Agenda and minutes

An apology for absence was received from Councillor Alex Evans.

The Local Government & Elections (Wales) Act stipulates that the member appointed as the committee chair must be a lay person.

UNANIMOUSLY RESOLVED that Mr D. MacGregor be appointed Chair of the Committee for the 2024/25 municipal year.

UNANIMOUSLY RESOLVED that Councillor G. Morgan be appointed Vice-Chair of the Committee for the 2024/25 municipal year.

The Chair welcomed Audit Wales representatives Ms Eleanor Ansell, Mr Gareth Jones and Mr Derwyn Owen to the meeting.

The Committee considered a report presented by Mr Gareth Jones, Audit Wales representative.  The report included the Audit Wales Work Programme and Timetable quarterly update, as at 31^st March 2024.

It was reported that materials from the good practice event on Audit Committees, effective practices and positive impact, which was held in May 2024 had been published and would be circulated to Committee Members following today’s meeting.

The Cabinet Member for Organisation and Workforce reported to the Committee that following the conclusion of the Audit Wales review on Safeguarding, the Authority had adopted an improved and robust approach in strengthening and monitoring the component elements of the corporate safeguarding process.

The Audit Wales Representative noted an observation raised regarding to the Thematic Review Digital.  The link included in page 4 of the report was signposted to a different Authority.  This would be duly corrected.

The following query was raised in relation to the report:-

• Reference was made to page 3 of the report.  It was asked, what work was being done following the completion of the National Review of Care Planning for Children and Young People Subject to the Public Law Outline Pre-proceedings in January 2024?  The Corporate Policy and Partnership Manager stated that she would check and inform the Committee on whether the Care Inspectorate Wales Report would proceed through the Scrutiny process or be captured via the Authority’s Performance Information Monitoring System (PIMS).

UNANIMOUSLY RESOLVED that the Audit Wales Work Programme Update be noted.

The Committee considered a report presented by Mr Gareth Jones, Audit Wales representative.  The Audit Wales Annual Audit Summary 2023 provided an outline of the work completed since the last Annual Audit Summary, which was issued in March 2023. The Audit Summary formed part of the Auditor General for Wales duties.

UNANIMOUSLY RESOLVED that the Audit Wales Annual Audit Summary 2023 be noted.

The Committee considered the 2024 Audit Plan for Carmarthenshire County Council presented by Mr Derwyn Owen, Audit Wales Representative.  It was noted that the Auditor General, as the auditor for the Carmarthenshire County Council, must discharge his statutory duties and obligations under the Public Audit (Wales) Act 2004 and the plan detailed the work to be carried out in order to discharge those responsibilities.

The plan set out the work intended to be undertaken to address the audit risks identified and other key areas of focus during 2024.  It also set out the estimated audit fee, detailed the audit team and key delivery dates and planned outputs.

The following query was raised as follows:-

• In connection with the Cyber Security arrangements, it was asked what was the responsibility of Audit Wales in the event of any of the bodies in Wales receiving a cyber-attack? Mr Owen stated that Audit Wales in terms of a national basis had undertaken work over the last 3-4 years assessing arrangements of all bodies in relation to cyber security.  The outcome reports were published in ‘private’.  It was reported that whilst it was fortunate that cyber-attacks on Welsh bodies were infrequent, it was important to seek to learn lessons and to publish the key results and key learnings from the events.

The Chair reminded the Committee that at its meeting on 17^th March 2023 [Minute 13 refers] received for consideration the Audit Wales’ report - Lessons from Cyber Attacks (October 2022), subsequently the Committee at its meeting on 29^th  September 2003 [minute 12 refers] received the Carmarthenshire County Council’s Response to that report which provided Members with the reassurance that this Council had robust arrangements in place in the event of a cyber-attack.

UNANIMOUSLY RESOLVED that the 2024 Audit Plan for the Authority be received and noted.

[Note: Councillors K. Broom, K. Davies, P. Warlow, D.E. Williams, J. Williams, Mrs K. Jones and Mr M. MacDonald declared an interest in this item but remained in the meeting during its consideration.]

The Committee considered the 2024 Audit Plan for the Dyfed Pension Fund that was presented by Ms Eleanor Ansell, Audit Wales Representative.  It was noted that the Auditor General, as the auditor for the Dyfed Pension Fund, must discharge his statutory duties and obligations under the Public Audit (Wales) Act 2004 and the plan detailed the work to be carried out in order to discharge those responsibilities.  Accordingly, consideration was given to the risks, audit team, fees and timetable.

It was commented that it was beneficial that the required work be submitted within the timescales in order to keep fee levels to a minimum.

UNANIMOUSLY RESOLVED that the 2024 Audit Plan for the Dyfed Pension Fund be noted.

The Committee considered the 2024 Audit Plan for the Burry Port Harbour, which was presented by Mr Derwyn Owen, Audit Wales Representative.  The report included a letter which set out the planned work to be undertaken during 2024 to discharge the statutory responsibilities of the Auditor General for Wales and to fulfil his obligations under the Code of Audit Practice.  It included the work intended to be undertaken, the estimated audit fee, details of the audit team and key dates for delivering the audit team’s activities and planned outputs.

UNANIMOUSLY RESOLVED that the 2024 Audit Plan for Burry Port Harbour be noted.

The Committee reviewed the Council’s Draft Annual Governance Statement (AGS) for the year ended 31 March 2024 which would accompany the Statement of Accounts to demonstrate that the Authority was in compliance with CIPFA’s 2016 Framework - Delivering Good Governance in Local Government and core principles of good governance.

The following observations raised by the Committee were addressed as follows:-

• In recognising that the management of complaints was an area in need of improvement, it was commented that the inclusion of improved information on this issue would be beneficial. It was also suggested that the action being taken to achieve this objective should be recorded in the action plan of the Annual Governance Statement.

Reference was made to Openness and Engagement section within Appendix 2 of the Statement of Accounts [AGS 2023/24 No.4].  In connection with the complaints policy and the concerns identified, it was asked if the date March 2025 should be brought forward?  It was reported that a separate action would be included in the action plan which would set out what officers intend to do in order to achieve compliance with the statutory requirements.  This would be included in the next version of the action plan.

• The work in regard to the additional data and information and evidence that had been included was commended and sincere gratitude was extended to officers for the thorough report.

• Reference was made to page 14 of the AGS report – What and how we can do better?  In reference to the first paragraph, it was commented that all members should be subject to receiving the response to valid questions.  It was agreed that the comment was fair and that it would be forwarded to the Monitoring Officer for consideration.

• It was commented that the Annual Governance Statement was presented well, it was easy to read and digestible whilst crystalising each section appropriately.

UNANIMOUSLY RESOLVED that subject to further consideration of the issues identified above, the Draft Annual Governance Statement for 2023/24 be endorsed.

The Committee considered the draft Statement of Accounts 2023/24 for

Carmarthenshire County Council, which had been prepared in accordance with the Accounts and Audit (Wales) Regulations 2014 (as amended 2018). 

This was a substantial document and had been considered in depth at a briefing earlier in the week.  In addition to the briefing earlier in the week, the Committee was provided with an overview of the salient points contained within the Statement of Accounts which summarised the financial position of the Authority for the year ended 31 March 2024.

The Director of Corporate Services detailed the movements which had been made to and from earmarked reserves, and explained that retrospective approval was sought in respect of transfers pertaining to the Major Development Fund, Modernising Education Programme (MEP) Capital Funding and the City Deal/ Pentre Awel Reserve. 

The following observations raised by the Committee were addressed as follows:-

• In acknowledging that 2023/24 had been a very challenging year, it was raised that previous audit statements had indicated that there was forecast to be 5% less children and an increase of 25% elderly persons  in the coming years, which would place significant pressure on social care and health, and more so on schools with the ever-decreasing funds.  The spending pressures evidenced in the draft accounts for 2023/24 were noted by the committee and the implications of these on the 2024/25 financial year were raised. It was asked if these were being modelled into future budget figures?  The Director of Corporate Services confirmed, yes and explained that work on next year’s budget had already commenced and that societal influences would be factored in.  In addition, thematic themes and trends from departments were being collated which would inform the future budget allocations.

Furthermore, arising from the discussions at the briefing earlier in the week, it was considered that it would be beneficial for Committee Members to have an indication of the underlying trends and be informed further of the ongoing pressure areas in order to enable the Committee to discharge its responsibilities in monitoring performance.  Therefore, it was suggested that it would be prudent to hold an additional informal briefing meeting in the Autumn to discuss the budgets and financial implications facing Council services and schools, taking into consideration the departmental financial modelling at an early stage of the year.  In response to the suggestion and a number of comments raised in recognising the benefits of being informed earlier in the budget process, the Director of Corporate Services took on board the suggestion and agreed to facilitate accordingly.

[Note: Councillors K. Broom, K. Davies, P. Warlow, D.E. Williams, J. Williams, Mrs K. Jones and Mr M. MacDonald declared an interest in this item but remained in the meeting during its consideration.]

The Committee received for consideration the Pre-Audit Dyfed Pension Fund Statement of Accounts 2023-24.  The report considered the financial position of the Dyfed Pension Fund as at 31st March, 2024 and its income and expenditure during that year.

It was noted that the Net Assets of the Fund had increased by £332.6m from 2022-23 to 2023-24 and that his was mainly due to the increase in market value of the investment assets.  In relation to expenditure, Benefits Payable and Transfers Out increased by £14.5m to £118.4m. Income, Contributions and Transfers In had increased by £7.4m to £108.3m.  Total membership of the Fund increased by 1,249 from 54,555 in 2022-23 to 55,804 in 2023-24 which was an increase of 2.29%.

The following observations raised by the Committee were addressed as follows:-

• Reference was made to page 32 of the report.  In response to a query regarding the extraordinary contribution rate of 271% in connection with Aberystwyth University - Admission bodies Community Admission Body (CAB), the Head of Financial Services stated that there was an explanation which he would provide outside of the meeting.

RESOLVED that the Pre-Audit Dyfed Pension Fund Statement of Accounts 2023-24 be received.

In accordance with the Accounts and Audit (Wales) Regulations 2014, and the delegated powers enshrined within the Local Government Measure, the Committee considered the 2023-24 Pre-Audit accounting statement of the Harbour Authority.

Carmarthenshire County Council has a range of statutory powers and duties for the purposes of improving, maintaining, and managing the Burry Port harbour through the Burry Port Harbour Revision Order 2000. 

From 1st April 2018, the Authority granted a long-term lease to The Marine & Property Group Ltd, who took over the running and management of Burry Port Harbour and consequently the activity on the statement was much reduced. In June 2023, the High Court appointed Administrators for Burry Port Marina Ltd, the company which leased and operated Burry Port Harbour. Following this, the Authority had entered into a funding agreement with the Administrators to enable the continued safe operation of the harbour during the period of administration.

The Committee was informed that the Authority had agreed to provide short term funding to ensure the Harbour remained operational. The company position had created significant doubt regarding the realisation of debt or balances, and a provision for this amount had been included.

It was reported that the net cost of the harbour activities in 2023-24 amounted to £239k, and all activities were fully funded by Carmarthenshire County Council.  The fixed assets held at 31st March 2023 totalled £843k.  The report stipulated that the increase in costs year on year of £93k consisted of an increase in other payments of £129k offset by a decrease in capital works expenditure of £34k.

UNANIMOUSLY RESOLVED that the pre-audit Accounting Statement for Burry Port Harbour Authority for 2023-24 be received.

The Committee considered a report which provided an update on the progress made on the implementation of the Internal Audit Plans for 2023/24 and 2024/25.  It was reported that a completion rate of 93% had been achieved for 2023/24. 

In addition, appended to the report, the Committee received a summary of the Final Reports for the following key financial systems completed during the last Quarter:

• Council Tax
• Creditor Payments
• Petty Cash

The following observations raised by the Committee were addressed as follows:-

• Reference was made to the Internal Audit review – Petty Cash (2023/24) and the Annual Certification Exercise. In commenting that petty cash was public money in which the officers were responsible for the management of the money, disappointment was expressed in regard to the certification exercise in 2022/23 which had a 79% return rate.  Whilst acknowledging follow-up e-mails had been issued in an attempt to receive all certifications, 21% remained unreturned. It was commented that this was a requirement and therefore an unreturned certification was unacceptable.

The Head of Financial Services agreed and stated that they had adopted a similar approach to the annual certification exercise on the payroll staff across the team which had been successful. 

• Reference was made to Petty Cash Account Usage.  In noting that the action ‘Consideration to be given to £75 limit, which has not kept pace with inflation over a period of time’ had been marked as completed, clarification was sought.  The Head of Financial Services stated that the team continued to consider an appropriate limit which was a longer piece of work, it if was more than £75 could or should another method other than cash be utilised?  It was therefore commented that further work was required and that the action was not yet complete.

UNANIMOUSLY RESOLVED that Internal Audit Plan Update 2023/24 and 2024/25 be received.

The Committee considered the Internal Audit Annual Report for 2023/24 which provided an opinion by the Chief Audit Executive (Head of Revenues and Financial Compliance) on the adequacy and effectiveness of the Authority’s control environment, based upon the delivery of the 2023/24 Internal Audit Plan approved by the Governance and Audit Committee. Accordingly, the report encapsulated the annual position of the audit work undertaken within the Authority during the reporting period in accordance with the provisions of the Public Sector Internal Audit Standards (PSIAS) and included comparable data.

The Committee noted that the overall opinion of the Head of Revenues and Financial Compliance was that based on the programme of audit work undertaken to assess the framework and application of governance, risk management and control, the annual opinion for 2023/24 was acceptable.

It was reported that during the period April 2023 to March 2024 a total of 115 recommendations had been made and following an analysis of the recommendations, it was positive to note that no fundamental weaknesses had been identified.

The report concluded that clear governance arrangements were in place, which comprised of defined management responsibilities and committee structures, with a generally sound control framework which operated reasonably consistently. 

The following observations raised by the Committee were addressed as follows:-

• An expression of thanks was extended to the staff within the Internal Audit Team for their hard work in delivering the audit plan throughout the year.

• In response to a query, the Principal Auditor stated that the progress updates in regard to the Audit Wales recommendations are presented to the Committee annually in December.  

• Reference was made to the Anti-Fraud and Anti-Corruption Strategy cited on page 12 of the report.  In response to a query, the Committee was informed that the Strategy 2020-2025 would be presented to the Committee early 2025 for review.

• In terms of Staffing, it was raised that it would be beneficial that the vacancies be added to the quarterly progress reports as this important aspect would highlight if there were adequate resources available for internal audit. 

• Reference was made to the set of definitions used to evaluate the level of assurance provided by audit engagements.  In commenting that whilst the new definitions were welcomed, it was asked how this would impact on the reports that were currently presented to this Committee?  The Principal Auditor explained that the new definitions would allow for a better differentiation between varying levels of assurance.  Furthermore, assurance was provided that subject to the Committee decision all fundamental reports would continue to be presented to the Committee regardless of the level of assurance.

UNANIMOUSLY RESOLVED that Internal Audit Annual Report 2023/24 be received.

The Committee considered the Governance and Audit Committee Annual Report 2023/24 presented by Mr David MacGregor, Chair of the Committee. 

The Committee has a continuous role in the process of securing ‘good governance’. The core purpose of a Governance and Audit Committee was to provide independent assurance on the adequacy of the risk management framework and associated control environment.

In accordance with the expectation/requirement that an Annual Report be produced each year, this report was the first of such reports which highlighted the range of issues considered by the Committee and reflected on the Committee’s performance during the 2023/24 municipal year.

UNANIMOUSLY RESOLVED that the Governance and Audit Committee Annual Report 2023/24 be received and that it be presented to full Council.

UNANIMOUSLY RESOLVED that the minutes of the Grants Panel meeting held on 22^nd February 2024 be received.

The Committee considered its Action Log which included progress information in regard to the actions arising from previous meetings.

It was highlighted that the Governance and Audit Committee Self-Assessment review had now been completed.

UNANIMOUSLY RESOLVED that the Governance and Audit Committee Action Log be received.

RESOLVED that the minutes of the meeting of the Governance and Audit Committee held on the 8^th March 2024 be signed as a correct record.