Agenda and minutes

An apology for absence was received on behalf of Councillor James Hansen.

It was noted that technical difficulties had been experienced which meant that Members joining remotely were not able to participate in the meeting (Councillor Graham Morgan and Jean Gleave (Independent Member).

There were no declarations of interest received.

To consider the minutes of the meeting of the Committee held on 19 January 2022.

The minutes of the last meeting held on 19 January 2022 were agreed as a correct record.

To consider the report of the Head of Internal Audit.

            The Committee considered the report of the Head of Internal Audit which provided the Combined Authority Audit and Governance Committee with an overview of the internal audit work completed in the fourth quarter of 2021-22, in accordance with the Internal Audit Plan 2021-22.

            Laura Williams, Head of Internal Audit, presented a report and provided information on the following key points:

·         A summary of Internal Audit Plan delivery for the period;

·         Details of work undertaken, and key items of note in respect of corporate systems, Combined Authority-specific systems and Merseytravel-specific systems;

·         Details of work undertaken in respect of fraud, bribery and corruption;

·         An update on internal audit performance with reference to the key performance indicators detailed in the Quality Assurance and Improvement Programme (QAIP); and

·         An update on the service’s compliance with the Public Sector Internal Audit Standards (PSIAS).

            Laura Williams confirmed that 10 audits had been completed during the reporting period but some were still in draft.

   The report had highlighted one opinion of Major organisational risk which was the Seacombe Landing Stage Capital Project. There were three core issues (1) a significant overrun of capital costs on the capital project in the region of 33% on the original budget (2) the failure or patchy application of early warning systems to provide a view to management in terms of the likelihood of those overruns occurring and some patchy application of risk management processes to identify and quantify those areas early; and (3) the role of consultants and reliance on consultants rather than having appropriate in-house capacity and capability to be able to question the work of external consultants on the authority’s behalf. Although the Director was not able to attend the meeting in person, the response from the Director to the recommendations had been positive and his comments in respect of the three high priority recommendations had been added to the report.  The Combined Authority had now put in place Delivery Boards which would each be chaired by an Executive Director with representation from across the authority, and these are one of the mechanisms for ensuring robust reporting of project performance.

            In respect of performance she confirmed that 98% of the plan had been completed or was in progress but there were a couple of pieces of work still outstanding and it was anticipated that they would be completed in a timely manner.

            The Chair, Councillor Edna Finneran invited questions/comments from Members of the Committee.

            Councillor David Burgess-Joyce referred to the fact that the Director had not been able to attend the meeting and he felt that this was unacceptable as he should have been in attendance or sent an appropriate Officer to answer any questions around the Seacombe Landing Stage audit report.

            RESOLVED That:-

(i)        the outcomes of the audit work undertaken during the period of the report be noted; and

(ii)     the progress made in the delivery of the approved Internal Audit Plan in respect of the Combined Authority be noted.

To consider the report of the Head of Internal Audit.

            The Committee considered the report of the Head of Internal Audit which provided the Combined Authority Audit and Governance Committee with the Internal Audit Plan of work and Internal Audit Charter for 2022-23.

            Laura Williams, Head of Internal Audit, presented the report which sought approval of the Internal Audit Plan for 2022-23 and the Internal Audit Charter for 2022-23. She informed the Committee that some small changes had been made in the approach to this in order to develop and modernise the process. The Plan concentrated on areas of most significant organisational risk, so as to contribute to the maintenance of an effective internal control environment and management of risk. Internal Audit had also produced an Internal Audit Charter for 2022-23 which highlighted the role of internal audit and how it would conduct its work.

            The report set out the quality assurance and improvement programme which was effectively our performance indicators. A suite of performance indicators had been developed to allow for reporting and monitoring the performance and effectiveness of the service, so as to provide an assurance of the quality of its work and usage of the results of this monitoring to improve continuously the service provided and maintain compliance with the Public Sector Internal Audit Standards.

            The Internal Audit Charter set out the role and the purpose of the authority and the ethical framework within which Internal Auditors operated. Staff in the team would sign up to those commitments on an annual basis and it set out the framework for how the audit team conducted its work.

            The Chair, Councillor Edna Finneran invited questions/comments from Members of the Committee.

            Councillor Mike Wharton wondered whether Members of the Committee should be involved in some sort of formal training as he felt it was really important that Members had a good understanding of all the reports that came to them. He was not sure whether any thought had been given as to how Members could be further developed in order to become a stronger Committee. Laura Williams confirmed that this had been something that had already been considered and she had recently engaged someone to provide a training session for the Committee on 19 July 2022. Officers had also given a lot of thought as to what the programme of training would look like, and the training session would be one element of that. She felt that there was a lot that Officers could do to support Members through that and therefore a programme of pre-meets prior to the Committee meetings were being considered in order to go through some of those areas offline and to discuss the issues more informally. Officers were committed to making the Committee more effective and therefore an annual review of effectiveness would be undertaken to which Members of the Committee would be able to contribute and that would assist in understanding where improvements could be made and how Officers could support that improvement. Councillor Wharton felt that that would be really helpful to better  ...  view the full minutes text for item 44.

To consider the report of the Head of Internal Audit.

            The Committee considered the report of the Head of Internal Audit which provided an update in respect of the system of corporate risk management and the activity that had been undertaken in continuing to embed this system during the fourth quarter of 2021-22.

            Laura Williams, Head of Internal Audit, presented the report which highlighted the following key points:

·           an update on the Corporate Risk Register including the key changes made since the last report; and

·           the ongoing activity to embed risk management further into the organisation.

            She advised that during this quarter the team had facilitated another review with the Executive Leadership Team looking at the Corporate Risk Register in particular. The Register in front of Members today was the 2021/22 version and Officers were in the process of refreshing that for 2022/23. The team had also been heavily involved in facilitating the review of the risks and actions and it was the intention that the Risk Register would be in a position where it was very much action planned and focused on moving these risks forward. Good progress was being made in this regard.

            In the reporting period there had been a few changes to the risks in respect of target dates being reviewed or extended. There had been some good progress around the environment risk in particular and the comments of the Committee at the last meeting had been taken on board. The resilience risk had been updated to reflect the lessons learnt as a result of the pandemic and work had been undertaken with the Directors to think about some of those mitigating actions moving forward.

            The authority had also undertaken a number of other activities to continue to embed effective risk management across the organisation such as rolling out training for all Officers in the basics of risk management. This was about presenting the basics to staff so they understood what they should be doing and what risk management was about, and she felt that that had helped to spearhead a corporate improvement.

            In terms of the performance indicators the percentage of service areas with a risk register that complied with the corporate risk management policy was ‘amber’ at 77%. Once the authority got to a percentage figure of 80% she would consider that to be excellent progress.

She confirmed that the Risk Register seen at the next meeting would be a revision of this one and that the themes would remain largely the same. She advised that a risk around financial sustainability would be included following a comment that had been raised at the last meeting but which was also currently a national, global and local issue.

            The Chair, Councillor Edna Finneran invited questions/comments from Members of the Committee.

            Martin McDonagh, Independent Member, had raised the issue at the last meeting about Covid being included under resilience as he felt that most people watching the meeting would not know what ‘resilience’ meant. He referred to an item in the Liverpool Echo which had showed a  ...  view the full minutes text for item 45.

To consider the report of the Monitoring Officer.

            Jill Coule, Chief Legal and Monitoring Officer, presented a report which advised Members of the Committee of the review of the Constitution and sought views on proposed amendments to be considered for the Constitution for the next Municipal Year.

            Jill Coule advised that quite a comprehensive report had been provided on the Constitution and that had come about because the Constitution was a document which was kept under permanent review and update. Officers had now looked at the whole document to ensure that any changes were consistently reflected throughout the document.

            One of the first things that had been considered was how Motions were handled.  It had been realised that there were inconsistencies about how they were referenced, handled and the amount of time to be taken when presenting and moving a Motion etc. So that element had been tidied up whilst also ensuring that best practice from the councils around the constituent authorities had been taken into account. Appendix 1 set out the changes that had been made to ensure that they could be readily understood.

            Work had also been undertaken around the replacement of Members and it could be seen that as an organisation the authority had a very large Overview and Scrutiny Committee of around 20 Members and consequently there were often a few changes throughout the year. The timing of Combined Authority meetings did not necessarily align and could cause delays in agreeing any changes to membership of the Committee. It had therefore been proposed that the Chief Legal and Monitoring Officer should be given delegated authority to handle those changes in membership and then to report those to the Combined Authority at the next available meeting.

            It was also noted that the Constitution had been silent about cancelling a meeting, but it was felt that it would be good to have that provision if needed and that it should be made clear and transparent about how that would be handled. It was good practice and Members would already have that provision in their constituent authorities. 

            In the past every time the Head of Paid Service went on leave she would write a letter setting out that she was going on leave and that that particular person would hold her powers over that period. It was therefore decided that as the Executive Director team was now in place, together with a Deputy Chief Executive, the letter could be dispensed with. The Constitution had therefore been amended to state that in the absence of the Head of Paid Service the Deputy Chief Executive should act in her position. 

            Paragraph 3.11 highlighted some areas of forthcoming work which included a piece of governance work around how to ensure that our family of subsidiary companies and organisations were properly recorded and reporting.

            Further work was required to develop that and to make sure that strong governance links from our subsidiary companies fed into Audit & Governance Committee, Overview and Scrutiny Committee and into the Combined Authority itself. She felt that  ...  view the full minutes text for item 46.

To consider the report of the Monitoring Officer.

            Jill Coule, Chief Legal and Monitoring Officer, presented a report which detailed the proposed arrangements to be adopted by the Combined Authority for investigating and making decisions in relation to allegations made under its Members Code of Conduct (“Members Code of Conduct Protocol”). A copy of the proposed draft of the Members Code of Conduct Protocol had been included as Appendix 1 to the report.

            Jill Coule said that in the capacity of Monitoring Officer she had responsibility to ensure that the standards of Members and the process to consider standards of Members’ behaviour was transparent and available for members of the public should they wish to complain or indeed if any other Members or staff wished to complain.

            The report set out a protocol for how the authority would deal with complaints about Member conduct. The Members of the Combined Authority were the Members who sat on the Combined Authority meeting. All other Members who joined us and helped us with our work remained Members of their constituent authorities and the Combined Authority was effectively an Outside Body to those Members. So it was the Combined Authority, the Leaders of the six local authorities, the Metro Mayor and the non-voting Member who was the Chair of the LEP, that were statutory Members of the Combined Authority and it was those eight individuals to which these processes and procedures would apply.

            Members would recall that when the Member Code of Conduct had been introduced previously it had been mentioned that a common approach would be sought across the constituent authorities in respect of the arrangements for dealing with complaints. It had not been possible to achieve that common approach and therefore the authority had taken the best bits from all the constituent authorities to make this work. The proposed protocol had been attached to the report as an appendix and it was noted that this was a draft document as comments or observations were still awaited from a couple of authorities. The Chief Legal and Monitoring Officer was therefore seeking delegated authority to work with the Chair in case there were any minor tweaks or comments required beyond the Committee’s consideration of this matter.

            The Chair, Councillor Edna Finneran invited questions/comments from Members of the Committee. There were no questions or comments submitted by Members of the Committee.

            RESOLVED That:-

(i)        the Members Code of Conduct Protocol for adoption by the Combined Authority at its meeting on 29 April 2022 be noted and endorsed; and

(ii)     it be noted and endorsed that the Monitoring Officer might need to amend the Members Code of Conduct Protocol before it was presented to the Combined Authority following further consultation with relevant stakeholders. Should that prove necessary any such amendments would be considered in consultation with the Chair of the Committee.

To consider the report of the Executive Director of Corporate Services.

            Sarah Johnston, Assistant Director for Finance, presented a report which provided the Members of the Audit and Governance Committee with details of the proposed accounting policies to be adopted for the closure and preparation of the Statement of Accounts 2021/22.

            It was noted that this was an annual report and was a review of the accounting policies which were applied for the Combined Authority. An annual review was undertaken to ensure that our accounting policies were fit for purpose and there were a number of considerations that were taken into account when undertaking this review. Specifically, whether there had been any changes in accounting standards as were enshrined in the CIPFA Code of Practice which was the base upon which the accounts were completed. Other things that were taken into account included anything that had come out of the previous year’s audit.  For example, if there were any areas that the auditor had highlighted the accounting policies would be looked at again to see if they needed to be reflective of that. The authority would also look to see if it could simplify, enhance or streamline any of its accounting policies.

            A copy of the accounting policies were set out in the appendices to the report. Sarah Johnston confirmed that there had been no significant changes and that was broadly reflective of the fact that the accounting landscape had not really changed and there had been no significant changes to accounting policies. Members might be aware that there had been a proposal to make changes in respect of leases and there was a decision pending by the accounting body, CIPFA, to defer the introduction of that standard. The authority had done the work and it had an accounting policy that could be implemented if necessary. But as it stood the accounting policies were being put forward on the basis of no change.

            The Chair, Councillor Edna Finneran invited questions/comments from Members of the Committee.

            Councillor David Burgess-Joyce asked what percentage/number of invoices had been paid without a purchase order? Sarah Johnston replied that she did not have those figures to hand but she could provide them for Councillor Burgess-Joyce outside of the meeting.

            RESOLVED That:-

(i)        the attached accounting polices be noted and any comments provided thereon; and

(ii)     the attached accounting policies be approved.

The Chair noted that this was the last meeting that Martin McDonagh would be attending as an Independent Member. His term of office had come to an end and she would like to thank him on behalf of the Committee for his role in promoting and maintaining high standards of conduct and governance in the Combined Authority.

As this was the last meeting of the year she also thanked the Members of the Committee for their attendance and participation over the year. She also thanked the Officers for their hard work during another challenging year.