Minutes of the WAO Board meeting on Friday 23 May 2014

Transcription

1 Members: Isobel Garner Chair and non-executive member Amanda Hughes Elected employee member Chrissie Hayes Non-executive member David Corner Non-executive member and Chair of the ARAC Huw Thomas Chief Executive and Auditor General for Wales Kevin Thomas Director of Corporate Services (DoCS) Louise Fleet Elected employee member Peter Price Non-executive member and Chair of the Remuneration Committee Steve Burnett Non-executive member Apologies: None In attendance: Gillian Body Assistant Auditor General, Performance Audit (AAGPA) Item 7 Jean Kincaid Planning and Management Information Manager Item 11 Phil Jones Chair, Equality Interest Group (EIG) Item 8 Steve O Donoghue Director of Finance (DoF) Full meeting Board Secretary Item Agenda Part 1: preliminaries 1 Non-executive members appointment of the elected employee members 2 Chair s welcome and apologies for absence 3 Declarations of interest 4 Minutes of the meeting of 23 April 2014 and matters arising 5 Auditor General s update 6 Chief Executive s report Part 2: for adoption / decision 7 Common Audit Platform: outline business case 8 Equality work: governance and delivery arrangements 9 ARMC: draft terms of reference Part 3: for discussion 10 Auditor General s draft annual report and accounts Business planning: development of key performance measures 12 Corporate risk register, April Elected employee members: research project update 14 Board development: shaping the next workshop 15 Any other business Part 1: preliminaries 1. Non-executive members appointment of the elected employee members 1.1 As the Elections Officer, Peter Price reported that Amanda Hughes and Louise Fleet had been elected following a ballot under Schedule 1, Part 4, section 16(1) of the Public Audit (Wales) Act He proposed their appointment as employee members of the Board. 1.2 The non-executive members appointed Amanda Hughes and Louise Fleet to the Board under Schedule 1, Part 4, section 16(3), of the Public Audit (Wales) Act 2013, in accordance with the result of the ballot. WAO Board minutes Page 1 of 7

2 2. Chair s welcome and apologies for absence 2.1 The Chair welcomed members and those in attendance to the first meeting of the fully constituted Board. 2.2 There were no apologies for absence. 3. Declarations of interest 3.1 Amanda Hughes declared a personal but non-prejudicial interest in agenda items 6, 7, 13 and Louise Fleet declared a personal but non-prejudicial interest in agenda items 6, 7, 8 and The Board Secretary declared a personal but non-prejudicial interest in agenda item Minutes of the meeting of 23 April 2014 and matters arising 4.1 Subject to two drafting amendments and transferring responsibility for one outstanding action from the DoCS to the DoF, the Board approved the minutes as an accurate record of its meeting on 23 April The Board considered the actions outstanding from previous meetings and agreed that: (a) outside the meeting, the DoF would provide a note on the learning and development arrangements to support the establishment of the new senior structure; (b) the outcome of the Senior Leadership Team s planned discussion on the 360º review process would be reported to the Remuneration Committee in July; and (c) the Chair of the ARMC, the DoCS and the Board Secretary would review the action in respect of the risk strategy and the review of risk management arrangements. 4.3 As agreed in April, the DoF confirmed that the Remuneration Committee would receive a draft terms of reference for the review of pay bands 1 to 7 before any discussion with the trades unions. The DoF was expecting to finalise a draft in June. 4.4 Non-executive members confirmed that they had completed their registers of interests and returned them to the Board Secretary. 4.5 The Board agreed that the Chief Executive and the three employee members should also complete a register of interests using the same format as non-executive members. 5. Auditor General s update 5.1 The Auditor General updated the Board on a range of issues including: (a) the briefing delivered to the National Assembly s Finance Committee on the implications of the Public Audit (Wales) Act 2013 for roles and responsibilities and the planning and reporting framework, including the WAO s funding regime; (b) the ongoing discussions about the inspection powers that may be attached to the Future Generations Bill; (c) the early response from audited bodies to fees where increases consequent on the Public Audit (Wales) Act 2013 have affected smaller Assembly Government Sponsored Bodies; (d) that the Welsh Government is continuing to consider next steps in its Review of Audit, Inspection and Regulation; (e) the completion of the Gloucester Constabulary s investigation into unlawful payments made by Carmarthenshire and Pembrokeshire County Councils and its WAO Board minutes Page 2 of 7 SO HVT DC / KT / SO

3 conclusion that no criminal offences had been committed; (f) the Welsh Government s establishment of task and finish arrangements as part of its planned response to the reports of the Williams Commission on Public Service Governance and Delivery and of the Silk Commission on Devolution. The WAO is likely to have observer status; and (g) the Minister for Local Government and Government Business had supported the Auditor General s decision to adopt a more proportionate approach to discharging his duties under the Local Government Measure. 5.2 The Auditor General informed members that he would soon be publishing reports on: (a) the outcome of the National Fraud Initiative, a biennial data matching exercise, the latest cycle of which had helped audited bodies identify around 4 million of fraud against the public sector; and (b) scrutiny arrangements in local government. 5.3 The Board noted that the Auditor General will be attending a meeting of the UK Supreme Audit Institutions at the end of June. It discussed briefly the opportunities for shared learning and the scope for a secondment programme. The Auditor General confirmed that he would continue to explore such opportunities. 5.4 The Chair took the opportunity to update the Board on a range of issues including: (a) the need to reduce the number of staff supporting Board appearances before the National Assembly s Finance Committee; (b) the distribution of the stakeholder survey and its potential to significantly enhance the Board s understanding of audited bodies; (c) that the Auditor General would be delivering a keynote address at the WLGA s conference in June; (d) that she and the Auditor General would be speaking at the WLGA s Co-ordinating Committee s next meeting in July; (e) some early thinking is being done on further improving the WAO s efficiency and effectiveness; and (f) a proposed meeting with the Chair of Audit Scotland at the end of June had been postponed because of his other commitments but she will be meeting the chairs of the other UK audit institutions during the course of the next year. 5.5 The Board agreed that it would be useful to devote some time at its next meeting to consider how the Chair s role is settling down in practice. 6. Chief Executive s report 6.1 The Board noted the Chief Executive s report, commenting on the level of accumulated reserves expected to be redistributed to local government bodies, the consequent reduction in cash balances and the need for even tighter control of cash flow. 6.2 The Chair highlighted the need to report on performance measures for the GPX programme. Part 2: for adoption / decision 7. Common Audit Platform: outline business case 7.1 The Chair reminded members that, on 22 May, they had received a detailed briefing on the outline business case for the Common Audit Platform with the aim of securing the Board s agreement to seek a supplementary estimate for resource cover. She confirmed the Board s acceptance that do nothing was not an option, a view reinforced by the Auditor General as the Accounting Officer. 7.2 The Chair summarised the discussion noting that it probed and challenged the IG / HVT WAO Board minutes Page 3 of 7

4 outline business case, notably in respect of: (a) its place within the wider IT strategy; (b) its relationship to a document management system; and (c) future-proofing the project. 7.3 The Board expected to see a positive appetite for the project to be confident that it would engender the culture change and other intangible benefits envisaged in the business case. The Board also expressed the need for further consideration of whether the revenue costs of implementation should be included in the supplementary estimate. Members expect to receive a more robust cost-benefit analysis and NPV calculation with evidence of tangible benefits in respect of efficiency gains. 7.4 Members approved the request to seek a supplementary estimate for on the basis that this would provide resource cover that will enable the Board to make a final decision on the preferred supplier in July. 7.5 The Chair confirmed that the process going forward would be that: (a) the project team will provide the additional information requested to all Board members and to the ARMC; (b) Board members will send any comments to the Chair of the ARMC which will scrutinise a revised paper at its meeting on 16 June and provide assurance to the Board that its concerns have been addressed and on the level of the funding being sought; and (c) If the National Assembly s Finance Committee approves the supplementary estimate, the Board will make its final decision on the project at its meeting in July. 8. Equality work: governance and delivery arrangements 8.1 The DoCS reminded the Board that it had previously approved the joint Strategic Equality Plan (SEP) which was being published that day. The WAO and the Auditor General have good foundations in place to support their equality work. 8.2 The DoCS also reminded the Board that, in its consideration of the SEP, it had asked for greater clarity about the roles and responsibilities in its delivery. He explained that the paper now before members covered proposals designed to strengthen the WAO s governance arrangements around equality work with a view to maximising its impact. 8.3 The Chair welcomed the Chair of the Equality Interest Group (EIG) who explained that the proposal had emerged from the first ever joint meeting of the EIG and the Equality Steering Group (ESG). He drew the Board s attention to particular aspects of the paper and provided additional context including: (a) the creation of the ESG and EIG had recognised the need to separate the responsibilities for managing equality work and for engaging with people representing staff sharing protected characteristics; (b) the Welsh Government s duty to publish, by 31 December 2014, the first report of progress by public bodies in complying with the General Equality Duty. The DoCS would be meeting Government officials in June to inform that report; (c) the results of the staff equality survey which were generally positive though with improvements needed in some respects; (d) the absence of a formal work programme leading to a reactive approach and a focus on compliance with the regulations; and (e) the need to complete some specific tasks including in respect of website accessibility and the reasonable adjustments policy. GB GB DC WAO Board minutes Page 4 of 7

5 8.4 The Chair of the EIG explained that the joint EIG / ESG meeting had discussed combining the two groups into one to provide more coherent direction and be more efficient. However, for the reasons described in the paper, they had decided to maintain the existing distinction and to recommend further developments, including the appointment of a project manager to lead the equality work programme on behalf of the ESG. 8.5 The Board Equality Ally expressed her disappointment about the missed opportunity to merge the ESG and EIG into a single group with a remit to manage compliance with the regulations and to proactively engage with representative groups. She thought that the addition of EIG members to the ESG was a positive step. However, she was disappointed that four ESG members had not attended the joint meeting. 8.6 The Board Equality Ally was also concerned about the risk of appointing a project manager given that equalities needed to be embedded throughout the WAO as part of the culture change agenda. She proposed that the appointment be time limited to 18 months, at a sufficiently senior level to carry the authority to implement solutions and performance managed to a set of specific targets. 8.7 The DoCS reported that the proposal to appoint a project manager recognised that the current delivery arrangements are inefficient and that a more co-ordinated approach was needed to drive further progress, ensuring that equalities became embedded across the WAO, including in the Auditor General s audit work. He endorsed the proposal for a time limited appointment but thought that 18 months was the minimum period required to secure successful outcomes. 8.8 The Board discussed the WAO s arrangements for supporting staff with protected characteristics who feel that they are not treated properly in the workplace and those who feel unable to challenge behaviour that does not promote equality. Members recognised the sensitivities and acknowledged the need to build confidence that concerns would be taken seriously. They emphasised the importance of responding quickly to the staff equality survey by building awareness of the support mechanisms already in place through the equality allies. 8.9 The Board: (a) authorised the DoCS to develop a job specification for, and to advertise, the role of Equality Project Manager to be funded from within existing resources on a 0.5 full-time equivalent basis; and (b) agreed that the DoCS and the project manager should develop a work programme to translate the priorities identified at the joint ESG / EIG meeting into a set of tasks with targets attached to them The Board agreed that the appointment will be time-limited to an 18-month term with a review report to the Board (including the results of a staff equality survey) after 12 months. 9. ARMC: draft terms of reference 9.1 The Chair of the ARMC explained that, at its first meeting in February, the Committee had considered its draft terms of reference. The version now before the Board reflected the Committee s discussion and the amendments received subsequently. He was, therefore, presenting the final draft for the Board s approval. 9.2 Subject to some minor drafting changes, the Board approved the Committee s terms of reference. 9.3 The Board also approved a change of name to Audit and Risk Assurance Committee (ARAC), reflecting best practice guidance. 9.4 The Board noted its decision, in October 2013, that an employee elected member should be appointed to the Committee. It agreed that the Chair of the Committee WAO Board minutes Page 5 of 7 KT KT DC

6 would discuss the time commitment with the employee elected members before confirming the membership. Part 3: for discussion 10. Auditor General s draft annual report and accounts The Chair reminded members that the annual report and accounts were the Auditor General s responsibility and, as such, were before the Board for discussion only The DoF explained that the Auditor General had brought forward by ten days the timetable for producing, auditing and certifying the annual report and accounts. He thanked the team for delivering the various outputs in line with that timetable The DoF highlighted the positive messages in respect of achievements during the year. He reported that the technical review had provided positive assurance on the draft which was tabled for formal consideration by the ARAC on 16 June The Board discussed a number of drafting points that would help to clarify and enhance the annual report narrative. Members also discussed the accounting treatment of the refund of accumulated local government reserves. The Chair of the ARAC requested a note reconciling the number of voluntary exit packages with the provisions for early retirement and severance The Auditor General explained that he expected to sign the annual report and accounts in June and to lay them before the National Assembly s summer recess The Board supported the Auditor General s view that he should table the annual report and accounts for discussion at the National Assembly s Finance Committee in the autumn, alongside the joint estimate of income and expenses for and the interim report on the exercise of the Auditor General s and the WAO s functions. 11. Business planning: development of key performance measures 11.1 The DoCS presented a paper that: (a) provided an overview of the work-in-progress on the business plan and its direction of travel; (b) described the approach to developing key performance measures (KPMs) against which the WAO will report organisational performance; and (c) sought the Board s endorsement of the key themes under which the WAO would brigade the KPMs The DoCS explained that the project was behind schedule but that he expected to meet the Board s requirement for a draft plan in July Responding to Members questions, the Planning and Management Information Manager explained that the level of engagement in the project was high but that there was a range of views that made it difficult to achieve consensus Members questioned whether the organisation understood the importance the Board attached to an effective business plan and emphasised that the Management Committee needed to drive the project to a successful conclusion. Whilst disappointed with progress to date, they were encouraged by the framework described in the paper The Board supported management s view that the pace of development needs to improve with greater emphasis on the activities the WAO intends to deliver linked to KPMs that demonstrate achievement The Board endorsed the key themes but not the suggested KPMs included in the paper. Members agreed to send any comments on the KPMs to the DoCS and the Planning and Management Information Manager. WAO Board minutes Page 6 of 7 SO KT Board

7 12. Corporate risk register, April The DoCS presented an updated risk register explaining that he had taken into account the Board s previous comments in respect of a more strategic focus. He confirmed that the register represented the collective view of the Management Committee The DoCS explained that he had received a draft report of the internal audit review of the WAO s risk management arrangements which he had shared with the Chair of the ARAC. The Management Committee would receive the report at its meeting on 4 June before consideration by the ARAC on 16 June The DoCS explained the movement in four risk areas and the rationale for the judgements made. The Board explored in particular the arrangements for securing audit independence (risk 10) following the completion of the annual review, noting that the Management Committee and the ARAC would receive a report in June. 13. Elected employee members: research project update 13.1 The Board noted the update on progress with the research project which it had approved in March The employee elected members confirmed their willingness to participate fully in the project. 14. Board development: shaping the next workshop 14.1 The Board discussed the options for the content and timing of its next development session. It agreed that the Chair and the Board Secretary would develop a proposal focused on Board effectiveness in October. 15. Any other business 15.1 The Board considered a paper explaining the changes to the delivery of probation services in Wales and the implications for the audit of the audit of financial statements The Board agreed that, for the reasons described in the paper: a) the audit of the final accounting period of the Wales Probation Trust by the Appointed Auditor (i.e. for the two months to 31 May 2014) would conclude the WAO s involvement in the audit of probation services; but b) WAO staff may, on a commissioned basis, perform some element of the audit of the Community Rehabilitation Company on behalf of and reporting to the NAO, pending its transfer into private ownership The Elections Officer thanked the Board Secretary for managing a successful election process. The Chair similarly thanked the Elections Officer The Chair confirmed that she would be working on a communication to all staff marking the first meeting of the fully constituted Board. 16. Date of next meeting 16.1 Wednesday 18 June 2014 in Cardiff IG / AJB IG WAO Board minutes Page 7 of 7