Agenda and minutes

The Chair to welcome Members to the meeting.

Lead: Chair

1.1          The Chair welcomed everyone to the meeting and extended a warm welcome to Ian Gilroy, representing Mazars. As only one elected member was present the meeting proceeded as a Consultation Call of the Finance Director.

Members are required to declare any personal, prejudicial, or disclosable pecuniary interest they may have relating to items on the agenda and state the nature of such interest.

Lead: Chair

2.1          There were no declarations of interest.

To note as a correct record the minutes of the Audit & Governance Committee held on 15 December 2023.

Lead: Chair

3.1             The minutes from the previous consultation call were approved as a true and accurate record of the meeting held on Friday 15 December 2023.

Matters Arising

3.2             The Chair confirmed there is currently no Vice Chair of the  Committee. Some Members of the Committee have expressed reasons as to why they are unable to take on the position at this stage.  The matter is therefore still outstanding and will be deferred to the July meeting.

To consider the updated Corporate Risk Register and deep dive on corporate risk 876, TfN Cyber security/attacks.

Lead: Daniella Della-Cerra-Smith

4.1             Mr Thomas had submitted comments prior to the meeting which have been shared. The Risk Manager went through the Risk Register and updates which had been made including the forthcoming timeline of events.

4.2             Ms Reed asked whether there could be explicit recording of on-going actions in the risk register; for example, the last attendance at a meeting or the last engagement if there are on-going actions.  The Risk Manager said assurance can be gained through the deep dive process which will ensure that there is a tracking of progress, and the Assurance Report also shows evidence.

4.3             Mr Brady conveyed that he felt there was a lack of specific risks around the political environment and horizon scanning in terms of the general election; he asked if there are any mitigations that TfN needs to think about in terms of global impacts.  He also asked about Control and Actions for T-683 and asked about its current relevance, given the national announcement from Government about HS2 and whether TfN should still be investing resources in this area.

4.4             The Risk Manager replied that Risk 879 is linked to the political environment and discussions are taking place at Chief Executive and Director level.  In terms of HS2, there are still discussions around rail and this risk will not be retired at this stage due to the proposals for Network North and HS2.  The Partnership and Programme Manager reiterated that HS2 remains on the risk register because it links into the Northern Powerhouse Rail programme.  The Finance Director said TfN has yet to fully understand the implications of the recent announcement.

4.5             Cllr Baker-Rogers asked whether there is reference on the risk register to the fact that the Government will soon switch off the analogue phone network. The Risk Manager responded that it is not yet on the register but will be reviewed in due course.  The IT Manager confirmed that we do not use analogue phones at TfN.  Cllr Baker-Rogers asked that it be added to show that we have shown consideration. The Finance Director suggested this was considered at the next functional risk review.

1.1                   

4.6             The Chair highlighted that there is a danger that risks begin to appear outdated when they refer to an organisation 2 – 3 years ago; for example, risk 310. If the wording of the risk is altered to a changed influence, it alters the thinking at a corporate level about the threat and could also alter the risk scoring. An organisation may not necessarily want to retain the original ambition about influence over an outcome, and it is important to recognise things have changed, and ambitions have changed.  The tone of the risk register needs to remain reflective of the organisation as it changes positions.

4.7             Mr Thomas commented that a risk to an organisation is maintaining risks which stagnate.  He stated that each time a risk is assessed from the outset, questions should be asked as to whether it has changed or  ...  view the full minutes text for item 4.

Toconsider the Transport for the North October-December 2023  Quarterly Operating Report.

Lead: Caroline Young

5.1             The Partnership and Programme Manager introduced the QOR, noting that it is an evolving report and, in the future, will be more sharply focused, providing greater assurance around performance and being easier to read. The January to March report is under development and will be published in mid-April.

5.2             Ms Reed asked whether the underspend in relation to analytical support to the DfT is a crystallised underspend, in that it was not agreed until late so will not roll over to following years and be accumulated.

5.3             The Finance Director replied that is a ring-fenced budget for 2 years and is underspent as it took part of the year to be finalised. The products are still being delivered and there will be an element of that grant that will not be used, so it will be returned. He confirmed that a delay in programmes being achieved does put pressure on subsequent years of ring-fenced budget, and a conversation about this is taking place with the DfT. He added that it is important to begin procurements early.

5.4             The Finance Director confirmed that the Operating Report can be shared with this Committee via a link once it has been published. The Partnership and Programme Manager indicated that the report will be published on TfN website going forward.

Resolved:

That the Quarterly Operating Report was noted

To consider the Revised Audit Completion Report

Lead: Ian Gilroy

6.1             Members received the presentation on the revised audit completion report from Mr Gilroy.

6.2             The Chair asked about the ability to complete the contracted activity given the on-going delay with the 22/23 year, and whether there is anything to say this will repeat for 23/24. Mr Gilroy replied that it is too early to say, because the nature of the issue in respect of the pensions for 22/23 was very specific.

6.3             Cllr Bakers Rogers requested further information about the material difference found for the pensions. The Finance Director explained that with the exception of the year ending March 2023, we have always based pension adjustments on the draft information that is available in February using estimated actuarial reports based on estimated head count. The external auditors review this and there has never been a material variation until this year; it was due to the net increase of staff between the estimated headcount and the actual headcount. In future, TfN will obtain two sets of reports, one based on February figures, and one based on actual, so we will be able to establish earlier whether there is a material adjustment.

Resolved:

That the External Audit report be noted.

To review the final accounts for 2022/23 for the submission to Board on 20 March.

Lead: Paul Kelly

7.1             The Finance Director explained the background to submitting the statutory accounts for approval.

7.2             Mr Thomas asked how fraud would be reported to the Committee and who would investigate any fraudulent activity. 

7.3             The Finance Director indicated that TfN has never suffered a fraud, but the process is detailed in the Constitution. TfN does have an anti-fraud policy that has recently been reviewed.

Action:      At the next meeting, responsibility for fraud investigation will be confirmed.

 Resolved:

That the Committee note the intention of the external auditor to provide an unqualified, clean audit opinion and recommended the Statement of Accounts be submitted to Board on 20 March for approval.

To consider the reports from RSM Risk Assurance Services

·       Progress Report

·       Audit Plan 2024/25

·       Staff Mental Health and Well-being report

·       IT Access Management Security Report

Lead: Alex Hire

8.1             The Chair thanked Ms Hire for sharing the background information relating to this agenda item. The risk report narrative provided additional signposting around the reports providing a complete picture.

8.2             Ms Hire presented the progress report and highlighted the key points within the internal audit plan for 24/25.  

8.3             The Chair asked whether there had been enough time between the co-sponsorship audit and the TAME audit and whether any of the actions from the first audit affect how the second audit is to be approached.

8.4             Ms Hire agreed to consider this off-line and said that timings can be rearranged if necessary. The Risk Manager indicated that the timing should not be an issue. The Finance Director commented that the first item is about governance and the second item is more about the product and whether it is producing what it should do.

8.5             The Chair asked about the wording of the TfN Offer review and whether we have the capability to deliver the offer and what will be the output of the audit. He asked if the expectation will be to reconsider the direction of travel based on the outcome of the review. The Finance Director stated that the TfN offer is good value for money solution (for DfT) and an obvious area for growth for TfN and hopefully the audit will support that.

8.6             Mr Brady commented that the 3 proposed audits are the right ones.  asked whether there could be more substance added to the specification of the TfN Offer audit prior to the next meeting.

8.7             The Risk Manager replied there is a deep dive on the TfN Offer in July so it would fit well in terms of timing.

8.8             Ms Hire then went through the report on mental health and well-being; substantial assurance in this area was provided with one action of refresher training for line managers.

8.9             Ms Hire provided an update on the IT Access Management Security review. 

8.10          Mr Thomas asked about DBS checks on staff and whether TfN has ever considered that this be done; some organisations enforce that all members of staff have this done on them regardless of their field of work.  Ms Reed commented that if the correct controls are in place no one should be able to do anything fraudulent.

8.11          The Head of HR provided assurance that a review and assess process is undertaken to ascertain whether a DBS check is required for each role. The Finance Director agreed that controls are not person specific and that Mr Thomas’ points will be considered in order to be satisfied all necessary checks are being carried out.

Resolved:

That the Internal Audit reports be noted.

To consider the updated Annual Governance Statement.

Lead: Joanne Barclay

9.1          The Senior Solicitor presented the report highlighting the main differences from last year including the partnership arrangements.  An updated chart was shared setting out the governance structure for TfN. A draft annual governance statement will be prepared as part of the publication of the draft accounts for May 2024.

Resolved:

The Committee noted and supported the further work to be undertaken in relation to the annual review of the effectiveness of internal controls for 2023/24 and that the additional work will be included in the final draft Annual Governance Statement, and noted and supported the future enhancements to the 2024/25 Annual Governance Statement.

To consider the proposed surveys which will be utilised as part of the monitoring the effectiveness of the committee.  Including self -assessment of good practice and evaluating the impact and effectiveness of the committee.

Lead: Joanne Barclay

10.1          The Senior Solicitor presented the report which detailed the proposed process for undertaking the monitoring and included the two proposed surveys for Committee members and Senior Officers.  Members and Officers will be asked to provide responses to the surveys by mid-April.  The responses will be reviewed and reported back to the Committee.  If any assistance is required, the Senior Solicitor can be emailed separately.

10.2          It was noted that Mr Thomas had provided his support in terms of the development of the surveys and thanks were given.

10.3          The Chair indicated that some of the points can be answered factually, others required more detail; therefore, some questions could have been covered offline rather than sending out to members.

Resolved:

That the Committee note and support the process and timeline to complete the survey, and the next steps once the surveys have been completed and returned to officers.

To consider the Annual Review of the 2024/25 Treasury Management Strategy.

Lead: Paul Kelly

11.1          The Finance Director presented the paper. He noted that there is an obligation to report, but there are no material changes.

Resolved:

That the Committee note that there are no material changes to the Treasury Management Strategy for 2024/25.

The next meeting of the Audit and Governance Committee will be held on 19 July at 11am.

The next meeting of the Committee will be held as a Consultation call on Friday 19^th July 2024 11:00am – 13:00pm