the document had been signed by the Deputy Leader rather than by the Leader of the Council.

In response to the questions, the Chief Officer: Finance and Commercial advised that: (g.) he previously reported to the Deputy Chief Executive but, with the deletion of that post, the Section 151 Officer would now report directly to the Chief  ...  view the full minutes text for item 8.

To note the recommendation to appoint two independent persons to the standards panel. 

This report, by the Head of Governance, notified the Committee that approval would be sought at the next Council meeting for the appointment of John Sharman and David Williams MBE QFSM as Independent Persons to the Standards Panel.

It was reported that, as a consequence of the Localism Act, the tenure of Jake Bharier and David Stevens MBE as Independent Persons had ended on 30 June 2013; Rob Cook was the only remaining serving Independent Person currently.  The Chairman advised that Mr. Bharier and Mr. Stevens had been invited to tea with the Chairman of the Council in recognition of their significant contributions to standards in the county.

The Chairman said that it was encouraging that the recruitment process had attracted a strong field of high calibre candidates to the positions.  The Committee noted that both Mr. Sharman and Mr. Williams had significant experience of local government and other public sector bodies.

RESOLVED:  That it be noted that approval was to be sought at Council, on 19 July 2013, to appoint John Sharman and David Williams MBE QFSM as Independent Persons to the Standards Panel.