Venue: Room 116, West Midlands Combined Authority, 16 Summer Lane, Birmingham, B19 3SD
Contact: Craig Evans, Governance Services Officer
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Appointment of Vice-Chair Presented By: Chair Minutes: The committee confirmed Councillor Ram Lakha OBE as Vice-Chair of the Audit, Risk & Assurance Committee for the 2024/25 municipal year.
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Minutes - 11 March 2024 Presented By: Chair Minutes: The minutes of the meeting held on 11 March 2024 were agreed as a correct record.
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Matters Arising Presented By: Chair Minutes: Minute No. 63 Health & Safety Annual Update
The Health and Safety Manager had retracted their resignation and therefore they would present the next health and safety annual update in April 2025.
Minute No. 66 Draft Annual Governance Statement
An update on the annual governance statement was included in the internal audit papers.
Minute No. 67 Overview of WMCA’s Arm’s Length Companies
There had been a discussion at the previous committee on materiality and which companies form part of the consolidation, which was noted in Grant Thornton’s report.
Minute No. 68 ARAC – Terms of Reference
It was noted that subsequent to the discussion at the previous meeting, the WMCA had obtained an opinion from legal counsel in June 2024 which stated that the WMCA arrangements in relation to the signing off of the annual statement of accounts are lawful.
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Presented By: Chair Minutes: The action list was reviewed and noted.
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Presented By: Chair Minutes: The Chair requested that for the 18 November 2024 committee meeting, the FY24 External Audit Findings Report from Grant Thornton be noted on the forward plan. Furthermore, the Chair requested the addition of Grant Thornton’s FY25 Audit Plan on the April forward plan.
Councillor Lakha emphasised the importance of the 18 November committee meeting being quorate, in order for members to approve the Annual Accounts.
Resolved: (1) That the work programme be reviewed and noted. |
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Chair's Remarks (if any) Presented By: Chair Minutes: The Chair welcomed existing and new members to the committee and invited introductions from lead officers. |
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WMCA External Audit Plan 2023/24 Presented By: Louise Cowen / Zak Francis, Grant Thornton Additional documents: Minutes: The committee considered a report from the Head of Financial Management to update members on progress towards completing the WMCA’s statutory Statement of Accounts.
The External Auditor from Grant Thornton referred members to the Appendix 1 document for informing the audit risk assessment for the WMCA and noted that the purpose was to contribute towards the effective two-way communication between the WMCA’s external auditors and the committee, as those charged with governance. The report covered some important areas of the auditor risk assessment, that Grant Thornton was required to make inquiries of the committee under auditing standards.
The Chair noted a correction in reference to pages 28 and 30 of the document to note that previously the WMCA’s internal audit service was provided from City of Wolverhampton Council, however during 2023, the WMCA had established its own Internal Audit team.
In response to the Chair referencing a Chief Audit Executive within the document, the Director of Law & Governance confirmed that this was within her role.
In response to the Chair who queried what the £350million funding allocation breakdown due to the WMCA was, the Executive Director of Finance & Business Hub confirmed that £100million was from the previous governments HS2 network reallocation that would be put towards the Capital Programme, and that there would be a one-off £250million payment over a five-year period to secure transport network stability within the region. The Chair noted the funding did not relate to the FY24 accounts, however, it would be relevant for consideration over the next few years.
The External Audit Plan, which was attached as Appendix 2, was presented by the External Auditor at Grant Thornton to provide an overview of the planned scope and timing of the statutory audit of the WMCA.
In response to the Chair who noted a reference to lease accounting within the document and whether there would be of significance for the WMCA accounts going forward, the Head of Financial Management noted that the International Financial Reporting Standard (IFRS) 16 Implementation came into effect on 1 April 2024 and would impact on the 2024/25 financial year. The Chair enquired as to whether there would be the need for any disclosures in the FY24 accounts as part of transition arrangements. The Head of Financial Management noted that the Finance team was implementing a plan to determine compliance with the new financial reporting standard.
In response to Councillor Jaspal who queried Grant Thornton’s resources and timescales to audit following the announcement from the Mayor for an independent review on all transport projects, the External Auditor from Grant Thornton noted that in terms of the external audit of the financial statements that there should be no impact as the current audit remained factual, however, areas such as Value for Money (VFM), effectiveness, economy efficiency and governance in terms of the review may have to be considered. The Executive Director of Finance & Business Hub provided a verbal overview to the committee that the purpose of the review was to look at the ... view the full minutes text for item 7. |
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WMCA Revenue Budget & Capital Programme Summary 2024/25 Presented By: Louise Cowen Minutes: The committee considered a paper from the Executive Director of Finance & Business Hub to provide a brief overview of the WMCA’s revenue and capital budgets for 2024/25 that was approved by the WMCA Board in February 2024.
Resolved:
(1) The Revenue Budget and Capital Programme Summary 2024/25 report for the West Midlands Combined Authority be noted.
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Risk Management at the WMCA Presented By: Peter Astrella Additional documents:
Minutes: The committee considered a report from the Risk Manager to present an update on risk management at the WMCA to note that the WMCA’s Risk Management Framework, that provided the structure and tools for staff to undertake consistent risk management, had recently been refreshed and approved by the WMCA Executive Board.
The Chair thanked the Risk Manager for the report in terms of setting the context for how risk was considered and managed within the WMCA.
Resolved:
(1) The report that provided the Audit, Risk & Assurance Committee with an update on risk management activity at the WMCA be noted. |
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Strategic Risk Update Presented By: Peter Astrella Additional documents:
Minutes: The committee considered a report from the Risk Manager to present visibility of the strategic risks currently faced by the WMCA and to support its function in monitoring the operation of risk management at the WMCA as outlined within the Strategic Risk Update at Appendix 1 and the Strategic Risk Register at Appendix 2.
In response to Councillor Fitter, who queried as to how often the committee would have visibility to strategic risks, the Risk Manager confirmed the committee would receive quarterly updates.
In response to Councillor Lakha, who queried how frequently the strategic risks were being overseen by Senior Managers and the WMCA’s Executive Board, the Executive Director of Finance & Business Hub confirmed that the organisational risks were reviewed monthly as part of a wider finance and business hub performance pack that included updates from human resources and finance monitoring for assurance.
In response to Councillor Little who sought assurance on the process of daily activity from officers reporting and monitoring strategic risks to ensure a detailed level of oversight, the Head of Business Improvement noted that since the development of the strategic risk register three years ago, the WMCA had sought to embed across the organisation visibility and transparency to performance and risk to enable evidence-based data driven decisions. She further provided a brief verbal overview of work within the WMCA to ensure delivery directorates had their own operational risk registers, new internal governance processes implemented to monitor risks, usage of a PowerBi tool to ensure triangulation of capital spend and reporting performance against the annual business plan and strategic risk register. In addition, considerable work had been undertaken around project and program risks to ensure an escalation route to the strategic risk register.
In response to Councillor Fitter who enquired whether there would be a risk report on the Mayor’s plan for bus franchising, the Risk Manager noted that he had commenced the process of communication with colleagues, heads of service and directors on whether there would be any assumed additions or changes to the risk register of occurrence to then be discussed with the WMCA’s Executive Board in August, before being presented to the committee in September.
Resolved:
(1) The key messages in the Strategic Risk Update and revisions to the Strategic Risk Register be noted. |
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2024/25 Internal Audit Plan Presented By: Matthew Dean Additional documents: Minutes: The committee considered a report from the Head of Internal Audit & Information Governance to present the proposed 2024/25 Internal Audit Plan for the WMCA.
The Chair thanked the Head of Internal Audit & Information Governance for the report noting a much stronger linkage between the plan and risk which was a positive development and he admired the ambition within the plan to complete 30 audits, which is significantly more than has been completed historically.
In response to Councillor Lakha who noted a number of deferred audits from 2023 and requested an understanding as to why, the Head of Internal Audit & Information Governance confirmed the reason was due to time constraints and resourcing within the internal audit function previously that had now been resolved due to increased capacity within the team.
The Head of Internal Audit & Information Governance noted that there were two audits in relation to the UK Shared Prosperity Fund and Operator Charging that had been deferred and were included within the 2024/25 Internal Audit Plan. Both audits were currently in progress with completion expected imminently.
Resolved:
(1) That the 2024/25 Internal Audit Plan be approved. |
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Internal Audit Update Report Presented By: Matthew Dean Additional documents:
Minutes: The committee considered a report from the Head of Internal Audit & Information Governance to present an update on the work completed by the Internal Audit team since the previous update in March 2024 and progress made against delivery of the 2023/24 Internal Audit Plan.
Resolved:
(1) The contents of the latest internal audit update report be noted. |
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Presented By: Joti Sharma Minutes: The committee considered a report from the Head of Programme Assurance & Appraisal to present reassurance that the WMCA continued to support embedding the Single Assurance Framework arrangements at the WMCA.
The report detailed thematic programme assurance information from WMCA projects that had been assured through the Single Assurance Framework (SAF) that applied to projects funded through devolved investment funds only. The report highlighted that projects were being delivered and through the framework were demonstrating compliance to devolved assurance arrangement standards as requested by Central Government.
Councillor Martin noted from the report that business cases seemed to be coming through steadily and broadly in line with previous years and noted that from an investment perspective that SAF appeared to be performing well to provide assurance to business case assessments.
Resolved:
(1) The contents of the report which had previously been considered by WMCA’s Executive Board be noted. |
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Treasury Management Outturn Report 2023/24 Presented By: Mark Finnegan Minutes: The committee considered a report from the Lead Treasury Accountant to present the annual Treasury Management Strategy statement which was an outturn report for the previous financial year known as a stewardship report.
The report had been written in accordance with the requirements of the Chartered Institute of Public Finance and Accountancy’s Code of Practice on Treasury Management. An important element of the code was that each local and combined authority delegate within its structures, an independent scrutiny function and that in the case of the WMCA this was fulfilled by ARAC. The Lead Treasury Accountant further noted that the committee would receive 2 further reports throughout the municipal year which was the Mid-year Review Report in November 2024 and the Treasury Strategy Statement in advance of the forthcoming financial year in February 2025.
The Chair noted that current forecasts suggested that the WMCA would not need to take on any further borrowings in 2024/25 or 2025/26 due to cash balances that remained elevated as a result of the inflows from the City Region Sustainable Transport Settlement Programme (CRSTS) and other government grants.
Furthermore, the Chair was pleased to note from the report that monies from investments with two local authorities who had issued Section 114 notices had been repaid.
Resolved:
(1) That the Treasury Management Outturn Report 2023/24 be noted. |
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Exclusion of the Public and Press [In accordance with s100(A) of the Local Government Act 1972, the public and press be excluded from the meeting for the following items of business as they are likely to involve the disclosure of exempt information as specified in the paragraphs of the Act.] Presented By: Chair |
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Whistleblowing Claims Update
Presented By: Loraine Quibell Minutes: The public was asked to leave for the disclosure of exhibit information in accordance with s100(A) of the Local Government Act 1972.
The committee considered a report from the Corporate Governance Manager to present an update on whistleblowing claims received to date and the actions that had been taken in response.
Councillor Little requested clarification on whistleblowing at the WMCA and distinction between whistleblowing claims (typically internal) being received from the public and public complaints. In response, the Corporate Governance Manager noted that whistleblowing was available to the public through a link on the WMCA’s website and therefore a recognition that whistleblowing claims can come from both internal and public sources. The Head of Audit & Information Governance further commented that the WMCA does have a complaints policy and that complaints are triaged to determine if they are complaints or whistleblowing claims and that Statutory officers, including the Monitoring officer, oversee the handling of whistleblowing claims.
Resolved:
(1) The actions taken by WMCA’s Internal Audit team in response to whistleblowing claims received and addressed by the authority since December 2023 when an update was last issued to the committee be noted. |