Internal Audit Report - Quarterly Revie · 7/28/2017 · Purpose To present the Internal Audit...

Purpose To present the Internal Audit report (April to June 2017) to Members

Recommendations That Members note the content of the report.

Summary To provide a summary of the audit activity for the period April to June 2017 and to report the findings to the Committee.

OFFICIAL

Internal Audit Report - Quarterly Review Audit Committee Date: 28 July 2017 Agenda Item: 5Submitted By: Chief Finance and Procurement Officer

Local Government (Access to information) Act 1972

Exemption Category: Nil

Contact Officer: Alison Wood– Chief Finance & Procurement Officer T: 01274 655711 E: [email protected]

Background papers open to inspection: None

Annexes: Internal Audit Report April to June 2017

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Internal Audit Report - Quarterly Review of 2

1 Information 1.1 This Committee has the responsibility for monitoring the work of internal audit. In order to facilitate

this, Internal Audit provide a quarterly report of its progress which includes a summary of the work completed and an assessment of the level of assurance provided by the systems examined. This report covers the period from April to June 2017.

On completion of each audit the Auditors provide an assessment of the level of assurance that the control systems in place provide. There are four rankings as detailed below. :-

Substantial assurance Adequate assurance Limited assurance No assurance

More details of how these classifications are measured are provided in the attached appendix.

This report includes a detailed explanation of action which has been taken on any audits which are ranked as providing either limited assurance or no assurance.

2 Audit Work 2.1 There has been one audit of other financial systems and risks, and one business risk audit, both of

which demonstrated substantial assurance. Details of each of these audits including the basis of the classification are in the attached appendix.

There has also been a special investigation into the procurement of the Premises Risk Database which resulted in limited assurance.

2.2 The report also provides details of work currently in progress

3 Audit Performance 2016/2017

Section 10 of the attached appendix compares current audit performance in the current financial year with the previous year.

4 Recommendations

4.1 Members are asked to note the contents of this report.

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April to June 2017

Simon Straker: Audit Manager

INTERNAL AUDIT QUARTERLY REPORT

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ABOUT THIS REPORT

This report contains information about the work of the Authority's Internal Audit provided by Kirklees Council. The 2017/18 Audit Plan as approved by this Committee earlier in the year includes 16 pieces of work covering a variety of cyclical audits which meet the expectations of the external auditor and address some of the major risks identified by the Authority.

For ease of reference the audits are categorised as follows:

1. Summary2. Major and Special Investigations3. Key Financial Systems4. Other Financial Systems & Risks5. Locations and Departments6. Business Controls7. Follow Up Audits8. Recommendation Implementation9. Advice, Consultancy & Other Work10. Internal Audit’s Performance

Investigation summaries may be included as a separate appendix depending upon the findings.

When reports have been agreed and finalised with the Director concerned and an Action Plan drawn up to implement improvements, the findings are shown in the text. Incomplete audits are shown as Work in Progress together with the status reached: these will be reported in detail in a subsequent report once finalised.

Good practice suggests that the Authority's management and the Audit Committee should receive an audit opinion reached at the time of an audit based upon the management of risk concerning the activity and the operation of financial and other controls. At the first meeting of the Audit Committee, Members resolved to adopt an arrangement relating to the level of assurance that each audit provides.

As agreed with the Audit Committee, the report has been expanded to include details of the key recommendations applicable to each audit that does not result in a formal follow up visit and the action taken by management regarding their implementation.

The final section of the report concerns Internal Audit’s own performance. There is a need to be mindful that with the relatively small numbers of audits included in the plan, percentages can give a slightly misleading impression. There is a paucity of qualitative measures of the effectiveness of internal audit, the main one being client satisfaction surveys following the completion of an audit for which the return rate is relatively low.

It is the practice of Internal Audit to undertake follow up audits to ensure that agreed actions have been undertaken. Any audits that produce less than "adequate assurance" will be followed up, together with a sample of the remainder and a new opinion will be expressed about the level of assurance that can be derived from action taken by management to address the weaknesses identified.

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1. SUMMARY

The final audit from 2016/17 Audit Plan on managing the risk of Supply Chain Failure wascompleted in April and produced a Substantial Assurance opinion. The Annual Report of InternalAudit 2016/17 summarises the outturn position and overall positive opinion on the Authority’s riskmanagement, governance and internal control environment.

Three audits have been completed so far in 2017/18, including an unplanned investigationrequested by the Director of Service Support and Chief Finance & Procurement Officer into theongoing procurement and payment for IT software by Fire Safety. This review concluded with aLimited Assurance opinion.

Both of the planned audits concluded with a substantial assurance opinion reflecting that the tworisk areas are being well managed.

There are no outstanding key recommendations from audit work in the previous year.

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2. SPECIAL INVESTIGATIONS & REVIEWS

Director of Service Support

Fire Safety Software Procurement

An investigation was undertaken at the request of the Director of Service Support and Chief Finance & Procurement Officer into the means of procuring and paying for work and services associated with the Premises Risk Database (PRD) as part of a larger review into the supply of this application.

The PRD is used by Fire Protection as a fire safety database to store and hold premises information and to calculate compliance scores in line with the Health & Safety Executive Enforcement Management Model. It was procured originally in 1999. The system is also used by Operational Crews to hold data which has been collected through Operational Risk Visits and to calculate the revisit schedule based on the last assessment.

The significance of (and reliance placed upon) the PRD has grown substantially since the initial procurement of a bespoke database. This has since resulted in the Authority incurring expenditure in excess of £280k in the intervening years, £130k of which has been on annual maintenance charges, and £152k on modifications/upgrades to the database.

Procurement arrangements associated with this supply have not been fully compliant with CSOs and FPRs. The original categorisation of the supply as a ‘proprietary article’ was inappropriate and contrary to the CSO definition. This initial decision was the basis that further approvals to incur expenditure used as the competition exemption. Therefore the initial guise of being a ‘proprietary article’ has perpetuated the continued use and reliance on a sole supplier to maintain and modify the bespoke database, and in doing so this has enabled this particular supplier to have a significant advantage over any other suppliers by a unique knowledge of the database and of the Authority’s requirements.

Contrary to CSOs, evidence could not be provided to support/certify the grounds for making the purchase a proprietary article, albeit in 1999, or for the later procurement decisions which were made on this basis. In addition, no information could be provided to indicate how the relationship between the Authority and this supplier initially commenced. The initial annual maintenance cost of £24k over a 3 year contract should have meant the procurement was the subject of competition by obtaining a minimum of three written quotations. In addition, the original contract document has not been subject to review with price increases having taken effect without evidence of any formal written approval.

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Various officers, past and present, have been involved in procurement decisions associated with this database. Meeting minutes indicate that there has been transparency over the years since the introduction of the database, with regards to reporting to senior management of upgrades & modifications and for gaining the authorisation to incur expenditure, indeed officers have highlighted a high level of satisfaction in terms of value for money with the functionality of the PRD, and the support provided by the supplier.

However, poor contract management arrangements and a lack of clear responsibility and involvement of the IT department, has led to the perpetuation of bad practice resulting in areas of non-compliance to CSOs/FPRs.

Unsurprisingly, a Limited Assurance opinion was allocated.

The actions identified by the Authority in a wider review in relation to the future management of the PRD supply are appropriate and will largely address the non-compliance issues identified in this investigation. Management have agreed the audit recommendations made and an Action Plan has been compiled to monitor implementation, including future procurement by competition in accordance with CSOs which will be prioritised as part of the current ICT strategy programme and consideration of the appropriateness of any further action against individual officers.

3. KEY FINANCIAL SYSTEMS

None during this period.

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4. OTHER FINANCIAL SYSTEMS & RISKS

This category relates to smaller scale and / or lower risk activities reviewed periodically to ensure a full coverage of the Authority’s activities.

System / Risk Findings Audit Opinion


Local Government Transparency Code

The Authority is complying with the mandatory requirements of the Code in the majority of cases and in some cases the mandatory requirements are being exceeded.

Sample testing was undertaken on contract data identified some anomalies, although this was likely due to the data extract method skewing the output rather than inaccuracy. This should be reviewed to identify if this occurs elsewhere within the file.

The format and ease of access was found to be as recommended by the Code. The majority of data provided was compliant with a few exceptions which can be easily rectified.

Timeliness of reported data was in line with the LGTC guidance. The exception to this was expenditure payments which were last published to Quarter 2 (30 September 2016). This data is provided by Kirklees Council and some omissions had been noted in the Quarter 3 data, therefore the Authority has opted not to publish further data until the matter has been rectified by the Council. Discussions are ongoing to rectify this problem.

Substantial Assurance

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5. LOCATION & DEPARTMENT AUDITS

This category relates to smaller scale and / or lower risk establishments reviewed periodically to ensure a full coverage of the Authority’s activity in accordance with the Audit Strategy, routine station audits have ceased.

None in this period.

6. BUSINESS RISK AUDITS

This category of audits reflects the revised Audit Strategy to incorporate coverage of the controls and management actions torespond to the major risks to the Authority’s objectives as codified in the Corporate Risk Matrix.

Risk Findings Audit Opinion


Supply Chain Failure (2016/17 Plan)

The controls in place to manage this risk were found to be operating effectively and the audit found good practice by procuring officers in ensuring the suitability of suppliers and contractors to the Authority. Some revisions and amendments to Contract Standing Orders were identified, such as the option or requirement for a performance bond and for specialist IT software providers the authority should ensure an appropriate cryptographic key (escrow agreement) is held by a third party to safeguard business continuity.

A number of revisions are proposed to Contract Standing Orders in the review of the Constitution report to the Annual Meeting.


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7. FOLLOW UP AUDITS

Any audits that result in a less than adequate assurance opinion are followed up usually within six months, depending upon thetimescale for implementing the agreed recommendations. Additionally, a sample of other audits is followed up periodically too.

None during this period.

8. REVIEW OF KEY RECOMMENDATIONS

No key recommendations were outstanding other than those in follow up audit.

Director of Service Delivery

(Not meeting) Service Delivery Standards

Robust arrangements are in place to monitor (and report) the impact of IRMP changes on actual response times against the RBPA. Formal reporting arrangements are in place at various levels across the Authority which includes Management Team and Full Authority meetings.

Performance against the RBPA is reported both in terms of percentage of incidents which have met RBPA, and average response times across each risk category. There is a risk that reliance on just average response times could reflect more favourably achievement against the RBPA. However, this is mitigated by the monitoring arrangements that are in place which involves detailed scrutiny of all incidents which have not met their target response times.

In addition to the internal monitoring arrangements, the Authority commissioned an independent assessment by external consultants to provide a retrospective critique on the impact of IRMP interventions, and whether the original impact studies and predictions have proved to be correct. The outcome of this review is positive, in that out of the 17 interventions, 15 can be fully supported by the statistical data, with 2 being partially supported.


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9. ADVICE, CONSULTANCY & OTHER WORK

System Comments

Director of Service Delivery

Joint Control & Command Project

Continued support to the Project Board in its attempts to move forward and complete user acceptance testing with the supplier and commence the contractual period of steady state prior to moving to the maintenance period.


Emergency Services Mobile Communications Project (ESMCP)

Internal Audit have been requested to provide ongoing assurance about the financial probity, governance and control of risk arising from the delivery of the project by 2018, both as regards WYFRA and within the Yorkshire & Humber region as a whole. The terms of reference have been agreed by the Project Board.

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10 INTERNAL AUDIT’S PERFORMANCE 2017/18

Performance Indicators 15/16 Actual

16/17 Actual

17/18 Target

17/18 Actual

Audits completed within the planned time allowance 85% 88% 80% 100%

Draft reports issued within 10 days of fieldwork completion 90% 100% 90% 100%

Client satisfaction in post audit questionnaires 100% 100% 90% n/a

Chargeable audit days 175 156 160 33

QA compliance sample checks – percentage pass 100 100 100 100

Planned Audits Completed 17 17 16 2

Planned Audits in Progress 0 0 0

Unplanned Work Completed 5 2 1

Unplanned Work in Progress 0 0 0

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2017/18 AUDIT PLAN DELIVERY

Planned audits Status

Transparency Code

Service Delivery Standards

Income Collection

Asbestos & Other Uninsured Claims (Operational)

Payroll & e-Procurement Follow ups

IRMP Implementation to manage reduced government grant

Procurement Rule Compliance & VFM

Capital Plan Delivery

Recruitment & Selection

Cyber Security Threat

Partnerships

Major CBRNE attack within West Yorkshire

Data Protection Compliance

Loss of Critical ICT systems, software or infrastructure

Future Authority Governance Arrangements

Members’ Allowances

Finalised

Finalised

Provisional Q2

Provisional Q2

Provisional Q2

Provisional Q2

Unplanned audits Status

Fire Safety IT Software Procurement Finalised

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Purpose To inform members of the Authority’s performance against Key Performance Indicators where targets are not being achieved

Recommendations That members note the report

Summary The Performance Management and Activity Report which is presented to the Full Authority outlines the Authority’s performance against key performance indicators thereby enabling the Authority to measure, monitor and evaluate performance against targets. This report highlights the key performance indicators where targets are not being achieved. The report also includes details of applications, authorisations and rejections under the Regulation of Investigatory Powers Act (RIPA) 2000

OFFICIAL

Abridged Performance Management Report Audit Committee Date: 28 July 2017 Agenda Item: 6Submitted By: Chief Legal and Governance Officer


Exemption Category: None

Contact Officer: Alison Davey Corporate Services Manager [email protected] T: 01274 655801


Annexes: Abridged Performance Management Report

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mailto:[email protected]

Abridged Performance Management Report Page 2 of 2

1 Introduction 1.1 The Performance Management and Activity Report, which is presented to each Full Authority

meeting outlines the Authority’s performance against key performance indicators thereby enabling the Authority to measure, monitor and evaluate performance against targets. These are detailed in three categories as shown below:

o Key Performance Indicators

o Service Delivery Indicators

o Corporate Health Indicators

1.2 The Performance Management and Activity Report is monitored bi-monthly by Management Team and by the Full Authority at each meeting.

1.3 A traffic light system is used to provide a clear visual indicator of performance against each specific target and comparison is made with the same period the previous year to indicate whether performance has improved, remained the same or deteriorated.

2 Information

2.1 The attached report highlights the key performance indicators where the targets are not being achieved.

2.2 Information regarding reasons why performance is not at the required level, together with actions being taken to address this, is provided within the report.

2.3 The report also includes details of the applications, authorisations and rejections under the Regulation of Investigatory Powers Act (RIPA) 2000.

3 Financial Implications 3.1 There are no financial implications arising from this report.

4 Human Resources and Diversity Implications

4.1 Measurement against key indicators on human resources and diversity are included in the Performance Management Report.

5 Health and Safety Implications

5.1 There are no health and safety implications associated with this report.

6 Service Plan Links 6.1 This report links to all the Service Plan priorities.

7 Conclusions 7.1 That Members note the report.

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Performance Management and Activity Report (Abridged) 2016/17

Period covered: 1 April 2016 – 31 March 2017 Date Issued: 29 June 2017

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Table of Contents

1. Introduction/Summary 22. Service Delivery Targets 33. Service Delivery Indicators – Overview 44. Service Delivery Indicators – WYFRS not achieving target 95. Regulation of Investigatory Powers Act (RIPA) 2000 11

1. Introduction/SummaryThe purpose of this report is to provide information regarding the performance of West Yorkshire Fire and Rescue Service against selected performance indicators for which performance has decreased compared with the same period the previous year.

The first section provides a summary of performance against all performance indicators detailed within the full Performance Management and Activity Report which is presented to each Full Authority Committee meeting.

In this report, appropriate and progressive monthly statistics have been utilised to identify trends in performance, with corresponding information regarding the action being taken to address areas of under-performance.

All data, unless specified, is for the reporting period 1 April – 31 March 2017.

A traffic light system has been employed to provide straightforward visual indication of performance against each specific indicator.

If further data is available following the last Performance Management Report presented to the Full Authority, this has been included to show the performance trend.

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2. Service Delivery Targets

Not achieving target (by more than 10%) Satisfactory performance (within 10% of target) Achieving or exceeding target

Actual Data

(2009/10)

Three Year Average Target

(2013/16)

Actual Data to date

(2016/17)

Performance Against Three Year Average

(2016/17)

End of Year Projection (2016/17)

Arson 10897 5758 6150 6.8% 6150

Actual Rescues 875 802 721 -10.1% 721

Total Activity 34270 22094 22291 0.9% 22291

Dwelling Fires 1549 1241 1181 -4.8% 1181

Non-Domestic Building Fires 513 420 502 19.5% 502

Prevalence of False Alarms 16750 10860 10431 -4.0% 10431

Fire-Related Injuries 270 215 215 0.0% 215

Road Traffic Collisions 1060 654 574 -12.2% 574

No. of Operational Risk Visits

5765 3858 -33.1% 3858

Malicious False Alarms 713 343 347 -1.2% 347

No. of Home Fire Safety Check Points

293850 309719 5.0% 309719

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3. Service Delivery Indicators – OverviewIndicates a worse performance compared to the same period last year (by more than 10%) Indicates a worse performance compared to the same period last year (up to 10%) Indicates a similar or better performance compared to the same period last year

Description 2016-17 To Date

Same Period 2015-16

Compared to Last Year

Accidental Dwelling Fires (per 10,000 dwellings) 10.38 10.80

Number of deaths arising from accidental fires in dwellings (per 100,000 population)

0.26 0.75

0102030405060708090

100

1991-1996 1996-2001 2001-2006 2006-2011 2011-2016

Number of Deaths arising from Accidental Fires in Dwellings

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Description Performance 2016-17 To Date

Performance Same Period

2015-16

Performance Compared to

Last Year Number of Injuries arising from accidental fires in dwellings (per 100,000 population)

6.32 6.40

(a) Number of Serious Injuries(per 100,000 population) 0.84 0.62 (b) Number of Slight Injuries (per 100,000 population) 5.48 5.78

The percentage of dwelling fires attended where there was a working smoke alarm which activated

55.1% 54.9%

The percentage of dwelling fires attended where a working smoke alarm was correctly fitted but did not activate

17.7% 17.8%

The percentage of dwelling fires attended where a smoke alarm, because it was faulty or incorrectly sited, did not activate

5.6% 5.6%

The percentage of dwelling fires attended where no smoke alarm was fitted

21.8% 21.7%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Working Smoke Alarmwhich Activated

Working Smoke Alarmwas Correctly Fitted butdid not Activate

Percentage of Dwelling Fires Attended where there was a Working Smoke Alarm

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2015-16


Last Year Number of calls to malicious false alarms (per 1000 population) – attended

0.15 0.15

False alarms caused by automatic fire detection equipment (per 1000 non-domestic properties)

40.76 41.12

False alarms caused by automatic fire detection equipment (per 1000 domestic properties)

4.16 4.20

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2015-16


Last Year Fires in non-domestic premises (per 1000 non-domestic premises)

6.40 5.64

Number of Primary Fires (per 100,000 population) 160.36 142.51

Number of Fire Casualties – excluding Precautionary Checks (per 100,000 population)

9.10 9.45

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2015-16


Last Year Arson Incidents – All Deliberate Fires (per 10,000 population)

27.58 26.98

Arson Incidents – Deliberate Primary Fires (per 10,000 population)

7.64 6.19

Arson Incidents – Deliberate Secondary Fires (per 10,000 population)

19.94 20.79

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Performance Management Report Page 9 of 12

4. Service Delivery Indicators – WYFRS not achieving target

Description Cumulative Year to Date Performance

Performance in 2015-16 To 30

Apr To 31 May

To 30 Jun

To 31 Jul

To 31 Aug

To 30 Sep

To 31 Oct

To 30 Nov

To 31 Dec

To 31 Jan

To 28 Feb

To 31 Mar

Fires in Non-Domestic Premises

(per 1,000 premises)

0.52 (41)

1.14 (90)

1.58 (125)

2.17 (171)

2.75 (217)

3.25 (256)

3.78 (298)

4.41 (348)

5.01 (395)

5.48 (432)

5.90 (465)

6.40 (505)

5.64 (445) to 31 March 2016

Comments: The increase in non-domestic building fires is of concern with 60 more fires in non-domestic buildings compared to the previous year. There has been significant concern around the number of prison fires with 118 fires in secure accommodation over the reporting period. This equates to 23% of total non-domestic fires. Prisons are regulated in terms of fire by the Crown Premises Fire Inspection Group, which is part of the Home Office rather than by WYFRS. The most significant concern is Wetherby YOI and we have now seconded a Watch Manager to work with Wetherby YOI for 2 days per week and initial findings appear positive in terms of the joint learning around how fires are being started and how the sources of ignition can be removed.

Description

Cumulative Year to Date Performance Performance

in 2015-16 To 30 Apr

To 31 May

To 30 Jun

To 31 Jul

To 31 Aug

To 30 Sep

To 31 Oct

To 30 Nov

To 31 Dec

To 31 Jan

To 28 Feb

To 31 Mar

Arson Incidents – Deliberate Primary Fires (per 10,000 population)

0.54 (122)

1.18 (268)

1.76 (399)

2.45 (554)

3.22 (730)

3.88 (878)

4.72 (1069)

5.43 (1230)

6.02 (1362)

6.58 (1489)

7.13 (1614)

7.64 (1731)

6.19 (1402) to 31 March 2017

Comments: Arson continues to be a specific problem, relating largely to vehicle fires, which account for 1020 (59%) of the total figure with a notable number within non domestic, specifically in prison buildings. We continue to work with the Police in all districts to better understand the issues around an increase in vehicle fires, many of which appear to be gang-related. There is also some additional work to be promoted in the new Safer Communities Strategy around arson prevention working with schools to develop longer term relationships in areas of high arson rates to generate better relations with children and young people living in areas where we experience a high rate of deliberate primary fires.

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Description

Cumulative Year to Date Performance Performance

in 2015-16 To 30 Apr

To 31 May

To 30 Jun

To 31 Jul

To 31 Aug

To 30 Sep

To 31 Oct

To 30 Nov

To 31 Dec

To 31 Jan

To 28 Feb

To 31 Mar

Number of Primary Fires (per 100,000 population)

13.29 (301)

26.63 (603)

39.17 (887)

53.61 (1214)

69.69 (1578)

82.81 (1875)

98.04 (2220)

112.57 (2549)

125.56 (2843)

136.86 (3099)

147.99 (3351)

160.40 (3632)

142.56 (3228) to 31 March 2017

Comments: 40% of the primary fires attended in the reporting period were vehicle fires, 32% were dwelling fires and 21% were non-domestic building fires. Clearly, the significant increase in vehicle fires over recent years needs to be addressed through partnership working with the Police and other relevant agencies. A detailed analysis of arson incidents across the districts has been sent to the District Command teams for them to better understand where they are experiencing issues to allow them to engage with partners in the development of prevention plans to address these issues. The information provided to districts contains details of where vehicle fires are occurring to allow them to better understand trends and work in partnership to address high risk areas.

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5. Regulation of Investigatory Powers Act (RIPA) 2000The Regulation of Investigatory Powers Act (RIPA) 2000 regulates the use of the powers to conduct covert surveillance by public bodies including West Yorkshire Fire and Rescue Authority. The Authority adheres to procedures based on the Codes of Practice produced by the Home Office. Annual returns are submitted to the Office of Surveillance Commissioners and the Interception of Communications Commissioners Office. The annual number of applications, authorisations and rejections are stated in the Annual Corporate Health Report which is submitted to the Full Authority Annual General meeting. A breakdown for this period is stated below.

Period: 1 April 2016 to 31 March 2017 Applications Authorisations Rejections

Directed Surveillance 0 0 0 Covert Human Intelligence Sources 0 0 0 Disclosure of Communications Data 0 0 0

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West Yorkshire Fire and Rescue Service

Oakroyd Hall

Birkenshaw

Bradford BD11 2DY

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Purpose To seek Members’ endorsement of the Chief Finance & Procurement Officer’s conclusion as to the effectiveness of the system of internal audit. To note the audit opinion on risk management and the internal control environment during 2016-17.

OFFICIAL

07 - Internal Audit Annual Report 2016-17 Audit Committee Date: 28 July 2017 Agenda Item: 7Submitted By: Chief Finance and Procurement Officer



Contact Officer: Alison Wood - Chief Finance & Procurement Officer T: 01274 655711 E: [email protected]

Simon Straker – Internal Audit Manager T: 01484 221000 E: [email protected]

Background papers open to inspection: Annual Report of Internal Audit 2016/17 Annual Governance Statement 2016/17 Internal Audit Plan 2016/17 Quarterly Reports of Internal Audit 2016/17 Audit Strategy & Charter

Annexes: 1 Summary of Audit Coverage 2016/17 2. Internal Audit PSIAS Compliance Action Plan

4 Internal Audit Plan 2017/18

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Recommendations Members endorse the Chief Finance & Procurement Officer’s conclusion as tothe effectiveness of the system of internal audit.

Members note the audit opinion on governance, risk management arrangements and the internal control environment in 2016/17, thereby providing assurance to the compilation process for the Annual Governance Statement 2016/17.

Summary The Chief Finance & Procurement Officer concludes the Authority’s systems of internal audit are effective.

This report concludes that the Authority's governance, risk management arrangements and internal control environment were effective and robust during the financial year to 31 March 2017.

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07 - Internal Audit Annual Report 2016-17 Page 2 of 10

ANNUAL REPORT OF INTERNAL AUDIT 2016/17

1. Introduction

1.1 This report provides an assessment of the adequacy and effectiveness of the Authority's governance, risk management system and internal control environment during the year, particularly in support of the Annual Governance Statement.

1.2 The assessment is drawn from the matters included in the Quarterly Reports to the Committee during the year on the audit opinions reached on the level of assurance concerning each of the risks, systems or process controls examined.

1.3 Each planned audit performed during the year concluded with at least an Adequate Assurance opinion, with exception to the audit of payroll processing which produced a Limited Assurance one. Over half of the audits concluded with a Substantial Assurance opinion, which is the highest available. An unplanned review of a procurement exercise also produced a Limited Assurance opinion.

1.4 The report also reviews compliance with the Public Sector Internal Audit Standards (PSIAS), the performance of the internal audit function against its performance indicators and quality assurance process and delivery of the 2016/17 Audit Plan. The Chief Finance & Procurement Officer has used this data in formulating her assessment of the Authority’s system of internal audit to conclude the degree of reliance that can be placed on its work and opinion on the internal control environment.

2. Operational Information

2.1 The scope of activity is established by the Financial Procedure Rules, the Audit Strategy & Charter (as updated following Committee approval recently) and statements of operating practice.

2.2 Subject to matters raised in this report (see 4.4), the internal audit activity during 2016/17 was performed in conformance with the requirements of the PSIAS.

2.3 In line with the Audit Strategy, assurance about the control environment is obtained by the maintenance and delivery of a risk based audit plan. Planned work during 2016/17 targeted areas of significant risk and where most value could be added, particularly on wider business and governance controls. This is necessary to support the requirements of the Accounts & Audit Regulations 2015 to "conduct a review of the effectiveness of the system of internal control" annually and to formulate an Annual Governance Statement that accompanies the Statement of Accounts.

2.4 Areas of significant risk are determined by the Authority through its risk management process and in particular the Corporate Risk Matrix. Review of this area accounted for approximately 50% of available audit resources, the remaining 50% continued to relate to the review of key financial systems and processes.

2.5 Each audit concludes with an opinion about the level of assurance derived on the adequacy and effectiveness of the system, process or location concerned at the time of the audit, based upon the management of risk and the adequacy and operation of financial

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and other controls. The approach involves the follow up of any activities about which less than "Adequate Assurance" is given, as a means of seeking to ensure that the work carried out by Internal Audit maximises the chances of improving the Authority's control environment.

2.6 The Audit Committee has previously agreed definitions of the different levels of assurance given and how these are derived from audit recommendations. Implementation of the agreed recommendations by management should provide for a satisfactory degree of control in all cases.

2.7 The outcome of individual audits is summarised quarterly and reported to the Audit Committee for consideration. These reports also include action taken by management regarding the implementation of any agreed key recommendations.

3. Summary of Audit Outcomes in 2016/17

3.1 The agreed Audit Plan for 2016/17 included 160 days of planned work in the following main areas:

• financial system and process audits,• main business and governance risks and controls,• follow up audits, and• ongoing project assurance to the Joint Command & Control and the

Emergency Services Mobile Communication Project Boards

Liaison with the Chief Finance & Procurement Officer throughout the year ensures that internal audit work undertaken continues to focus on the high risk areas and is reflective of any new developments or particular areas of concern so as to ensure the most appropriate use of internal audit resources. Appendix 1 provides a summary of the audits undertaken.

At this point it is only appropriate to record the positive working relationship with the recently retired Chief Finance & Procurement Officer, Mr Maren, which has existed for many years and to look forward to this continuing with his successor.

3.2 Key financial systems, creditor payments and bank reconciliation produced positive assurance opinions, whereas payroll processing produced a limited assurance one due to reductions in input checking undertaken. Management have since confirmed the previous level of checking has been re-instated.

3.3 The Authority’s risk management arrangements have been considered in individual pieces of audit work, whereby management activity to address particular business risks, as recorded on the Corporate Risk Matrix, has been assessed. These audits all concluded with positive assurance opinions and conclusions that management controls to address the key risks to the Authority were robust and operating effectively. Where appropriate, management has agreed recommendations to further enhance the control environment.

3.4 The outcomes of the National Fraud Initiative 2016/17 demonstrated the effectiveness of system controls in preventing fraud and corruption in the Authority’s business and governance.

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3.5 Follow-up audits were carried out to assess the degree of implementation of recommendations agreed by management after the original audits had produced Limited Assurance opinions of

• Building Repairs & Maintenance (two audits)• Charging for Unwanted Fire Signals

This work provided assurance that management are effective in implementing agreed actions as each produced a positive opinion.

3.6 As part of the continuing support to the Joint Command and Control Project with South Yorkshire FRA, Internal Audit has undertaken a number of pieces of assurance work linked mainly to the payment milestones in the contract. Processes to test and evidence satisfactory completion of tasks and delivery of functionality have been found to be robust. A similar approach has been agreed as regards the Mobile Services Communication Project.

3.7 Towards the end of the year an unplanned review was undertaken of the circumstances of an abortive procurement of Microsoft Licences which produced a Limited Assurance opinion. In any event, the exercise was cancelled as it had not followed EU Procurement Rules but it also demonstrated configuration weakness in the Delta e-Procurement system which enabled one individual to undertake all aspects of the process, contrary to Contract Standing Orders. This shortcoming was rectified shortly afterwards.

3.8 In accordance with our commitment to provide help, assistance and add value, questions and issues raised by managers have been resolved, particularly in relation to advice/approval for authorisation of contracting matters, and to evaluation of potential suppliers. In addition, the Audit Plan is designed to be sufficiently flexible to accommodate any ad hoc requests for audit reviews.

4. Effectiveness of the System of Internal Audit

4.1 The Internal Audit function is included in the Financial Services Service Level Agreement with Kirklees Council. The latest available benchmarking information from CIPFA showed internal audit operations have been at approximately the lower quartile of costs (based on £m gross expenditure) compared with Metropolitan and Unitary authorities, a position supported by data gathered by the previous Chief Finance & Procurement Officer from the other metropolitan fire authorities.

4.2 The Accounts & Audit Regulations 2015 also require authorities to conduct an annual review of the effectiveness of their system of internal audit, so as to ensure the opinion of the Head of Internal Audit on the internal control environment can be relied upon as a key source of evidence in compiling the Annual Governance Statement.

4.3 PSIAS include a requirement for annual self-assessment reviews and an external assessment of compliance every 5 years. At the last meeting of the Committee, Members agreed to fulfil this requirement as part of a regional mutual peer review approach, whereby Wakefield MDC will be asked to undertake the assessment of Kirklees Council

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later in 2017. A report detailing the approach and terms of reference will be tabled at a future meeting.

4.4 A self-assessment against the PSIAS requirements was carried out in March 2017 which concluded that overall the Authority’s audit arrangements are compliant. The recommendations and intended actions resulting from the review are shown in Appendix 2 of this report. Subject to these matters, there are no non-conformances that need to be reported.

4.5 A summary of the performance in delivering the 2016/17 Plan as reported to the Audit Committee during the year is shown overleaf:

Performance Indicators 16/17 Target 16/17 Actual

Audits completed within the planned time allowance

80% 88%

Draft reports issued within 10 days of fieldwork completion

90% 100%

Client satisfaction in returned post audit questionnaires

90% 100%

Chargeable audit days (cumulative) 160 156

QA compliance sample checks – pass rate

90% 100%

Planned Audits Completed 17 17

Unplanned Audits Completed 2

4.6 A positive working relationship has continued with KPMG colleagues (the Authority’s external auditor), to maximise the use of audit resources and ensure our mutual roles are fulfilled, albeit that the nature of the relationship has changed now. KPMG does not routinely place reliance on internal audit financial systems work due to a different approach to risk and materiality than their predecessor. This may impact upon the future internal audit approach to systems with a high impact but low likelihood of error.

4.7 Members may wish to endorse the positive opinion of the system of internal audit reached by the Chief Finance & Procurement Officer.

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5. Internal Audit in 2017/18

5.1 In 2017/18 Internal Audit will continue to strive to reliably achieve planned audit work and to address Authority priorities and activities that will add value for the organisation. Audit work in the coming year will continue to be mindful of the ongoing period of austerity across the public sector and the consequent increased risks, including fraud and corruption.

5.2 In addition, we will continue to develop the approach to organisational and business controls encompassed in the revised Audit Strategy to focus on areas of highest risk and thus to contribute to the level of assurance required by the Chief Fire Officer / Chief Executive, Chair of the Authority and Chief Finance & Procurement Officer in order to sign off the Annual Governance Statement.

5.3 Planned audit work built into the agreed 2017/18 Internal Audit Plan includes key financial control audits in relation to income, procurement and capital expenditure plan, review of controls to manage key business risks and follow up audits.

5.4 The summary Audit Plan for 2017/18 as approved at the last meeting of the Committee is attached for information at Appendix 3.

6. Conclusion and Governance, Risk Management & Internal Control Opinion

6.1 This report has summarised the main activities of Internal Audit during 2016/17, detailed information on which has been provided to this Committee during the year.

6.2 Audit work during 2016/17 provided sufficient evidence to demonstrate that overall the system of internal audit is effective and has been undertaken in compliance with the PSIAS.

6.3 A review of the Authority’s framework of governance, risk management and internal control has provided sufficient evidence and assurance that each is robust and effective and that in the small number of occasions where it has been necessary, management have taken/agreed appropriate action to address weaknesses.

6.4 Overall, the Authority has a sound control environment and no items of significance have been identified that merit consideration for inclusion in the Annual Governance Statement for 2016/17.

7. Recommendations

7.1 Members endorse the Chief Finance & Procurement Officer’s conclusion as to the effectiveness of the system of internal audit.

7.2 Members note the positive audit opinion on governance and risk management arrangements and the internal control environment, thereby providing assurance to the compilation process for the 2016/17 Annual Governance Statement.

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Appendix 1 – Summary of Audit Coverage 2016/17

Audit Report Status Assurance Opinion

Financial Systems & Risks

• SAP Payroll• SAP Creditor Payments• Bank Reconciliation

Finalised Finalised Finalised

Limited Adequate Substantial

Other Financial Systems & Risks

• Mobile Devices Contract• Delta e-Procurement System• Lease Car Scheme• Absence Management

Finalised Finalised Finalised Finalised

Adequate Adequate Substantial Adequate

Corporate Governance

• National Fraud Initiative 2016/17 Finalised Substantial

Business Risk Management

• Misuse of Information Assets• Vehicle Accident• Negligent Fire Safety Work• Stress• Supply Chain Failure

Finalised Finalised Finalised Finalised Finalised

Adequate Substantial Substantial Substantial Substantial

Follow up Audits

• Responsive Repairs Management (followup & second follow up)

• Unwanted Fire Signal Charging

Finalised Finalised Finalised

Adequate Substantial Substantial

Unplanned Audits

• Procurement of Microsoft Licences Finalised Limited

Project Risk Assurance

• Joint Command & Control Contract• Emergency Services Mobile

Communication

Ongoing Ongoing

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Appendix 2 – PSIAS Compliance Self-Assessment

- Action Plan 2017/18

Issue (PSIAStandard) Action Timescale

Current arrangements do not routinely evidence a full range of stakeholder feedback on a structured basis (3.4)

Explore options to collect feedback information in a structured way with the CFPO

September 2017

The audit planning process should be more closely linked to the overall organisational assurance framework (4.1)

Discuss compilation of a strategic assurance map with Management Board reflecting the key business risks and incorporate fully into compilation of the 2018/19 audit plan

March 2018

Compliance with the document retentions policy should be verified (4.4)

Partial checks of audit files have been undertaken during the year but more work is needed in 2017/18 to verify full compliance

September 2017

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Appendix 3 - INTERNAL AUDIT PLAN 2017/18

Key Financial Systems

• Income Collection• Procurement• Capital Plan Delivery

Other Systems

• Recruitment & Selection• Cyber Security Threat• Partnership Governance• Data Protection Compliance

Business Risks & Controls

• Risk 1 IRMP Implementation to manage reduced government grant• Risk 10 Major CBRNE attack within West Yorkshire• Risk 18 Asbestos & Other Uninsured Claims (Operational)• Risk 23 Loss of Critical ICT systems, software or infrastructure• Risk 25 Future Authority Governance Arrangements• Risk 32 Failure to meet Service Delivery Standards

Follow Up Audits

• Payroll processing• Delta e-Procurement system

Contingency

• Joint Command & Control Project - Assurance to Board• Emergency Services Mobile Communications Project – Assurance to Board

Total Days per SLA 160

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Purpose To present the Annual Governance Statement of the Authority for approval.

Recommendations That the Annual Governance Statement be approved.

Summary This report presents the Annual Governance Statement of the Authority for approval and inclusion in the 2016-17 Statement of Accounts.

OFFICIAL

Annual Governance Statement 2016-17 Audit Committee Date: 28 July 2017 Agenda Item: 8Submitted By: Chief Finance and Procurement Officer



Contact Officer: 35T

Background papers open to inspection: 35T

Annexes: 35T

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Annual Governance Statement 2016-17 Page 2 of 3

1 Introduction 1.1 The Authority is required to include its Annual Governance Statement within its statement of

accounts.

1.2 The purpose of the Annual Governance Statement is to set out the formal procedures for governance within the Authority, and to report upon their effectiveness and to identify any significant issues. Although it forms part of the statement of accounts document it relates to the overall governance of the Authority rather than just the financial systems. The statement is prepared by the Chief Executive and his Management Board and is signed by the Chief Executive, the Chair of the Authority and the Chief Finance & Procurement Officer.

1.3 Although the original statement is signed in June it remains a live document which can changed prior to final approval as part of the statement of accounts. In the current year there has been one small change relating to the update on the function of the Human Resources directorate.

2 The Form of the Statement

2.1 The statement is split into five sections which explain how the system of governance work and what procedures and policies are in place to ensure that the systems remain effective. Detailed below is a brief explanation of each of the sections.

i) Scope of responsibility and Code of Corporate GovernanceProvides a definition of corporate governance which is the requirement the Authority has toconduct its business lawfully and in accordance with proper standards linked to the Nolanprinciples of Standards in Public Life.

ii) The Purpose of the Governance Framework– provides a brief explanation of thepurpose of the Governance Framework along with an assurance that the framework hasbeen in place for the whole of the financial year 2016-17.

iii) The Governance Framework – provides a detailed explanation of the core elements thatmake up the governance framework within West Yorkshire Fire & Rescue Authority andhow they contribute to it achieving its ambition of ‘Making West Yorkshire Safer’.

iv) Review of Effectiveness - The Authority has a responsibility to review the effectiveness ofthe systems of governance annually. Included within this section is a self-assessment ofthe effectiveness of the governance structure and the means by which it is measured. Itconcludes with an assurance from the Management Board that it considers the currentsystems to be effective.

v) Significant Governance IssuesThe final section identifies the key areas of challenge to the systems of governance thatthe review of the governance has identified. Not surprisingly these issues are related tothe uncertainty over the future funding of the Authority the specific issues included are:-

1. Grant loss2. Police and Crime Act 20163. Pay increases

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This process of self-assessment provides the Authority with the evidence to support Managements’ conclusion that it is continuing to provide a high quality service with the resources available.

• Statement of Assurance

The Authority is required to produce an annual Statement of Assurance as part of the Fire and Rescue National Framework for England. The purpose of the statement is to provide independent assurance to communities and the Government that the service is being delivered efficiently and effectively. Whilst the Fire and Rescue National Framework sets out the Government’s priorities and objectives for fire and rescue authorities in England, it does not prescribe operational matters as these are determined locally by fire and rescue authorities.

This Statement of Assurance provides assurance that WYFRA is providing an efficient, effective and value for money service to the community of West Yorkshire in its financial, governance and operational matters.

• Conclusion

Overall, the Authority and its Management Board conclude that the systems and procedures provide effective systems of management control enabling the Authority to provide and efficient, effective and economic service to the public of West Yorkshire.

3 Recommendation

3.1 Members are asked to approve the Annual Governance statement for inclusion within the 2016/17 Annual Statement of Accounts.

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Annual Governance Statement

1. Scope of Responsibility and Code of Corporate Governance

Corporate governance is a phrase used to describe the systems and procedures that are inplace to ensure that business is conducted in accordance with the law and proper standards,and that public money is properly accounted for and used economically, efficiently andeffectively.

The Authority has a duty to achieve best value in the way it functions and to ensure thatarrangements are in place to secure continuous improvement in all areas of serviceprovision.

The Authority has set out its arrangements for the governance of its affairs in itsConstitution (a copy of this can be found at www.westyorksfire.gov.uk) which includes theAuthority’s Code of Corporate Governance which is consistent with the principles of theCIPFA / SOLACE Framework Delivering Good Governance in Local Government.

In publishing this statement the Authority fulfils the requirement under regulation 4(2) ofthe Accounts and Audit Regulations 20165, and accompanies the 2016/172015/16Statement of Accounts.

It is a requirement to produce this statement under regulation 6(1)b of the Accounts andAudit (England) Regulations and that it is approved by Audit Committee in advance of themagreeing the Statement of Accounts.

By applying the principles within the Authority’s own Code of Corporate Governance andapplying the Nolan Principles of Standards in Public Life, the Authority commits to deliver itsservices with integrity, accountability, transparency, effectiveness, and inclusivity.

2. The Purpose of the Governance Framework

The governance framework comprises systems and processes, and cultures and values, bywhich the Authority is directed and controlled. It enables the Authority to monitor theachievement of its strategic objectives and to consider whether those objectives have led tothe delivery of appropriate, cost effective services.

The Authority acknowledges that it can never eliminate risk entirely from its operations andthis statement explains the systems used to manage this risk to a reasonable level, a keyelement of which is the system of internal control.

The governance framework has been in place at West Yorkshire Fire and Rescue Authorityfor the year ending 31 March 2017 and will remain in place up to the date of the approval ofthe statement of accounts.

3. The Governance Framework

Summarised below are some of the key elements of the governance framework:

3.1 Strategic Objectives and the Service Planning Process

The Authority’s Ambition, Aims and Priorities are set out in its 2015-2020 Service Plan. Thisplan is supported by the Integrated Risk Management Plan and the Medium Term FinancialPlan, all of which are reviewed and approved annually by the Authority. All these plans are

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http://www.westyorksfire.gov.uk/

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published on the website at www.westyorksfire.gov.uk. The Authority’s Ambition, Aims and Priorities are:-

Ambition: ‘Making West Yorkshire Safer’:-

Aim: ‘Provide an Excellent Fire and Rescue Service working in partnership to reduce death, injury, economic loss, and contribute to community well-being’

Priorities:

• Deliver a professional and resilient emergency response service• Deliver a proactive community safety programme• Provide a safe, skilled work force that serves the needs of a diverse community• Provide effective and ethical governance and achieve value for money.

These objectives are set out in the Authority’s Service Plan which is published on the Authority’s website. These objectives form part of area plans, departmental plans and station plans. There is an on-going system of monitoring and reporting achievement of the Authority against its corporate aims with regular reports on progress monitored by senior management and the Authority through its committee structure. Copies of the plan are distributed to all fire stations and departments of the Authority.

3.2 The Internal Control Environment

Internal Control describes the systems and processes that ensure the Authority is able to achieve its objectives with integrity and in compliance with laws, regulations and its own policies. They define the decision making processes and the controls that are in place to monitor these processes. The fundamentals include making sure that decisions are taken at the correct level and that there are clear separations of duty within the decision making processes.

It covers the reliability of financial reporting and performance management against the achievement of the Authority’s strategic goals.

The Authority’s systems of internal control conform to the standards of financial governance set out in CIPFA statement of the role of the Chief Financial Officer in Local Government.

3.3 The Constitution

The Authority has a written constitution which is reviewed annually by the Chief Legal and Governance Officer and is formally approved by the Authority at its AGM. It is published on the website at (www.westyorksfire.gov.uk) and is included within the body of evidence which supports this statement. This document forms the basis of the Governance Framework and sets out the way the Authority is governed and is made up of the following documents:-

• Authority committee standing orders and procedures• The roles and responsibilities of the executive officers• Access to information rules• Contract standing orders• Financial procedure rules

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• Anti-fraud and corruption strategy• Code of corporate governance• Members’ code of conduct• Officers’ code of conduct• Member\ officer relations protocol• Officers’ employment rules• Protocol regarding the use of Authority resources by Members• Members’ allowances• Management structures• Officer delegation scheme• Complaints procedure• Whistle blowing policy

3.4 The Committee Structure

The constitution sets out the Framework under which the Authority is governed. It sets out in detail the composition of the Authority, the role and functions of the elected members, the roles and responsibilities of designated office holders and the roles, functions and terms of reference of the Authority and its Committees.

The Authority has four standing committees each of which, along with the Authority, meet 4 times per year and an executive committee which deals with urgent business:-

Human Resources Committee (11 Members) This committee deals with all issues relating to the employment of staff including conditions of service, industrial relations, equal opportunities and training.

Finance and Resources Committee (11 Members) This committee is responsible for all issues relating to the Assets of the Authority. This includes Finance (including recommendation to the Authority in relation to the revenue budget, capital planning and precepts), Insurance, Treasury Management, Buildings, land and property, and IT. This committee receives regular reports on the financial performance of the Authority along with detailed updates on treasury management activity.

Audit Committee (6 Members) This committee is established in accordance with CIPFA guidance ‘Audit Committees – Practical Guidance for Local Authorities’. In addition to all matters relating to both internal and external audit, the committee is responsible for performance review and risk management and business continuity.

Community Safety Committee (11 Members) This committee is responsible for the oversight of all aspects of service delivery, which includes the key areas of emergency response, fire protection and fire prevention. This covers responsibility for Integrated Risk Management Planning, national resilience support arrangements and shared services.

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Executive Committee The Executive Committee of 6 members which deals with any urgent matter.

The terms of reference of all the Authority’s committees are available on the Authority’s website. All meetings are open to the general public and wherever possible items are considered within the public sessions of the meetings. Copies of reports and minutes of all meetings are published on the Authority’s website.

3.5 Management Structure

Following a review of corporate management during 2015/2016 a restructure of the Management Board was approved and implemented with effect from 1 January 2016. The purpose of the revised structure was to better align the board structure to the provision of service and provide a professional Human Resources input.

The revised Corporate Management Board is made up of the following Executive Officers who meet monthly:

• Chief Executive/Chief Fire Officer• Director of Service Support• Director of Service Delivery• Chief Legal and Governance Officer• Chief Finance and Procurement Officer• Chief Employment Services Officer

The Corporate Management Board is supported by a Management Team which, in addition to the Board members, includes senior officers from both the operational and non-operational sides of the organisation.

There is a close interaction between management and elected members based around a formal briefing process prior to each committee. Management also provide training and briefings for the elected members prior to their consideration of key isuues such as the medium term financial plan and integrated risk management plan.

The Chief Executive’s Strategy Group, consisting of Management Board members and the Chair and Vice Chair of the Authority, meet bi-monthly. The purpose of this group is to allow senior management and the political leadership to consider major issues affecting the Authority and the Fire Service as a whole. Leading elected members from the opposition are invited to attend the meeting when key issues, including the budget, are being discussed.

Tri-service Collaboration Board. The Police and Cime Act 2017 placed a duty on Fire and Rescue Authorities to collaborate with the other emergency services to provide increased efficiency and improve service delivery. The tri-service collaboration board has been extavblished with West Yorkshire Police and Yorkshire ambulance to identify areas where this can be achieved. The Board consists of the key political leaders of the organisations including the Chair of the Fire Authority and Yorkshire Ambulance and the Police and Crime Commissioner supported by members of senior management.

These are the key elements which make up the Governance Framework. Other areas including officer and member training and development, communication strategy and examples of the performance management structure are available on the Authority website.

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4. Review of Effectiveness

The Authority has responsibility for conducting, at least annually, a review of theeffectiveness of its governance arrangements. The review process is on-going and isinformed by the work of the Management Board, the Chief Finance and ProcurementOfficer, Internal Audit, external auditors and other external assessors. The results of thereviews are reported to the Authority through the committee structure.

4.1 A self-assessment of our effectiveness

• Integrated Risk Management Planning (IRMP)

The Authority is systematically reviewing the service it provides throughout the county through the IRMP process. This process aims to improve community safety and wellbeing and reduce the risk of fires in homes. The Authority maintains a community risk matrix which breaks down the county in different areas based on a risk categorisation from low to very high. This information allows the Authority to measure service delivery to make sure that it is line with the level of risk. This information has informed the Risk Managment Plans which have transformed service delivery over the last 5 years.

Through this process, the Authority is able to continue to achieve its aim of making West Yorkshire safer with its reducing resources.

• Effective Performance Management

It is important that the Authority is able to measure its performance against its aims and objectives. The Authority has a well-established performance management structure which is focused on outcomes. The system is embedded throughout the organisation from individual Fire Station level through District Command to Authority wide achievement.

Each year the Authority produces district risk reduction plans which set service delivery priorities and targets for the coming year. The targets are challenging, outcome based and are designed to build on the success of the previous year. The service delivery framework, coupled with the service delivery plans, has already proved to be successful in targeting the Authority’s resources where the risk exists throughout the five districts.

Performance against the service delivery plan is monitored by the Service Delivery Board, Management Board and Management Team with reports on performance presented to each meeting of the Community Safety Committee where each of the District Commanders attends to be challenged by the members of the Committee.

This system of monitoring has proved successful in measuring performance and provides the vital evidence needed to support the Integrated Risk Management Plan.

• Effective Financial Planning and Management

The Government’s austerity measures have seen the fire Authority lose £21m in government grant over the past 5 years and will lose a further £7.9m by 2019/2020. The Authority has from the start taken a strategic approach to this grant loss matching changes to service delivery through the Integrated Risk Management Plan to the reducing resources. This

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planning coupled with significant capital investment has seen the construction of 8 new fire stations to replace 16 old fire stations delivering over £23m in ongoing revenue savings

In 2016/2017 the Authority received Home Office approval of its 4 year afficiency plan thus securing the 4 year settlement which delivered an overall grant loss of £7.9m. This has offered a degree of certaintly over funding for the next 3 years allowing the Authority to develop a strategy for the use of balances linked to its precept strategy.

The significant has developed a comprehensive expenditure monitoring system delivering financial information and forecasts from individual cost centre level through the organisation to senior management and the Fire Authority. The establishment of a new capital account post during 2016/2017 has seen the introduction of similar levels of detailed financial information for all capital schemes.

The authority maintains a strong record of financial management which is evidenced by its track record of maintaining expenditure within the approved budget.

• Effective Arrangements for Accountability

The Authority can demonstrate robust systems of accountability both to elected members and the general public. The district command structure, which mirrors the 5 district boundaries in West Yorkshire, provide for close interaction with the local district councils on service delivery and joint working.

The Authority presents its budget proposals to the district councils and provides representatives of the business community with the opportunity to comment on the budget proposals.

• Internal Audit

The Authority procures its internal audit service from Kirklees Council which complies with Public Sector Internal Audit Standards. This not only provides better value for money but also gives the Authority access to specialist auditors and gives an added element of independence.

The work of internal audit extends well beyond the normal probity audits and includes examination of the key financial systems as well as verification work on the Authority’s business continuity plan. During 2016/2017 the Internal Audit section provided an independent review role within the new command and control project implementation and and overview to the Emergency Services Mobile Communications Project.

• Human Resources

Following the appointment of the Chief Employment Services Officer in late 2015, work has continued to align people policies and practice to business need. As well as updating core policies, a full staff survey and cultural audit has been carried out. This has resulted in the refresh of the Authority’s values and the introduction of a new behavioural framework designed to further improve staff engagement. This work anticipated the findings of the Thomas Report that was published during the year and ensured that the Authority was able to respond positively to its recommendations.

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Recruitment of whole-time firefighters commenced in February 2016 and culminated in over 6,000 applicants for some 70 posts that will be available during 2017-18. An extensive positive action campaign has ensured that there is real diversity amongst the applicants and the Authority will careful monitor the impact of its recruitment process on underrepresented groups. The process will be repeated in each of the next two years with a similar number of vacancies forecast.

The Authority continues to prioritise the health and wellee-being of its staff. A 24 hour Employee Assistance Programme has been introduced to provide staff with an additional level of support. Sickness levels across the Authority remain low.

Summary

This process of self-assessment provides the Authority with the evidence to support Managements’ conclusion that it is continuing to provide a high quality service with the resources available.

• Statement of Assurance

The Authority is required to produce an annual Statement of Assurance as part of the Fire and Rescue National Framework for England. The purpose of the statement is to provide independent assurance to communities and the Government that the service is being delivered efficiently and effectively. Whilst the Fire and Rescue National Framework sets out the Government’s priorities and objectives for fire and rescue authorities in England, it does not prescribe operational matters as these are determined locally by fire and rescue authorities.

This Statement of Assurance provides assurance that WYFRA is providing an efficient, effective and value for money service to the community of West Yorkshire in its financial, governance and operational matters.

• Conclusion

Overall, the Authority and its Management Board conclude that the systems and procedures provide effective systems of management control enabling the Authority to provide and efficient, effective and economic service to the public of West Yorkshire.

4.2 External review

KPMG continue to provide an external review of systems and procedure as part of their role as the appointed external auditors to the Authority, they will continue to do so until 2017/2018 providing continuity of expertise.

In addition The Police and Crime Act 2017 included the establishment of a Fire Service Inspectorate which will perform independent reviews on all Fire and Rescue Services. Whilst the scope or timetable for these reviews is not yet known the Authority welcomes this additional level of external review

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4.3 Compliance

These systems and reviews demonstrate that the Authority’s assurance arrangements conform to the governance requirements of the CIPFA Statement on the Role of the Head of Internal Audit (2010). They also demonstrate the systems that are in place to enable the Monitoring Officer and Chief Finance Officer to discharge their functions in relation to the governance of the Authority.

5 Significant Governance Issues

The continuing reduction in government funding remains a significant challenge to the Authority as it continues to maintain service standards with reducing resources. In addition, the potential for changes in the governance of the Authority also provide a degree of uncertainty.

5.1 Grant Loss

The Authority has received confirmation of the 4 year local government finance settlement which will deliver £7.95m in grant loss during the current spending review period. If the Authority is to deliver the required savings it will need to reduce whole tme firefighter establishment to around 900 by April 2020. The current programme of station rationalisation will not deliver all the required savings and further interventions will need to be identified.

What remains unclear is the long term financial position of the Authority. The recent general election has seen all parties identify key priorities for public spending which do not appear to include the fire service. This coupled with the potential impact of ‘Brexit ‘means that the Authority should be prepared for further financial restraint in the next spending review period.

5.2 Police and Crime Act 2016

The Police and Crime Act imposes a statutory requirement on emergency serices to collaborate to improve public safety and deliver better efficiency. The emergency services in West Yorkshire have established a joint body to review areas of collaboration this is yet to deliver any significant change. This process is dependant on the the services agreeing joint prioities and delivering change with willing partners. This must remain one of the key priority if the Authroity is to comply with the Act.

5.3 Pay Increases

Following 6 years of pay restraint there is increasing pressure from the trade unions for pay increases to catch up with price inflation. The current 4 year settlement only includes provision for 1% pay increases and is unlikely to be increased if the trade unions negotiate

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more significant pay increases. Every additional 1% pay increase would cost the Authority £0.6m which would have to be funded by identifying further efficiency savings.

6 Summary

The Fire Authority continues to operate in a difficult environment and we accept that the above issues present the Authority and its Management Board with a major challenge. However, previous performance demonstrates the ability of the Authority and its management to manage in challenging times. We are therefore confident that we have the ability to continue to deliver a high quality service whilst driving through major changes to the organisation, and that the systems are in place to further enhance our governance arrangements.

John Roberts Chief Fire Officer / Chief Executive

30 June 2017

Geoffrey Maren Chief Finance and Procurement Officer

30 June 2017

Cllr Judith Hughes Chair, West Yorkshire Fire & Rescue Authority

30 June 2017

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Purpose a) To report on the financial outturn for 2016-17b) To present the key statements from the draft Statement of Accounts for2016-17 c) To report on the level of Members’ Allowances in 2016-17

Recommendations a) That the revenue and capital outturn for 2016-17 be noted;b) That the Statement of Accounts for 2016-17 be noted;c) That the report on Members’ Allowances for 2016-17 be noted.

Summary This report presents details of the Authority’s financial outturn for 2016-17 together with a copy of the unaudited Statement of Accounts, and the outturn for Members’ Allowances

OFFICIAL

Statement of Accounts and Financial Outturn 2016-17 Audit Committee Date: 28 July 2017 Agenda Item: 09 Submitted By: Chief Finance and Procurement Officer



Contact Officer: Alison Wood, Chief Finance and Procurement Officer T: 01274 655711 E: [email protected]


Annexes: Annex 1 – Capital budget monitoring summary Annex 2 – Expenditure and Funding Anaylsis Annex 3 – Movement in reserves Statement Annex 4 - Comprehensive Income and Expemditure Statement Annex 5 – Balance sheet

Annex 6 - Cash Flow Statement

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IntroductionThe purpose of this report is to present a comprehensive review of the financial activity of the Authority for the financial year 2016-17 looking at the following areas. The Statement of Accounts will be submitted to the Audit Committee for approval in September following the completion of the Audit. This report is for noting only and provides a brief explanation of the key statements which build up the statement of accounts.

Section 1 – Revenue Expenditure This section compares the actual expenditure for the year with the revenue budget, enabling the Authority to measure financial performance. The report is in a similar format to the revenue monitoring reports presented to each meeting of the Finance and Resources Committee providing an explanation of the major variations.

Section 2 – Capital Expenditure Outturn This section reports on actual capital expenditure for the year, compares this performance with the approved Capital Plan, and describes the more significant variations. It also provides details of the major capital schemes completed within the year.

Section 3- Statement of Accounts This section presents the four key statements from the Authority’s formal Statement of Accounts for 2016-17 explains their purpose and the financial position of the Authority. It also explains the Expenditure Funding Analysis, a new requirement for 2016-17.

Section 4 – Members’ Allowances Outturn Finally, the report includes details of the sums paid to individual members in respect of their various allowances. This is a statutory requirement under Regulation 26A of the Local Authorities (Member Allowances) Regulations 1991, as amended.

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Section 1- Revenue Expenditure

1 Revenue Expenditure Outturn

1.1 Revenue Outturn

2 It became clear very early in the year that the number of firefighters retiring was exceeding the budget provision thus putting pressure on service delivery. This was supported by extensive use of overtime but still resulted in an underspending on firefighter salaries. Overall the budget was underspent by £1.99m and this is analysed below.

The table below provides a summary of the revenue outturn.

EXPENDITURE Revenue

Outturn £000 Revised

Budget £000 Variance £000

Uniformed Staff 53,879,717 54,772,000 -892,283 Support Staff 8,424,964 8,403,000 21,964 Training 547,279 680,000 -132,721 Other Employee Expenses 248,043 194,500 53,543 Premises Expenses 3,527,129 3,290,200 236,929 Transport Costs 2,187,690 2,172,600 15,090 Supplies and Services 4,703,698 4,578,400 125,298 Insurance 874,608 1,081,300 -206,692 Lead Authority Charges 237,270 294,000 -56,730 Capital Financing Charges 6,918,000 6,918,000 0 Provision for Pay and Prices 388,000 388,000 0 Total Expenditure 81,936,397 82,772,000 -835,603

Total Income 3,407,155 2,244,000 -1,163,155

Net Expenditure 78,529,241 80,528,000 -1,998,759

An explanation of the major variations are detailed below:

Uniformed Staff -£0.892m

This is the largest area of expenditure and accounts for the most significant budget variance which had been forecast throughout the year. The majority of the variance falls in three areas:

Whole-time Firefighters -£1.227m

As explained in the introduction this is the underspending as a result of an increased number of firefighter retirements reduced by the increase in overtime payments.

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Retained firefighters -£0.124m

Payments to retained firefighters are broken down between the retaining fees and payments when they are called out to incidents. In recent years the Authority has seen a 50% reduction in operational activity which has seen a significant reduction in payments to retained firefighters.

Firefighters Pensions £0.474m

This is the cost of the nationally agreed contribution holiday awarded to staff that joined the 1992 firefighters pension schemes between the age of 18 to 20 years. Under the scheme these staff are unable to retire until they are 50 and consequently had paid two additional years contributions with no pension benefit. This expenditure is 100% funded through government grant which forms a large proportion of the increase in income which is detailed below.

Support Staff £21k

This is the net impact of underspending in the current year as a result of vacancies which is offset by the forecast redundancy costs of the restructure of information technology which have been set aside in an earmarked reserve.

Training Courses -£132k

As explained in the introduction this partly as a result of staff shortages causing difficulty in releasing staff for training courses.

Other Employee Expenses £53k

The overspending is a result of increased expenditure in preparation for the firefighter recruitment process.

Premises £236k

Cuts in the programmed repairs to building have resulted in additional expenditure on day to day repairs and maintenance...

Transport -£15k

Expenditure is in line with the revenue budget.

Supplies and services £125k

Following a significant underspending on this area in 2015/2016, the revenue budget was reduced significantly resulting in an overspending in 2016/2017.

Income -£1,163

The Authority has generated significant additional income through a number of areas in fire safety including charges for persistent false alarms, fire reports and the primary authority scheme. This also includes additional grant of £474k to fund the additional pension costs as explained above.

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1.2 Revenue Balances

At 1 April 2016 the Authority had a balance on the general fund of £23.3m which has been accumulated through underspending in the previous years. It was agreed by the Fire Authority to set aside £10m of these reserves into a capital financing reserve to fund future capital expenditure thus reducing the balance of the general fund to £13.3m. The Authority had planned to use £0.19m of balances to fund the revenue budget but ultimately underspent the budget by £2.0m thus increasing the general fund leaving a balance of £15.1m at 31 March 2017.

The Authority has calculated that it needs to maintain a minimum revenue balance of £5m to meet uninsured risks which are identified in the corporate risk register, which leaves useable balances of £10.1m.

The 2017/2018 revenue budget and medium term financial plan will commit further use of balances to enable the Authority to recommence whole-time recruitment in 2017/2018 and maintain a minimum establishment of 900 whole-time firefighters. Already the government have indicated that there will be an increase in pension costs which will have to be met by those authorities with unfunded pension schemes in 2018/2019 and these will have to be funded through balances.

The Authority continues to face significant financial challenges in the next 4 years as funding for public authorities continues to be reduced. The use of these balances will enable the Authority to achieve these financial challenges whilst recommencing recruitment of whole-time firefighters.

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Section 2 – Capital Expenditure2.1 In addition to its day-to-day revenue spending the Authority planned to spend £16.4m on

major capital schemes in 2016/2017, a comparison to actual expenditure is detailed below:

Revised Capital Plan

Expenditure 2016/17

Balance Uncommitted

£000 £000 £000

CORPORATE RESOURCES Property Services 1,621 1,398 223 Information Technology 2,353 598 1,755 Transport 2,465 1,198 1,267 Human Resources 146 34 112 Finance 74 25 49

STRATEGIC DEVELOPMENT IRMP 7,609 4,174 3,435

SERVICE DELIVERY Operations 1,408 570 838 Fire Safety & Community Relations 751 684 67

Total Expenditure 16,427 8,681 7,746

Capital expenditure for the year has totalled £8.67m which is 53% of the revised capital plan. The majority of the expenditure is work on the Integrated Risk management Plan (IRMP) where £4.2m has been spent. By the end of 2016/17 the Authority had almost completed the IRMP 2 programme resulting in the opening of Ossett Fire Station in October 2016 and the majority of the construction of the new Shipley Fire Station which opened in May 2017. Overall expenditure on the IRMP has totalled £20m and has generated ongoing revenue savings of £3.6m per annum.

2.2 Financing of the Capital Programme

Once again in 2016/17 the Authority was able to fund its capital plan without the need for any new long term borrowing and funded it with a combination of internal borrowing and capital receipts.

a) Use of internal resources £6.42m

A combination of healthy revenue balances, coupled with the timing of the pension grantpayment, has left the Authority with significant cash balances in year. The continuingimpact of the downturn in the economy on the bank base rate means that the Authoritywas better using these balances to reduce borrowing rather than investing themexternally. It will be necessary to replace this internal funding with external borrowing inthe future but this will be done when interest rates are favourable.

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b) Capital receipts £2.25m

This is income from the sale of Authority assets, the Authority sold 7 former fire stations and Gillats Quarry in 2016/17 generating £2.25m of capital receipts. In addition the Authority will have a further £2.8m in receipts available in 2017/18 from the sale of land at FSHQ and the former South Elmsall Fire Station. These capital receipts will be used to fund new capital expenditure.

Section 3 – Statement of Accounts

3.1 The formal Statement of Accounts for 2016/17 will be presented to the September meeting of the Audit Committee once the audit has been completed. Included within this report is a copy of the four main financial statements which summarise the financial transactions for the year and set out the financial position at the end of 2016/17. This report does not include the numerous notes and supporting statements which will be provided at the September meeting. There is no longer a need to have the accounts approved prior to the audit and therefore these documents are provided for information only. It is hoped by taking this approach that members may get a better understanding of the accounts. The statements included are:-

o Expenditure and Funding Analysis (Annex 2) o Movement in Reserve Statement (Annex 3) o Comprehensive Income and Expenditure Statement (Annex 4) o Balance Sheet (Annex 5) o Cash Flow Statement (Annex 6)

3.2 There are regulations and accounting codes which the Authority must comply with in the preparation of the accounts and the following statement provides assurance that these have been complied with:- The preparation, format and approval procedures for the Statement of Accounts have been carried out in accordance with the requirements of the Code of Practice on Local Authority Accounting in the United Kingdom, (the Code of Practice) published by Chartered Institute of Public Finance and Accountancy (CiPFA). A brief explanation of the key financial statements is provided below.

The format of the Statement of Accounts has been revised following the outcome of the 'Telling the story review'. This includes streamlined reporting requirements for the movement in reserves statement and the introduction of the expenditure and funding analysis and expenditure and income analysed by nature note.

3.3 Expenditure and Funding Analysis (Annex 2)

This is a new statement which is included in public sector accounts for the first time in 2016/2017. The expenditure and funding analysis helps to explain the difference between the way information is reported during the year in the form of budget monitoring reports to directors and the statutory reporting format required for the final accounts which is shown in the comprehensive income and expenditure statement. The bottom line on the expenditure and funding analysis shows that the general fund and other earmarked reserves at the end of 2016/2017 total £33.034m.

65

3.4 Movement in Reserve Statement (Annex 3) The Authority carries a number of financial reserves which are classified as either ‘usable’ or ‘unusable’. This statement shows the changes in the value of these reserves during the financial year.

Useable reserves have been created by setting aside money over a number of years to meet known commitments and as their title suggests, will be used to fund future years’ expenditure, these reserves can be either capital or revenue. The value of useable reserves has increased by £4.1m during the year from £28.9m to £33m. Details of the changes to reserves are included within the statement of accounts, however, the most significant changes are an increase in the general reserve of £1.99m as a result of the underspending.

Unusable reserves cannot be used to fund future years’ expenditure because they are created as a result of accounting adjustments and are not backed by funds. An example of this type is a ‘revaluation reserve’ which is set up when the book value of an asset (e.g. building) changes to reflect market value. Whilst the value may have increased the funds would only become available if and when the asset was sold. The statement shows that the total value of unusable reserves has increased by £0.238m from a deficit of £1.11m to £1.35m. The reason for this deficit is the net liability relating to pension benefits which is explained in the paragraph on the balance sheet below.

3.5 Comprehensive Income and Expenditure Statement (Annex 4) From 2016/17 local authorities are no longer required to report based on the service expenditure analysis in the Service Reporting Code of Practice (SeRCOP) but to report on the same basis as the Authority's budget and performance monitoring reports. This new format means that the service section of the comprehensive income and expenditure statement supports accountability and transparency as it reflects the way in which services operate and performance is managed. However, this is perhaps the most misleading of the accounts because it does not show the cost to the tax payer of providing the service as its title might suggest. What this statement does show is the cost of providing services in the year in accordance with ‘generally accepted accounting practices’ which require the inclusion of a number of large transactions which do not involve the movement of cash. These include charges for depreciation and variations in the estimated future cost of pensions. As a result of these adjustments it is not possible to identify the cost of the service to the tax payer from this statement. Details of the cost of the service and how this is funded through grant and council tax is shown in Section 1 of this report.

3.5 Balance Sheet (Annex 5) The balance sheet shows the financial value of the Authority at 31 March 2017, showing its assets and liabilities and how these are matched by its reserves. The bottom line of the balance sheet shows that the Authority has net liabilities of £1.32bn. However, an examination of long term liabilities shows that the largest single item on the balance sheet is a liability relating to defined pension benefits of just over £1.38bn at 31 March 2017. This represents the total future cost of pension liabilities of all existing employees and current pensioners that will be paid over their lifetime. The firefighters’ pension scheme is an unfunded scheme which does not carry investments to meet future liabilities and consequently on the face of it that the Authority has huge liabilities. However, pension

66

payments are funded annually by mixture of authority contributions, employee contributions and government grant which means that the Authority will not be expected to meet the whole of this liability in any future year. Therefore, if we were to remove this long term liability from the balance sheet, it shows that the Authority has real net assets of £62m.

3.6 Cash Flow Statement (Annex 6) The Cash Flow Statement shows the changes in cash and cash equivalents of the authority during the reporting period. The statement shows how the authority generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities. The amount of net cash flows arising from operating activities is a key indicator of the extent to which the operations of the Authority are funded by way of taxation and grant income or from the recipients of services provided by the authority. Investing activities represent the extent to which cash outflows have been made for resources which are intended to contribute to the authority’s future service delivery. Cash flows arising from financing activities are useful in predicting claims on future cash flows by providers of capital (i.e. borrowing) to the authority.

67

Section 4 – Members’ Allowances Outturn

4.1 Under Regulation 26A of the Local Authorities (Member Allowances) Regulations 1991, as amended, the Authority is required to publish details of all sums paid within the year under the scheme to each individual member in respect of Basic allowance, Special Responsibility allowance. This information is provided below.

Basic Allowance

Special Responsibility

Allowance Expenses

Cllr Alice Smart £2,707.04 -£250.00 Cllr Angela Tait £3,521.04 £747.16 £41.60 Cllr Angela Taylor £772.67 Cllr Anthony Wallis £539.51 £674.99 Cllr Bryan Smith £3,521.04 £3,885.96 £351.00 Cllr Cahal Burke £3,521.04 £136.50 Cllr Caroline Anderson £3,521.04 Cllr Chris Pillai £2,981.53 £156.00 Cllr Christopher Townsley £3,521.04 £971.04 £130.00 Cllr Darren O'Donovan £2,660.34 £22.10 Cllr Dominic Fear £482.72 £33.32 Cllr Ghulam Hussain £3,009.92 £647.16 £8.45 Cllr Glen Miller £1,581.31 Cllr Joanne Dodds £3,038.32 £2,990.03 Cllr John Caffrey £548.98 £30.26 Cllr Judith Hughes £3,521.04 £19,425.00 £240.94 Cllr Julie Heselwood £3,000.46 £747.16 £15.60 Cllr Kamila Maqsood £511.12 £199.16 £42.90 Cllr Karen Renshaw £3,521.04 £223.88 £87.10 Cllr Lisa Holmes £3,521.04 Cllr Mark Shaw £870.48 £58.50 Cllr Martyn Ward £2,981.53 £466.05 Cllr Mohammed Akhtar £321.50 £1.93 £5.85 Cllr Monica Graham £2,748.37 £283.50 Cllr Mumtaz Hussain £548.98 £90.10 £9.10 Cllr Pauleen Grahame £520.58 £211.30 £39.00 Cllr Peter Harrand £3,521.04 £3,885.96 £465.40 Cllr Riaz Ahmed £3,038.32 £59.15 Cllr Richard Dunbar £482.72 £83.32 Cllr Ron Grahame £3,521.04 £3,885.96 £273.00 Cllr Stuart McKenna £520.58 £53.06 Cllr Tariq Hussain £548.98 £22.66 £9.10 Cllr Teresa Peart £2,981.53 Cllr Tracy Austin £3,521.04 £9,713.04 £390.29 Mr Michael Wilkinson £500.00 £64.35

68

Recommendations a) That the revenue and capital outturn for 2016/17 be noted;

b) That the Statement of Accounts for 2016/17 be noted;

c) That the report on Members’ Allowances for 2016/17 be noted.

69

Statement of Accounts and Financial Outturn 2016-17 Page 2 of 24

Annex 1

CAPITAL BUDGET MONITORING 2016/17 SUMMARY

Directorate 2016/17 Capital Plan

2016/17 Virement

2016/17 Slippage

2016/17 Revised

Capital Plan

Expenditure 2016/17

Balance Uncommitted

Property services £1,260,000 -£50,000 £411,000 £1,621,000 £1,398,123 £222,877

IRMP £4,784,000 £0 £2,824,892 £7,608,892 £4,173,711 £3,435,181

ICT £1,673,600 £0 £679,441 £2,353,041 £597,679 £1,755,362

HR £146,400 £0 £0 £146,400 £33,900 £112,500

Transport £1,793,500 £41,306 £630,558 £2,465,364 £1,198,433 £1,266,931

Operations £988,000 £0 £420,463 £1,408,463 £570,536 £837,927 NCP Grant funded expenditure £0 £0 £0 £0

Fire Safety & Community Relations

£700,000 £0 £50,739 £750,739 £684,061 £66,678

Finance £34,000 £0 £39,500 £73,500 £24,907 £48,593

£11,379,500 -£8,694 £5,056,593 £16,427,399 £8,681,351 £7,746,048

70

PROPERTY

2016/17 FINANCIAL YEAR

Details of Capital Virement Slippage Revised

Capital Expenditur

e Balance

Scheme Plan Plan to date Uncomm

itted

Training Centre £0 £0 Training Centre boiler replacement £180,000 £180,000 £168,781 £11,219 Training Centre window replacement, cladding and fascias £60,000 £60,000 £56,332 £3,668 RTC Pad classroom facilities £25,000 £25,000 £27,725 -£2,725

£0 £0

SPECIFIC REFURBISHMENTS £0 £0 Upgrade main shower and washing facilities - Bingley

£40,000 £40,000

£13,726 £26,274

Emergency generator - Slaithwaite £30,000 £30,000 £0 £30,000 Roof replacement - Skelmanthorpe £50,000 £50,000 £47,936 £2,064 Upgrade of washing and toilet facilities - Wetherby

£40,000 £40,000

£6,556 £33,444

Upgrade of washing and toilet facilities - Garforth

£50,000 £50,000

£10,104 £39,896

Drainage interceptors & refuelling pads £40,000 £40,000

£46,049 -£6,049

Mytholmroyd flood remediation and upgrade works following floods 2015 £380,000

£380,000 £309,883

£70,117 £0 £0

GENERAL £0 £0 Upgrade heating systems £20,000 -£20,000 £0 £0 £0 Training towers & lightening surge protection systems

£50,000 £50,000

£21,910 £28,090

Asbestos removal & management £30,000 -£30,000 £0 £0 £0 Internal fabric refurbishments £30,000 -£30,000 £0 £0 £0

External fabric refurbishments £30,000 -£30,000 £0 £0 £0 Gym, external windows, doors , fascia boards - Rawdon

£50,000 £50,000

£48,399 £1,601

Upgrading of roofs/guttering/fascia boards - Otley

£35,000 £35,000

£29,660 £5,340

Security, CCTV and intruder alarms £50,000 £50,000 £56,860 -£6,860 Additional Security, CCTV and intruder alarms

£9,767 -£9,767

Drill ground & road surface replacement (Todmorden & Slaithwaite)

£20,000 £20,000 £40,711 -£20,711

Asbestos Management to Upgrade Heating Systems

£50,000 £50,000 £897 £49,103

TOTAL CAPITAL PLAN 2016/17 £1,260,000 -£50,000 -£60,000 £1,150,000 £895,294 £254,706

SLIPPED SCHEMES Roof Replacement - transport workshops £60,000 £60,000 £103,170 -£43,170Security and Control System £50,000 £50,000 £52,828 -£2,828 Health & Safety improvements £17,000 £17,000 £19,534 -£2,534

71

Electrical, Heating and other services equipment improvements £7,000 £7,000 £9,422

-£2,422 Training Towers & Lightening Surge Protection £44,000 £44,000 £43,196 £804 Asbestos Mangement and removal £25,000 £25,000 £24,595 £405 DDA Access £10,000 £10,000 £9,390 £610 Internal fabric refurbishments £9,000 £9,000 £8,776 £224 External fabric refurbishments £11,000 £11,000 £11,041 -£41 Drill Ground & Road Surface Replacements £4,000 £4,000 £4,660 -£660 MPTC Refurbishment £225,000 £225,000 £140,637 £84,363 Odsal Fire Station upgrade and refurbishment of central heating and solar panel domestic hot water system

£9,000 £9,000 £7,469 £1,531

TOTAL SLIPPED SCHEMES £0 £0 £471,000 £471,000 £434,718 £36,282

SCHEMES - NO APPROVAL FSHQ site alterations to facilitate sale of land £0 £0

£10,354 -£10,354

Access control and security improvements £0 £0 £502 -£502 Refubishment of the existing technical services building and refurbishment of the gym

£0 £0 £18,537 -£18,537

Meltham - refurbishment and upgrade of toilet and washing facilities

£0 £0 £905 -£905

Cooling and Ventilation systems £0 £0 £15,292 -£15,292 TOTAL SCHEMES - NO APPROVAL £0 £0 £0 £0 £45,590 -£45,590

Capital General Equipment £22,521 -£22,521

TOTAL CAPITAL £1,260,000 -£50,000 £411,000 £1,621,000 £1,398,123 £222,877

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IRMP 2016/17 FINANCIAL YEAR

Details of Capital Virement Slippage Revised Capital

Expenditure Balance

Scheme Plan Plan to date Uncommitted

SLIPPED SCHEMES

South Kirkby £99,786 £99,786 £24,888 £74,898

Rastrick £485,655 £485,655 £117,540 £368,115 Killingbeck £87,568 £87,568 £47,440 £40,128 Carlton Road £288,345 £288,345 £46,008 £242,337 Shipley / Idle £2,143,500 £2,143,500 £2,735,387 -£591,887

Ossett £1,863,538 £1,863,538 £1,203,723 £659,815 Weetwood £2,640,500 £2,640,500 £0 £2,640,500 Rothwell £0 -£1,276 £1,276

TOTAL SLIPPED SCHEMES £4,784,000 £0 £2,824,892 £7,608,892 £4,173,711 £3,435,181

TOTAL CAPITAL £4,784,000 £0 £2,824,892 £7,608,892 £4,173,711 £3,435,181

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ICT


Details of Capital Vireme

nt Slippage Revised Capital

Expenditure Balance

Scheme Plan Plan to date Uncommitte

d

Computer Hardware £45,000 £25,00

0 £70,000 £77,618 -£7,618 Software Licences £170,000 £170,000 £139,171 £30,829

New WAN (Enabling work) £170,000 £170,000 £124,101 £45,899 Servers and Storage £20,000 £20,000 £0 £20,000

Networking Hardware £190,000

-£25,00

0 £165,000 £63,578

£101,422 Telephone Systems £85,000 £85,000 £15,919 £69,081 Remote Access Systems £40,000 £40,000 £0 £40,000

Implementation of ICT Review £728,800 £728,800 £0 £728,800 ITIL Service Management £71,200 £71,200 £61,800 £9,400 Retained Pagers £153,600 £153,600 £0 £153,600

TOTAL CAPITAL PLAN 2016/17 £1,673,600 £0 £0 £1,673,600 £482,188 £1,191,412

SLIPPED SCHEMES MDT replacement £0 £108,000 £108,000 £47,550 £60,450 Software Licences £0 £120,000 £120,000 £0 £120,000 New WAN (enabling work) £0 £110,000 £110,000 £398 £109,602

Networking hardware £0 £80,000 £80,000 £0 £80,000 Mobile Device Management Solution £0 £63,000 £63,000 £0 £63,000 CRM Upgrade £0 £110,000 £110,000 £57,787 £52,213 Microsoft Project Service Software Licences £0 £40,000 £40,000 £0 £40,000

GIS £0 £35,000 £35,000 £0 £35,000 Appliance CCTV £3,053 £3,053 £0 £3,053 Fire Station Transmitting Infrastructure £10,388 £10,388 £9,757 £631


Expenditure no approvals

Servers and Storage £0 £0 £0 £0 Server room equipment £0 £0 £0 £0 New Data Network £0 £0 £0 £0 Computer Hardware £0 £0 £0 £0

TOTAL EXPENDITURE NO APPROVAL £0 £0 £0 £0

TOTAL CAPITAL £1,673,600 £0 £679,441 £2,353,041 £597,679 £1,755,362

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HUMAN RESOURCES 2016/17 FINANCIAL YEAR

Details of Capital Virement Slippag

e Revised Capital

Expenditure Balance

Scheme Plan Plan to date Uncommitte

d

Station Based Fitness Equipment £112,500 £112,500 £0 £112,500 Recruitment Software £33,900 £33,900 £33,900 £0

TOTAL CAPITAL PLAN 2016/17 £146,400 £0 £0 £146,400 £33,900 £112,500

TRANSPORT 2016/17 FINANCIAL YEAR

Details of Capital Virement Slippage Revised Capital Expenditure Balance Scheme Plan Plan to date Uncommitted

Ladders £30,000 £30,000 £32,656 -£2,656 POD Refurbishments £40,000 £40,000 £0 £40,000 Vehicle Replacement £1,473,500 -£18,694 £1,454,806 £524,707 £930,099

Flood Vehicles £250,000 £60,000 £310,000 £171,068 £138,932

TOTAL CAPITAL PLAN 2016/17 £1,793,500 £41,306 £0 £1,834,806 £728,431 £1,106,375

SLIPPED SCHEMES Vehicle replacement £439,142 £439,142 £397,836 £41,306

Command Unit Lite (Grant funded) £0 £57,858 £57,858 £1,675 £56,183 Silent Witness £0 £13,558 £13,558 £2,833 £10,725 Vehicle Telematics £0 £80,000 £80,000 £67,660 £12,340 Demountable PODS £0 £40,000 £40,000 £0 £40,000


Expenditure no approvals

Ladders

TOTAL CAPITAL £1,793,500 £41,306 £630,558 £2,465,364 £1,198,433 £1,266,931

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OPERATIONS


Details of Capital Vireme

nt Slippage Revised Capital

Expenditure Balance

Scheme Plan Plan to date Uncommit

ted

Lay Flat Hose £50,000 £50,000 £58,437 -£8,437 Thermal Image Cameras £150,000 £150,000 £149,380 £620 Line Rescue £12,000 £12,000 £0 £12,000 Gas Tight Suits £14,000 £14,000 £0 £14,000 Lance Firefighting Equipment £105,000 £105,000 £0 £105,000 Water Rescue £12,000 £12,000 £0 £12,000 Reciprocating Saws £12,000 £12,000 £12,392 -£392 Hydrants £450,000 £450,000 £298,400 £151,600 Flood Response - Boats/Sled/Ancillary Equipment £80,500 £80,500

£0 £80,500

Flood Response - PPE £71,500 £71,500 £0 £71,500 Flood Response - Vehicle conversion/Uplift £19,000 £19,000 £0 £19,000 Flood Response - Communications £12,000 £12,000 £17,117 -£5,117 TOTAL CAPITAL PLAN 2016/17 £988,000 £0 £0 £988,000 £535,726 £452,274 SLIPPED SCHEMES BA Compressor £0 £9,555 £24,069 £24,069 £34,810 -£10,741 New Control Project Contingency £0 £342,364 £342,364 £0 £342,364 New Control Project West Yorks £0 £0 £0 £0 New Control Project South Yorks Collaboration £0 £0 £0 £0 New Control Project (Premises costs) £0 £54,030 £54,030 £0 £54,030 TOTAL SLIPPAGE £0 £0 £420,463 £420,463 £34,810 £385,653 Expenditure no approvals Lay Flat Hose

TOTAL CAPITAL £988,000 £0 £420,463 £1,408,463 £570,536 £837,927

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FIRE SAFETY


Details of Capital Virement Slippage Revised Capital Expenditure Balance


Home Fire Safety Checks £700,000 £700,000 £684,061 £15,939 TOTAL CAPITAL PLAN 2016/17 £700,000 £0 £0 £700,000 £684,061 £15,939 SLIPPED SCHEMES Premises Risk Database £12,000 £12,000 £0 £12,000 Mobile IT Devices £38,739 £38,739 £0 £38,739 TOTAL SLIPPAGE £0 £0 £50,739 £50,739 £0 £50,739 TOTAL CAPITAL £700,000 £0 £50,739 £750,739 £684,061 £66,678

FINANCE

Details of Capital Virement Slippage

Revised Capital Expenditure Balance


Photocopiers £34,000 £39,500 £73,500 £24,907 £48,593

TOTAL CAPITAL PLAN 2016/17 £34,000 £0 £39,500 £73,500 £24,907 £48,593

77

Annex 2 Expenditure and Funding Analysis

2016/17

2016/17

Net

Exp

endi

ture

Ch

arge

able

to

the

Gene

ral

Fund

Adju

stm

ents

be

twee

n Fu

ndin

g an

d Ac

coun

ting

Basis

(Not

e7)

Net

Exp

endi

ture

in

the

Com

preh

ensiv

e an

d In

com

e Ex

pend

iture

St

atem

ent

(Not

e 8)

£000 £000 £000 Service Delivery 20,355 17,837 38,192 Sevice Support 5,257 3,937 9,194 Employment Services 3,351 106 3,457 Legal and Governance 1,346 85 1,431 Finance and Procurement 599 66 665

Net Cost of Services 30,908 22,031 52,939

Other Income and Expenditure -34,985 -3,506 -38,491

Surplus or deficit -4,077 18,525 14,448

Opening General Fund Balance at 31 March 2016 28,957

Less Deficit on General Fund in year 4,077

Closing General Fund Balance at 31 March 2017 33,034

78

Annex 3 Movement In Reserves Statement 2016/17

Movement in Reserves during 2016/17

Note

Gene

ral F

und

Bala

nce

Capi

tal R

ecei

pts

Rese

rve

Capi

tal G

rant

s U

napp

lied

Tota

l Usa

ble

Rese

rves

Unu

sabl

e Re

serv

es

TOTA

L AU

THO

RITY

RE

SERV

ES

£000 £000 £000 £000 £000 £000

Balance at 01 April 2016 28,957 0 0 28,957 -1,113,089 -1,084,132 Total Comprehensive Income & Expenditure -14,448 0 0 -14,448 -219,402 -233,850 Adjustments between accounting basis & funding basis under regulations

9 18,525 0 0 18,525 -18,525 0

Increase/Decrease in 2016/17 4,077 0 0 4,077 -237,927 -233,850 Balance at 31 March 2017 carried forward 33,034 0 0 33,034 -1,351,016 -1,317,982

79

Annex 4

Comprehensive Income & Expenditure Statement for 2016/17

2015/16 2016/17

Gros

s Ex

pend

iture

Gros

s Inc

ome

Net

Ex

pend

iture

Gros

s Ex

pend

iture

Gros

s Inc

ome

Net

Ex

pend

iture

£000 £000 £000 £000 £000 £000 57,924 -2,109 55,815 Service Delivery 40,625 -2,433 38,192 -1,667 41 -1,626 Service Support 12,867 -3,673 9,194

-163 -3 -166 Employment Services 3,557 -100 3,457 290 -34 256 Legal and Governance 1,442 -11 1,431 -37 -62 -99 Finance and Procurement 687 -22 665

56,347 -2,167 54,180 Cost of Services 59,178 -6,239 52,939

483 -400 83 Other Operating Expenditure (Note 10) 3,002 -2,358 644

43,173 -79 43,094 Financing and Investment Income & Expenditure (Note 11) 42,186 -76 42,110

0 -82,092 -82,092 Taxation and Non specific Grant Income

(Note 12) 0 -81,245 -81,245

100,003 -84,738 15,265 Deficit on Provision of Services 104,366 -89,919 14,448

94 Unrealised Surplus or Deficit on revaluation

of fixed -2,971 assets

-132,584

Re-measurement of the net defined benefit liability 222,373

Other adjustments

-132,490

Other Comprehensive Income and Expenditure 219,402

-117,225

Total Comprehensive Income and Expenditure 233,850

80

Annex 5 Balance Sheet as at 31 March 2017

31 March Notes

31 March

2016 2017

£000 £000

Property, Plant and Equipment 13

68,675 Other Land & Buildings 72,918

16,002 Vehicle, Plant & Equipment 15,643

5,215 Assets Under Construction 4,224

540 Surplus Assets not held for sale 0

854 Intangible Assets 15 901

91,286 Long Term Assets 93,686

1,937 Assets Held for Sale 16 826

635 Inventories 19 671

13,425 Short Term Debtors 20 15,754

-2,700 Doubtful Debt provision 20 -2,853

9,570 Cash and Cash Equivalents 21 9,785

22,867 Current Assets 24,183

-130 Bank Overdraft -392

-722 Short Term Borrowing -717

-8,067 Short Term Creditors 25 -8,402

-485 Provisions (<1yr) 26 -262

-9,404 Current Liabilities -9,773

-46,075 Long Term Borrowing -45,839

-8 Capital Grants received in Advance -22

-1,142,798 Net liability related to defined Benefit Pension Schemes

38 -1,380,217

-1,188,881 Long Term Liabilities

-1,426,078

-1,084,132 Net Assets

-1,317,982

28,957 Usable Reserves 27 33,034

-1,113,089 Unusable Reserves 29

-1,351,016

-1,084,132 Total Reserves

-1,317,982

81

Annex 6

Cash Flow Statement for 2016/17

2015/16 Notes 2016/17 £000 £000

-15,267 Net surplus or (deficit) on the provision of services -14,448

24,804 Adjustment to surplus or deficit on the provision of services for noncash movements 22 25,716

-610 Adjust for items included in the net surplus or deficit 22 -2,304 on the provision of services that are investing and financing activities

8,927 Net Cash flows from operating activities 8,964

-9,757 Net Cash flows from Investing Activities 23 -6,075

-465 Net Cash flows from Financing Activities 24 -2,936

-1,295 Net increase or (decrease) in cash and cash equivalents -47

10,735 Cash and cash equivalents at the beginning of the reporting period 21 9,440

9,440 Cash and cash equivalents at the end of the reporting period 9,393

82

Internal Audit Report - Quarterly Revie · 7/28/2017 · Purpose To present the Internal Audit...

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