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AUDIT COMMITTEE
Tuesday 15 January 2019 at 2.00 p.m. Filby Room, Jubilee House, Falconers Chase,
Wymondham, Norfolk NR18 0WW
A G E N D A
Note for Members of the Public: If you have any specific requirements to enable you to attend the meeting, please contact the OPCCN (details overleaf) prior to the meeting.
Part 1 – Public Agenda
1. Welcome and Apologies
2. Declarations of Personal and/or Prejudicial Interests
3. To approve the minutes of the meeting held on 23 October 2018
4. Audit Committee Terms of Reference – Report from Chief Finance Officer
5. Audit of the 2018/19 Statements of Accounts Action Plan – Report from Chief Finance Officer
6. External Audit Plan 2018/19 – Report from Associate Partner (Ernst and Young LLP)
7. Internal Audit – Reports from Head of Internal Audit (TIAA)A. 2018/19 Plan UpdateB. 2018/19 Internal Audit Follow Up Recommendations
8. Treasury Management – Reports from Chief Finance OfficerA. 2018/19 Half Year UpdateB. 2019/20 Strategy
9. Forward Work Plan – Report from Chief Finance Officer
1
Part 2 – Private Agenda
10. Duty Management System – update report – Report from Chief FinanceOfficer
11. Management of Police Information – update report – Report from ChiefFinance Officer
12. Strategic Risk Register Update – Report from Chief Executive and ChiefConstable
13. Date of Next Meeting
Tuesday 16 April 2019 at 2pm – Wroxham Room.
Enquiries to:
OPCCN Building 8, Jubilee House, Falconers Chase, Wymondham, Norfolk, NR18 0WW Direct Dial: 01953 424455 Email: [email protected]
如果您希望把这份资料翻译为国语，请致电 01953 424455或发电子邮件至：
[email protected] 联系诺福克警察和犯罪事务专员办公室。
Если вы хотите получить данный документ на русском языке, пожалуйста, обратитесь в Управление полиции и комиссии по рассмотрению правонарушений в графстве Норфолк по тел. 01953 424455 или по электронной почте: [email protected]
Se desejar obter uma cópia deste documento em português, por favor contacte o Gabinete do Comissário da Polícia e Crimes através do 01953 424455 ou pelo e-mail: [email protected]
Jei šio dokumento kopiją norėtumėte gauti lietuvių kalba, prašome susisiekti su Policijos ir nusikalstamumo komisarų tarnyba Norfolko grafystėje (Office of the Police and Crime Commissioner for Norfolk) telefonu 01953 424455 arba elektroninio pašto adresu [email protected]
Jeśli chcieliby Państwo otrzymać kopię niniejszego dokumentu w języku polskim, prosimy skontaktować się z władzami policji hrabstwa Norfolk (Office of the Police and Crime Commissioner for Norfolk) pod numerem 01953 424455 lub pisać na: [email protected]
2
MINUTES OF THE AUDIT COMMITTEE MEETING HELD ON MONDAY 23 OCTOBER 2018 AT 2.00 PM
JUBILEE HOUSE, FALCONERS CHASE, WYMONDHAM
Members in attendance:
Mr R Bennett (Chairman) Mrs J Hills Ms A Bennett Mr A Matthews Mr P Hargrave
Also in attendance:
Mr J Hummersone Chief Finance Officer (CFO) Mr C Hewitt Manager, Ernst &Young LLP (EY) Mr C Harris Head of Internal Audit, TIAA Ms F Dodimead Audit Director, TIAA
Part 1 - Public Agenda
1. Welcome and Apologies
The Chairman welcomed members to the meeting and apologies were notedfrom DCC P Sanford and Mr M Stokes (OPCC).
2. Declarations of Personal and/or Prejudicial Interests
No interests relevant to the agenda were noted.
3. To confirm the minutes of the meeting held on 24 August 2018
3.1 The minutes were approved as a correct record. The CFO reported that thefurther clarification on ‘impact’ scores (risk register) remained outstanding.
3.2 With reference to Minute 4 (Statements of Accounts 2017/18) the Committee waspleased to note that the external auditor’s opinion on the accounts was receivedbefore the end of August. The CFO advised that he had spoken to PSAA Ltd(Public Sector Audit Appointments) regarding the reasons for the delay in thesign off of the accounts. As this was the first year with tighter deadlines thePSAA was extending some flexibility to all local authorities. The CFO reported
3
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that a meeting was to be held with EY on 1 November 2018 to discuss the problems with the 2017/18 audit with a view to ensuring that the sign off deadline was not missed for 2018/19. The action plan would be reported to the Committee.
3.3 Mr Hewitt (EY) presented the Annual Audit Letter and the Committee noted that it had already been published on the websites.
4. Internal Audit - 2017/18 Audit Progress Report and Follow Up Report
4.1 The Director of Audit introduced the Progress Report and referred to the fact thatthere were two limited assurance reports, Management of Police Information(MoPI) and the Duty Management System (DMS).
4.2 The Committee focussed its discussions on the limited assurance reports inparticular whether the issues identified were on the risk registers and whetherChief Officers were clear about the implications of the shortcomings identified.The CFO reported positively on both these matters but acknowledged that therisks were being tolerated because the back office was severely stretched.Resources were having to be prioritised because of the severe financialconstraints.
4.3 The Committee requested reports on MoPI and the DMS to the nextmeeting. It was hoped that the reports would give more context to the problemspicked up at the audit and reassure members that the organisation was aware ofthe risks and implications.
4.4 It was also agreed that if risks were to be tolerated, i.e. recommendations notactioned or actioned over a longer period this needed to be come back to theCommittee for final sign off. Failure to do this would mean the Follow Up auditwork would continue to identify recommendations as outstanding (notcompleted).
4.5 The Director of Audit introduced the Follow Up Report. It was noted that 16recommendations (Priority 1 and 2) had been implemented since the last meetingand 34 recommendations remained outstanding (or which 3 were priority 1). TheCommittee noted the increase in the number of outstanding recommendationsand the CFO described the processes within the forces for monitoring andchallenging implementation. Again the Committee indicated that if the risks ofnot completing were being tolerated then this should be reported back and thesuggested actions discontinued.
4.6 The Committee noted the reports.
5. Forward Work Plan
5.1 The Committee noted the Plan with some minor changes including the additionof the two reports previous agreed.
4
- 3 -
Part 2 - Private Agenda
6. Strategic Risk Register Update
6.1 The CFO introduced the report. There were no particular concerns in respect ofthe identified risks but the Committee again asked for clarification as to thereasons for reductions in some of the ‘impact’ scores.
6.2 The CFO reported that work was ongoing to refine the strategic risk register anda meeting would be held shortly to progress the reporting improvements.
7. Close of Meeting
7.1 The Chairman expressed the Committee’s thanks and appreciation to Mr Hewitt(EY) as this was his last meeting. He had been involved in the external audit ofNorfolk Police for many years.
7.2 The next meeting would be held on 15 January 2019 at 2 pm in the Filby Room,OCC.
………….…………………….
Mr R Bennett CHAIRMAN
5
AUDIT COMMITTEE 15 JANUARY 2019 AGENDA ITEM: 4
Norfolk Audit Committee 15 January 2019 Agenda Item 4
ORIGINATOR: Chief Finance Officer
REASON FOR SUBMISSION: For Discussion and Agreement
SUBMITTED TO : Audit Committee
SUBJECT: To consider the current Terms of Reference for the Committee
SUMMARY:
The Terms of Reference make reference to an annual review. The Committee is asked consider whether any changes are required.
RECOMMENDATION:
The Committee is invited to consider the Terms of Reference and propose any changes.
6
1. Purpose
1.1 To consider the current Terms of Reference (Appendix 1).
2. Background
2.1 The Terms of Reference are based on the current Chartered Institute of PublicFinance and Accountancy (CIPFA) model Terms of Reference and have beenexpanded to include responsibility for the oversight of Treasury Managementarrangements.
3. Recommendation
3.1 The Committee is recommended to review the Terms of Reference and proposeany necessary changes.
4. Financial Implications
None.
5. Other Implications and Risks
5.1 As identified within the report.
7
ORIGINATOR CHECKLIST (MUST BE COMPLETED) STATE ‘YES’ OR ‘NO’
Has legal advice been sought on this submission? No
Have financial implications been considered? Yes
Have human resource implications been considered? Yes
Have accommodation, ICT, transport, other equipment and resources, and environment and sustainability implications been considered?
No
Have value-for-money and risk management implications been considered?
Yes
Have equality, diversity and human rights implications been considered including equality analysis, as appropriate?
Yes
Is the recommendation consistent with the objectives in the Police and Crime Plan?
Yes
Has consultation been undertaken with people or agencies likely to be affected by the recommendation?
Yes
Has communications advice been sought on areas of likely media interest and how they might be managed?
No
In relation to all the above, have all relevant material issues been highlighted in the ‘other implications and risks’ section of the submission and have all the relevant officers/staff been consulted?
Yes
Contact Officer:
John Hummersone Chief Finance Officer
01953 424484 [email protected]
8
Norfolk Audit Committee Terms of Reference
Constitution
The Committee will comprise five named members with appropriate public sector experience and who are independent of the PCC and the Constabulary. One of the members will be the Chairman who will be directly appointed by the Police and Crime Commissioner for Norfolk (PCC) and the Chief Constable.
Statement of purpose
1. The Audit Committee is a key component of the corporate governancearrangements of the PCC for Norfolk and the Chief Constable of Norfolk. Itprovides an independent and high-level focus on the audit, assurance andreporting arrangements that underpin good governance and financial standards.
2. The purpose of the Audit Committee is to provide independent advice andrecommendation to the PCC and the Chief Constable on the adequacy of thegovernance and risk management frameworks, the internal control environment,and financial reporting, thereby helping to ensure efficient and effectiveassurance arrangements are in place. To this end the Committee is enabledand required to have oversight of, and to provide independent review of, theeffectiveness of the governance, risk management and control frameworks,financial reporting and annual governance processes, and internal audit andexternal audit.
3. These terms of reference will summarise the core functions of the committee inrelation to the Office of the Police and Crime Commissioner (OPCC) and to theConstabulary and describe the protocols in place to enable it to operateindependently, robustly and effectively.
Governance, risk and control
The Committee will, in relation to the PCC and the Chief Constable:
4. Review the corporate governance arrangements against the good governanceframework and consider annual governance reports and assurances.
5. Review the Annual Governance Statement[s] prior to approval and considerwhether [it] [they] properly [reflects] [reflect] the governance, risk and controlenvironment and supporting assurances and identify any actions required forimprovement.
6. Consider the arrangements to secure value for money and review assurancesand assessments on the effectiveness of these arrangements.
7. Consider the framework of assurance and ensure that it adequately addressesthe risks and priorities of the OPCC/the Constabulary.
9
8. Monitor the effective development and operation of risk management, review therisk profile, and monitor progress of the police and crime commissioner/the chiefconstable in addressing risk-related issues reported to them.
9. Consider reports on the effectiveness of internal controls and monitor theimplementation of agreed actions.
10. Review arrangements for the assessment of fraud risks and potential harm fromfraud and corruption and monitor the effectiveness of the counter-fraud strategy,actions and resources.
And in relation to the above, to give such advice and make such recommendations on the adequacy of the level of assurance and on improvement as it considers appropriate.
Internal audit
The Committee will:
11. Annually review the internal audit charter and resources.12. Review the internal audit plan and any proposed revisions to the internal audit
plan.13. Oversee the appointment and consider the adequacy of the performance of the
internal audit service and its independence.14. Consider the head of internal audit’s annual report and opinion, and a regular
summary of the progress of internal audit activity against the audit plan, and thelevel of assurance it can give over corporate governance arrangements.
15. Consider summaries of internal audit reports and such detailed reports as thecommittee may request from the PCC/Chief Constable including issues raised orrecommendations made by the internal audit service, management responsesand progress with agreed actions.
16. Consider a report on the effectiveness of internal audit to support the AnnualGovernance Statement, where required to do so by the Accounts and AuditRegulations
External audit
The Committee will:
17. Comment on the scope and depth of external audit work, its independence andwhether it gives satisfactory value for money.
18. Consider the external auditor’s annual management letter, relevant reports, andthe report to those charged with governance.
19. Consider specific reports as agreed with the external auditor.20. Advise and recommend on the effectiveness of relationships between external
and internal audit and other inspection agencies or relevant bodies.
10
And in relation to the above, to give such advice and make such recommendations on the adequacy of the level of assurance and on improvement as it considers appropriate.
Financial reporting
The Committee will:
21. Review the annual statement of accounts. Specifically, to consider whetherappropriate accounting policies have been followed and whether there areconcerns arising from the financial statements or from the audit of the financialstatements that need to be brought to the attention of the police and crimecommissioner and/or the chief constable.
22. Consider the external auditor’s report to those charged with governance onissues arising from the audit of the financial statements.
And in relation to the above, to give such advice and make suchrecommendations on the adequacy of the level of assurance and onimprovement as it considers appropriate.
Other functions
The Committee will:
23. Examine the annual draft Treasury Management Strategy, monitor its applicationduring the year and make any recommendations to the PCC and to the ChiefConstable in this respect.
Accountability arrangements
The Committee will:
24. On a timely basis report to the PCC and the Chief Constable with its advice andrecommendations in relation to any matters that it considers relevant togovernance, risk management and financial management.
25. Report to the PCC and the Chief Constable on its findings, conclusions andrecommendations concerning the adequacy and effectiveness of theirgovernance, risk management and internal control frameworks; financialreporting arrangements, and internal and external audit functions.
26. Review its performance against its terms of reference and objectives on anannual basis and report the results of this review to the PCC and the ChiefConstable.
As agreed by Audit Committee 25 November 2014 Reviewed by Audit Committee 15 January 2019
11
AUDIT COMMITTEE 15 JANUARY 2019 AGENDA ITEM: 5
Norfolk Audit Committee 15 January 2019 1 Agenda Item 5 – Audit of Accounts 2018/19 Action Plan
ORIGINATOR: Chief Finance Officer
REASON FOR SUBMISSION: For discussion and to note.
SUBMITTED TO : Audit Committee
SUBJECT: Audit of the 2018/19 Statements of Accounts Action Plan
SUMMARY:
The 2017/18 Accounts were not signed off by the statutory deadline of 31 July 2018. The report details the results of a meeting with Ernst and Young LLP (EY) to discuss the audit of the 2018/19 accounts, with a view to avoiding a similar situation.
RECOMMENDATION:
The Committee is invited to note the report.
12
AUDIT COMMITTEE 15 JANUARY 2019 AGENDA ITEM: 5
Norfolk Audit Committee 15 January 2019 2 Agenda Item 5 – Audit of Accounts 2018/19 Action Plan
1. Purpose
1.1 To consider the Action Plan for the audit of the 2018/19 Accounts (Appendix 1).
2. Background
2.1 The 2017/18 Accounts were not signed off by the statutory deadline of 31st July2018.
2.2 This matter was discussed by the Committee, in detail, at its meeting 30 July2018. The Committee requested that an Action Plan be provided followingdiscussions with EY.
3. Recommendation
3.1 The Committee is recommended to note the report.
13
Norfolk Audit Committee 15 January 2019 3 Agenda Item 5 – Audit of Accounts 2018/19 Action Plan
ORIGINATOR CHECKLIST (MUST BE COMPLETED) STATE ‘YES’ OR ‘NO’
Has legal advice been sought on this submission? No
Have financial implications been considered? Yes
Have human resource implications been considered? Yes
Have accommodation, ICT, transport, other equipment and resources, and environment and sustainability implications been considered?
No
Have value-for-money and risk management implications been considered?
Yes
Have equality, diversity and human rights implications been considered including equality analysis, as appropriate?
Yes
Is the recommendation consistent with the objectives in the Police and Crime Plan?
Yes
Has consultation been undertaken with people or agencies likely to be affected by the recommendation?
Yes
Has communications advice been sought on areas of likely media interest and how they might be managed?
No
Contact Officer:
John Hummersone Chief Finance Officer
01953 424484 [email protected]
14
Norfolk Audit Committee 15 January 2019 4 Agenda Item 5 – Audit of Accounts 2018/19 Action Plan
Appendix 1
Notes of Meeting 1 November 2018
Attendees:-
Associate Partner – Ernst and Young LLP Chief Finance Officer (Norfolk)
Chief Finance Officers (Norfolk and Suffolk)
Head of Finance
Other members of the Finance Team
AGREED ACTION PLAN
PPE Valuations
Value all large properties in addition to the properties which were due for revaluation in the usual valuation cycle.
Accounts team
Audit PPE valuations during the interim audit, clearing any issues at this time
Ernst & Young
Provision of Information from HR
Identify what proof is acceptable in relation to queries before the audit begins.
Senior Financial Accountant and Audit Manager (EY)
Provide all paperwork relating to compromise agreements within 2 working days of a request from EY
HR
Provide all paperwork relating to exit packages within 2 working days of a request from EY
HR
Provide all paperwork for lump sum payments within 2 working days of a request from EY
Senior Financial Accountant
IAS19 Pension valuation changes
Discuss with Pension Funds, at early stages, the need for reports to be prepared using March asset valuations.
Head of Financial Accounting
15
Norfolk Audit Committee 15 January 2019 5 Agenda Item 5 – Audit of Accounts 2018/19 Action Plan
Timing of the audit and not meeting the deadline
Complete all work on the main audit by mid-July. EY team
Prioritise areas which have the potential to cause delay e.g. PPE, PFI etc
EY team
Provide a list of items which will be available for audit before the draft accounts are finalised.
Finance
Provide EY with our thoughts about which Tranche of audits we would prefer to be within:
Tranche 1 Mid May – End June
Tranche 2 June to Mid July
Head of Financial Accounting
Provide the initial Annual Governance Statement during the interim audit.
CFOs
Discuss with key personnel, ahead of the Audit Committee meeting, EY’s Value for Money conclusions
CFOs
Provide the year-end timetables to CFOs once agreed.
Finance & EY
Additional comments regarding the Statements of Accounts
Provide additional disclosure notes/ narrative in relation to:
The expected effect of the changes in theLeasing standard
The anticipated effect of Brexit and that itseffects have been considered. There mayeven be a post balance sheet eventrelated to Brexit.
Head of Financial Accounting
16
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ief
Co
nst
ab
le o
f N
orf
olk
Po
lice
(C
C),
Au
dit
Co
mm
itte
e a
nd
ma
na
ge
me
nt
in a
cco
rda
nce
wit
h t
he
sta
tem
en
t o
f re
spo
nsi
bilit
ies.
Ou
r w
ork
ha
s b
ee
n u
nd
ert
ake
n s
o t
ha
t w
e m
igh
t st
ate
to
th
e P
CC
,CC
, A
ud
it C
om
mit
tee a
nd
ma
na
ge
me
nt
tho
se m
att
ers
we
are
re
qu
ire
d t
o s
tate
to
th
em
in t
his
re
po
rt a
nd
fo
r n
o o
the
r p
urp
ose
. T
o t
he
fu
lle
st e
xte
nt
pe
rmit
ted
by
la
w w
e d
o n
ot
acc
ep
t o
r a
ssu
me
re
spo
nsi
bilit
y t
o a
ny
on
e o
the
r th
an
th
e P
CC
, C
C,
Au
dit
Co
mm
itte
e a
nd
ma
na
ge
me
nt
for
this
re
po
rt o
r fo
r th
e o
pin
ion
s w
e h
av
e
form
ed
. It
sh
ou
ld n
ot
be
pro
vid
ed
to
an
y t
hir
d-p
art
y w
ith
ou
t o
ur
pri
or
wri
tte
n c
on
sen
t.
Ove
rvie
w o
f o
ur
20
18
/19
au
dit
st
rate
gy
01
Au
dit
ris
ks
02
Au
dit
m
ate
ria
lity
04
Sco
pe
of
ou
r a
ud
it0
5
Ap
pe
nd
ice
s0
9A
ud
it t
ea
m0
6A
ud
it
tim
elin
e0
7In
de
pe
nd
en
ce
08
Va
lue
fo
r M
on
ey
Ris
ks
03
V F M
19
4
Ove
rvie
w o
f o
ur
20
18
/19
a
ud
it
stra
teg
y0
10
1
20
5
Ov
erv
iew
of
ou
r 2
01
8/1
9 a
ud
it s
tra
teg
y
Audit
risks a
nd a
reas o
f fo
cus
Ris
k /
are
a o
f fo
cus
Ris
k identi
fied
Change f
rom
PY
Deta
ils
Mis
sta
tem
en
tsd
ue
to
fra
ud
or
err
or
Fra
ud
ris
kN
o c
ha
ng
e f
rom
a
sse
ssm
en
t m
ad
ein
p
revio
us
ye
ars
As
ide
nti
fie
d i
n I
SA
24
0,
ma
na
ge
me
nt
is in
a u
niq
ue
po
siti
on
to
pe
rpe
tra
tefr
au
d
be
cau
se o
f it
s a
bilit
y t
o m
an
ipu
late
acc
ou
nti
ng
re
cord
s d
ire
ctly
or
ind
ire
ctly
an
d
pre
pa
re f
rau
du
len
t fi
na
nci
al
sta
tem
en
ts b
y o
ve
rrid
ing
co
ntr
ols
th
at
wo
uld
o
the
rwis
e a
pp
ea
r to
be
op
era
tin
g e
ffe
ctiv
ely
.
Inco
rre
ct c
ap
ita
lisa
tio
n o
f re
ve
nu
e
exp
en
dit
ure
Fra
ud
ris
kN
o c
ha
ng
e f
rom
a
sse
ssm
en
t m
ad
ein
p
revio
us
ye
ars
Lin
kin
g t
o o
ur
fra
ud
ris
k a
bo
ve
we
ha
ve
co
nsi
de
red
th
e c
ap
ita
lisa
tio
n o
f re
ve
nu
e
exp
en
dit
ure
on
pro
pe
rty
, p
lan
t a
nd
eq
uip
me
nt
as
a s
ep
ara
tesp
eci
fic
risk
, g
ive
n
the
exte
nt
of
the
PC
C’s
ca
pit
al
pro
gra
mm
e.
Va
lua
tio
n o
f P
rop
ert
y,
Pla
nt
an
d
Eq
uip
me
nt
Inh
ere
nt
Ris
kN
o c
ha
ng
e f
rom
a
sse
ssm
en
t m
ad
ein
p
revio
us
ye
ars
Th
e f
air
va
lue
of
Pro
pe
rty
, P
lan
t a
nd
Eq
uip
me
nt
(PP
E)
rep
rese
nt
sig
nif
ica
nt
ba
lan
ces
in t
he
Gro
up
’s a
cco
un
ts a
nd
are
su
bje
ct t
o v
alu
ati
on
ch
an
ge
s,
imp
air
me
nt
revie
ws
an
d d
ep
reci
ati
on
ch
arg
es.
Ma
na
ge
me
nt
is r
eq
uir
ed
to
ma
ke
m
ate
ria
l ju
dg
em
en
tal
inp
uts
an
d a
pp
ly e
stim
ati
on
te
chn
iqu
es
to c
alc
ula
te t
he
y
ea
r-e
nd
ba
lan
ces
reco
rde
d i
n t
he
ba
lan
ce s
he
et.
Acc
ou
nti
ng
fo
rP
en
sio
n L
iab
ilit
yIn
he
ren
t R
isk
No
ch
an
ge
fro
m
ass
ess
me
nt
ma
de
in
pre
vio
us
ye
ars
Th
e G
rou
p’s
pe
nsi
on
fu
nd
de
fici
t is
a m
ate
ria
l e
stim
ate
d b
ala
nce
fo
r b
oth
th
e P
CC
a
nd
CC
. A
cco
un
tin
g f
or
this
sch
em
e i
nvo
lve
s si
gn
ific
an
t e
stim
ati
on
an
d
jud
ge
me
nt
an
d t
he
refo
re m
an
ag
em
en
t e
ng
ag
es
an
act
ua
ry t
o u
nd
ert
ake
th
e
calc
ula
tio
ns
on
th
eir
be
ha
lf.
ISA
s (U
K a
nd
Ire
lan
d)
50
0 a
nd
54
0 r
eq
uir
e u
s to
u
nd
ert
ake
pro
ced
ure
s o
n t
he
use
of
ma
na
ge
me
nt
exp
ert
s a
nd
th
e a
ssu
mp
tio
ns
un
de
rly
ing
fa
ir v
alu
e e
stim
ate
s.
Pu
blic
Fin
an
ce I
nit
iati
ve
s (P
FI)
Inh
ere
nt
Ris
kN
o c
ha
ng
e f
rom
a
sse
ssm
en
t m
ad
ein
p
revio
us
ye
ars
Th
e P
CC
an
d C
C d
iscl
osu
re t
wo
PF
I co
ntr
act
s in
wit
hin
th
eir
fin
an
cia
l st
ate
me
nts
. T
he
lia
bilit
y a
nd
pa
ym
en
ts f
or
serv
ice
s a
re d
ep
en
de
nt
up
on
ass
um
pti
on
s w
ith
in
the
acc
ou
nti
ng
mo
de
ls u
nd
erp
inn
ing
bo
th P
FI
sch
em
es.
As
such
Ma
na
ge
me
nt
is
req
uir
ed
to
ap
ply
est
ima
tio
n t
ech
niq
ue
s to
su
pp
ort
th
e d
iscl
osu
res
wit
hin
th
e
fin
an
cia
l st
ate
me
nts
.
The f
ollow
ing ‘
dashboard
’ sum
mari
ses t
he s
ignif
icant
accounti
ng a
nd a
udit
ing m
att
ers
outl
ine r
isk identi
ficati
on f
or
the u
pco
min
g a
udit
and a
d in t
his
report
. It
seeks t
o p
rovid
e t
he P
olice a
nd C
rim
e C
om
mis
sio
ner
(PC
C)
and C
hie
f C
onsta
ble
(C
C)
wit
h a
n o
verv
iew
of
our
init
ial
risk identi
ficati
on f
or
the u
pcom
ing
audit
and a
ny
changes in r
isks identi
fied i
n t
he c
urr
ent
year.
21
6
Ov
erv
iew
of
ou
r 2
01
8/1
9 a
ud
it s
tra
teg
y
Mate
riality
Pla
nn
ing
ma
teri
ality
£5
.2m
Pe
rfo
rma
nce
m
ate
ria
lity
£3
.9m
Au
dit
dif
fere
nce
s
£0
.26
m
We
ha
ve
de
term
ine
d t
he
ma
teri
ality
le
ve
l fo
r th
e f
ina
nci
al st
ate
me
nts
of
the
PC
C G
rou
p,
the
su
bsi
dia
rie
s (P
CC
an
d C
C S
ing
le e
nti
ty
acc
ou
nts
) a
nd
th
e P
olice
Pe
nsi
on
Fu
nd
an
d t
his
is
set
at
2%
of
the
pri
or
ye
ars
gro
ss e
xp
en
dit
ure
on
pro
vis
ion
of
serv
ice
s fo
rth
e P
CC
G
rou
p a
nd
CC
Sin
gle
en
tity
acc
ou
nts
, 2
% o
f th
e p
rio
r y
ea
rs g
ross
ass
ets
fo
r th
e P
CC
sin
gle
en
tity
acc
ou
nts
an
d 2
% o
f b
en
efi
tsp
ay
ab
le f
or
the
Po
lice
Pe
nsi
on
Fu
nd
. P
lan
nin
g m
ate
ria
lity
is
set
at
£5
.2 m
illio
n f
or
the
Gro
up
, £
2 m
illio
n f
or
the
PC
C,
£4
.7 m
illio
n f
or
the
CC
an
d £
0.8
m
illio
n f
or
the
Po
lice
Pe
nsi
on
Fu
nd
.
Pe
rfo
rma
nce
ma
teri
ality
is
set
at
£3
.9 m
illio
n f
or
the
PC
C G
rou
p,
£1
.5 m
illio
n f
or
the
PC
C,
£3
.5 m
illio
n f
or
the
CC
a
nd
£0
.6 m
illio
n f
or
the
Po
lice
Pe
nsi
on
Fu
nd
. P
erf
orm
an
ce m
ate
ria
lity
re
pre
sen
ts 7
5%
of
ma
teri
ality
fo
r th
e g
rou
p,
sub
sid
iari
es
an
d P
en
sio
n F
un
d.
We
will re
po
rt a
ll u
nco
rre
cte
d m
isst
ate
me
nts
re
lati
ng
to
th
e p
rim
ary
sta
tem
en
ts (
com
pre
he
nsi
ve
in
com
e
an
d e
xp
en
dit
ure
sta
tem
en
t, b
ala
nce
sh
ee
t, m
ove
me
nt
in r
ese
rve
s st
ate
me
nt,
ca
sh f
low
sta
tem
en
t a
nd
p
olice
pe
nsi
on
fu
nd
fin
an
cia
l st
ate
me
nts
). T
he
re
po
rtin
g t
hre
sho
ld w
e h
av
e s
et
is £
0.2
6m
illio
n f
or
the
P
CC
Gro
up
, £
0.1
millio
n f
or
the
PC
C,
£0
.23
millio
n f
or
the
CC
an
d £
0.0
4 m
illio
n f
or
the
Pe
nsi
on
Fu
nd
.
22
7
Ov
erv
iew
of
ou
r 2
01
8/1
9 a
ud
it s
tra
teg
y
Audit
scope
Th
is A
ud
it P
lan
co
ve
rs t
he
wo
rk t
ha
t w
e p
lan
to
pe
rfo
rm t
o p
rovid
e y
ou
wit
h:
▪O
ur
au
dit
op
inio
n o
n w
he
the
r th
e f
ina
nci
al st
ate
me
nts
of
the
PC
C a
nd
CC
fo
r N
orf
olk
giv
e a
tru
e a
nd
fa
ir v
iew
of
the
fin
an
cia
l p
osi
tio
n a
s a
t 3
1 M
arc
h 2
01
9 a
nd
of
the
in
com
e a
nd
exp
en
dit
ure
fo
r th
e y
ea
r th
en
en
de
d;
an
d
▪O
ur
con
clu
sio
n o
n t
he
PC
C a
nd
CC
’s a
rra
ng
em
en
ts t
o s
ecu
re e
con
om
y,
eff
icie
ncy
an
d e
ffe
ctiv
en
ess
.
We
will a
lso
re
vie
w a
nd
re
po
rt t
o t
he
Na
tio
na
l A
ud
it O
ffic
e (
NA
O),
to
th
e e
xte
nt
an
d i
n t
he
fo
rm r
eq
uir
ed
by
th
em
, o
n t
he
PC
C’s
an
d C
C’s
Wh
ole
of
Go
ve
rnm
en
t A
cco
un
ts r
etu
rn.
Ou
r a
ud
it w
ill a
lso
in
clu
de
th
e m
an
da
tory
pro
ced
ure
s th
at
we
are
re
qu
ire
d t
o p
erf
orm
in
acc
ord
an
ce w
ith
ap
plica
ble
la
ws
an
d a
ud
itin
g s
tan
da
rds.
Wh
en
pla
nn
ing
th
e a
ud
it w
e t
ake
in
to a
cco
un
t se
ve
ral ke
y in
pu
ts:
▪S
tra
teg
ic,
op
era
tio
na
l a
nd
fin
an
cia
l ri
sks
rele
va
nt
to t
he
fin
an
cia
l st
ate
me
nts
;▪
De
ve
lop
me
nts
in
fin
an
cia
l re
po
rtin
g a
nd
au
dit
ing
sta
nd
ard
s;▪
Th
e q
ua
lity
of
syst
em
s a
nd
pro
cess
es;
▪C
ha
ng
es
in t
he
bu
sin
ess
an
d r
eg
ula
tory
en
vir
on
me
nt;
an
d,
▪M
an
ag
em
en
t’s
vie
ws
on
all o
f th
e a
bo
ve
.
By
co
nsi
de
rin
g t
he
se in
pu
ts,
ou
r a
ud
it i
s fo
cuse
d o
n t
he
are
as
tha
t m
att
er
an
d o
ur
fee
db
ack
is
mo
re l
ike
ly t
o b
e r
ele
va
nt
to t
he
PC
C a
nd
CC
.
23
8
Au
dit
ris
ks
02
01
24
9
Au
dit
ris
ks
Ou
r re
spo
nse
to
sig
nif
ica
nt
risk
s
What
will
we d
o?
We
will u
nd
ert
ake
ou
r st
an
da
rd p
roce
du
res
to a
dd
ress
fra
ud
ris
k,
wh
ich
in
clu
de
:
➢Id
en
tify
ing
fra
ud
ris
ks
du
rin
g t
he
pla
nn
ing
sta
ge
s.
➢In
qu
irin
g o
f m
an
ag
em
en
t a
bo
ut
risk
s o
f fr
au
d a
nd
th
e c
on
tro
ls p
ut
in
pla
ce t
o a
dd
ress
th
ose
ris
ks.
➢U
nd
ers
tan
din
g t
he
ove
rsig
ht
giv
en
by
th
ose
ch
arg
ed
wit
h g
ove
rna
nce
of
ma
na
ge
me
nt’
s p
roce
sse
s o
ve
r fr
au
d.
➢C
on
sid
eri
ng
th
e e
ffe
ctiv
en
ess
of
ma
na
ge
me
nt’
s co
ntr
ols
de
sig
ne
d t
o
ad
dre
ss t
he
ris
k o
f fr
au
d.
➢D
ete
rmin
ing
an
ap
pro
pri
ate
str
ate
gy
to
ad
dre
ss t
ho
se id
en
tifi
ed
ris
ks
of
fra
ud
.
➢P
erf
orm
ing
ma
nd
ato
ry p
roce
du
res
reg
ard
less
of
spe
cifi
cally
id
en
tifi
ed
fr
au
d r
isks,
in
clu
din
g t
est
ing
of
jou
rna
l e
ntr
ies
an
d o
the
r a
dju
stm
en
ts i
n
the
pre
pa
rati
on
of
the
fin
an
cia
l st
ate
me
nts
.
We
ha
ve
set
ou
tth
esi
gn
ific
an
tri
sks
(in
clu
din
gfr
au
dri
sks
de
no
ted
by
*)
ide
nti
fie
dfo
rth
ecu
rre
nt
ye
ar
au
dit
alo
ng
wit
hth
era
tio
na
lea
nd
exp
ecte
da
ud
ita
pp
roa
ch
.T
he
risk
sid
en
tifi
ed
be
low
ma
ych
an
ge
tore
fle
ct
an
ysi
gn
ific
an
tfi
nd
ing
so
rsu
bse
qu
en
tis
sue
sw
eid
en
tify
du
rin
gth
ea
ud
it.
What
is t
he r
isk?
Th
e f
ina
nci
al
sta
tem
en
ts a
s a
wh
ole
are
no
t fr
ee
o
f m
ate
ria
l m
isst
ate
me
nts
wh
eth
er
cau
sed
by
fr
au
d o
r e
rro
r.
As
ide
nti
fie
d i
n I
SA
(U
K a
nd
Ire
lan
d)
24
0,
ma
na
ge
me
nt
is in
a u
niq
ue
po
siti
on
to
p
erp
etr
ate
fra
ud
be
cau
se o
f it
s a
bilit
y t
o
ma
nip
ula
te a
cco
un
tin
g r
eco
rds
dir
ect
ly o
r in
dir
ect
ly a
nd
pre
pa
re f
rau
du
len
t fi
na
nci
al
sta
tem
en
ts b
y o
ve
rrid
ing
co
ntr
ols
th
at
oth
erw
ise
ap
pe
ar
to b
e o
pe
rati
ng
eff
ect
ive
ly.
We
id
en
tify
an
d r
esp
on
d t
o t
his
fra
ud
ris
k o
n e
ve
ry
au
dit
en
ga
ge
me
nt.
Fo
r th
e G
rou
p a
nd
PC
C S
ing
le E
nti
ty,
we
ha
ve
id
en
tifi
ed
th
e p
ote
nti
al
for
the
in
corr
ect
cl
ass
ific
ati
on
of
reve
nu
e s
pe
nd
as
cap
ita
l a
s a
p
art
icu
lar
are
a w
he
re t
he
re is
a r
isk o
f fr
au
d o
r e
rro
r.
Un
de
r IS
A2
40
th
ere
is
als
o a
pre
sum
ed
ris
k t
ha
t re
ve
nu
e m
ay
be
mis
sta
ted
du
e t
o im
pro
pe
r re
cog
nit
ion
of
reve
nu
e.
In
th
e p
ub
lic
sect
or,
th
is
req
uir
em
en
t is
mo
dif
ied
by
Pra
ctic
e N
ote
10
, is
sue
d b
y t
he
Fin
an
cia
l R
ep
ort
ing
Co
un
cil,
wh
ich
st
ate
s th
at
au
dit
ors
sh
ou
ld a
lso
co
nsi
de
r th
e r
isk
tha
t m
ate
ria
l m
isst
ate
me
nts
ma
y o
ccu
r b
y t
he
m
an
ipu
lati
on
of
exp
en
dit
ure
re
cog
nit
ion
. W
e
con
sid
er
this
ris
k is
no
t m
ate
ria
l in
re
lati
on
to
o
ur
au
dit
.
Mis
sta
tem
en
ts d
ue
to
fra
ud
or
err
or
*
25
10
Au
dit
ris
ks
Ou
r re
spo
nse
to
sig
nif
ica
nt
risk
s (c
on
tin
ue
d)
What
will
we d
o?
We
will u
nd
ert
ake
ad
dit
ion
al
pro
ced
ure
s to
ad
dre
ss t
he
sp
eci
fic
risk
we
h
av
e id
en
tifi
ed
, w
hic
h w
ill i
ncl
ud
e:
➢S
am
ple
te
stin
g a
dd
itio
ns
to p
rop
ert
y,
pla
nt
an
d e
qu
ipm
en
t to
en
sure
th
at
the
y h
av
e b
ee
n c
orr
ect
ly c
lass
ifie
d a
s ca
pit
al
an
d i
ncl
ud
ed
at
the
co
rre
ct v
alu
e in
ord
er
to id
en
tify
an
y r
eve
nu
e i
tem
s th
at
ha
ve
be
en
in
ap
pro
pri
ate
ly c
ap
ita
lise
d;
an
d
➢D
esi
gn
sp
eci
fic
jou
rna
l p
roce
du
res
to r
ev
iew
ad
just
me
nt
jou
rna
ls f
rom
a
cro
ss t
he
fin
an
cia
l y
ea
r th
at
imp
act
th
e p
rop
ert
y p
lan
t a
nd
eq
uip
me
nt
acc
ou
nt
ba
lan
ce
What
is t
he r
isk?
Th
e f
ina
nci
al
sta
tem
en
ts a
s a
wh
ole
are
no
t fr
ee
o
f m
ate
ria
l m
isst
ate
me
nts
wh
eth
er
cau
sed
by
fr
au
d o
r e
rro
r.
As
ide
nti
fie
d i
n I
SA
(U
K)
24
0,
ma
na
ge
me
nt
is in
a
un
iqu
e p
osi
tio
n t
o p
erp
etr
ate
fra
ud
be
cau
se o
f it
s a
bilit
y t
o m
an
ipu
late
acc
ou
nti
ng
re
cord
s d
ire
ctly
or
ind
ire
ctly
an
d p
rep
are
fra
ud
ule
nt
fin
an
cia
l st
ate
me
nts
by
ove
rrid
ing
co
ntr
ols
th
at
oth
erw
ise
ap
pe
ar
to b
e o
pe
rati
ng
eff
ect
ive
ly.
We
id
en
tify
an
d r
esp
on
d t
o t
his
fra
ud
ris
k o
n e
ve
ry
au
dit
en
ga
ge
me
nt.
Th
is c
ou
ld m
ate
ria
lize
as
a r
esu
lt o
f ca
pit
alizi
ng
e
xp
en
dit
ure
on
re
ve
nu
e i
tem
s.
Mis
sta
tem
en
ts d
ue
to
fra
ud
or
err
or
-In
co
rre
ct
ca
pit
alisa
tio
n
of
Re
ve
nu
e E
xp
en
dit
ure
Mis
sta
tem
en
ts t
ha
t o
ccu
r in
re
lati
on
to
th
is r
isk m
ay
im
pa
ct t
he
fo
llo
win
g s
ign
ific
an
t a
cco
un
ts:
PC
C P
PE
Ad
dit
ion
s –
Va
lua
tio
n
(£8
.9 m
illio
n)
PC
C C
IES
Ne
t C
ost
of
Se
rvic
es
–E
xp
en
dit
ure
–C
om
ple
ten
ess
(£
18
.4m
)
Fig
ure
s q
uo
ted
ab
ove
are
fro
m t
he
2
01
7/1
8 f
ina
nci
al st
ate
me
nts
26
11
Au
dit
ris
ks
Oth
er
are
as
of
au
dit
fo
cu
s
What
is t
he r
isk/a
rea
of
focus?
What
will
we d
o?
Acc
ou
nti
ng
for
Pro
pert
y, P
lan
t &
Eq
uip
men
t
Pro
pe
rty
, P
lan
t a
nd
Eq
uip
me
nt
rep
rese
nt
a s
ign
ific
an
t b
ala
nce
in
th
e P
CC
l’s
acc
ou
nts
an
d a
re s
ub
ject
to
va
lua
tio
n c
ha
ng
es,
im
pa
irm
en
t re
vie
ws
an
d
de
pre
cia
tio
n c
ha
rge
s.
Ma
na
ge
me
nt
is r
eq
uir
ed
to
ma
ke
ma
teri
al
jud
ge
me
nta
l in
pu
ts a
nd
ap
ply
e
stim
ati
on
te
chn
iqu
es
to c
alc
ula
te t
he
ye
ar-
en
d b
ala
nce
s re
cord
ed
in
th
e
Ba
lan
ce S
he
et
for
lan
d a
nd
bu
ild
ing
s in
pa
rtic
ula
r.
Th
e P
CC
will e
ng
ag
e a
n e
xte
rna
l e
xp
ert
va
lue
r w
ho
will a
pp
ly a
nu
mb
er
of
com
ple
x a
ssu
mp
tio
ns
to t
he
se a
sse
ts.
An
nu
ally
ass
ets
are
ass
ess
ed
to
id
en
tify
wh
eth
er
the
re is
an
y in
dic
ati
on
of
imp
air
me
nt.
As
the
PC
C’s
ass
et
ba
se is
sig
nif
ica
nt,
an
d t
he
ou
tpu
ts f
rom
th
e v
alu
er
are
su
bje
ct t
o e
stim
ati
on
, th
ere
is
a r
isk f
ixe
d a
sse
ts m
ay
be
un
de
r/o
ve
rsta
ted
.
ISA
s (U
K a
nd
Ire
lan
d)
50
0 a
nd
54
0 r
eq
uir
e u
s to
un
de
rta
ke
pro
ced
ure
s o
n
the
use
of
ma
na
ge
me
nt
exp
ert
s a
nd
th
e a
ssu
mp
tio
ns
un
de
rly
ing
fa
ir v
alu
e
est
ima
tes.
We
will:
•C
on
sid
er
the
wo
rk p
erf
orm
ed
by
th
e P
CC
’s v
alu
ers
, in
clu
din
g t
he
ad
eq
ua
cy o
f th
e
sco
pe
of
the
wo
rk p
erf
orm
ed
, th
eir
pro
fess
ion
al ca
pa
bilit
ies
an
d t
he
re
sult
s o
f th
eir
w
ork
;
•S
am
ple
te
st k
ey
ass
et
info
rma
tio
n u
sed
by
th
e v
alu
ers
in
pe
rfo
rmin
g t
he
ir v
alu
ati
on
(e
.g.
flo
or
pla
ns
to s
up
po
rt v
alu
ati
on
s b
ase
d o
n p
rice
pe
r sq
ua
re m
etr
e);
•C
on
sid
er
the
an
nu
al
cycl
e o
f va
lua
tio
ns
to e
nsu
re t
ha
t a
sse
ts h
av
e b
ee
n v
alu
ed
w
ith
in a
5 y
ea
r ro
llin
g p
rog
ram
me
as
req
uir
ed
by
th
e C
od
e f
or
PP
E a
nd
an
nu
ally
fo
r IP
. W
e h
av
e a
lso
co
nsi
de
red
if
the
re a
re a
ny
sp
eci
fic
cha
ng
es
to a
sse
ts t
ha
t h
av
e
occ
urr
ed
an
d t
ha
t th
ese
ha
ve
be
en
co
mm
un
ica
ted
to
th
e v
alu
er;
•R
ev
iew
ass
ets
no
t su
bje
ct t
o v
alu
ati
on
in
20
18
/19
to
co
nfi
rm t
ha
t th
e r
em
ain
ing
a
sse
t b
ase
is
no
t m
ate
ria
lly
mis
sta
ted
;
•C
on
sid
er
cha
ng
es
to u
sefu
l eco
no
mic
liv
es
as
a r
esu
lt o
f th
e m
ost
re
cen
t va
lua
tio
n;
•C
on
sid
er
circ
um
sta
nce
s th
at
req
uir
e t
he
use
of
EY
va
lua
tio
n s
pe
cia
list
s to
re
vie
w
an
y m
ate
ria
l sp
eci
alist
ass
ets
an
d t
he
un
de
rly
ing
ass
um
pti
on
s u
sed
;a
nd
•T
est
acc
ou
nti
ng
en
trie
s h
av
e b
ee
n c
orr
ect
ly p
roce
sse
d i
n t
he
fin
an
cia
l st
ate
me
nts
.
We
ha
ve
ide
nti
fie
do
the
ra
rea
so
fth
ea
ud
it,
tha
th
av
en
ot
be
en
cla
ssi
fie
da
ssi
gn
ific
an
tri
sks,
bu
ta
rest
ill
imp
ort
an
tw
he
nco
nsi
de
rin
gth
eri
sks
of
ma
teri
al
mis
sta
tem
en
tto
the
fin
an
cia
lst
ate
me
nts
an
dd
isclo
sure
sa
nd
the
refo
rem
ay
be
ke
ya
ud
itm
att
ers
we
willin
clu
de
ino
ur
au
dit
rep
ort
.
27
12
Au
dit
ris
ks
Oth
er
are
as
of
au
dit
fo
cu
s
What
is t
he r
isk/a
rea
of
focus?
What
will
we d
o?
Pe
nsi
on
Lia
bilit
y V
alu
ati
on
Th
e L
oca
l A
uth
ori
ty A
cco
un
tin
g C
od
e o
f P
ract
ice
an
d I
AS
19
re
qu
ire
th
e
CC
to m
ake
exte
nsi
ve
dis
clo
sure
s w
ith
in its
fin
an
cia
l st
ate
me
nts
re
ga
rdin
g
its
me
mb
ers
hip
of
the
Lo
cal G
ove
rnm
en
t P
en
sio
n S
che
me
ad
min
iste
red
b
y N
orf
olk
Co
un
ty C
ou
nci
l. T
he
PC
C m
ust
als
o d
o s
imila
r in
re
spe
ct o
f th
e
Po
lice
Pe
nsi
on
Fu
nd
.T
he
PC
C a
nd
CC
’s p
en
sio
n f
un
d d
efi
cit
is a
ma
teri
al e
stim
ate
d b
ala
nce
an
d
the
Co
de
re
qu
ire
s th
at
this
lia
bilit
y b
e d
iscl
ose
d o
n t
he
re
spe
ctiv
e b
ala
nce
sh
ee
ts o
f th
e P
CC
an
d C
C.
At
31
Ma
rch
20
18
th
is t
ota
lle
d £
1 m
illio
n a
nd
£
1.6
millio
n r
esp
ect
ive
lyfo
r th
e P
olice
Pe
nsi
on
Sch
em
es
an
d
£8
8.2
millio
n f
or
the
LG
PS
.T
he
in
form
ati
on
dis
clo
sed
is
ba
sed
on
th
e I
AS
19
re
po
rt i
ssu
ed
to
th
e P
CC
a
nd
CC
by
th
e a
ctu
ary
to
th
e C
ou
nty
Co
un
cil
an
d a
lso
th
e P
olice
Pe
nsi
on
F
un
d.
Acc
ou
nti
ng
fo
r th
ese
sch
em
es
invo
lve
s si
gn
ific
an
t e
stim
ati
on
an
d
jud
ge
me
nt
an
d t
he
refo
re m
an
ag
em
en
t e
ng
ag
es
an
act
ua
ry t
o u
nd
ert
ake
th
e c
alc
ula
tio
ns
on
th
eir
be
ha
lf.
ISA
s (U
K a
nd
Ire
lan
d)
50
0 a
nd
54
0
req
uir
e u
s to
un
de
rta
ke
pro
ced
ure
s o
n t
he
use
of
ma
na
ge
me
nt
exp
ert
s a
nd
th
e a
ssu
mp
tio
ns
un
de
rly
ing
fa
ir v
alu
e e
stim
ate
s.
We
will:
•L
iais
e w
ith
th
e a
ud
ito
rs o
f N
orf
olk
Pe
nsi
on
Fu
nd
, t
o o
bta
in a
ssu
ran
ces
ove
r th
e
info
rma
tio
n s
up
plie
d t
o t
he
act
ua
ry in
re
lati
on
to
No
rfo
lkP
olice
Fo
rce
;
•A
sse
ss t
he
wo
rk o
f th
e L
GP
S P
en
sio
n F
un
d a
nd
th
e P
olice
Pe
nsi
on
act
ua
ry (
Hy
ma
ns
Ro
be
rtso
n)
incl
ud
ing
th
e a
ssu
mp
tio
ns
the
y h
av
e u
sed
by
re
lyin
g o
n t
he
wo
rk o
f P
WC
-C
on
sult
ing
Act
ua
rie
s co
mm
issi
on
ed
by
Pu
blic
Se
cto
r A
ud
ito
r A
pp
oin
tme
nts
fo
r a
ll
Lo
cal G
ove
rnm
en
t se
cto
r a
ud
ito
rs,
an
d c
on
sid
eri
ng
an
y r
ele
va
nt
revie
ws
by
th
e E
Y
act
ua
ria
l te
am
; a
nd
•R
evie
w a
nd
te
st t
he
acc
ou
nti
ng
en
trie
s a
nd
dis
clo
sure
s m
ad
e w
ith
in t
he
PC
C a
nd
CC
’s
fin
an
cia
l st
ate
me
nts
in
re
lati
on
to
IA
S1
9.
We
ha
ve
ide
nti
fie
do
the
ra
rea
so
fth
ea
ud
it,
tha
th
av
en
ot
be
en
cla
ssi
fie
da
ssi
gn
ific
an
tri
sks,
bu
ta
rest
ill
imp
ort
an
tw
he
nco
nsi
de
rin
gth
eri
sks
of
ma
teri
al
mis
sta
tem
en
tto
the
fin
an
cia
lst
ate
me
nts
an
dd
isclo
sure
sa
nd
the
refo
rem
ay
be
ke
ya
ud
itm
att
ers
we
willin
clu
de
ino
ur
au
dit
rep
ort
.
28
13
Au
dit
ris
ks
Oth
er
are
as
of
au
dit
fo
cu
s
What
is t
he r
isk/a
rea
of
focus?
What
will
we d
o?
Pri
va
te F
ina
nce
In
itia
tiv
e (
PF
I)
Th
e P
CC
an
d C
C d
iscl
ose
s tw
o P
FI
con
tra
cts
wit
hin
the
ir f
ina
nci
al
sta
tem
en
ts f
or:
►T
he
use
of
Ju
bile
e H
ou
se,
Op
era
tio
ns
an
dC
om
mu
nic
ati
on
s C
en
tre
at
Wy
mo
nd
ha
m f
rom
20
01
un
til 2
03
7.
At
the
31
Ma
rch
20
18
th
e P
FI
Lia
bilit
y a
sso
cia
ted
wit
h t
he
OC
C a
mo
un
ted
to
£2
5.5
m;
an
d
►T
he
use
of
six P
olice
In
ve
stig
ati
on
Ce
ntr
es
sha
red
wit
h t
he
Po
lice
an
d
Cri
me
Co
mm
issi
on
er
for
Su
ffo
lk f
rom
20
11
un
til
20
41
. T
he
arr
an
ge
me
nts
als
o in
clu
de
s p
ay
me
nts
by
th
e P
olice
an
d C
rim
eC
om
mis
sio
ne
r fo
r C
am
bri
dg
esh
ire
. A
t 3
1 M
arc
h2
01
8,
the
PC
C f
or
No
rfo
lk’s
sh
are
of
the
PF
Ilia
bilit
y w
as
£3
5.8
millio
n.
Th
e lia
bilit
y a
nd
pa
ym
en
ts f
or
serv
ice
s a
re d
ep
en
de
nt
up
on
ass
um
pti
on
s w
ith
in t
he
acc
ou
nti
ng
mo
de
lsu
nd
erp
inn
ing
bo
th P
FI
sch
em
es.
As
such
M
an
ag
em
en
t is
re
qu
ire
d t
o a
pp
ly e
stim
ati
on
te
chn
iqu
es
to s
up
po
rtth
e d
iscl
osu
res
wit
hin
th
e f
ina
nci
al
sta
tem
en
ts.
Ou
r a
pp
roa
ch w
ill fo
cus
on
:
•E
nq
uir
ing
wh
eth
er
the
re h
av
e b
ee
n a
ny
sig
nif
ica
nt
cha
ng
es
wit
hin
th
e m
od
el
sin
ce
ou
r re
vie
w;
•U
nd
ert
akin
ga
re
vie
w a
nd
ass
ess
ing
th
e im
pa
ct o
f a
ny
ch
an
ge
s in
ass
um
pti
on
s u
po
n
the
mo
de
l; a
nd
•A
gre
ein
g t
he
mo
de
ls t
o t
he
dis
clo
sure
s w
ith
in t
he
fin
an
cia
l st
ate
me
nts
We
ha
ve
ide
nti
fie
do
the
ra
rea
so
fth
ea
ud
it,
tha
th
av
en
ot
be
en
cla
ssi
fie
da
ssi
gn
ific
an
tri
sks,
bu
ta
rest
ill
imp
ort
an
tw
he
nco
nsi
de
rin
gth
eri
sks
of
ma
teri
al
mis
sta
tem
en
tto
the
fin
an
cia
lst
ate
me
nts
an
dd
isclo
sure
sa
nd
the
refo
rem
ay
be
ke
ya
ud
itm
att
ers
we
willin
clu
de
ino
ur
au
dit
rep
ort
.
29
14
Au
dit
ris
ks
Oth
er
are
as
of
au
dit
fo
cu
s
What
is t
he r
isk/a
rea
of
focus?
What
will
we d
o?
IFR
S 9
fin
an
cia
l in
stru
me
nts
Th
is n
ew
acc
ou
nti
ng
sta
nd
ard
is
ap
plica
ble
fo
r lo
cal a
uth
ori
ty a
nd
po
lice
a
cco
un
ts f
rom
th
e 2
01
8/1
9 f
ina
nci
al
ye
ar
an
d w
ill ch
an
ge
:•
Ho
w f
ina
nci
al
ass
ets
are
cla
ssif
ied
an
d m
ea
sure
d;
•H
ow
th
e im
pa
irm
en
t o
f fi
na
nci
al
ass
ets
are
ca
lcu
late
d;
an
d
•T
he
dis
clo
sure
re
qu
ire
me
nts
fo
r fi
na
nci
al
ass
ets
.
Th
ere
are
tra
nsi
tio
na
l a
rra
ng
em
en
ts w
ith
in t
he
sta
nd
ard
; a
nd
th
e
20
18
/19
Cip
fa C
od
e o
f p
ract
ice
on
lo
cal a
uth
ori
ty a
cco
un
tin
g p
rovid
es
gu
ida
nce
on
th
e a
pp
lica
tio
n o
f IF
RS
9.
Ho
we
ve
r,u
nti
l th
e G
uid
an
ce N
ote
s a
re iss
ue
d a
nd
an
y s
tatu
tory
ove
rrid
es
are
co
nfi
rme
d t
he
re r
em
ain
s so
me
un
cert
ain
ty o
n t
he
acc
ou
nti
ng
tre
atm
en
t.
We
will:
•A
sse
ss t
he
Gro
up
an
d P
CC
’s im
ple
me
nta
tio
na
rra
ng
em
en
ts t
ha
t sh
ou
ld in
clu
de
an
im
pa
ct a
sse
ssm
en
t p
ap
er
sett
ing
ou
t th
e a
pp
lica
tio
n o
f th
e n
ew
sta
nd
ard
, tr
an
siti
on
al
ad
just
me
nts
an
d p
lan
ne
d a
cco
un
tin
g f
or
20
18
/19
;
•C
on
sid
er
the
cla
ssif
ica
tio
n a
nd
va
lua
tio
n o
f fi
na
nci
al in
stru
me
nt
ass
ets
;
•R
ev
iew
ne
w e
xp
ect
ed
cre
dit
lo
ss m
od
el
imp
air
me
nt
calc
ula
tio
ns
for
ass
ets
; a
nd
•C
he
cka
dd
itio
na
l d
iscl
osu
re r
eq
uir
em
en
ts.
IFR
S1
5 R
ev
en
ue
fro
m c
on
tra
cts
wit
h c
ust
om
ers
Th
is n
ew
acc
ou
nti
ng
sta
nd
ard
is a
pp
lica
ble
fo
r lo
cal a
uth
ori
ty a
nd
po
lice
a
cco
un
ts f
rom
th
e 2
01
8/1
9 f
ina
nci
al
ye
ar.
Th
e k
ey
re
qu
ire
me
nts
of
the
sta
nd
ard
co
ve
r th
e id
en
tifi
cati
on
of
pe
rfo
rma
nce
ob
lig
ati
on
s u
nd
er
cust
om
er
con
tra
cts
an
d t
he
lin
kin
g o
f in
com
e t
o t
he
me
eti
ng
of
tho
se p
erf
orm
an
ce o
blig
ati
on
s.
Th
e 2
01
8/1
9 C
ipfa
Co
de
of
pra
ctic
e o
n l
oca
l a
uth
ori
ty a
cco
un
tin
g
pro
vid
es
gu
ida
nce
on
th
e a
pp
lica
tio
n o
f IF
RS
15
an
d i
ncl
ud
es
a u
sefu
l fl
ow
dia
gra
m a
nd
co
mm
en
tary
on
th
e m
ain
so
urc
es
of
LG
re
ve
nu
e a
nd
h
ow
th
ey
sh
ou
ld b
e r
eco
gn
ise
d.
Th
e im
pa
ct o
n P
olice
acc
ou
nti
ng
is
like
ly t
o b
e lim
ite
d a
s la
rge
re
ve
nu
e
stre
am
s like
co
un
cil
tax
an
d g
ove
rnm
en
t g
ran
ts w
ill b
e o
uts
ide
th
e s
cop
e
of
IFR
S 1
5.
Ho
we
ve
r w
he
re t
ha
t st
an
da
rd i
s re
leva
nt,
th
e r
eco
gn
itio
n o
f re
ve
nu
e w
ill ch
an
ge
an
d n
ew
dis
clo
sure
re
qu
ire
me
nts
in
tro
du
ced
.
We
will:
•A
sse
ss t
he
Gro
up
, P
CC
an
d C
C im
ple
me
nta
tio
na
rra
ng
em
en
ts t
ha
t sh
ou
ld in
clu
de
an
im
pa
ct a
sse
ssm
en
t p
ap
er
sett
ing
ou
t th
e a
pp
lica
tio
n o
f th
e n
ew
sta
nd
ard
, tr
an
siti
on
al
ad
just
me
nts
an
d p
lan
ne
d a
cco
un
tin
g f
or
20
18
/19
;
•C
on
sid
er
ap
plica
tio
n t
o t
he
Gro
up
, P
CC
an
d C
C r
ev
en
ue
str
ea
ms,
an
d w
he
re t
he
st
an
da
rd i
s re
leva
nt
test
to
en
sure
re
ve
nu
e i
s re
cog
nis
ed
wh
en
(o
r a
s) it
sati
sfie
s a
p
erf
orm
an
ce o
blig
ati
on
; a
nd
•C
he
cka
dd
itio
na
l d
iscl
osu
re r
eq
uir
em
en
ts.
We
ha
ve
ide
nti
fie
do
the
ra
rea
so
fth
ea
ud
it,
tha
th
av
en
ot
be
en
cla
ssi
fie
da
ssi
gn
ific
an
tri
sks,
bu
tm
ay
be
still
imp
ort
an
tw
he
nco
nsi
de
rin
gth
eri
sks
of
ma
teri
al
mis
sta
tem
en
tto
the
fin
an
cia
lst
ate
me
nts
an
dd
isclo
sure
sa
nd
the
refo
rem
ay
be
ke
ya
ud
itm
att
ers
we
willin
clu
de
ino
ur
au
dit
rep
ort
.
30
15
Va
lue
fo
r M
on
ey
Ris
ks
03
01
V F M
31
16
Va
lue
fo
r M
on
ey
Backgro
und
We
are
re
qu
ire
d t
o c
on
sid
er
wh
eth
er
the
PC
C a
nd
CC
ha
ve
pu
t in
pla
ce ‘
pro
pe
r a
rra
ng
em
en
ts’
to s
ecu
re e
con
om
y,
eff
icie
ncy
an
d e
ffe
ctiv
en
ess
on
its
use
of
reso
urc
es.
Th
is is
kn
ow
n a
s o
ur
va
lue
fo
r m
on
ey
co
ncl
usi
on
.
Fo
r 2
01
8/1
9 t
his
is
ba
sed
on
th
e o
ve
rall e
va
lua
tio
n c
rite
rio
n:
“In
all s
ign
ific
an
t re
spe
cts,
th
e a
ud
ite
d b
od
y h
ad
pro
pe
r a
rra
ng
em
en
ts t
o e
nsu
re it
too
k p
rop
erl
y i
nfo
rme
d d
eci
sio
ns
an
d d
ep
loy
ed
re
sou
rce
s to
ach
iev
e p
lan
ne
d a
nd
su
sta
ina
ble
ou
tco
me
s fo
r ta
xp
ay
ers
an
d l
oca
l p
eo
ple
”
Pro
pe
r a
rra
ng
em
en
ts a
re d
efi
ne
d b
y s
tatu
tory
gu
ida
nce
iss
ue
d b
y t
he
Na
tio
na
l A
ud
it O
ffic
e.
Th
ey
co
mp
rise
yo
ur
arr
an
ge
me
nts
to
:
▪T
ake
in
form
ed
de
cisi
on
s;▪
De
plo
y r
eso
urc
es
in a
su
sta
ina
ble
ma
nn
er;
an
d▪
Wo
rk w
ith
pa
rtn
ers
an
d o
the
r th
ird
pa
rtie
s.
In c
on
sid
eri
ng
yo
ur
pro
pe
r a
rra
ng
em
en
ts,
we
will d
raw
on
th
e r
eq
uir
em
en
ts o
f th
e C
IPF
A/S
OL
AC
E f
ram
ew
ork
fo
r lo
cal g
ove
rnm
en
t to
en
sure
th
at
ou
r a
sse
ssm
en
t is
ma
de
ag
ain
st a
fra
me
wo
rk t
ha
t y
ou
are
alr
ea
dy
re
qu
ire
d t
o h
av
e
in p
lace
an
d t
o r
ep
ort
on
th
rou
gh
do
cum
en
ts s
uch
as
yo
ur
an
nu
al
go
ve
rna
nce
sta
tem
en
t.
We
are
on
ly r
eq
uir
ed
to
de
term
ine
wh
eth
er
the
re a
re a
ny
ris
ks
tha
t w
e c
on
sid
er
sig
nif
ica
nt,
wh
ich
th
e C
od
e o
f A
ud
it
Pra
ctic
e d
efi
ne
s a
s:
“A m
att
er
is s
ign
ific
an
t if
, in
th
e a
ud
ito
r’s
pro
fess
ion
al vie
w,
it is
rea
son
ab
le t
o c
on
clu
de
th
at
the
ma
tte
r w
ou
ld b
e o
f in
tere
st t
o t
he
au
dit
ed
bo
dy
or
the
wid
er
pu
blic”
Ou
r ri
sk a
sse
ssm
en
t su
pp
ort
s th
e p
lan
nin
g o
f su
ffic
ien
t w
ork
to
en
ab
le u
s to
de
liv
er
a s
afe
co
ncl
usi
on
on
a
rra
ng
em
en
ts t
o s
ecu
re v
alu
e f
or
mo
ne
y a
nd
en
ab
les
us
to d
ete
rmin
e t
he
na
ture
an
d e
xte
nt
of
furt
he
r w
ork
th
at
ma
y b
e r
eq
uir
ed
. If
we
do
no
t id
en
tify
an
y s
ign
ific
an
t ri
sks
the
re is
no
re
qu
ire
me
nt
to c
arr
y o
ut
furt
he
r w
ork
. W
e c
on
sid
er
bu
sin
ess
an
d o
pe
rati
on
al
risk
s in
sofa
r a
s th
ey
re
late
to
pro
pe
r a
rra
ng
em
en
ts a
t b
oth
se
cto
r a
nd
o
rga
nis
ati
on
-sp
eci
fic
lev
el.
In
20
18
/19
th
is in
clu
de
s co
nsi
de
rati
on
of
the
ste
ps
take
n b
y t
he
PC
C &
CC
to
co
nsi
de
r th
e im
pa
ct o
f B
rexit
on
its
fu
ture
se
rvic
e p
rov
isio
n,
me
diu
m-t
erm
fin
an
cin
g a
nd
in
ve
stm
en
t va
lue
s. A
lth
ou
gh
th
e
pre
cise
im
pa
ct c
an
no
t y
et
be
mo
de
lle
d,
we
an
tici
pa
te t
ha
t A
uth
ori
tie
s w
ill b
e c
arr
yin
g o
ut
sce
na
rio
pla
nn
ing
an
d
tha
t B
rexit
an
d i
ts im
pa
ct w
ill fe
atu
re o
n o
pe
rati
on
al
risk
re
gis
ters
.
We
ha
ve
no
t y
et
com
ple
ted
ou
r va
lue
fo
r m
on
ey
pla
nn
ing
ris
k a
sse
ssm
en
t fo
r 2
01
8/1
9.
Ou
r ri
sk a
sse
ssm
en
t w
ill
con
sid
er
bo
th t
he
po
ten
tia
l fi
na
nci
al im
pa
ct o
f th
e iss
ue
s w
e h
av
e id
en
tifi
ed
, a
nd
als
o t
he
lik
elih
oo
d t
ha
t th
e iss
ue
w
ill b
e o
f in
tere
st t
o lo
cal ta
xp
ay
ers
, th
e G
ove
rnm
en
t a
nd
oth
er
sta
ke
ho
lde
rs.
We
will u
pd
ate
yo
u o
f o
ur
ass
ess
me
nt
du
rin
g t
he
au
dit
.
V F M
Pro
pe
r a
rra
ng
em
en
ts f
or
secu
rin
g v
alu
e f
or
mo
ne
y
Info
rme
d
de
cisi
on
ma
kin
g
Wo
rkin
g w
ith
p
art
ne
rs a
nd
th
ird
pa
rtie
s
Su
sta
ina
ble
re
sou
rce
d
ep
loy
me
nt
32
17
Au
dit
ma
teri
ality
04
01
33
18
Mate
riality
We
ha
ve
de
term
ine
dth
em
ate
ria
lity
leve
lfo
rth
efi
na
nci
al
sta
tem
en
tso
fth
eP
CC
Gro
up
,th
esu
bsi
dia
rie
s(P
CC
an
dC
CS
ing
lee
nti
tya
cco
un
ts)
an
dth
eP
olice
Pe
nsi
on
Fu
nd
an
dth
isis
set
at
2%
of
the
pri
or
ye
ars
gro
sse
xpe
nd
itu
reo
np
rovis
ion
of
serv
ice
sfo
rth
eP
CC
Gro
up
an
dC
CS
ing
lee
nti
tya
cco
un
ts,
2%
of
the
pri
or
ye
ars
gro
ssa
sse
tsfo
rth
eP
CC
sin
gle
en
tity
acco
un
tsa
nd
2%
of
be
ne
fits
pa
ya
ble
for
the
Po
lice
Pe
nsi
on
Fu
nd
.P
lan
nin
gm
ate
ria
lity
isse
ta
t£
5.2
millio
nfo
rth
eG
rou
p,
£4
.7m
illio
nfo
rth
eC
C,
£2
millio
nfo
rth
eP
CC
an
d£
0.8
millio
nfo
rth
eP
olice
Pe
nsi
on
Fu
nd
.
Ma
teri
ality
will
be
rea
sse
sse
dth
rou
gh
ou
tth
ea
ud
itp
roce
ss.
We
ha
ve
pro
vid
ed
sup
ple
me
nta
lin
form
ati
on
ab
ou
ta
ud
itm
ate
ria
lity
inA
pp
en
dix
D.
Au
dit
ma
teri
ality
Gro
ss e
xp
en
dit
ure
on
pro
vis
ion
of
serv
ice
s
£2
61
mP
lan
nin
gm
ate
ria
lity
£5
.2m
Pe
rfo
rma
nce
m
ate
ria
lity
£3
.9m
Au
dit
dif
fere
nce
s
£0
.26
m
Ma
teri
ality
Pla
nnin
g m
ate
riality
–th
e a
mo
un
t o
ve
r w
hic
h w
e a
nti
cip
ate
mis
sta
tem
en
ts
wo
uld
in
flu
en
ce t
he
eco
no
mic
de
cisi
on
s o
f a
use
r o
f th
e f
ina
nci
al
sta
tem
en
ts.
Perf
orm
ance m
ate
riality
–th
e a
mo
un
t w
e u
se t
o d
ete
rmin
e t
he
exte
nt
of
ou
r a
ud
it p
roce
du
res.
Pe
rfo
rma
nce
ma
teri
ality
is
set
at
£3
.9 m
illio
n f
or
the
P
CC
Gro
up
, £
3.5
millio
n f
or
the
CC
, £
1.5
millio
n f
or
the
PC
C a
nd
£0
.6
millio
n f
or
the
Po
lice
Pe
nsi
on
Fu
nd
. P
erf
orm
an
ce m
ate
ria
lity
re
pre
sen
ts 7
5%
o
f m
ate
ria
lity
fo
r th
e g
rou
p,
sub
sid
iari
es
an
d P
en
sio
n F
un
d.
Audit
dif
fere
nce t
hre
shold
–w
e p
rop
ose
th
at
mis
sta
tem
en
ts i
de
nti
fie
d
be
low
th
is t
hre
sho
ld a
re d
ee
me
d c
lea
rly
tri
via
l. W
e w
ill re
po
rt t
o y
ou
all
un
corr
ect
ed
mis
sta
tem
en
ts o
ve
r th
is a
mo
un
t re
lati
ng
to
th
ep
rim
ary
st
ate
me
nts
(co
mp
reh
en
sive
in
com
e a
nd
exp
en
dit
ure
sta
tem
en
t, b
ala
nce
sh
ee
t, a
nd
po
lice
pe
nsi
on
fu
nd
fin
an
cia
l st
ate
me
nts
). T
he
re
po
rtin
g
thre
sho
ld w
e h
av
e s
et
is £
0.2
6 m
illio
n f
or
the
PC
C G
rou
p,
£0
.23
millio
n f
or
the
CC
, £
0.1
millio
n f
or
the
PC
C a
nd
£0
.04
millio
n f
or
the
Pe
nsi
on
Fu
nd
.
Oth
er
un
corr
ect
ed
mis
sta
tem
en
ts,
such
as
recl
ass
ific
ati
on
s a
nd
m
isst
ate
me
nts
in
th
e c
ash
flo
w s
tate
me
nt
an
d m
ove
me
nt
in r
ese
rve
s st
ate
me
nt
or
dis
clo
sure
s, a
nd
co
rre
cte
d m
isst
ate
me
nts
will b
e
com
mu
nic
ate
d t
o t
he
exte
nt
tha
t th
ey
me
rit
the
att
en
tio
n o
f th
e jo
int
ind
ep
en
de
nt
au
dit
co
mm
itte
e,
or
are
im
po
rta
nt
fro
m a
qu
alita
tive
p
ers
pe
ctiv
e.
Specif
ic m
ate
riality
–W
e h
av
e s
et
a m
ate
ria
lity
of
the
au
dit
dif
fere
nce
th
resh
old
of
£1
00
,00
0 f
or
rela
ted
pa
rty
tra
nsa
ctio
ns
an
d m
em
be
rs’
allo
wa
nce
s. F
or
off
ice
rs r
em
un
era
tio
n i
ncl
ud
ing
exit
pa
cka
ge
s w
e w
ill a
pp
ly
ma
teri
ality
of
£5
,00
0 i
n l
ine
wit
h b
an
din
gs.
Th
is r
efl
ect
s o
ur
un
de
rsta
nd
ing
th
at
an
am
ou
nt
less
th
an
ou
r m
ate
ria
lity
wo
uld
in
flu
en
ce t
he
eco
no
mic
d
eci
sio
ns
of
use
rs o
f th
e f
ina
nci
al
sta
tem
en
ts i
n r
ela
tio
n t
o t
he
se
dis
clo
sure
s.
Key
defi
nit
ions
We
re
qu
est
th
at
the
PC
C a
nd
CC
con
firm
th
eir
un
de
rsta
nd
ing
of,
an
d a
gre
em
en
t to
, th
ese
ma
teri
ality
an
d r
ep
ort
ing
le
ve
ls.
34
19
Sco
pe
of
ou
r a
ud
it0
50
1
35
20
Obje
cti
ve a
nd S
cope o
f our
Audit
scopin
g
Un
de
r th
e C
od
e o
f A
ud
it P
ract
ice
ou
r p
rin
cip
al
ob
ject
ive
s a
re t
o r
evie
w a
nd
re
po
rt o
n t
he
PC
C a
nd
CC
’s f
ina
nci
al
sta
tem
en
ts a
nd
arr
an
ge
me
nts
fo
r se
curi
ng
eco
no
my
, e
ffic
ien
cy a
nd
eff
ect
ive
ne
ss in
th
eir
use
of
reso
urc
es
to t
he
exte
nt
req
uir
ed
by
th
e r
ele
va
nt
leg
isla
tio
n a
nd
th
e r
eq
uir
em
en
ts o
f th
e C
od
e.
We
iss
ue
an
au
dit
re
po
rt t
ha
t co
ve
rs:
1.
Fin
an
cia
l st
ate
me
nt
au
dit
Ou
r o
bje
ctiv
e i
s to
fo
rm a
n o
pin
ion
on
th
e f
ina
nci
al
sta
tem
en
ts u
nd
er
Inte
rna
tio
na
l S
tan
da
rds
on
Au
dit
ing
(U
K a
nd
Ire
lan
d).
We
als
o p
erf
orm
oth
er
pro
ced
ure
s a
s re
qu
ire
d b
y a
ud
itin
g,
eth
ica
l a
nd
in
de
pe
nd
en
ce s
tan
da
rds,
th
e C
od
e a
nd
oth
er
reg
ula
tio
ns.
We
ou
tlin
e b
elo
w t
he
pro
ced
ure
s w
e
will u
nd
ert
ake
du
rin
g t
he
co
urs
e o
f o
ur
au
dit
.
Pro
ce
du
res
req
uir
ed
by
sta
nd
ard
s•
Ad
dre
ssin
g t
he
ris
k o
f fr
au
d a
nd
err
or;
•S
ign
ific
an
t d
iscl
osu
res
incl
ud
ed
in
th
e f
ina
nci
al st
ate
me
nts
;•
En
tity
-wid
e c
on
tro
ls;
•R
ea
din
g o
the
r in
form
ati
on
co
nta
ine
d i
n t
he
fin
an
cia
l st
ate
me
nts
an
d r
ep
ort
ing
wh
eth
er
it is
inco
nsi
ste
nt
wit
h o
ur
un
de
rsta
nd
ing
an
d t
he
fin
an
cia
l st
ate
me
nts
; a
nd
•A
ud
ito
r in
de
pe
nd
en
ce.
Pro
ce
du
res
req
uir
ed
by
th
e C
od
e•
Re
vie
win
g,
an
d r
ep
ort
ing
on
as
ap
pro
pri
ate
, o
the
r in
form
ati
on
pu
blish
ed
wit
h t
he
fin
an
cia
l st
ate
me
nts
, in
clu
din
g t
he
An
nu
al
Go
ve
rna
nce
; a
nd
•R
evie
win
g a
nd
re
po
rtin
g o
n t
he
Wh
ole
of
Go
ve
rnm
en
t A
cco
un
ts r
etu
rn,
in l
ine
wit
h t
he
in
stru
ctio
ns
issu
ed
by
th
e N
AO
2.
Arr
an
ge
me
nts
fo
r se
cu
rin
g e
co
no
my
, e
ffic
ien
cy
an
d e
ffe
cti
ve
ne
ss (
va
lue
fo
r m
on
ey
)
We
are
re
qu
ire
d t
o c
on
sid
er
wh
eth
er
the
PC
C a
nd
CC
ha
s p
ut
in p
lace
‘p
rop
er
arr
an
ge
me
nts
’ to
se
cure
eco
no
my
, e
ffic
ien
cy a
nd
eff
ect
ive
ne
ss o
n t
he
ir u
se o
f re
sou
rce
s.
Sco
pe
of
ou
r a
ud
it
Ou
r A
ud
it P
roce
ss a
nd
Str
ate
gy
36
21
Audit
Pro
cess O
verv
iew
Ou
r a
ud
it i
nvo
lve
s:
•Id
en
tify
ing
an
d u
nd
ers
tan
din
g t
he
ke
y p
roce
sse
s a
nd
in
tern
al
con
tro
ls;
an
d
•S
ub
sta
nti
ve
te
sts
of
de
tail o
f tr
an
sact
ion
s a
nd
am
ou
nts
.
Fo
r 2
01
8/1
9 w
e p
lan
to
fo
llo
w a
su
bst
an
tive
ap
pro
ach
to
th
e a
ud
it a
s w
e h
av
e c
on
clu
de
d t
his
is
the
mo
st e
ffic
ien
t w
ay
to
ob
tain
th
e le
ve
l o
f a
ud
it a
ssu
ran
ce r
eq
uir
ed
to
co
ncl
ud
e t
ha
t th
e f
ina
nci
al
sta
tem
en
ts a
re n
ot
ma
teri
ally
mis
sta
ted
.
An
aly
tics
:W
e w
ill u
se o
ur
com
pu
ter-
ba
sed
an
aly
tics
to
ols
to
en
ab
le u
s to
ca
ptu
re w
ho
le p
op
ula
tio
ns
of
yo
ur
fin
an
cia
l d
ata
, in
pa
rtic
ula
r jo
urn
al e
ntr
ies.
Th
ese
to
ols
:•
He
lp i
de
nti
fy s
pe
cifi
c e
xce
pti
on
s a
nd
an
om
alie
s w
hic
h c
an
th
en
be
su
bje
ct t
o m
ore
tra
dit
ion
al
sub
sta
nti
ve
au
dit
te
sts;
an
d
•G
ive
gre
ate
r like
lih
oo
d o
f id
en
tify
ing
err
ors
th
an
ra
nd
om
sa
mp
lin
g t
ech
niq
ue
s.
We
will re
po
rt t
he
fin
din
gs
fro
m o
ur
pro
cess
an
d a
na
lyti
cs w
ork
, in
clu
din
g a
ny
sig
nif
ica
nt
we
akn
ess
es
or
ine
ffic
ien
cie
s id
en
tifi
ed
an
d r
eco
mm
en
da
tio
ns
for
imp
rov
em
en
t, t
o m
an
ag
em
en
t a
nd
th
e J
oin
t In
de
pe
nd
en
t A
ud
it C
om
mit
tee
.
Inte
rna
l a
ud
it:
We
will re
vie
w in
tern
al
au
dit
pla
ns
an
d t
he
re
sult
s o
f th
eir
wo
rk.
We
will re
fle
ct t
he
fin
din
gs
fro
m t
he
se r
ep
ort
s, t
og
eth
er
wit
h r
ep
ort
s fr
om
an
y o
the
r w
ork
co
mp
lete
d
in t
he
ye
ar,
in
ou
r d
eta
ile
d a
ud
it p
lan
, w
he
re t
he
y r
ais
e iss
ue
s th
at
cou
ld h
ave
an
im
pa
ct o
n t
he
fin
an
cia
l st
ate
me
nts
.
Sco
pe
of
ou
r a
ud
it
Ou
r A
ud
it P
roce
ss a
nd
Str
ate
gy
(co
nti
nu
ed
)
37
22
Au
dit
te
am
06
01
38
23
Au
dit
te
am
Au
dit
te
am
Audit
team
str
uctu
re:
Ma
rk H
od
gso
n
Ass
oci
ate
Pa
rtn
er
Work
ing t
ogeth
er
wit
h t
he P
CC
and C
C
We
are
wo
rkin
g t
og
eth
er
wit
h o
ffic
ers
to
est
ab
lish
st
ron
g c
om
mu
nic
ati
on
an
d p
roce
sse
s fo
r th
e
20
18
/19
au
dit
.
We
will co
nti
nu
e t
o k
ee
p o
ur
au
dit
ap
pro
ach
un
de
r re
vie
w t
o s
tre
am
lin
e i
t w
he
re p
oss
ible
.
EY
Pe
nsi
on
S
pe
cia
list
EY
Actu
ari
es
Sa
pp
ho
Po
we
ll
Ma
na
ge
r
EY
Re
al
Est
ate
s
Ho
an
g L
e H
uu
Se
nio
r
39
24
Au
dit
te
am
Use
of
spe
cia
list
s
Wh
en
au
dit
ing
ke
y ju
dg
em
en
ts,
we
are
oft
en
re
qu
ire
d t
o r
ely
on
th
e in
pu
t a
nd
ad
vic
e p
rov
ide
d b
y s
pe
cia
list
s w
ho
ha
ve
qu
alifi
ca
tio
ns
an
d e
xp
ert
ise
no
t p
oss
ess
ed
by
th
e
core
au
dit
te
am
. T
he
are
as
wh
ere
eit
he
r E
Y o
r th
ird
pa
rty
sp
eci
alist
s m
ay
be
re
qu
ire
d t
o p
rov
ide
in
pu
t fo
r th
e c
urr
en
t y
ea
r a
ud
it a
re:
Are
aS
pe
cia
list
s
Va
lua
tio
n o
f L
an
d a
nd
Bu
ild
ing
sW
e w
ill co
nsi
de
r a
ny
va
lua
tio
n a
spe
cts
tha
t m
ay
re
qu
ire
EY
va
lua
tio
n s
pe
cia
list
s to
re
vie
w a
ny
ma
teri
al sp
eci
alist
ass
ets
a
nd
th
e u
nd
erl
yin
g a
ssu
mp
tio
ns
use
d b
y t
he
PC
C’s
va
lue
r, C
art
er
Jo
na
s.
Pe
nsi
on
s d
iscl
osu
reE
YP
en
sio
ns
Ad
vis
ory
, P
wC
(C
on
sult
ing
Act
ua
ry t
o t
he
Na
tio
na
l A
ud
it O
ffic
e)
wh
o w
ill re
vie
w t
he
wo
rk o
f H
ym
an
s R
ob
ert
son
, th
e a
ctu
ari
es
to t
he
No
rfo
lk C
ou
nty
Co
un
cil
Pe
nsi
on
Fu
nd
, a
nd
th
e G
ove
rnm
en
t A
ctu
ari
es
De
pa
rtm
en
t.
In a
cco
rda
nce
wit
h A
ud
itin
g S
tan
da
rds,
we
will e
va
lua
te e
ach
sp
eci
alist
’s p
rofe
ssio
na
l co
mp
ete
nce
an
d o
bje
ctiv
ity
, co
nsi
de
rin
g t
he
ir q
ua
lifi
cati
on
s, e
xp
eri
en
ce a
nd
a
va
ila
ble
re
sou
rce
s, t
og
eth
er
wit
h t
he
in
de
pe
nd
en
ce o
f th
e in
div
idu
als
pe
rfo
rmin
g t
he
wo
rk.
We
als
o c
on
sid
er
the
wo
rk p
erf
orm
ed
by
th
e s
pe
cia
list
in
lig
ht
of
ou
r kn
ow
led
ge
of
the
PC
C a
nd
CC
’s b
usi
ne
ss a
nd
pro
cess
es
an
d o
ur
ass
ess
me
nt
of
au
dit
ris
k in
th
e
pa
rtic
ula
r a
rea
. F
or
exa
mp
le,
we
wo
uld
ty
pic
ally
pe
rfo
rm t
he
fo
llo
win
g p
roce
du
res:
•A
na
lyse
so
urc
e d
ata
an
d m
ake
in
qu
irie
s a
s to
th
e p
roce
du
res
use
d b
y t
he
sp
eci
alist
to
est
ab
lish
wh
eth
er
the
so
urc
e d
ata
is
rele
va
nt
an
d r
elia
ble
;
•A
sse
ss t
he
re
aso
na
ble
ne
ss o
f th
e a
ssu
mp
tio
ns
an
d m
eth
od
s u
sed
;
•C
on
sid
er
the
ap
pro
pri
ate
ne
ss o
f th
e t
imin
g o
f w
he
n t
he
sp
eci
alist
ca
rrie
d o
ut
the
wo
rk;
an
d
•A
sse
ss w
he
the
r th
e s
ub
sta
nce
of
the
sp
eci
alist
’s f
ind
ing
s a
re p
rop
erl
y r
efl
ect
ed
in
th
e f
ina
nci
al
sta
tem
en
ts.
40
25
Au
dit
tim
elin
e0
70
1
41
26
Au
dit
tim
elin
e
Be
low
is
a t
ime
tab
le s
ho
win
g t
he
ke
y s
tag
es
of
the
au
dit
an
d t
he
de
liv
era
ble
s w
e h
av
e a
gre
ed
to
pro
vid
e t
o y
ou
th
rou
gh
th
e a
ud
itcy
cle
in
20
18
/19
Fro
m t
ime
to
tim
e m
att
ers
ma
y a
rise
th
at
req
uir
e i
mm
ed
iate
co
mm
un
ica
tio
n w
ith
th
e P
CC
an
d C
Ca
nd
we
will d
iscu
ss t
he
m w
ith
th
e P
CC
an
d C
C a
nd
se
nio
r m
an
ag
em
en
ta
s a
pp
rop
ria
te.
We
will a
lso
pro
vid
e u
pd
ate
s o
n c
orp
ora
te g
ove
rna
nce
an
d r
eg
ula
tory
ma
tte
rs a
s n
ece
ssa
ry.
Tim
eline
Tim
eta
ble
of
co
mm
un
ica
tio
n a
nd
de
live
rab
les
Jan
Mar
Ju
lO
ct
Feb
May
Sep
Dec
Apr
Ju
nA
ug
Nov
Pla
nn
ing
Inte
rim
Au
dit
Su
bst
an
tiv
e t
est
ing
Wa
lkth
rou
gh
s
Pla
nn
ing
Ris
k a
sse
ssm
en
t a
nd
se
ttin
g o
f sc
op
esA
ud
it P
lan
Re
po
rtin
g o
ur
ind
ep
en
de
nce
, ri
sk
ass
ess
me
nt,
pla
nn
ed
a
ud
it a
pp
roa
ch a
nd
th
e
sco
pe
of
ou
r a
ud
it
Wa
lkth
rou
gh
s
Wa
lkth
rou
gh
of
ke
y
syst
em
s a
nd
pro
cess
es
An
nu
al
Au
dit
Le
tte
r
Th
e A
nn
ua
l A
ud
it L
ett
er
will b
e p
rov
ide
d f
ollo
win
g
com
ple
tio
n o
f o
ur
au
dit
p
roce
du
res
Au
dit
Re
sult
s R
ep
ort
Re
po
rtin
g o
ur
con
clu
sio
ns
on
ke
y ju
dg
em
en
ts a
nd
est
ima
tes
an
d c
on
firm
ati
on
of
ou
r in
de
pe
nd
en
ce
Ye
ar
En
d A
ud
it
Wo
rk b
eg
ins
on
ou
r y
ea
r e
nd
au
dit
. T
his
is
wh
en
we
w
ill co
mp
lete
an
y
sub
sta
nti
ve
te
stin
g n
ot
com
ple
ted
at
inte
rim
Inte
rim
Au
dit
Ea
rly
su
bst
an
tiv
e t
est
ing
42
27
Ind
ep
en
de
nce
08
01
43
28
Ind
ep
en
de
nce
Th
e F
RC
Eth
ica
l S
tan
da
rd a
nd
IS
A (
UK
) 2
60
“C
om
mu
nic
ati
on
of
au
dit
ma
tte
rs w
ith
th
ose
ch
arg
ed
wit
h g
ove
rna
nce
”, r
eq
uir
es
us
toco
mm
un
ica
te w
ith
yo
u o
n a
tim
ely
ba
sis
on
all s
ign
ific
an
t fa
cts
an
d m
att
ers
th
at
be
ar
up
on
ou
r in
teg
rity
, o
bje
ctiv
ity
an
d i
nd
ep
en
de
nce
. T
he
Eth
ica
l S
tan
da
rd,
as
rev
ise
d i
n J
un
e 2
01
6,
req
uir
es
tha
t w
e
com
mu
nic
ate
fo
rma
lly
bo
th a
t th
e p
lan
nin
g s
tag
e a
nd
at
the
co
ncl
usi
on
of
the
au
dit
, a
s w
ell a
s d
uri
ng
th
e c
ou
rse
of
the
au
dit
ifa
pp
rop
ria
te.
Th
e a
im o
f th
ese
co
mm
un
ica
tio
ns
is t
o e
nsu
re f
ull a
nd
fa
ir d
iscl
osu
re b
y u
s to
th
ose
ch
arg
ed
wit
h y
ou
r g
ove
rna
nce
on
ma
tte
rs in
wh
ich
yo
u h
ave
an
inte
rest
.
In a
dd
itio
n,
du
rin
g t
he
co
urs
e o
f th
e a
ud
it,
we
are
re
qu
ire
d t
o c
om
mu
nic
ate
wit
h y
ou
wh
en
eve
r a
ny
sig
nif
ica
nt
jud
ge
me
nts
are
ma
de
ab
ou
t th
rea
ts t
o o
bje
ctiv
ity
an
d
ind
ep
en
de
nce
an
d t
he
ap
pro
pri
ate
ne
ss o
f sa
feg
ua
rds
pu
t in
pla
ce,
for
exa
mp
le,
wh
en
acc
ep
tin
g a
n e
ng
ag
em
en
t to
pro
vid
e n
on
-au
dit
se
rvic
es.
We
als
o p
rov
ide
in
form
ati
on
on
an
y c
on
tin
ge
nt
fee
arr
an
ge
me
nts
, t
he
am
ou
nts
of
an
y f
utu
re s
erv
ice
s th
at
ha
ve
be
en
co
ntr
act
ed
, a
nd
de
tails
of
an
y w
ritt
en
pro
po
sal
to
pro
vid
e n
on
-au
dit
se
rvic
es
tha
t h
as
be
en
su
bm
itte
d;
We
en
sure
th
at
the
to
tal a
mo
un
t o
f fe
es
tha
t E
Y a
nd
ou
r n
etw
ork
fir
ms
ha
ve
ch
arg
ed
to
yo
u a
nd
yo
ur
aff
ilia
tes
for
the
pro
vis
ion
of
serv
ice
s d
uri
ng
th
e r
ep
ort
ing
pe
rio
d,
an
aly
sed
in
ap
pro
pri
ate
ca
teg
ori
es,
are
dis
clo
sed
.
Re
qu
ire
d c
om
mu
nic
ati
on
s
Pla
nn
ing
sta
ge
Fin
al
sta
ge
►T
he
pri
nci
pa
l th
rea
ts,
if a
ny,
to
ob
ject
ivit
y a
nd
in
de
pe
nd
en
ce i
de
nti
fie
d b
y E
rnst
& Y
ou
ng
(E
Y)
incl
ud
ing
co
nsi
de
rati
on
of
all r
ela
tio
nsh
ips
be
twe
en
th
e y
ou
, yo
ur
aff
ilia
tes
an
d d
ire
cto
rs a
nd
us;
►T
he
sa
feg
ua
rds
ad
op
ted
an
d t
he
re
aso
ns
wh
y t
hey
a
re c
on
sid
ere
d t
o b
e e
ffe
ctiv
e,
incl
ud
ing
an
y
En
ga
ge
me
nt
Qu
ality
revie
w;
►T
he
ove
rall a
sse
ssm
en
t o
f th
rea
ts a
nd
sa
feg
ua
rds;
►In
form
ati
on
ab
ou
t th
e g
en
era
l p
olici
es
an
d p
roce
ss
wit
hin
EY
to
ma
inta
in o
bje
ctiv
ity
an
d i
nd
ep
en
de
nce
.
►W
he
re E
Y h
as
de
term
ine
d i
t is
ap
pro
pri
ate
to
ap
ply
m
ore
re
stri
ctiv
e i
nd
ep
en
de
nce
ru
les
tha
n p
erm
itte
d
un
de
r th
e E
thic
al S
tan
da
rd [
no
te:
ad
dit
ion
al
wo
rdin
g s
ho
uld
be
in
clu
de
d i
n t
he
co
mm
un
ica
tio
n
refl
ect
ing
th
e c
lie
nt
spe
cifi
c si
tua
tio
n]
►In
ord
er
for
yo
u t
o a
sse
ss t
he
in
teg
rity
, o
bje
ctiv
ity
an
d i
nd
ep
en
de
nce
of
the
fir
m a
nd
ea
ch c
ove
red
pe
rso
n,
we
are
re
qu
ire
d t
o p
rov
ide
a w
ritt
en
dis
clo
sure
of
rela
tio
nsh
ips
(in
clu
din
g t
he
pro
vis
ion
of
no
n-a
ud
it
serv
ice
s) t
ha
t m
ay
be
ar
on
ou
r in
teg
rity
, o
bje
ctiv
ity
an
d i
nd
ep
en
de
nce
. T
his
is
req
uir
ed
to
ha
ve
re
ga
rd t
o
rela
tio
nsh
ips
wit
h t
he
en
tity
, it
s d
ire
cto
rs a
nd
se
nio
r m
an
ag
em
en
t, i
ts a
ffilia
tes,
an
d i
ts c
on
ne
cte
d p
art
ies
an
d t
he
th
rea
ts t
o in
teg
rity
or
ob
ject
ivit
y,
incl
ud
ing
th
ose
th
at
cou
ld c
om
pro
mis
e i
nd
ep
en
de
nce
th
at
the
se
cre
ate
. W
e a
re a
lso
re
qu
ire
d t
o d
iscl
ose
an
y s
afe
gu
ard
s th
at
we
ha
ve
pu
t in
pla
ce a
nd
wh
y t
he
y a
dd
ress
su
ch t
hre
ats
, to
ge
the
r w
ith
an
y o
the
r in
form
ati
on
ne
cess
ary
to
en
ab
le o
ur
ob
ject
ivit
y a
nd
in
de
pe
nd
en
ce t
o
be
ass
ess
ed
;
►D
eta
ils
of
no
n-a
ud
it s
erv
ice
s p
rov
ide
d a
nd
th
e f
ee
s ch
arg
ed
in
re
lati
on
th
ere
to;
►W
ritt
en
co
nfi
rma
tio
n t
ha
t th
e f
irm
an
d e
ach
co
ve
red
pe
rso
n i
s in
de
pe
nd
en
t a
nd
, if
ap
plica
ble
, th
at
an
y
no
n-E
Y f
irm
s u
sed
in
th
e g
rou
p a
ud
it o
r e
xte
rna
l e
xp
ert
s u
sed
ha
ve
co
nfi
rme
d t
he
ir in
de
pe
nd
en
ce t
o u
s;
►W
ritt
en
co
nfi
rma
tio
n t
ha
t a
ll c
ove
red
pe
rso
ns
are
in
de
pe
nd
en
t;
►D
eta
ils
of
an
y in
con
sist
en
cie
s b
etw
ee
n F
RC
Eth
ica
l S
tan
da
rd a
nd
yo
ur
po
licy
fo
r th
e s
up
ply
of
no
n-a
ud
it
serv
ice
s b
y E
Y a
nd
an
y a
pp
are
nt
bre
ach
of
tha
t p
olicy
;
►D
eta
ils
of
an
y c
on
tin
ge
nt
fee
arr
an
ge
me
nts
fo
r n
on
-au
dit
se
rvic
es
pro
vid
ed
by
us
or
ou
r n
etw
ork
fir
ms;
a
nd
►A
n o
pp
ort
un
ity
to
dis
cuss
au
dit
or
ind
ep
en
de
nce
iss
ue
s.
Intr
od
ucti
on
44
29
Ind
ep
en
de
nce
We
hig
hlig
ht
the
fo
llo
win
g s
ign
ific
an
t fa
cts
an
d m
att
ers
th
at
ma
y b
e r
ea
son
ab
ly c
on
sid
ere
d t
o b
ea
r u
po
n o
ur
ob
ject
ivit
y a
nd
in
de
pe
nd
en
ce,
incl
ud
ing
th
e p
rin
cip
al
thre
ats
, if
an
y.
We
ha
ve
ad
op
ted
th
e s
afe
gu
ard
s n
ote
d b
elo
w t
o m
itig
ate
th
ese
th
rea
ts a
lon
g w
ith
th
e r
ea
son
s w
hy
th
ey
are
co
nsi
de
red
to
be
eff
ect
ive
. H
ow
ev
er
we
will o
nly
p
erf
orm
no
n –
au
dit
se
rvic
es
if t
he
se
rvic
e h
as
be
en
pre
-ap
pro
ve
d i
n a
cco
rda
nce
wit
h y
ou
r p
olicy
.
Self
inte
rest
thre
ats
A s
elf
inte
rest
th
rea
t a
rise
s w
he
n E
Y h
as
fin
an
cia
l o
r o
the
r in
tere
sts
in t
he
PC
C a
nd
/or
CC
. E
xa
mp
les
incl
ud
e w
he
re w
e r
ece
ive
sig
nif
ica
nt
fee
s in
re
spe
ct o
f n
on
-au
dit
se
rvic
es;
wh
ere
we
ne
ed
to
re
cove
r lo
ng
ou
tsta
nd
ing
fe
es;
or
wh
ere
we
en
ter
into
a b
usi
ne
ss r
ela
tio
nsh
ip w
ith
yo
u.
At
the
tim
e o
f w
riti
ng
, th
ere
are
no
lo
ng
ou
tsta
nd
ing
fe
es.
We
be
lie
ve
th
at
it is
ap
pro
pri
ate
fo
r u
s to
un
de
rta
ke
pe
rmis
sib
le n
on
-au
dit
se
rvic
es
an
d w
e w
ill c
om
ply
wit
h t
he
po
lici
es
tha
t y
ou
ha
ve
ap
pro
ve
d.
No
ne
of
the
se
rvic
es
are
pro
hib
ite
d u
nd
er
the
FR
C's
ES
or
the
Na
tio
na
l A
ud
it O
ffic
e’s
Au
dit
or
Gu
ida
nce
No
te 0
1 a
nd
th
e s
erv
ice
s h
av
e b
ee
n a
pp
rov
ed
in
acc
ord
an
ce w
ith
y
ou
r p
olicy
on
pre
-ap
pro
va
l. T
he
ra
tio
of
no
n a
ud
it f
ee
s to
au
dit
s fe
es
is n
ot
pe
rmit
ted
to
exce
ed
70
%.
At
the
tim
e o
f w
riti
ng
, w
e a
re n
ot
un
de
rta
kin
g a
ny
no
n-a
ud
it w
ork
on
be
ha
lf o
f th
e G
rou
p.
Th
ere
fore
no
ad
dit
ion
al
safe
gu
ard
s a
re r
eq
uir
ed
.
A s
elf
inte
rest
th
rea
t m
ay
als
o a
rise
if
me
mb
ers
of
ou
r a
ud
it e
ng
ag
em
en
t te
am
ha
ve
ob
ject
ive
s o
r a
re r
ew
ard
ed
in
re
lati
on
to
sa
les
of
no
n-a
ud
it s
erv
ice
s to
yo
u.
We
co
nfi
rm t
ha
t n
o m
em
be
r o
f o
ur
au
dit
en
ga
ge
me
nt
tea
m,
incl
ud
ing
th
ose
fro
m o
the
r se
rvic
e l
ine
s, h
as
ob
ject
ive
s o
r is
re
wa
rde
d i
n r
ela
tio
n t
o s
ale
s to
yo
u,
in c
om
plia
nce
w
ith
Eth
ica
l S
tan
da
rd p
art
4.
Th
ere
are
no
oth
er
self
inte
rest
th
rea
ts a
t th
e d
ate
of
this
re
po
rt.
Overa
ll A
ssessm
en
t
Ove
rall,
we
co
nsi
de
r th
at
the
sa
feg
ua
rds
tha
t h
av
e b
ee
n a
do
pte
d a
pp
rop
ria
tely
mit
iga
te t
he
pri
nci
pa
l th
rea
ts id
en
tifi
ed
an
d w
e t
he
refo
re c
on
firm
th
at
EY
is
ind
ep
en
de
nt
an
d t
he
ob
ject
ivit
y a
nd
in
de
pe
nd
en
ce o
f M
ark
Ho
dg
son
, y
ou
r a
ud
it e
ng
ag
em
en
t p
art
ne
r a
nd
th
e a
ud
it e
ng
ag
em
en
t te
am
ha
ve
no
t b
ee
n c
om
pro
mis
ed
.
Re
lati
on
ship
s, s
erv
ice
s a
nd
re
late
d t
hre
ats
an
d s
afe
gu
ard
s
Self
revie
w t
hre
ats
Se
lf r
evie
w t
hre
ats
ari
se w
he
n t
he
re
sult
s o
f a
no
n-a
ud
it s
erv
ice
pe
rfo
rme
d b
y E
Y o
r o
the
rs w
ith
in t
he
EY
ne
two
rk a
re r
efl
ect
ed
in
th
e a
mo
un
ts i
ncl
ud
ed
or
dis
clo
sed
in
th
e f
ina
nci
al st
ate
me
nts
.
Th
ere
are
no
se
lf r
evie
w t
hre
ats
at
the
da
te o
f th
is r
ep
ort
.
45
30
Ind
ep
en
de
nce
Managem
en
t th
reats
Pa
rtn
ers
an
d e
mp
loy
ee
s o
f E
Y a
re p
roh
ibit
ed
fro
m t
akin
g d
eci
sio
ns
on
be
ha
lf o
f m
an
ag
em
en
t o
f th
e P
CC
an
d/o
r C
C
Ma
na
ge
me
nt
thre
ats
ma
y a
lso
ari
se d
uri
ng
th
e
pro
vis
ion
of
a n
on
-au
dit
se
rvic
e in
re
lati
on
to
wh
ich
ma
na
ge
me
nt
is r
eq
uir
ed
to
ma
ke
ju
dg
em
en
ts o
r d
eci
sio
n b
ase
d o
n t
ha
t w
ork
.
Th
ere
are
no
ma
na
ge
me
nt
thre
ats
at
the
da
te o
f th
is r
ep
ort
.
Re
lati
on
ship
s, s
erv
ice
s a
nd
re
late
d t
hre
ats
an
d s
afe
gu
ard
s
Oth
er
thre
ats
Oth
er
thre
ats
, su
ch a
s a
dvo
cacy
, fa
milia
rity
or
inti
mid
ati
on
, m
ay
ari
se.
Th
ere
are
no
oth
er
thre
ats
at
the
da
te o
f th
is r
ep
ort
.
EY
Tra
nspare
ncy
Report
20
17
Ern
st &
Yo
un
g (
EY
) h
as
po
lici
es
an
d p
roce
du
res
tha
t in
stil p
rofe
ssio
na
l va
lue
s a
s p
art
of
firm
cu
ltu
re a
nd
en
sure
th
at
the
hig
he
st s
tan
da
rds
of
ob
ject
ivit
y,
ind
ep
en
de
nce
a
nd
in
teg
rity
are
ma
inta
ine
d.
De
tails
of
the
ke
y p
olici
es
an
d p
roce
sse
s in
pla
ce w
ith
in E
Y f
or
ma
inta
inin
g o
bje
ctiv
ity
an
d i
nd
ep
en
de
nce
ca
n b
e f
ou
nd
in
ou
ra
nn
ua
l T
ran
spa
ren
cy R
ep
ort
wh
ich
th
e f
irm
is
re
qu
ire
d t
o p
ub
lish
by
la
w.
Th
e m
ost
re
cen
t ve
rsio
n o
f th
is R
ep
ort
is
for
the
ye
ar
en
de
d 1
Ju
ly 2
01
8 a
nd
ca
n b
e f
ou
nd
he
re:
htt
ps:
//w
ww
.ey
.co
m/u
k/e
n/a
bo
ut-
us/
ey
-uk-t
ran
spa
ren
cy-r
ep
ort
-20
18
Oth
er
co
mm
un
ica
tio
ns
46
31
Ap
pe
nd
ice
s0
90
1
47
32
Ap
pe
nd
ix A
Fe
es
Pla
nn
ed
fe
e
20
18
/19
Sca
le f
ee
20
18
/19
Fin
al
Fe
e2
01
7/1
8
£’s
£’s
£’s
To
tal P
CC
Fe
e –
Co
de
wo
rk:
26
,04
52
6,0
45
33
,83
5 –
No
te 1
To
tal
CC
Fe
e –
Co
de
wo
rk:
11
,55
01
1,5
50
15
,00
0 –
No
te 1
To
tal a
ud
it f
ee
s3
7,5
95
37
,59
54
8,8
25
Pu
blic
Se
cto
r A
ud
it A
pp
oin
tme
nts
Ltd
(P
SA
A)
ha
s p
ub
lish
ed
th
e f
ee
sca
le f
or
the
au
dit
of
the
20
18
/19
acc
ou
nts
of
op
ted
-in
pri
nci
pa
l lo
cal g
ove
rnm
en
t a
nd
po
lice
bo
die
s.
Th
is is
de
fin
ed
as
the
fe
e r
eq
uir
ed
by
au
dit
ors
to
me
et
sta
tuto
ry r
esp
on
sib
ilit
ies
un
de
r th
e L
oca
l A
ud
it a
nd
Acc
ou
nta
bilit
y A
ct 2
01
4 i
n a
cco
rda
nce
wit
h t
he
re
qu
ire
me
nts
o
f th
e C
od
e o
f A
ud
it P
ract
ice
an
d s
up
po
rtin
g g
uid
an
ce p
ub
lish
ed
by
th
e N
ati
on
al
Au
dit
Off
ice
, th
e f
ina
nci
al
rep
ort
ing
re
qu
ire
me
nts
se
t o
ut
in t
he
Co
de
of
Pra
ctic
e o
n
Lo
cal A
uth
ori
ty A
cco
un
tin
g p
ub
lish
ed
by
CIP
FA
/LA
SA
AC
, a
nd
th
e p
rofe
ssio
na
l st
an
da
rds
ap
plica
ble
to
au
dit
ors
’ w
ork
.
A b
rea
kd
ow
n o
f o
ur
fee
s is
sh
ow
n in
th
e t
ab
le b
elo
w.
All f
ees
exclu
de
VA
T
No
te 1
–T
he
fin
al fe
e f
or
20
17
/18
is
still su
bje
ct t
o a
pp
rov
al
by
th
e P
ub
lic
Se
cto
r A
ud
it A
pp
oin
tme
nts
(P
SA
A L
td)
follo
win
g t
he
su
bm
issi
on
of
a s
cale
fe
e v
ari
ati
on
of
£9
,95
0 f
or
the
ad
dit
ion
al
au
dit
pro
ced
ure
s re
qu
ire
d d
uri
ng
th
at
au
dit
. T
he
ori
gin
al
sca
le f
ee
s h
av
e b
ee
n s
ho
wn
in
th
e t
ab
le a
bo
ve
.
In a
dd
itio
n,
the
ag
ree
d f
ee
pre
sen
ted
is
ba
sed
on
th
e f
ollo
win
g a
ssu
mp
tio
ns:
►O
ffic
ers
me
eti
ng
th
e a
gre
ed
tim
eta
ble
of
de
liv
era
ble
s;►
Ou
r a
cco
un
ts o
pin
ion
an
d v
alu
e f
or
mo
ne
y c
on
clu
sio
n b
ein
g u
nq
ua
lifi
ed
;►
Ap
pro
pri
ate
qu
ality
of
do
cum
en
tati
on
is
pro
vid
ed
; a
nd
►T
he
PC
C a
nd
CC
ha
ve
an
eff
ect
ive
co
ntr
ol
en
vir
on
me
nt.
If a
ny
of
the
ab
ove
ass
um
pti
on
s p
rov
e t
o b
e u
nfo
un
de
d,
we
will se
ek a
va
ria
tio
n t
o t
he
ag
ree
d f
ee
. T
his
will b
e d
iscu
sse
d w
ith
ma
na
ge
me
nt
in
ad
va
nce
. A
ny
va
ria
tio
ns
to t
he
au
dit
fe
e n
ee
d t
o b
e a
pp
rove
d b
y P
SA
A.
Fe
es
for
the
au
dit
or’
s co
nsi
de
rati
on
of
corr
esp
on
de
nce
fro
m t
he
pu
blic
an
d
form
al o
bje
ctio
ns
will b
e c
ha
rge
d i
n a
dd
itio
n t
o t
he
sca
le f
ee
.
48
33
Ou
r R
ep
ort
ing
to
yo
u
Re
qu
ire
d c
om
mu
nic
ati
on
sW
ha
t is
re
po
rte
d?
Wh
en
an
d w
he
re
Te
rms
of
en
ga
ge
me
nt
Co
nfi
rma
tio
n b
y t
he
PC
Ca
nd
CC
of
acc
ep
tan
ce o
f te
rms
of
en
ga
ge
me
nt
as
wri
tte
n i
n t
he
e
ng
ag
em
en
t le
tte
r si
gn
ed
by
bo
th p
art
ies.
Th
e s
tate
me
nt
of
resp
on
sib
ilit
ies
serv
es
as
the
fo
rma
l te
rms
of
en
ga
ge
me
nt
be
twe
en
th
e
PS
AA
’s a
pp
oin
ted
au
dit
ors
an
d a
ud
ite
d b
od
ies.
Ou
r re
spo
nsi
bilit
ies
Re
min
de
r o
f o
ur
resp
on
sib
ilit
ies
as
set
ou
t in
th
e e
ng
ag
em
en
t le
tte
rT
he
sta
tem
en
t o
f re
spo
nsi
bilit
ies
serv
es
as
the
fo
rma
l te
rms
of
en
ga
ge
me
nt
be
twe
en
th
e
PS
AA
’s a
pp
oin
ted
au
dit
ors
an
d a
ud
ite
d b
od
ies.
Pla
nn
ing
an
d a
ud
it
ap
pro
ach
C
om
mu
nic
ati
on
of
the
pla
nn
ed
sco
pe
an
d t
imin
g o
f th
e a
ud
it,
an
y lim
ita
tio
ns
an
d t
he
si
gn
ific
an
t ri
sks
ide
nti
fie
d.
Wh
en
co
mm
un
ica
tin
g k
ey
au
dit
ma
tte
rs t
his
in
clu
de
s th
e m
ost
sig
nif
ica
nt
risk
s o
f m
ate
ria
l m
isst
ate
me
nt
(wh
eth
er
or
no
t d
ue
to
fra
ud
) in
clu
din
g t
ho
se t
ha
t h
av
e t
he
gre
ate
st e
ffe
ct o
n
the
ove
rall a
ud
it s
tra
teg
y,
the
allo
cati
on
of
reso
urc
es
in t
he
au
dit
an
d d
ire
ctin
g t
he
eff
ort
s o
f th
e e
ng
ag
em
en
t te
am
Au
dit
Pla
n–
Ja
nu
ary
20
19
Sig
nif
ica
nt
fin
din
gs
fro
m
the
au
dit
•
Ou
r vie
w a
bo
ut
the
sig
nif
ica
nt
qu
alita
tive
asp
ect
s o
f a
cco
un
tin
g p
ract
ice
s in
clu
din
g
acc
ou
nti
ng
po
lici
es,
acc
ou
nti
ng
est
ima
tes
an
d f
ina
nci
al
sta
tem
en
t d
iscl
osu
res
•S
ign
ific
an
t d
iffi
cult
ies,
if a
ny
, e
nco
un
tere
d d
uri
ng
th
e a
ud
it
•S
ign
ific
an
t m
att
ers
, if
an
y,
ari
sin
g f
rom
th
e a
ud
it t
ha
t w
ere
dis
cuss
ed
wit
h m
an
ag
em
en
t
•W
ritt
en
re
pre
sen
tati
on
s th
at
we
are
se
ekin
g
•E
xp
ect
ed
mo
dif
ica
tio
ns
to t
he
au
dit
re
po
rt
•O
the
r m
att
ers
if
an
y,
sig
nif
ica
nt
to t
he
ove
rsig
ht
of
the
fin
an
cia
l re
po
rtin
g p
roce
ss
•F
ind
ing
s a
nd
iss
ue
s re
ga
rdin
g t
he
op
en
ing
ba
lan
ce o
n i
nit
ial a
ud
its
Au
dit
Re
sult
s R
ep
ort
–J
uly
20
19
Ap
pe
nd
ix B
Re
qu
ire
d c
om
mu
nic
ati
on
s w
ith
th
e P
CC
an
d C
CW
e h
av
e d
eta
ile
d t
he
co
mm
un
ica
tio
ns
tha
t w
e m
ust
pro
vid
e t
o t
he
PC
C a
nd
CC
.
49
34
Ap
pe
nd
ix B
Re
qu
ire
d c
om
mu
nic
ati
on
s w
ith
th
e P
CC
an
d C
C (
co
nti
nu
ed
)
Ou
r R
ep
ort
ing
to
yo
u
Re
qu
ire
d c
om
mu
nic
ati
on
sW
ha
t is
re
po
rte
d?
Wh
en
an
d w
he
re
Go
ing
co
nce
rnE
ve
nts
or
con
dit
ion
s id
en
tifi
ed
th
at
ma
y c
ast
sig
nif
ica
nt
do
ub
t o
n t
he
en
tity
’s a
bilit
y t
o
con
tin
ue
as
a g
oin
g c
on
cern
, in
clu
din
g:
•W
he
the
r th
e e
ve
nts
or
con
dit
ion
s co
nst
itu
te a
ma
teri
al u
nce
rta
inty
•W
he
the
r th
e u
se o
f th
e g
oin
g c
on
cern
ass
um
pti
on
is
ap
pro
pri
ate
in
th
e p
rep
ara
tio
n a
nd
p
rese
nta
tio
n o
f th
e f
ina
nci
al st
ate
me
nts
•T
he
ad
eq
ua
cy o
f re
late
d d
iscl
osu
res
in t
he
fin
an
cia
l st
ate
me
nts
Au
dit
Re
sult
s R
ep
ort
–J
uly
20
19
Mis
sta
tem
en
ts•
Un
corr
ect
ed
mis
sta
tem
en
ts a
nd
th
eir
eff
ect
on
ou
r a
ud
it o
pin
ion
, u
nle
ss p
roh
ibit
ed
by
la
w o
r re
gu
lati
on
•T
he
eff
ect
of
un
corr
ect
ed
mis
sta
tem
en
ts r
ela
ted
to
pri
or
pe
rio
ds
•A
re
qu
est
th
at
an
y u
nco
rre
cte
d m
isst
ate
me
nt
be
co
rre
cte
d
•C
orr
ect
ed
mis
sta
tem
en
ts t
ha
t a
re s
ign
ific
an
t
•M
ate
ria
l m
isst
ate
me
nts
co
rre
cte
d b
y m
an
ag
em
en
t
Au
dit
Re
sult
s R
ep
ort
–J
uly
20
19
Fra
ud
•
En
qu
irie
s o
f th
e P
CC
an
d C
Cto
de
term
ine
wh
eth
er
the
y h
av
e k
no
wle
dg
e o
f a
ny
act
ua
l,
susp
ect
ed
or
alle
ge
d f
rau
d a
ffe
ctin
g t
he
en
tity
•A
ny
fra
ud
th
at
we
ha
ve
id
en
tifi
ed
or
info
rma
tio
n w
e h
av
e o
bta
ine
d t
ha
t in
dic
ate
s th
at
a
fra
ud
ma
y e
xis
t
•A
dis
cuss
ion
of
an
y o
the
r m
att
ers
re
late
d t
o f
rau
d
Au
dit
Re
sult
s R
ep
ort
–J
uly
20
19
Re
late
d p
art
ies
•S
ign
ific
an
t m
att
ers
ari
sin
g d
uri
ng
th
e a
ud
it i
n c
on
ne
ctio
n w
ith
th
e e
nti
ty’s
re
late
d p
art
ies
incl
ud
ing
, w
he
n a
pp
lica
ble
:
•N
on
-dis
clo
sure
by
ma
na
ge
me
nt
•In
ap
pro
pri
ate
au
tho
risa
tio
n a
nd
ap
pro
va
l o
f tr
an
sact
ion
s
•D
isa
gre
em
en
t o
ve
r d
iscl
osu
res
•N
on
-co
mp
lia
nce
wit
h la
ws
an
d r
eg
ula
tio
ns
•D
iffi
cult
y in
id
en
tify
ing
th
e p
art
y t
ha
t u
ltim
ate
ly c
on
tro
ls t
he
en
tity
Au
dit
Re
sult
s R
ep
ort
–J
uly
20
19
50
35
Ap
pe
nd
ix B
Re
qu
ire
d c
om
mu
nic
ati
on
s w
ith
th
e P
CC
an
d C
C (
co
nti
nu
ed
)
Ou
r R
ep
ort
ing
to
yo
u
Re
qu
ire
d c
om
mu
nic
ati
on
sW
ha
t is
re
po
rte
d?
Wh
en
an
d w
he
re
Ind
ep
en
de
nce
C
om
mu
nic
ati
on
of
all s
ign
ific
an
t fa
cts
an
d m
att
ers
th
at
be
ar
on
EY
’s,
an
d a
ll in
div
idu
als
in
vo
lve
d i
n t
he
au
dit
, o
bje
ctiv
ity
an
d i
nd
ep
en
de
nce
Co
mm
un
ica
tio
n o
f ke
y e
lem
en
ts o
f th
e a
ud
it e
ng
ag
em
en
t p
art
ne
r’s
con
sid
era
tio
n o
f in
de
pe
nd
en
ce a
nd
ob
ject
ivit
y s
uch
as:
•T
he
pri
nci
pa
l th
rea
ts
•S
afe
gu
ard
s a
do
pte
d a
nd
th
eir
eff
ect
ive
ne
ss
•A
n o
ve
rall a
sse
ssm
en
t o
f th
rea
ts a
nd
sa
feg
ua
rds
•In
form
ati
on
ab
ou
t th
e g
en
era
l p
olici
es
an
d p
roce
ss w
ith
in t
he
fir
m t
o m
ain
tain
ob
ject
ivit
y
an
d i
nd
ep
en
de
nce
Au
dit
Pla
n –
Ja
nu
ary
20
19
Au
dit
Re
sult
s R
ep
ort
–J
uly
20
19
Exte
rna
l co
nfi
rma
tio
ns
•M
an
ag
em
en
t’s
refu
sal
for
us
to r
eq
ue
st c
on
firm
ati
on
s
•In
ab
ilit
y t
o o
bta
in r
ele
va
nt
an
d r
elia
ble
au
dit
ev
ide
nce
fro
m o
the
r p
roce
du
res
Au
dit
Re
sult
s R
ep
ort
–J
uly
20
19
Co
nsi
de
rati
on
of
law
s a
nd
re
gu
lati
on
s •
Au
dit
fin
din
gs
reg
ard
ing
no
n-c
om
plia
nce
wh
ere
th
e n
on
-co
mp
lia
nce
is
ma
teri
al a
nd
b
elie
ve
d t
o b
e i
nte
nti
on
al.
Th
is c
om
mu
nic
ati
on
is
sub
ject
to
co
mp
lia
nce
wit
h le
gis
lati
on
o
n t
ipp
ing
off
•E
nq
uir
y o
f th
e P
CC
an
d C
Cin
to p
oss
ible
in
sta
nce
s o
f n
on
-co
mp
lia
nce
wit
h la
ws
an
d
reg
ula
tio
ns
tha
t m
ay
ha
ve
a m
ate
ria
l e
ffe
ct o
n t
he
fin
an
cia
l st
ate
me
nts
an
d t
ha
t th
e P
CC
an
d C
Cm
ay
be
aw
are
of
Au
dit
Re
sult
s R
ep
ort
–J
uly
20
19
Inte
rna
lco
ntr
ols
•S
ign
ific
an
t d
efi
cie
nci
es
in i
nte
rna
l co
ntr
ols
id
en
tifi
ed
du
rin
g t
he
au
dit
Au
dit
Re
sult
s R
ep
ort
–J
uly
20
19
51
36
Ap
pe
nd
ix B
Re
qu
ire
d c
om
mu
nic
ati
on
s w
ith
th
e P
CC
an
d C
C (
co
nti
nu
ed
)
Ou
r R
ep
ort
ing
to
yo
u
Re
qu
ire
d c
om
mu
nic
ati
on
sW
ha
t is
re
po
rte
d?
Wh
en
an
d w
he
re
Gro
up
au
dit
s•
An
ove
rvie
w o
f th
e t
yp
e o
f w
ork
to
be
pe
rfo
rme
d o
n t
he
fin
an
cia
l in
form
ati
on
of
the
co
mp
on
en
ts
•A
n o
ve
rvie
w o
f th
e n
atu
re o
f th
e g
rou
p a
ud
it t
ea
m’s
pla
nn
ed
in
vo
lve
me
nt
in t
he
wo
rk t
o
be
pe
rfo
rme
d b
y t
he
co
mp
on
en
t a
ud
ito
rs o
n t
he
fin
an
cia
l in
form
ati
on
of
sig
nif
ica
nt
com
po
ne
nts
•In
sta
nce
s w
he
re t
he
gro
up
au
dit
te
am
’s e
va
lua
tio
n o
f th
e w
ork
of
a c
om
po
ne
nt
au
dit
or
ga
ve
ris
e t
o a
co
nce
rn a
bo
ut
the
qu
ality
of
tha
t a
ud
ito
r’s
wo
rk
•A
ny
lim
ita
tio
ns
on
th
e g
rou
p a
ud
it,
for
exa
mp
le,
wh
ere
th
e g
rou
p e
ng
ag
em
en
t te
am
’s
acc
ess
to
in
form
ati
on
ma
y h
av
e b
ee
n r
est
rict
ed
•F
rau
d o
r su
spe
cte
d f
rau
d in
vo
lvin
g g
rou
p m
an
ag
em
en
t, c
om
po
ne
nt
ma
na
ge
me
nt,
e
mp
loy
ee
s w
ho
ha
ve
sig
nif
ica
nt
role
s in
gro
up
-wid
e c
on
tro
ls o
r o
the
rs w
he
re t
he
fra
ud
re
sult
ed
in
a m
ate
ria
l m
isst
ate
me
nt
of
the
gro
up
fin
an
cia
l st
ate
me
nts
Au
dit
Pla
n –
Ja
nu
ary
20
19
Au
dit
Re
sult
s R
ep
ort
–J
uly
20
19
Re
pre
sen
tati
on
sW
ritt
en
re
pre
sen
tati
on
s w
e a
re r
eq
ue
stin
g f
rom
ma
na
ge
me
nt
an
d/o
r th
ose
ch
arg
ed
wit
h
go
ve
rna
nce
Au
dit
Re
sult
s R
ep
ort
–J
uly
20
19
Ma
teri
al in
con
sist
en
cie
s a
nd
mis
sta
tem
en
tsM
ate
ria
l in
con
sist
en
cie
s o
r m
isst
ate
me
nts
of
fact
id
en
tifi
ed
in
oth
er
info
rma
tio
n w
hic
h
ma
na
ge
me
nt
ha
s re
fuse
d t
o r
evis
eA
ud
it R
esu
lts
Re
po
rt –
Ju
ly 2
01
9
Au
dit
ors
re
po
rt•
Ke
y a
ud
it m
att
ers
th
at
we
will in
clu
de
in
ou
r a
ud
ito
r’s
rep
ort
•A
ny
cir
cum
sta
nce
s id
en
tifi
ed
th
at
aff
ect
th
e f
orm
an
d c
on
ten
t o
f o
ur
au
dit
or’
s re
po
rt
Au
dit
Re
sult
s R
ep
ort
–J
uly
20
19
Fe
e R
ep
ort
ing
•B
rea
kd
ow
n o
f fe
e in
form
ati
on
wh
en
th
e
au
dit
pla
n i
s a
gre
ed
•B
rea
kd
ow
n o
f fe
e in
form
ati
on
at
the
co
mp
leti
on
of
the
au
dit
•A
ny
no
n-a
ud
it w
ork
Au
dit
Pla
n –
Ja
nu
ary
20
19
Au
dit
Re
sult
s R
ep
ort
–J
uly
20
19
An
nu
al
Au
dit
Le
tte
r –
Se
pte
mb
er
20
19
52
37
Ap
pe
nd
ix C
Ad
dit
ion
al a
ud
it in
form
ati
on
Ou
r re
spo
nsi
bilit
ies
re
qu
ire
d
by
au
dit
ing
sta
nd
ard
s•
Ide
nti
fyin
g a
nd
ass
ess
ing
th
e r
isks
of
ma
teri
al
mis
sta
tem
en
t o
f th
e f
ina
nci
al st
ate
me
nts
, w
he
the
r d
ue
to
fra
ud
or
err
or,
de
sig
n a
nd
p
erf
orm
au
dit
pro
ced
ure
s re
spo
nsi
ve
to
th
ose
ris
ks,
an
d o
bta
in a
ud
it e
vid
en
ce t
ha
t is
su
ffic
ien
t a
nd
ap
pro
pri
ate
to
pro
vid
e a
ba
sis
for
ou
r o
pin
ion
.
•O
bta
inin
g a
n u
nd
ers
tan
din
g o
f in
tern
al
con
tro
l re
leva
nt
to t
he
au
dit
in
ord
er
to d
esi
gn
au
dit
pro
ced
ure
s th
at
are
ap
pro
pri
ate
inth
e
circ
um
sta
nce
s, b
ut
no
t fo
r th
e p
urp
ose
of
exp
ress
ing
an
op
inio
n o
n t
he
eff
ect
ive
ne
ss o
f th
e G
rou
p’s
in
tern
al
con
tro
l.
•E
va
lua
tin
g t
he
ap
pro
pri
ate
ne
ss o
f a
cco
un
tin
g p
olici
es
use
d a
nd
th
e r
ea
son
ab
len
ess
of
acc
ou
nti
ng
est
ima
tes
an
d r
ela
ted
dis
clo
su
res
ma
de
by
ma
na
ge
me
nt.
•C
on
clu
din
g o
n t
he
ap
pro
pri
ate
ne
ss o
f m
an
ag
em
en
t’s
use
of
the
go
ing
co
nce
rn b
asi
s o
f a
cco
un
tin
g.
•E
va
lua
tin
g t
he
ove
rall p
rese
nta
tio
n,
stru
ctu
re a
nd
co
nte
nt
of
the
fin
an
cia
l st
ate
me
nts
, in
clu
din
g t
he
dis
clo
sure
s, a
nd
wh
eth
er
the
fi
na
nci
al
sta
tem
en
ts r
ep
rese
nt
the
un
de
rly
ing
tra
nsa
ctio
ns
an
d e
ve
nts
in
a m
an
ne
r th
at
ach
iev
es
fair
pre
sen
tati
on
.
•O
bta
inin
g s
uff
icie
nt
ap
pro
pri
ate
au
dit
ev
ide
nce
re
ga
rdin
g t
he
fin
an
cia
l in
form
ati
on
of
the
en
titi
es
or
act
ivit
ies
wit
hin
th
e G
rou
p t
o
exp
ress
an
op
inio
n o
n t
he
co
nso
lid
ate
d f
ina
nci
al st
ate
me
nts
. R
ea
din
g o
the
r in
form
ati
on
co
nta
ine
d i
n t
he
fin
an
cia
l st
ate
me
nts
,th
e
Jo
int
Ind
ep
en
de
nt
Au
dit
Co
mm
itte
e r
ep
ort
ing
ap
pro
pri
ate
ly a
dd
ress
es
ma
tte
rs c
om
mu
nic
ate
d b
y u
s to
th
e J
oin
t In
de
pe
nd
en
tA
ud
it
Co
mm
itte
e a
nd
re
po
rtin
g w
he
the
r it
is
ma
teri
ally
in
con
sist
en
t w
ith
ou
r u
nd
ers
tan
din
g a
nd
th
e f
ina
nci
al st
ate
me
nts
; a
nd
•M
ain
tain
ing
au
dit
or
ind
ep
en
de
nce
.
Oth
er
requir
ed p
rocedure
s d
uri
ng t
he c
ours
e o
f th
e a
udit
In a
dd
itio
n t
o t
he
ke
y a
rea
s o
f a
ud
it f
ocu
s o
utl
ine
d i
n s
ect
ion
2,
we
ha
ve
to
pe
rfo
rm o
the
r p
roce
du
res
as
req
uir
ed
by
au
dit
ing
, e
thic
al a
nd
in
de
pe
nd
en
ce s
tan
da
rds
an
d
oth
er
reg
ula
tio
ns.
We
ou
tlin
e t
he
pro
ced
ure
s b
elo
w t
ha
t w
e w
ill u
nd
ert
ake
du
rin
g t
he
co
urs
e o
f o
ur
au
dit
.
53
38
Ap
pe
nd
ix D
Ad
dit
ion
al a
ud
it in
form
ati
on
(co
nti
nu
ed
)
Purp
ose a
nd e
valu
ati
on o
f m
ate
riality
Fo
r th
e p
urp
ose
s o
f d
ete
rmin
ing
wh
eth
er
the
acc
ou
nts
are
fre
e f
rom
ma
teri
al e
rro
r, w
e d
efi
ne
ma
teri
ality
as
the
ma
gn
itu
de
of
an
om
issi
on
or
mis
sta
tem
en
t th
at,
in
div
idu
ally
or
in t
he
ag
gre
ga
te,
in lig
ht
of
the
su
rro
un
din
g c
ircu
mst
an
ces,
co
uld
re
aso
na
bly
be
exp
ect
ed
to
in
flu
en
ce t
he
ec
on
om
ic d
eci
sio
ns
of
the
use
rs o
f th
e f
ina
nci
al
sta
tem
en
ts.
Ou
r e
va
lua
tio
n o
f it
re
qu
ire
s p
rofe
ssio
na
l ju
dg
em
en
t a
nd
ne
cess
ari
ly t
ake
s in
to a
cco
un
t q
ua
lita
tive
as
we
ll a
s q
ua
nti
tati
ve
co
nsi
de
rati
on
s im
plici
t in
th
e
de
fin
itio
n.
We
wo
uld
be
ha
pp
y t
o d
iscu
ss w
ith
yo
u y
ou
r e
xp
ect
ati
on
s re
ga
rdin
g o
ur
de
tect
ion
of
mis
sta
tem
en
ts i
n t
he
fin
an
cia
lst
ate
me
nts
.
Ma
teri
ality
de
term
ine
s:
•T
he
lo
cati
on
s a
t w
hic
h w
e c
on
du
ct a
ud
it p
roce
du
res
to s
up
po
rt t
he
op
inio
n g
ive
n o
n t
he
Gro
up
fin
an
cia
l st
ate
me
nts
; a
nd
•T
he
le
ve
l o
f w
ork
pe
rfo
rme
d o
n i
nd
ivid
ua
l a
cco
un
t b
ala
nce
s a
nd
fin
an
cia
l st
ate
me
nt
dis
clo
sure
s.
Th
e a
mo
un
t w
e c
on
sid
er
ma
teri
al a
t th
e e
nd
of
the
au
dit
ma
y d
iffe
r fr
om
ou
r in
itia
l d
ete
rmin
ati
on
. A
t th
is s
tag
e,
ho
we
ve
r, it
isn
ot
fea
sib
le t
o a
nti
cip
ate
all o
f th
e
circ
um
sta
nce
s th
at
ma
y u
ltim
ate
ly in
flu
en
ce o
ur
jud
ge
me
nt
ab
ou
t m
ate
ria
lity
. A
t th
e e
nd
of
the
au
dit
we
will fo
rm o
ur
fin
al o
pin
ion
by
re
fere
nce
to
all m
att
ers
th
at
cou
ld
be
sig
nif
ica
nt
to u
sers
of
the
acc
ou
nts
, in
clu
din
g t
he
to
tal e
ffe
ct o
f th
e a
ud
it m
isst
ate
me
nts
we
id
en
tify
, a
nd
ou
r e
va
lua
tio
n o
f m
ate
ria
lity
at
tha
t d
ate
.
54
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
AUD
IT C
OM
MIT
TEE
15 J
anua
ry 2
019
Agen
da It
em 7
A 20
18/1
9
Page
4
Po
lice
and
Cri
me
Com
mis
sion
ers
for
Nor
folk
and
Suf
folk
an
d C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Aud
it Pr
ogre
ss R
epor
t – N
orfo
lk
2018
/19
55
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
AUD
IT C
OM
MIT
TEE
15 J
anua
ry 2
019
Agen
da It
em 7
A 20
18/1
9
Page
5
INTR
ODU
CTIO
N
1.
This
sum
mar
y re
port
prov
ides
an
upda
te o
n th
e pr
ogre
ss o
f ou
r w
ork
at t
he P
olic
e an
d C
rime
Com
mis
sion
ers
for
Nor
folk
and
Suf
folk
and
Chi
ef C
onst
able
s of
N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s as
at
8th J
anua
ry 2
019.
The
rep
ort
is b
ased
on
inte
rnal
aud
it w
ork
carri
ed o
ut b
y TI
AA
and
man
agem
ent
repr
esen
tatio
ns t
hat
have
bee
n re
ceive
d du
ring
the
perio
d si
nce
our
last
pro
gres
s re
port.
PR
OG
RESS
AG
AINS
T TH
E 20
18/1
9 AN
NUAL
PLA
N
2.
Our
pro
gres
s ag
ains
t the
Ann
ual P
lan
for
2018
/19
is s
et o
ut in
App
endi
x A
. The
res
ults
of t
hese
revie
ws
are
sum
mar
ised
at A
ppen
dix
B.
AUDI
TS C
OM
PLET
ED S
INCE
THE
LAS
T RE
PORT
TO
CO
MM
ITTE
E
5.
The
tabl
e be
low
set
s ou
t det
ails
of a
udits
fina
lised
sin
ce th
e pr
evio
us m
eetin
g of
the
Aud
it C
omm
ittee
.
Key
Date
s Nu
mbe
r of
Re
com
men
datio
ns
Revi
ew
Eval
uatio
n Dr
aft i
ssue
d Re
spon
ses
Rece
ived
Fi
nal i
ssue
d 1
2 3
OE
Enac
t Rep
lace
men
t Pr
ojec
t (NS
C190
6)
Reas
onab
le
12/1
1/20
18
23/1
1/20
18
23/1
1/20
18
0 2
1 1
GDPR
(NS
C190
7)
N/A
15/0
6/20
18
18/1
2/20
18
19/1
2/20
18
0 2
2 3
Capi
tal (
NSC1
910)
Re
ason
able
23
/10/
2018
07
/11/
2018
12
/11/
2018
0
1 2
0
Allo
wan
ces
(NSC
1912
) Li
mite
d 12
/07/
2018
09
/11/
2018
14
/11/
2018
1
2 0
0
Vetti
ng (N
SC19
17)
Reas
onab
le
29/0
5/20
18
13/1
1/20
18
22/1
1/20
18
0 4
2 0
56
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
AUD
IT C
OM
MIT
TEE
15 J
anua
ry 2
019
Agen
da It
em 7
A 20
18/1
9
Page
6
Tran
spor
t Pr
ocur
emen
t (N
SC19
19)
Reas
onab
le
20/1
2/20
18
04/0
1/20
19
04/0
1/20
19
0 1
1 0
Esta
tes
Stra
tegy
and
Po
licie
s (N
SC19
21)
Reas
onab
le
31/1
0/20
18
13/1
1/20
18
13/1
1/20
18
0 1
1 0
Purc
hase
Car
ds
(NSC
1923
) Re
ason
able
04
/01/
2019
04
/01/
2019
04
/01/
2019
0
0 0
0
C
opie
s of
the
fin
alis
ed r
epor
ts a
re a
vaila
ble
to A
udit
Com
mitt
ee M
embe
rs o
n re
ques
t. Th
e de
tails
for
Nor
folk
onl
y re
ports
will
onl
y be
inc
lude
d in
the
Nor
folk
pr
ogre
ss r
epor
t. CH
ANG
ES T
O T
HE A
NNUA
L PL
AN 2
018/
19
6.
Th
ere
has
been
the
follo
win
g ch
ange
s m
ade
to th
e an
nual
pla
n si
nce
the
last
mee
ting:
MO
PI
– a
deta
iled
follo
w u
p w
as p
ropo
sed
in y
ear,
a re
port
on p
rogr
ess
will
ins
tead
be
rece
ived
by m
anag
emen
t an
d a
follo
w u
p w
ith p
ositi
on s
tate
men
t un
derta
ken
in 2
019/
20
Tran
sfor
mat
ion
with
Bus
ines
s C
ases
– C
DC
are
goi
ng t
hrou
gh r
estru
ctur
e, w
hich
will
con
tinue
thr
ough
out
quar
ter
four
and
int
o 20
19/2
0. T
he a
udit
will
be
mov
ed t
o 20
19/2
0 to
revie
w o
n co
mpl
etio
n of
the
rest
ruct
ure.
FRAU
DS/IR
REG
ULA
RITI
ES
7.
We
regu
larly
lia
ise
with
PS
D re
gard
ing
any
wor
k st
ream
s th
at m
ay b
e re
leva
nt f
or in
tern
al a
udit.
LIAI
SON
8.
Liai
son
is u
nder
take
n w
ith th
e fo
llow
ing:
Liai
son
with
the
Chi
ef F
inan
ce O
ffice
rs:
Reg
ular
pro
gres
s m
eetin
gs a
re h
eld
with
the
Chi
ef F
inan
ce O
ffice
rs.
Liai
son
with
PS
D: R
egul
ar m
eetin
gs a
re h
eld
with
PS
D d
urin
g th
e ye
ar.
Liai
son
with
Ris
k M
anag
emen
t: In
crea
sed
liais
on h
as c
omm
ence
d, t
o di
rect
ly li
nk in
tern
al a
udit
with
risk
man
agem
ent.
Liai
son
with
Ext
erna
l A
udit:
We
have
lia
ised
with
EY
dur
ing
the
year
and
kep
t th
em i
nfor
med
of
our
wor
k an
d w
ill m
ake
avai
labl
e to
the
m a
ll fin
al a
udit
repo
rts.
57
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
AUD
IT C
OM
MIT
TEE
15 J
anua
ry 2
019
Agen
da It
em 7
A 20
18/1
9
Page
7
PRO
GRE
SS A
CTIO
NING
PRI
ORI
TY 1
(URG
ENT
and
NOT
APPR
OVE
D RE
COM
MEN
DAT
IONS
)
9.
It is
not
ed t
hat
ther
e ar
e a
num
ber
of l
imite
d as
sura
nce
repo
rts i
ssue
d, w
here
ele
men
ts o
f th
e sy
stem
hav
e w
arra
nted
a l
imite
d as
sura
nce
due
eith
er t
o no
n-co
mpl
ianc
e w
ith s
tatu
tory
req
uire
men
ts o
r in
tern
al r
equi
rem
ents
, ho
wev
er i
t is
als
o no
ted
that
pro
gres
s is
bei
ng m
ade
by m
anag
emen
t at
the
tim
e of
the
aud
it to
ad
dres
s th
e co
ntro
l wea
knes
ses
and
this
pro
gres
s is
take
n in
to a
ccou
nt in
the
over
all
annu
al o
pini
on.
10.
We
have
mad
e th
e fo
llow
ing
urge
nt r
ecom
men
datio
ns (
i.e. f
unda
men
tal
cont
rol i
ssue
s) s
ince
the
prev
ious
Pro
gres
s R
epor
t:
Allo
wan
ces
- Th
e po
licy
and
proc
esse
s fo
r do
g ha
ndle
r al
low
ance
s an
d as
soci
ated
exp
ense
s to
be
clar
ified
, ad
opte
d w
ithin
the
pol
icy,
com
mu
nica
ted
to
rele
vant
sta
ff/of
ficer
s an
d ac
cura
te r
ecor
ds m
aint
aine
d.
11.
We
have
mad
e no
rec
omm
enda
tions
whi
ch h
ave
not b
een
appr
oved
by
man
agem
ent
sinc
e th
e pr
evio
us P
rogr
ess
Rep
ort.
RE
SPO
NSIB
ILIT
Y/DI
SCLA
IMER
12
. Th
is r
epor
t ha
s be
en p
repa
red
sole
ly f
or m
anag
emen
t's u
se a
nd m
ust
not
be r
ecite
d or
ref
erre
d to
in
who
le o
r in
par
t to
thi
rd p
artie
s w
ithou
t ou
r pr
ior
writ
ten
cons
ent.
The
mat
ters
rai
sed
in t
his
repo
rt no
t ne
cess
arily
a c
ompr
ehen
sive
sta
tem
ent
of a
ll th
e w
eakn
esse
s th
at e
xist
or
all t
he im
prov
eme
nts
that
mig
ht b
e m
ade.
N
o re
spon
sibi
lity
to a
ny t
hird
par
ty is
acc
epte
d as
the
rep
ort
has
not
been
pre
pare
d, a
nd is
not
inte
nded
, fo
r an
y ot
her
purp
ose.
TIA
A n
eith
er o
wes
nor
acc
epts
any
du
ty o
f ca
re t
o an
y ot
her
party
who
may
rec
eive
thi
s re
port
and
spec
ifica
lly d
iscl
aim
s an
y lia
bilit
y fo
r lo
ss,
dam
age
or e
xpe
nse
of w
hats
oeve
r na
ture
, w
hich
is
caus
ed b
y th
eir r
elia
nce
on o
ur r
epor
t.
58
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
AUD
IT C
OM
MIT
TEE
15 J
anua
ry 2
019
Agen
da It
em 7
A 20
18/1
9
Page
8
App
endi
x A
Prog
ress
aga
inst
the
Ann
ual P
lan
for
2018
/19
Syst
em
Plan
ned
Qua
rter
Pl
anne
d Da
ys
Act
ual
Days
to
date
C
urre
nt S
tatu
s A
udit
Com
mitt
ee
Repo
rtin
g A
ssur
ance
C
omm
ents
2018
/19
Plan
GDP
R (N
SC19
07)
1 18
18
Fi
nal r
epor
t iss
ued
Janu
ary
2019
N/
A
Adv
isor
y re
port
Fixe
d A
sset
s (N
SC19
11)
1 10
10
Fi
nal r
epor
t iss
ued
Oct
ober
201
8 Su
bsta
ntia
l
Allo
wan
ces
(NSC
1912
) 1
14
14
Fina
l rep
ort i
ssue
d Ja
nuar
y 20
19
Lim
ited
Duty
Man
agem
ent S
yste
m (1
916)
1
14
14
Fina
l rep
ort i
ssue
d O
ctob
er 2
018
Lim
ited
Vet
ting
(NSC
1917
) 1
10
10
Fina
l rep
ort i
ssue
d Ja
nuar
y 20
19
Reas
onab
le
Stat
ions
, inc
ludi
ng b
uild
ing
acce
ss a
nd
vehi
cle
secu
rity
(NSC
1922
) 1
14
14
Fina
l Rep
ort i
ssue
d Ju
ly 2
018
Reas
onab
le
Proc
eeds
of C
rime
(NSC
1927
) 1
10
10
Draf
t rep
ort i
ssue
d
Lone
Wor
king
(NSC
1929
) 1
10
10
Fina
l rep
ort i
ssue
d O
ctob
er 2
018
Reas
onab
le
Stra
tegi
c C
ontr
ol, C
orpo
rate
Gov
erna
nce
and
Whi
stle
blow
ing
(NSC
1901
) 2
10
10
Draf
t rep
ort i
ssue
d
Cap
ital P
rogr
amm
e (N
SC19
10)
2 10
10
Fi
nal r
epor
t iss
ued
Janu
ary
2019
Re
ason
able
Esta
blis
hmen
t, C
apac
ity, R
ecru
itmen
t and
Re
tent
ion
(NSC
1915
) 2
15
15
Draf
t rep
ort i
ssue
d
Enac
t Rep
lace
men
t Pro
ject
(NSC
1906
) 2
12
12
Fina
l rep
ort i
ssue
d Ja
nuar
y 20
19
Reas
onab
le
Web
site
Con
tent
/ CA
D G
razi
ng (N
SC19
08)
2 12
In p
rogr
ess
59
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
AUD
IT C
OM
MIT
TEE
15 J
anua
ry 2
019
Agen
da It
em 7
A 20
18/1
9
Page
9
Syst
em
Plan
ned
Qua
rter
Pl
anne
d Da
ys
Act
ual
Days
to
date
C
urre
nt S
tatu
s A
udit
Com
mitt
ee
Repo
rtin
g A
ssur
ance
C
omm
ents
Esta
tes
Stra
tegy
and
Pol
icie
s (N
SC19
21)
2 6
6 Fi
nal r
epor
t iss
ued
Janu
ary
2019
Re
ason
able
Ethi
cal S
tand
ards
(Rel
atio
nshi
ps C
ondu
ct)
(NSC
1930
) 1-
2 10
10
Dr
aft r
epor
t iss
ued
Risk
Man
agem
ent –
Em
bedd
ing/
Deve
lopm
ent
(NSC
1903
) 1-
3 12
In p
rogr
ess
Wor
king
with
man
agem
ent t
o m
onito
r em
bedd
ing,
rev
iew
in Q
4
Com
mis
sion
ers
Gra
nts
(NSC
1904
) 2
18
18
Draf
t rep
ort i
ssue
d
ERP
Disa
ster
Rec
over
y (N
SC19
13)
3 12
In p
rogr
ess
Tran
spor
t Str
ateg
y (NS
C19
18)
2 6
6 Dr
aft r
epor
t
Dr
aft r
epor
t pre
pare
d, to
be
issu
ed
Tran
spor
t Pro
cure
men
t (NS
C19
19)
2 9
9 Fi
nal r
epor
t iss
ued
Janu
ary
2019
Re
ason
able
Purc
hase
Car
ds (N
NSC
1923
) Nor
folk
onl
y 3
6 6
Fina
l rep
ort i
ssue
d Ja
nuar
y 20
19
Reas
onab
le
Con
trol
Roo
m (N
SC19
24) N
orfo
lk o
nly
3 14
Fiel
dwor
k co
mpl
ete
Clo
se o
ut m
eetin
g 8/
1/19
Con
trol
Roo
m (N
SC19
25) S
uffo
lk o
nly
3 14
Fiel
dwor
k co
mpl
ete
Clo
se o
ut m
eetin
g 8/
1/19
Key
Fina
ncia
l Sys
tem
s (N
SC19
09)
4 30
In p
rogr
ess
Tele
mat
ics
and
Fuel
Usa
ge (N
SC19
20)
4 16
Sche
dule
d
Reco
vere
d Pr
oper
ty (N
SC19
28)
4 10
Sche
dule
d
Tran
sfor
mat
ion
& S
trat
egic
Pla
nnin
g, w
ith
Busi
ness
Cas
es (N
SC19
02)
4 12
Can
celle
d
M
oved
to 2
019/
20
MoP
I Pro
ject
Impl
emen
tatio
n (N
SC19
14)
3 4
C
ance
lled
Mov
ed to
201
9/20
Cus
tody
Adm
inis
tratio
n 1
--
C
ance
lled
HMIC
insp
ectio
n un
dert
aken
Cyb
er S
ecur
ity –
Mat
urity
Ass
essm
ent
(NSC
1905
) 2
Can
celle
d
M
oved
to 2
019/
20
60
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
AUD
IT C
OM
MIT
TEE
15 J
anua
ry 2
019
Agen
da It
em 7
A 20
18/1
9
Page
10
Syst
em
Plan
ned
Qua
rter
Pl
anne
d Da
ys
Act
ual
Days
to
date
C
urre
nt S
tatu
s A
udit
Com
mitt
ee
Repo
rtin
g A
ssur
ance
C
omm
ents
Reco
rds
Man
agem
ent (
NSC
1913
) 3
Can
celle
d
Re
plac
ed w
ith E
RP D
isas
ter
Reco
very
Follo
w u
p of
pre
viou
s re
com
men
datio
ns
1-4
12
3 O
ngoi
ng
Man
agem
ent
1-4
20
4 O
ngoi
ng
Con
tinge
ncy
b/fw
d
58
Con
tinge
ncy
(c/fw
d)
(3
4)
Poss
ible
Loc
al C
ount
er F
raud
day
s
Tota
l Day
s Pl
anne
d
384
Ann
ual P
lan
Days
330
KE
Y:
=
To b
e co
mm
ence
d
= S
ite w
ork
com
men
ced
=
Dra
ft re
port
issu
ed
=
Fina
l rep
ort i
ssue
d
61
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
11
Ap
pend
ix B
Sum
mar
ies
of F
inal
ised
Aud
it R
epor
ts is
sued
sin
ce th
e la
st re
port
Au
dit R
epor
t: En
act P
roje
ct R
epla
cem
ent (
NSC
1906
)
Rep
ort:
Nov
embe
r 201
8
SCO
PE
A r
evie
w o
f ar
rang
emen
ts i
n pl
ace
over
the
Man
agem
ent
and
Gov
erna
nce
of t
he E
nact
rep
lace
men
t pr
ojec
t w
as r
eque
sted
to
help
pro
vide
assu
ranc
e ov
er t
he f
orce
s’ p
roce
dure
s, c
ontro
ls a
nd r
ecor
ds r
elat
ing
to t
his
proj
ect,
spec
ifica
lly:
Pro
ject
D
ocum
enta
tion,
G
over
nanc
e,
Cha
nge
Man
agem
ent
and
Acc
epta
nce
proc
esse
s. A
cros
s N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s.
MAT
ERIA
LITY
The
deve
lopm
ent
of a
rep
lace
men
t fo
r th
e E
nact
sys
tem
in t
ime
to r
epla
ce
it w
hen
supp
ort
for
it en
ds is
crit
ical
for
the
seam
less
pro
visio
n of
bus
ines
s cr
itica
l adm
inis
tratio
n se
rvic
es.
KEY
FIND
ING
S
The
proj
ect t
o re
plac
e E
nact
is b
eing
reg
ular
ly s
crut
inis
ed b
y th
e S
hare
d S
ervic
es T
rans
actio
nal
Pro
ject
Boa
rd.
The
proj
ect h
as b
een
deve
lopi
ng n
ew fo
rms
usin
g th
e C
loud
-bas
ed A
pex
deve
lopm
ent
tool
, alth
ough
a lo
cal i
nsta
llatio
n of
the
tool
is re
quire
d.
Test
ing
of t
he n
ew s
yste
m h
as b
een
reco
gnis
ed a
s a
requ
irem
ent,
alth
ough
te
st s
crip
ts h
ave
not y
et b
een
deve
lope
d to
doc
umen
t th
is.
The
proj
ect t
o re
plac
e E
nact
is b
eing
reg
ular
ly s
crut
inis
ed b
y th
e S
hare
d S
ervic
es T
rans
actio
nal
Pro
ject
Boa
rd.
OVE
RALL
ASS
URAN
CE A
SSES
SMEN
T
ACTI
ON
POIN
TS
Urge
nt
Impo
rtant
Ro
utin
e O
pera
tiona
l
0 2
1 1
62
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
12
Rec
omm
enda
tions
– U
rgen
t (Pr
iorit
y 1)
, Im
porta
nt (P
riorit
y 2)
and
Not
App
rove
d Re
port
Re
f Ri
sk A
rea
Find
ing
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Com
men
ts
Impl
emen
tati
on
Tim
etab
le
(dd/
mm
/yy)
Resp
onsi
ble
Offi
cer
(Job
Titl
e)
1 D
irect
ed
The
proj
ect i
s ve
ry s
mal
l and
is b
eing
ru
n by
the
ER
P s
uppo
rt te
am.
The
E
RP
S
yste
m
and
Dev
elop
men
t M
anag
er is
the
lead
, sup
porte
d by
the
ER
P S
yste
m S
uppo
rt Te
chni
cian
, who
is
wor
king
on
the
chan
ges
to re
plac
e E
nact
usi
ng t
he A
pex
tool
. I
t w
as
note
d th
at
the
proj
ect
team
ar
e cu
rren
tly o
nly
able
to
use
a cl
oud-
base
d Ap
ex e
nviro
nmen
t to
dev
elop
th
e E
nact
re
plac
emen
t as
a
loca
l in
stal
latio
n ha
s no
t ye
t be
en
impl
emen
ted.
A
reco
mm
enda
tion
to
help
ens
ure
that
the
loca
l ins
talla
tion
of th
e Ap
ex d
evel
opm
ent t
ool i
s be
ing
rais
ed.
Man
agem
ent
to e
nsur
e th
at a
lo
cal
inst
alla
tion
of
the
Apex
de
velo
pmen
t to
ol i
s co
mpl
eted
as
soo
n as
pos
sibl
e so
that
the
rele
vant
for
ms
and
othe
r to
ols
that
ar
e to
re
plac
e th
e E
nact
sy
stem
can
be
deve
lope
d an
d im
plem
ente
d in
a ti
mel
y m
anne
r.
2 A
pex
has
bee
n in
stal
led
onto
our
tes
t da
tab
ase
to
allo
w
deve
lopm
ent
to
beg
in.
Som
e m
inor
co
nfig
urat
ion
is
bei
ng fi
nalis
ed. W
hils
t thi
s de
velo
pmen
t is
und
erw
ay, A
pex
will
be
inst
alle
d in
to
our c
hang
e co
ntro
lled
envi
ronm
ent a
nd
prod
uctio
n en
viro
nmen
t dat
abas
es. T
his
will
not
affe
ct th
e fo
rms
deve
lopm
ent a
s th
ese
can
be
extra
cted
fro
m t
he t
est
data
bas
e an
d up
load
ed in
to e
ach
of th
e ne
w e
nviro
nmen
ts w
ithou
t th
e ne
ed to
re
crea
te th
e w
hole
form
.
23/1
1/18
E
RP
S
yste
ms
and
Dev
elop
men
t M
anag
er
63
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
13
Repo
rt
Ref
Risk
Are
a Fi
ndin
g Re
com
men
datio
n Pr
iorit
y M
anag
emen
t Co
mm
ents
Im
plem
enta
tion
Ti
met
able
(d
d/m
m/y
y)
Resp
onsi
ble
Offi
cer
(Job
Titl
e)
2 C
ompl
ianc
e Te
st
scrip
ts
for
docu
men
ting
the
test
ing
of th
e ne
w s
yste
m h
ave
yet t
o be
dev
elop
ed.
How
ever
, it
is n
oted
th
at
the
Pro
ject
tim
elin
e do
cum
ent
sugg
ests
that
this
has
bee
n fa
ctor
ed
into
the
wor
k re
quire
d to
com
plet
e th
e pr
ojec
t. A
rec
omm
enda
tion
to e
nsur
e th
at a
ll te
stin
g is
form
ally
doc
umen
ted
into
test
scr
ipts
, with
resu
lts re
porte
d to
rel
evan
t se
nior
man
agem
ent
and
the
SS
TC
proj
ect
boar
d ha
s be
en
rais
ed.
ER
P M
anag
emen
t to
ensu
re th
at
all t
estin
g of
the
new
form
s an
d re
late
d pr
oces
ses
are
form
ally
do
cum
ente
d in
to t
estin
g sc
ripts
w
ith r
esul
ts r
epor
ted
to re
leva
nt
seni
or m
anag
emen
t as
this
will
he
lp
dem
onst
rate
th
at
appr
opria
te
test
ing
has
take
n pl
ace
and
will
als
o he
lp in
form
th
e pr
ojec
t acc
epta
nce
proc
ess.
2 Te
st s
crip
ts w
ill b
e cr
eate
d as
par
t of
th
e fo
rm b
uild
in
antic
ipat
ion
of u
ser
acce
ptan
ce te
stin
g.
17/1
2/18
E
RP
S
yste
ms
and
Dev
elop
men
t M
anag
er
64
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
14
Audi
t Rep
ort:
GD
PR (N
SC19
07)
Rep
ort:
Dec
embe
r 201
8
SCO
PE
The
focu
s of
the
rev
iew
was
to
supp
ort
to a
ssis
t th
e co
nsta
bula
ries
to
embe
d an
d co
mpl
y w
ith G
DP
R b
y m
eans
of
unde
rtaki
ng a
gap
ana
lysi
s re
view
of
th
e ex
istin
g D
ata
Pro
tect
ion
Act
m
easu
res.
Th
e La
w
Enf
orce
men
t D
irect
ive (
LED
) is
not
cov
ered
by
the
scop
e of
the
rev
iew
, al
thou
gh i
s re
fere
nced
in
the
repo
rt.
MAT
ERIA
LITY
The
pote
ntia
l ris
k pr
ofile
ass
ocia
ted
with
non
-com
plia
nce
with
the
new
G
DP
R le
gisl
atio
n an
d su
bseq
uent
dat
a br
each
is a
20m
Eur
o fin
e or
4%
of
turn
over
and
rep
utat
iona
l da
mag
e.
KEY
FIND
ING
S
A D
ata
Pro
tect
ion
Offi
cer
has
been
ass
igne
d an
d a
Dat
a P
rote
ctio
n R
efor
m
proj
ect
is i
n pr
ogre
ss,
repo
rting
to
the
Info
rmat
ion
Man
agem
ent
Ste
erin
g G
roup
(IM
SG
). Th
e pr
ojec
t sc
ope
incl
udes
an
up
date
of
po
licie
s an
d pr
oces
ses.
Alth
ough
ini
tial
wor
k st
arte
d in
201
7, t
he f
orm
al p
roje
ct s
copi
ng d
ocum
ent
was
pro
duce
d in
Apr
il 20
18 a
nd t
he p
roje
ct p
lan
in M
ay 2
018.
E
viden
ce
was
see
n de
mon
stra
ting
sign
ifica
nt p
rogr
ess
agai
nst
the
plan
.
A
Dat
a P
rote
ctio
n R
efor
m
Com
mun
icat
ions
P
lan
is i
n pl
ace
and
bein
g fo
llow
ed,
with
G
DP
R
bein
g w
idel
y co
mm
unic
ated
ac
ross
th
e C
onst
abul
arie
s.
Ther
e is
an
esta
blis
hed
Sub
ject
Acc
ess
Req
uest
pro
cess
in p
lace
, alth
ough
th
e im
pact
of
in
crea
sed
requ
ests
du
e to
G
DP
R
is
a ris
k th
at
need
s m
anag
ing.
An
Info
rmat
ion
Ass
et R
egis
ter
(IAR
) is
mai
ntai
ned
and
field
s ha
ve b
een
adde
d fo
r G
DP
R,
alth
ough
wor
k is
nee
ded
to r
econ
cile
it
to t
he I
T as
set
regi
ster
and
to
ensu
re c
ompl
eten
ess.
OVE
RALL
ASS
URAN
CE A
SSES
SMEN
T
This
is a
gap
ana
lysi
s re
view
, th
eref
ore
no o
pini
on h
as b
een
give
n.
ACTI
ON
POIN
TS
Urge
nt
Impo
rtant
Ro
utin
e O
pera
tiona
l
0 2
2 3
65
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
15
Rec
omm
enda
tions
– U
rgen
t (Pr
iorit
y 1)
, Im
porta
nt (P
riorit
y 2)
and
Not
App
rove
d Re
port
Re
f Ri
sk A
rea
Find
ing
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Com
men
ts
Impl
emen
tati
on
Tim
etab
le
(dd/
mm
/yy)
Resp
onsi
ble
Offi
cer
(Job
Titl
e)
1 O
pera
tiona
l N
ew P
olic
e st
anda
rds
info
rmat
ion
and
Info
rmat
ion
Com
mis
sion
ers'
O
ffice
(IC
O)
guid
ance
is a
wai
ted
befo
re n
ew
polic
ies
are
final
ised
an
d ta
king
ac
coun
t of
th
e 's
even
fo
rces
' jo
int
wor
king
ar
rang
emen
ts.
It w
as
conf
irmed
th
at
an
initi
al
revi
ew
of
polic
ies
is u
nder
way
as
part
of t
he
proj
ect
with
fo
lder
s m
aint
aine
d of
th
ose
revi
ewed
and
tho
se a
wai
ting
revi
ew.
Pol
icie
s be
rev
iew
ed,
appr
oved
an
d up
date
d to
fully
inco
rpor
ate
GD
PR
whe
n it
is p
ract
ical
to d
o so
, in
line
with
the
actio
n pl
an in
pl
ace.
2 Th
e Im
plem
enta
tion
Team
ha
ve
revi
ewed
an
d up
date
d 15
8 of
th
e po
licie
s w
hich
wer
e ap
prov
ed a
nd s
ent
bac
k to
the
Pol
icy
Uni
t.
Ther
e ar
e 14
pol
icie
s aw
aitin
g a
final
ch
eck
bef
ore
they
are
ret
urne
d to
the
P
olic
y U
nit a
nd n
ine
pend
ing
bei
ng s
ent
to
the
rele
vant
de
partm
ent
to m
ake
chan
ges
bef
ore
they
are
retu
rned
. Th
ere
are
six
polic
ies
pend
ing
revi
ew b
y th
e Im
plem
enta
tion
Team
. A
pro
cess
has
bee
n es
tab
lishe
d w
ith
the
Pol
icy
Uni
t to
inc
lude
the
tea
m i
n co
nsul
tatio
n pr
oces
ses
for
any
new
po
licie
s to
en
sure
th
at
DP
A/G
DP
R
issu
es a
re a
ddre
ssed
.
31/0
1/19
C
ompl
ianc
e O
ffice
r
66
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
16
Repo
rt
Ref
Risk
Are
a Fi
ndin
g Re
com
men
datio
n Pr
iorit
y M
anag
emen
t Co
mm
ents
Im
plem
enta
tion
Ti
met
able
(d
d/m
m/y
y)
Resp
onsi
ble
Offi
cer
(Job
Titl
e)
4 O
pera
tiona
l Th
ere
is a
n es
tabl
ishe
d pr
oces
s in
pl
ace
for
hand
ling
Sub
ject
Acc
ess
Req
uest
s (S
ARs)
, an
d pe
rform
ance
st
atis
tics
show
that
95%
of r
eque
sts
have
bee
n re
spon
ded
to i
n th
e 40
da
ys r
equi
red
by th
e D
ata
Pro
tect
ion
Act 1
998.
At t
he ti
me
of th
e au
dit v
isit
ahea
d of
the
GD
PR
‘go-
live’
dat
e of
25
th M
ay 2
018,
the
new
GD
PR
targ
et
of r
espo
ndin
g in
one
mon
th w
as n
ot
yet
wor
ked
to.
Th
e vo
lum
e of
re
ques
ts i
n th
e sh
ort,
med
ium
and
lo
ng
term
af
ter
GD
PR
is
no
t ye
t kn
own,
but
it is
ant
icip
ated
ther
e w
ill
be a
n in
crea
se d
ue to
the
rem
oval
of
the
appl
icat
ion
fee
and
publ
icity
in th
e m
edia
adv
isin
g pe
ople
how
to re
ques
t ac
cess
to th
eir i
nfor
mat
ion.
A pa
per
be
pres
ente
d to
m
anag
emen
t se
tting
ou
t th
e an
ticip
ated
im
pact
of
th
e in
crea
sed
num
bers
of S
ARS
and
ho
w
this
w
ill
be
man
aged
to
ensu
re c
ompl
ianc
e w
ith th
e ne
w
one
mon
th r
espo
nse
times
cale
re
quire
d by
GD
PR
.
2 S
ince
th
e D
PA
b
ecam
e la
w
SA
R
requ
ests
hav
e in
crea
sed
by
100%
and
pe
rform
ance
aga
inst
sta
tuto
ry d
eadl
ines
ha
ve r
educ
ed.to
77%
for
Suf
folk
and
83
%
for
Nor
folk
. A
pa
per
is
bei
ng
draf
ted
and
disc
ussi
on h
eld
with
the
D
CC
s to
man
age
dem
and.
31/0
1/19
In
form
atio
n C
ompl
ianc
e M
anag
er
67
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
17
Audi
t Rep
ort:
Cap
ital (
NSC
1910
)
R
epor
t: N
ovem
ber 2
018
SCO
PE
The
revie
w
cons
ider
ed
the
arra
ngem
ents
fo
r ac
coun
ting
for
the
capi
tal
prog
ram
me.
The
sco
pe o
f th
e re
view
doe
s no
t in
clud
e co
nsid
erat
ion
of t
he
fund
ing
arra
ngem
ents
or
the
spec
ifica
tion
of t
he p
roje
cts,
acr
oss
Nor
folk
an
d S
uffo
lk C
onst
abul
arie
s.
MAT
ERIA
LITY
As
at J
une
2018
the
Suf
folk
Cap
ital
Pla
n w
as £
3.9m
, N
orfo
lk £
5.7m
and
Jo
int
£3.5
m.
KEY
FIND
ING
S
Cap
ital P
rogr
amm
e M
onito
ring
is c
over
ed i
n se
ctio
n 3
of t
he F
inan
cial
R
egul
atio
ns.
Rol
es a
nd r
espo
nsib
ilitie
s ar
e de
fined
with
in J
ob D
escr
iptio
ns.
The
Cap
ital P
lan
is a
ppro
ved
on a
n an
nual
bas
is a
s pa
rt of
the
Med
ium
Te
rm F
inan
cial
Pla
n at
the
Pol
ice
and
Crim
e P
anel
.
Bus
ines
s ca
ses
are
subm
itted
for
app
rova
l fo
r in
divid
ual
capi
tal
bids
, th
e do
cum
enta
tion
requ
ires
upda
ting
and
cons
iste
nt u
se a
cros
s th
e Fo
rce.
Cap
ital b
udge
ts a
re m
onito
red
mon
thly
with
bud
get
hold
ers
inpu
t ho
wev
er
thes
e do
not
reco
rd t
he a
mou
nt a
ppro
ved
in t
he o
rigin
al b
usin
ess
case
for
com
paris
on.
Ther
e is
a
docu
men
ted
repo
rting
st
ruct
ure
for
Cap
ital
mon
itorin
g an
d m
inut
es re
cord
whe
re i
ssue
s ar
e ra
ised
.
OVE
RALL
ASS
URAN
CE A
SSES
SMEN
T
ACTI
ON
POIN
TS
Urge
nt
Impo
rtant
Ro
utin
e O
pera
tiona
l
0 1
2 0
68
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
18
Rec
omm
enda
tions
– U
rgen
t (Pr
iorit
y 1)
, Im
porta
nt (P
riorit
y 2)
and
Not
App
rove
d Re
port
Re
f Ri
sk A
rea
Find
ing
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Com
men
ts
Impl
emen
tati
on
Tim
etab
le
(dd/
mm
/yy)
Resp
onsi
ble
Offi
cer
(Job
Titl
e)
2 C
ompl
ianc
e Th
ree
esta
tes
capi
tal
proj
ects
pe
r fo
rce
and
two
join
t pr
ojec
ts
wer
e re
view
ed t
o en
sure
tha
t a
busi
ness
ca
se h
ad b
een
prod
uced
and
agr
ees
to t
he b
udge
t in
the
cap
ital p
lan,
the
busi
ness
cas
e te
mpl
ate
was
use
d, th
e da
te th
e bu
sine
ss c
ase
was
revi
ewed
, ev
iden
ce
easi
ly
loca
ted
to s
uppo
rt sc
rutin
y, t
he d
ate
the
busi
ness
cas
e w
as
appr
oved
an
d w
ho
appr
oved
. Te
stin
g id
entif
ied
that
the
Bus
ines
s ca
se te
mpl
ate
isn'
t use
d an
d th
eref
ore
ther
e is
no
co
nsis
tenc
y in
th
e in
form
atio
n be
ing
prov
ided
fo
r ap
prov
al.
Bus
ines
s ca
se
tem
plat
e do
cum
enta
tion
be
used
co
nsis
tent
ly a
cros
s bo
th f
orce
s fo
r al
l ca
pita
l bi
ds,
to e
nsur
e co
nsis
tenc
y of
in
form
atio
n pr
esen
ted
and
deci
sion
s m
ade
and
reco
rded
.
2 Th
e P
MO
are
cur
rent
ly r
evie
win
g th
e B
usin
ess
Cas
e te
mpl
ate
for
re-d
esig
n.
This
rev
iew
will
ens
ure
the
use
of a
co
nsis
tent
te
mpl
ate
that
ca
ptur
es a
ll re
leva
nt in
form
atio
n in
ord
er to
prio
ritis
e pr
ojec
ts
and
eval
uate
ho
w
they
ar
e co
ntrib
utin
g to
stra
tegi
c pr
iorit
ies,
thu
s en
ablin
g a
chec
k on
ben
efits
real
isat
ion,
po
st im
plem
enta
tion
revi
ew e
tc. A
s ke
y st
akeh
olde
rs F
inan
ce, H
R a
nd I
CT
will
b
e co
nsul
ted
on a
long
with
PM
and
ot
her i
nter
nal d
epar
tmen
t res
ourc
es.
30/0
4/19
H
ead
of
Pro
gram
me
Man
agem
ent
Offi
ce
69
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
19
Audi
t Rep
ort:
Allo
wan
ces
(NSC
1912
)
R
epor
t: N
ovem
ber 2
018
SCO
PE
The
revie
w f
ocus
ed o
n th
e va
lidity
of
allo
wan
ces
clai
med
, in
clud
ing
on-
call,
ove
rnig
ht,
mut
ual
aid
and
mea
l al
low
ance
s, a
s w
ell
as c
ompl
ianc
e w
ith
polic
y an
d cl
arifi
catio
n of
cla
imin
g al
low
ance
s ac
ross
Nor
folk
and
S
uffo
lk C
onst
abul
arie
s.
MAT
ERIA
LITY
From
the
dat
a pr
ovid
ed b
y th
e H
ead
of T
rans
actio
nal
Ser
vices
the
cos
t in
20
17/1
8 of
al
low
ance
s,
expe
nses
, ov
ertim
e an
d tra
vel
was
£1
0m
in
Nor
folk
and
£7.
8m in
Suf
folk
.
KEY
FIND
ING
S
The
over
all
opin
ion
is d
erive
d fro
m t
he n
atur
e of
the
urg
ent
and
impo
rtant
re
com
men
datio
ns r
aise
d an
d th
e ris
ks w
ithin
the
sys
tem
, id
entif
ied
thro
ugh
this
rev
iew
and
rel
evan
t re
com
men
datio
ns r
aise
d w
ithin
a r
ecen
t ov
ertim
e an
d ex
pens
es a
udit
that
impa
ct o
n al
low
ance
s.
Pol
icie
s an
d pr
oced
ures
ar
e ou
t of
da
te,
inco
nsis
tent
be
twee
n C
onst
abul
arie
s an
d re
quire
rev
iew
and
con
solid
atio
n.
The
dog
unit
does
not
hav
e cu
rrent
up
to d
ate
reco
rds
of p
olic
e do
gs h
eld
and
the
appl
icat
ion
of a
llow
ance
s is
inco
nsis
tent
acr
oss
dog
hand
lers
.
Ther
e is
no
curre
nt h
onor
ariu
m p
olic
y he
ld a
nd i
ncon
sist
enci
es in
pay
men
t m
etho
dolo
gies
can
be
adop
ted.
OVE
RALL
ASS
URAN
CE A
SSES
SMEN
T
ACTI
ON
POIN
TS
Urge
nt
Impo
rtant
Ro
utin
e O
pera
tiona
l
1 2
0 0
70
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
20
Rec
omm
enda
tions
– U
rgen
t (Pr
iorit
y 1)
, Im
porta
nt (P
riorit
y 2)
and
Not
App
rove
d Re
port
Re
f Ri
sk A
rea
Find
ing
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Com
men
ts
Impl
emen
tati
on
Tim
etab
le
(dd/
mm
/yy)
Resp
onsi
ble
Offi
cer
(Job
Titl
e)
3 C
ompl
ianc
e Te
stin
g co
nclu
ded
that
rat
es o
f pa
y fo
r eac
h do
g ha
ndle
d w
ere
calc
ulat
ed
corr
ectly
, and
aut
horis
ed e
nact
form
s w
ere
in p
lace
to s
uppo
rt an
y ch
ange
s.
Inco
nsis
tenc
ies
wer
e id
entif
ied
betw
een
reco
rds
held
by
payr
oll a
nd
the
Insp
ecto
r, S
peci
alis
t O
pera
tions
, w
ith p
ayro
ll hol
ding
the
corr
ect d
etai
ls;
one
paid
dog
han
dler
was
not
on
the
reco
rds
held
by
the
Dog
Uni
t and
four
po
lice
offic
ers
wer
e pa
id f
or m
ore
dogs
than
reco
rded
by
the
Dog
Uni
t.
It is
not
cle
ar w
hat
expe
nses
dog
ha
ndle
rs
are
entit
led
to
clai
m
in
addi
tion
to
thei
r do
g ha
ndle
r al
low
ance
and
wha
t ex
pens
es a
re
expe
cted
to b
e co
vere
d as
par
t of t
he
allo
wan
ce;
sam
ple
test
ing
iden
tifie
d th
at
two
of
the
dog
hand
lers
onl
y cl
aim
ed t
he a
llow
ance
, w
hils
t ot
her
dog
hand
lers
cla
imed
reim
burs
emen
t fo
r ite
ms
such
as
do
g gr
oom
ing,
m
ileag
e co
sts
and
vale
t ve
hicl
es,
whi
lst
the
rem
aini
ng d
og h
andl
ers
clai
med
add
ition
al e
xpen
ses,
whi
ch
wer
e in
cons
iste
ntly
app
lied.
The
polic
y an
d pr
oces
ses
for d
og
hand
ler
allo
wan
ces
and
asso
ciat
ed
expe
nses
to
be
cl
arifi
ed,
adop
ted
with
in
the
polic
y, c
omm
unic
ated
to re
leva
nt
staf
f/offi
cers
an
d ac
cura
te
reco
rds
mai
ntai
ned.
1 Th
is
will
b
e re
ferr
ed
to
the
Sup
erin
tend
ent
Spe
cial
ist
Ope
ratio
ns,
who
will
form
a p
olic
y an
d pr
oces
s.
31/0
3/19
S
upt
Spe
cial
ist
Ops
71
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
21
Repo
rt
Ref
Risk
Are
a Fi
ndin
g Re
com
men
datio
n Pr
iorit
y M
anag
emen
t Co
mm
ents
Im
plem
enta
tion
Ti
met
able
(d
d/m
m/y
y)
Resp
onsi
ble
Offi
cer
(Job
Titl
e)
1 D
irect
ed
Thro
ugh
a re
view
of
stan
dard
for
ms
avai
labl
e on
the
intra
net i
t was
cle
ar
that
no
t al
l w
ere
read
ily a
vaila
ble.
H
owev
er, i
t was
als
o co
nsid
ered
that
th
ere
is m
ore
clar
ity n
eede
d ar
ound
w
hich
allo
wan
ces
requ
ire a
spe
cific
fo
rm.
O
nce
the
polic
y ha
s be
en
revi
ewed
an
d ag
reed
ap
prop
riate
fo
rms
are
need
ed
to
supp
ort
the
requ
irem
ents
of
the
polic
y.
At t
he
time
of t
he r
evie
w t
here
was
a f
orm
av
aila
ble
on th
e in
trane
t to
clai
m b
oot
allo
wan
ce,
how
ever
eye
tes
ts a
nd
bonu
s pa
ymen
ts w
ere
not
pres
ent.
E
xcep
tions
wer
e no
ted
in t
he u
se o
f fo
rms
and
clai
min
g th
roug
h ex
pens
es
inst
ead.
A st
anda
rd a
ppro
ach
be a
dopt
ed
rega
rdin
g th
e us
e of
for
ms
for
clai
min
g al
low
ance
s. T
his
is t
o be
inco
rpor
ated
with
in g
uida
nce
for
staf
f an
d av
aila
ble
on t
he
intra
net.
2 Th
e co
nten
t of
th
e P
ayro
ll an
d H
R
Intra
net p
ages
are
und
er re
view
as
part
of t
he S
STC
pro
ject
. F
orm
s w
ill b
e lo
aded
ont
o th
e in
trane
t for
sta
ff to
use
an
d th
e te
ams
will
dire
ct t
hem
to
use
the
appr
opria
te
form
.
Futu
re
deve
lopm
ents
of
fo
rms
on
line
will
fo
llow
.
31/0
3/19
H
ead
of
Tran
sact
iona
l S
ervi
ces
2 C
ompl
ianc
e Th
e E
nact
sys
tem
is
bein
g us
ed fo
r pr
oces
sing
hon
orar
ium
pay
men
ts, t
his
is n
ot in
line
with
the
proc
ess
stat
ed in
th
e G
ood
Wor
k R
ecog
nitio
n po
licy,
w
hich
is
curr
ently
sub
ject
to
revi
ew
and
upda
te.
Of
the
test
ing
com
plet
ed
all
hono
rariu
ms
had
been
cla
imed
usi
ng
the
Ena
ct s
yste
m. T
he E
nact
sys
tem
do
es n
ot r
equi
re a
utho
risat
ion
by a
lin
e m
anag
er.
The
proc
ess
and
met
hodo
logy
be
re
view
ed
for
mak
ing
hono
rariu
m p
aym
ents
, to
enab
le
trans
pare
ncy
and
com
plia
nce
with
Con
stab
ular
ies’
pol
icy.
2 A
Joi
nt G
ood
Wor
k R
ecog
nitio
n P
olic
y is
b
eing
de
velo
ped.
Th
e po
licy
will
st
anda
rdis
e th
e pr
oces
s fo
r ho
nora
rium
s.
31/0
3/19
P
olic
y , R
ewar
d an
d E
mpl
oyee
R
elat
ions
M
anag
er
72
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
22
Audi
t Rep
ort:
Vetti
ng (N
SC19
17)
Rep
ort:
Nov
embe
r 201
8
SCO
PE
The
revie
w f
ocus
sed
on t
he s
yste
ms
and
proc
esse
s fo
r ve
tting
new
and
ex
istin
g st
aff,
offic
ers
and
cont
ract
ors,
ac
ross
N
orfo
lk
and
Suf
folk
C
onst
abul
arie
s.
MAT
ERIA
LITY
Per
form
ance
inf
orm
atio
n sh
ows
that
a t
otal
of
3,31
5 ve
tting
app
licat
ions
w
ere
com
plet
ed in
201
7/18
.
KEY
FIND
ING
S
Ther
e ar
e na
tiona
l pol
icie
s an
d lo
cal p
roce
dure
s in
pla
ce, a
lthou
gh t
he lo
cal
Vet
ting
Pol
icy
has
been
with
draw
n aw
aitin
g fu
rther
nat
iona
l gui
danc
e.
The
WP
C C
oreV
et s
yste
m is
use
d to
reco
rd v
ettin
g in
form
atio
n.
Stre
ngth
enin
g th
e ap
plic
atio
n pa
ssw
ord
cont
rols
wou
ld im
prov
e se
curit
y.
Wor
k is
taki
ng p
lace
to
addr
ess
a ve
tting
bac
klog
. T
here
is
also
a la
rge
arch
iving
bac
klog
whi
ch r
equi
res
revie
w a
nd r
isk
asse
ssm
ent.
Test
ing
foun
d th
at n
ew s
tarte
r vet
ting
and
vetti
ng r
enew
als
are
carri
ed o
ut
in li
ne w
ith th
e po
licy,
with
min
or m
atte
rs a
risin
g.
Test
ing
conc
lude
d th
at c
ontra
ctor
s ar
e ve
tted
in li
ne w
ith t
he p
olic
y, w
ith n
o m
atte
rs a
risin
g.
OVE
RALL
ASS
URAN
CE
ASSE
SSM
ENT
ACTI
ON
POIN
TS
Urge
nt
Impo
rtant
Ro
utin
e O
pera
tiona
l
0 4
2 0
73
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
23
Rec
omm
enda
tions
– U
rgen
t (Pr
iorit
y 1)
, Im
porta
nt (P
riorit
y 2)
and
Not
App
rove
d Re
port
Re
f Ri
sk A
rea
Find
ing
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Com
men
ts
Impl
emen
tati
on
Tim
etab
le
(dd/
mm
/yy)
Resp
onsi
ble
Offi
cer
(Job
Titl
e)
1 D
irect
ed
The
vetti
ng
polic
y tit
led
‘Vet
ting
– In
terim
Gui
danc
e (v
5)’ w
as p
ublis
hed
in A
pril
2016
and
has
a re
view
dat
e of
Ap
ril
2018
.
The
Vetti
ng
Man
ager
ex
plai
ned
that
th
e po
licy
was
w
ithdr
awn
due
to t
he p
ublic
atio
n of
th
e ne
w
Cod
e of
P
ract
ice
and
Auth
oris
ed
Pro
fess
iona
l P
ract
ice
(AP
P),
and
the
Vetti
ng T
eam
follo
ws
natio
nal
rule
s.
Vetti
ng u
nits
acr
oss
the
coun
try a
re ra
isin
g qu
estio
ns a
nd
furth
er g
uida
nce
is a
wai
ted
from
the
natio
nal
lead
. L
ater
in t
he y
ear
the
Con
stab
ular
ies
will
dec
ide
whe
ther
to
rew
rite
a lo
cal
polic
y or
whe
ther
to
have
a
colla
bora
tive
polic
y sh
ared
ac
ross
sev
en fo
rces
.
The
Vetti
ng P
olic
y be
rev
iew
ed,
appr
oved
, and
com
mun
icat
ed.
2 Th
e ex
istin
g po
licy
has
bee
n w
ithdr
awn
as n
on-c
ompl
iant
. N
ow w
orki
ng t
o a
seve
n fo
rce
polic
y in
line
with
AP
P, w
ith
loca
l gui
danc
e.
Onc
e th
e na
tiona
l gui
danc
e is
pro
duce
d in
Sep
tem
ber
201
8, t
he s
even
for
ce
appr
oach
w
ill
be
agre
ed
and
loca
l gu
idan
ce p
rodu
ced
on th
is b
asis
.
31/0
3/20
19
Sen
ior
Com
plai
nts,
A
ppea
ls
and
Pol
icy
Man
ager
74
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
24
Repo
rt
Ref
Risk
Are
a Fi
ndin
g Re
com
men
datio
n Pr
iorit
y M
anag
emen
t Co
mm
ents
Im
plem
enta
tion
Ti
met
able
(d
d/m
m/y
y)
Resp
onsi
ble
Offi
cer
(Job
Titl
e)
2 C
ompl
ianc
e In
or
der
to
acce
ss
the
Cor
eVet
ap
plic
atio
n, t
he u
ser
first
nee
ds t
o pa
ss n
etw
ork
auth
entic
atio
n in
ord
er
to a
cces
s a
brow
ser.
The
use
r nee
ds
to k
now
the
UR
L to
find
Cor
eVet
and
a
Cor
eVet
us
erna
me,
w
hich
is
di
ffere
nt
to
the
netw
ork
user
nam
e.
The
user
m
ust
then
en
ter
an
appl
icat
ion
pass
wor
d w
hich
is s
et b
y th
e ad
min
istra
tor a
nd is
requ
ired
to b
e ch
ange
d th
e fir
st
time
it is
us
ed.
Ther
e is
no
t a
requ
irem
ent
for
pass
wor
ds
to
be
set
leng
th
or
com
plex
ity h
owev
er,
or f
or u
sers
to
chan
ge p
assw
ords
. Th
e In
form
atio
n S
ecur
ity O
ffice
r pro
vide
d co
pies
of t
he
IT
Sec
urity
P
olic
y an
d ad
vise
d to
en
sure
tha
t an
y pa
ssw
ords
cre
ated
ar
e of
a m
inim
um o
f nin
e ch
arac
ters
, co
mpr
ised
of
uppe
r an
d lo
wer
cas
e le
tters
, nu
mbe
rs
and
spec
ial
char
acte
rs.
A se
rvic
e re
ques
t be
pu
t to
W
PC
, th
e C
oreV
et
syst
em
supp
lier,
to
iden
tify
whe
ther
pa
ssw
ord
cont
rols
co
uld
be
intro
duce
d to
im
prov
e au
then
ticat
ion
cont
rol i
n lin
e w
ith
the
IT
Sec
urity
P
olic
y.
In t
he
mea
ntim
e, s
taff
be a
dvis
ed to
set
st
rong
pas
swor
ds a
nd to
cha
nge
thes
e on
a p
erio
dic
basi
s.
2 W
PC
hav
e ad
vise
d th
at th
ey c
an a
men
d th
e se
tting
s. T
hey
will
giv
e th
e fo
rces
ad
min
istra
tor a
cces
s to
ena
ble
spe
cifie
d of
ficer
s to
upd
ate.
31/1
0/20
18
Sen
ior
Com
plai
nts,
A
ppea
ls
and
Pol
icy
Man
ager
75
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
25
Repo
rt
Ref
Risk
Are
a Fi
ndin
g Re
com
men
datio
n Pr
iorit
y M
anag
emen
t Co
mm
ents
Im
plem
enta
tion
Ti
met
able
(d
d/m
m/y
y)
Resp
onsi
ble
Offi
cer
(Job
Titl
e)
5 C
ompl
ianc
e Th
e H
R
depa
rtmen
t pr
ovid
es
the
Vetti
ng
team
w
ith
notif
icat
ion
of
leav
ers,
and
the
se a
re t
hen
mar
ked
as 'n
o lo
nger
em
ploy
ed' o
n C
orev
et.
This
trig
gers
a s
ix y
ear
cloc
k in
ord
er
to m
eet t
he re
quire
d re
tent
ion
perio
d,
afte
r w
hich
th
e re
cord
is
de
lete
d.
Audi
t tes
ting
conf
irmed
this
had
bee
n do
ne
for
all
rece
nt
leav
ers
in
the
sam
ple.
U
ntil
rece
ntly
how
ever
thi
s pr
oces
s di
d no
t ope
rate
resu
lting
in a
ba
cklo
g of
reco
rds
requ
iring
arc
hivi
ng,
whi
ch
is
expe
cted
to
am
ount
to
th
ousa
nds
of
reco
rds
whe
n co
ntra
ctor
s ar
e ta
ken
into
acc
ount
. Th
ese
each
req
uire
man
ual
revi
ew
and
so c
lear
ing
thes
e is
a re
sour
ce-
inte
nsiv
e ex
erci
se.
Th
e S
enio
r C
ompl
aint
s,
Appe
als
&
Pol
icy
Man
ager
ha
s be
en
task
ed
with
re
view
ing
PS
D's
co
mpl
ianc
e w
ith
MO
PI,
of w
hich
this
is p
art.
An a
sses
smen
t be
mad
e of
the
risk
of
the
arch
ivin
g ba
cklo
g,
taki
ng
into
ac
coun
t th
e M
anag
emen
t of
P
olic
e In
form
atio
n (M
OP
I) re
quire
men
ts
and
the
new
G
ener
al
Dat
a P
rote
ctio
n R
egul
atio
ns (G
DP
R).
O
nce
asse
ssed
th
e ris
k be
en
tere
d on
to th
e P
SD
risk
log
in
orde
r th
at i
s ca
n be
man
aged
, an
d an
act
ion
plan
dev
ised
to
redu
ce th
e ba
cklo
g.
2 Th
is h
as b
een
ente
red
onto
the
risk
log.
W
ork
will
be
unde
rtake
n to
add
ress
the
risk.
Thi
s tim
ing
of i
mpl
emen
tatio
n is
de
pend
ent
on
addi
tiona
l re
sour
ces,
w
hich
is
de
pend
ent
on
bud
get
and
reso
urce
, as
suc
h an
int
erim
dat
e is
pr
ovid
ed u
ntil
a kn
own
impl
emen
tatio
n da
te c
an b
e id
entif
ied.
31/0
3/20
19
Sen
ior
Com
plai
nts,
A
ppea
ls
and
Pol
icy
Man
ager
76
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
26
Repo
rt
Ref
Risk
Are
a Fi
ndin
g Re
com
men
datio
n Pr
iorit
y M
anag
emen
t Co
mm
ents
Im
plem
enta
tion
Ti
met
able
(d
d/m
m/y
y)
Resp
onsi
ble
Offi
cer
(Job
Titl
e)
6 O
pera
tiona
l P
erfo
rman
ce s
tatis
tics
are
prod
uced
by
th
e Ve
tting
M
anag
er
for
the
Det
ectiv
e S
uper
inte
nden
t, H
ead
of th
e P
SD
.
Thes
e sh
ow
a ba
cklo
g in
pr
oces
sing
vet
ting
appl
icat
ions
. F
or
the
last
12
mon
ths
thes
e sh
ow a
pea
k ba
cklo
g of
307
in J
une
2017
, w
hich
re
duce
d do
wn
to 2
1 by
Nov
embe
r 20
17 b
ut s
ubse
quen
tly in
crea
sed
to
109
in F
ebru
ary
2018
. T
he V
ettin
g M
anag
er p
rovi
ded
an u
pdat
e on
4th
M
ay
that
th
ere
wer
e 14
5 ne
w
appl
icat
ions
ou
tsta
ndin
g an
d 20
3 re
cord
s th
at r
equi
re r
enew
al v
ettin
g.
The
Vetti
ng
Team
ha
s a
vaca
ncy
whi
ch i
s cu
rren
tly b
eing
adv
ertis
ed,
and
whe
n th
is p
ost i
s fil
led
it sh
ould
he
lp to
add
ress
the
back
log.
The
vetti
ng re
new
als
back
log
be
clea
red
in
orde
r th
at
rene
wal
ve
tting
is
do
ne
in
a tim
ely
man
ner.
2 D
ue t
o re
sour
ce p
ress
ures
, ne
w f
orce
ap
plic
ants
and
inc
reas
e in
the
leve
l of
chec
ks
to
be
unde
rtake
n on
ea
ch
appl
ican
t, th
e b
ackl
og h
as g
aine
d pa
ce.
The
team
are
run
ning
with
one
pos
t do
wn
and
no a
pplic
ants
app
lied
to th
e fir
st a
dver
t, th
is h
as g
one
out t
o ad
vert
agai
n.
The
post
w
ill
need
to
b
e re
sour
ced
bef
ore
this
ca
n b
e pr
ogre
ssed
. The
re a
re th
ree
tem
pora
ry
role
s th
at f
inis
h on
31st
Mar
ch 2
019,
ho
wev
er t
his
is u
nlik
ely
to b
e m
et b
y th
en. I
f res
ourc
e is
sues
can
be
reso
lved
it
wou
ld s
till p
ut b
ack
impl
emen
tatio
n b
y at
lea
st s
ix m
onth
s af
ter
the
orig
inal
de
adlin
es.
Oth
er w
ays
to p
roce
ss th
ese
are
bei
ng
inve
stig
ated
. A
bus
ines
s ca
se a
roun
d w
eb f
orm
s ha
s b
een
prep
ared
whi
ch
wou
ld h
elp
the
proc
ess.
31/1
2/20
19
Sen
ior
Com
plai
nts,
A
ppea
ls
and
Pol
icy
Man
ager
77
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
27
Audi
t Rep
ort:
Tran
spor
t Pro
cure
men
t (N
SC19
19)
Rep
ort:
Janu
ary
2019
SCO
PE
The
revie
w f
ocus
ed o
n po
licy
and
com
plia
nce
for
purc
hasi
ng v
ehic
les
for
curre
nt a
nd fu
ture
req
uire
men
ts,
for
Nor
folk
and
Suf
folk
Con
stab
ular
ies.
MAT
ERIA
LITY
Nor
folk
an
d S
uffo
lk
Con
stab
ular
ies
have
co
mbi
ned
vehi
cle
fleet
of
ap
prox
imat
ely
1,15
0 ve
hicl
es (
excl
udin
g bi
cycl
es).
KEY
FIND
ING
S
A
com
preh
ensi
ve
proc
urem
ent
prog
ram
me
is
in
plac
e fo
r th
e C
onst
abul
arie
s tra
nspo
rt re
quire
men
ts,
whi
ch c
ompl
ies
with
the
tra
nspo
rt st
rate
gy.
In a
dditi
on,
a pr
ogra
mm
e is
in
plac
e to
fit
tele
mat
ics
into
sel
ecte
d po
lice
vehi
cles
. Te
lem
atic
s sh
ould
br
ing
a nu
mbe
r of
be
nefit
s,
incl
udin
g;
redu
ced
fuel
us
age,
re
duce
d m
aint
enan
ce c
osts
and
ass
ista
nce
with
pro
curin
g of
veh
icle
s fo
r th
e fu
ture
. Tw
o ar
eas
wer
e id
entif
ied
for
impr
ovem
ent:
A
set
proc
ess
to
be d
evel
oped
for
add
ress
ing,
ina
ppro
pria
te d
river
beh
avio
ur
that
is id
entif
ied
thro
ugh
the
use
of t
elem
atic
s.
Rec
onci
liatio
n be
twee
n th
e as
set
regi
ster
and
Tra
nman
to
be u
nder
take
n, t
o en
sure
tha
t acc
urat
e an
d co
rrect
rec
ords
are
mai
ntai
ned.
OVE
RALL
ASS
URAN
CE A
SSES
SMEN
T
ACTI
ON
POIN
TS
Urge
nt
Impo
rtant
Ro
utin
e O
pera
tiona
l
0 1
1 0
78
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
28
Rec
omm
enda
tions
– U
rgen
t (Pr
iorit
y 1)
, Im
porta
nt (P
riorit
y 2)
and
Not
App
rove
d Re
port
Re
f Ri
sk A
rea
Find
ing
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Com
men
ts
Impl
emen
tati
on
Tim
etab
le
(dd/
mm
/yy)
Resp
onsi
ble
Offi
cer
(Job
Titl
e)
1 D
irect
ed
Tele
mat
ics
will
en
able
th
e C
onst
abul
arie
s to
iden
tify
driv
ers
that
ar
e no
t driv
ing
Con
stab
ular
y ve
hicl
es
corr
ectly
and
effi
cien
tly.
Whe
re i
t is
id
entif
ied
that
the
re a
re d
river
s th
at
are
not d
rivin
g C
onst
abul
ary
vehi
cles
co
rrec
tly a
set
pro
cess
nee
ds t
o be
de
velo
ped
so th
at th
ere
is c
larit
y as
to
how
that
is to
be
deal
t with
.
A st
anda
rd
be
agre
ed
for
iden
tifyi
ng
thro
ugh
tele
mat
ics
whe
n dr
iver
s ar
e no
t us
ing
vehi
cles
cor
rect
ly a
nd e
ffici
ently
an
d ho
w th
is is
add
ress
ed.
2 A
Tr
ansp
ort
Sta
ndar
ds
Gro
up
is
sche
dule
d to
m
eet
on
15th
Janu
ary
2019
. Te
rms
of r
efer
ence
hav
e b
een
prov
ided
to T
IAA
. Thi
s G
roup
will
agr
ee
the
proc
ess
and
repo
rt di
rect
ly in
to th
e M
otor
Ris
k M
anag
emen
t P
rogr
amm
e B
oard
as
the
over
sigh
t gro
up.
31/0
3/20
19
Hea
d of
Tr
ansp
ort
Ser
vice
s,
Uni
form
an
d E
quip
men
t
79
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
29
Audi
t Rep
ort:
Esta
tes
Stra
tegy
(NSC
1921
)
Rep
ort:
Nov
embe
r 201
8
SCO
PE
The
audi
t ap
prai
sed
the
stra
tegy
for
man
agin
g th
e es
tate
s fo
r cu
rrent
and
fu
ture
req
uire
men
ts,
with
sup
porti
ng p
olic
ies,
acr
oss
Nor
folk
and
Suf
folk
C
onst
abul
arie
s.
The
audi
t co
nsid
ered
if
the
esta
tes
stra
tegy
is
in
lin
e w
ith c
orpo
rate
st
rate
gies
and
dire
ctio
n fo
r cu
rrent
and
futu
re n
eed.
MAT
ERIA
LITY
Tota
l bu
dget
ed
expe
nditu
re
for
Nor
folk
es
tate
fo
r th
e 20
18/1
9 fin
anci
al
year
is
£2.9
mill
ion.
Tot
al b
udge
ted
expe
nditu
re f
or S
uffo
lk e
stat
e fo
r th
e 20
18/1
9 fin
anci
al y
ear i
s £1
.7 m
illio
n.
KEY
FIND
ING
S
Nor
folk
and
Suf
folk
hav
e cu
rrent
est
ate
stra
tegi
es.
Impl
emen
tatio
n pl
ans
are
in p
lace
to
supp
ort
with
the
deliv
ery
of N
orfo
lk a
nd S
uffo
lk e
stat
e st
rate
gies
.
A J
oint
Env
ironm
enta
l S
trate
gy is
in p
lace
. Th
e st
rate
gy fo
rmal
ly d
ocum
ents
th
e C
onst
abul
arie
s ap
proa
ch t
o en
viron
men
tal
man
agem
ent.
The
Car
bon
Man
agem
ent
Wor
king
Gro
up h
as b
een
task
ed w
ith m
onito
ring
perfo
rman
ce
of
the
Con
stab
ular
ies
agai
nst
the
deliv
ery
of
the
Join
t E
nviro
nmen
tal
Stra
tegy
, in
pa
rticu
lar
mon
itorin
g th
e pr
ogre
ss
of
the
Con
stab
ular
ies
in
redu
cing
ea
ch
Con
stab
ular
ies’
ca
rbon
fo
otpr
int.
The
Car
bon
Man
agem
ent
Wor
king
G
roup
ha
s no
t m
et
regu
larly
du
ring
the
curre
nt fi
nanc
ial
year
.
The
Car
bon
Man
agem
ent
Wor
king
Gro
up h
as a
n ac
tion
plan
in p
lace
to
supp
ort
the
deliv
ery
of t
he C
onst
abul
arie
s Jo
int
Env
ironm
enta
l S
trate
gy. A
ta
rget
com
plet
ion
date
nee
ds t
o be
ass
igne
d fo
r ac
tions
to e
nabl
e ef
fect
ive
esca
latio
n w
here
pro
gres
s is
not
mad
e.
Nor
folk
and
Suf
folk
hav
e cu
rrent
est
ate
stra
tegi
es.
Impl
emen
tatio
n pl
ans
are
in p
lace
to
supp
ort
with
the
deliv
ery
of N
orfo
lk a
nd S
uffo
lk e
stat
e st
rate
gies
.
OVE
RALL
ASS
URAN
CE A
SSES
SMEN
T
ACTI
ON
POIN
TS
Urge
nt
Impo
rtant
Ro
utin
e O
pera
tiona
l
0 1
1 0
80
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
30
Rec
omm
enda
tions
– U
rgen
t (Pr
iorit
y 1)
, Im
porta
nt (P
riorit
y 2)
and
Not
App
rove
d Re
port
Re
f Ri
sk A
rea
Find
ing
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Com
men
ts
Impl
emen
tati
on
Tim
etab
le
(dd/
mm
/yy)
Resp
onsi
ble
Offi
cer
(Job
Titl
e)
1 D
irect
ed
The
Car
bon
Man
agem
ent
Wor
king
G
roup
has
bee
n ta
sked
to m
onito
r the
pe
rform
ance
of
the
Con
stab
ular
ies
agai
nst
the
deliv
ery
of
the
Join
t E
nviro
nmen
tal S
trate
gy.
The
Car
bon
Man
agem
ent
Wor
king
G
roup
has
not
met
reg
ular
ly d
urin
g th
e cu
rren
t fin
anci
al y
ear.
The
Car
bon
Man
agem
ent
Wor
king
Gro
up t
o m
eet
at t
he
desi
gnat
ed in
terv
als
as p
er t
he
Car
bon
Man
agem
ent
Wor
king
G
roup
term
s of
refe
renc
e.
2 Th
e ne
xt C
arb
on M
anag
emen
t Wor
king
G
roup
is p
lann
ed to
take
pla
ce o
n 29
th
Nov
emb
er 2
018,
29/1
1/18
H
ead
of E
stat
es
81
P
olic
e an
d C
rime
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk a
nd C
hief
Con
stab
les
of N
orfo
lk a
nd S
uffo
lk C
onst
abul
arie
s
Inte
rnal
Aud
it P
rogr
ess
Rep
ort
2018
/19
Page
31
Audi
t Rep
ort:
Purc
hase
Car
ds (N
SC19
23)
R
epor
t: Ja
nuar
y 20
19
SCO
PE
The
audi
t fo
cuse
d on
the
use
of
purc
hase
car
ds i
n N
orfo
lk C
onst
abul
ary,
an
d co
mpl
ianc
e w
ith p
olic
y.
MAT
ERIA
LITY
Pur
chas
e ca
rd
expe
nditu
re
for
the
perio
d A
pril
to N
ovem
ber
has
been
ap
prox
imat
ely
£160
k fo
r N
orfo
lk C
onst
abul
ary,
whi
ch i
s in
lin
e w
ith t
he
expe
nditu
re f
or t
he s
ame
perio
d in
201
7/18
.
KEY
FIND
ING
S
Pro
gres
s ha
s be
en m
ade
in re
latio
n to
reco
mm
enda
tions
rais
ed in
the
prev
ious
aud
it an
d a
reas
onab
le a
ssur
ance
opi
nion
can
be
give
n. W
hils
t no
furth
er re
com
men
datio
ns h
ave
been
ra
ised
, su
bsta
ntia
l as
sura
nce
is n
ot a
pplic
able
due
to
the
natu
re o
f th
e sy
stem
, w
here
ex
cept
ions
do
aris
e, w
ith re
ason
able
pre
vent
ion
and
dete
ctiv
e co
ntro
ls a
pplie
d.
Pur
chas
e ca
rd e
xpen
ditu
re is
sub
mitt
ed a
nd a
utho
rised
pro
mpt
ly a
nd is
upl
oade
d on
to th
e le
dger
. E
xpen
ditu
re o
ver
the
indi
vidu
al tr
ansa
ctio
n lim
it of
£50
0 w
as m
ade
by s
plitt
ing
trans
actio
ns o
n ca
rds,
this
has
pre
viou
sly
been
rais
ed. M
anag
emen
t are
con
side
ring
the
indi
vidu
al c
ases
. P
urch
ase
card
s ar
e no
t alw
ays
used
in li
ne w
ith th
e pu
rcha
se c
ard
man
ual,
the
maj
ority
of
thos
e ex
cept
ions
iden
tifie
d w
ere
for
fuel
pay
men
ts, a
s th
e fu
el c
ard
for p
olic
e ve
hicl
es w
as
reje
cted
. Man
agem
ent a
re c
onsi
derin
g th
e in
divi
dual
cas
es.
OVE
RALL
ASS
URAN
CE A
SSES
SMEN
T
ACTI
ON
POIN
TS
Urge
nt
Impo
rtant
Ro
utin
e O
pera
tiona
l
0 0
0 0
82
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 1
Po
lice
and
Cri
me
Com
mis
sion
ers
for N
orfo
lk a
nd S
uffo
lk
and
Chi
ef C
onst
able
s of
Nor
folk
and
Suf
folk
Con
stab
ular
ies
Follo
w U
p R
evie
w
2018
/19
83
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 2
84
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 3
Exec
utiv
e Su
mm
ary
IN
TRO
DUCT
ION
1.
The
follo
w u
p of
int
erna
l au
dit
reco
mm
enda
tions
und
erta
ken
by T
IAA
is
unde
rtake
n th
roug
hout
the
yea
r an
d re
porte
d to
the
Aud
it C
omm
ittee
dur
ing
the
year
at
each
mee
ting.
2.
The
sum
mar
y ta
bles
sho
w t
he n
umbe
r of
rai
sed
and
brou
ght
forw
ard
prio
rity
1 (P
1 -
Urg
ent)
and
prio
rity
2 (P
2 -
Impo
rtant
) re
com
men
datio
ns im
plem
ente
d si
nce
bein
g re
porte
d to
the
Oct
ober
201
8 A
udit
Com
mitt
ee m
eetin
g an
d th
ose
outs
tand
ing
past
the
ir im
plem
enta
tion
date
s. A
bre
akdo
wn
of t
his
sum
mar
y is
atta
ched
as
Figu
re
Figu
re 1
- Su
mm
ary
of th
e ac
tion
take
n on
Rec
omm
enda
tions
mad
e
Eval
uatio
n P1
- Ur
gent
Re
com
men
datio
ns
P2 -
Impo
rtant
Re
com
men
datio
ns
Tota
l O
ctob
er 2
018
Posi
tion
for
com
paris
on
Nu
mbe
r Nu
mbe
r
Tota
l
New
Rec
omm
enda
tions
Add
ed S
ince
La
st M
eetin
g 1
24
25
N/A
Impl
emen
ted
Sinc
e La
st M
eetin
g 1
10
11
16
Out
stan
ding
– P
ast O
rigin
al D
eadl
ine
(in
cl. D
eadl
ines
Ext
ende
d*)
2*(2
) 33
*(24)
35
34
Orig
inal
Dea
dlin
e No
t Yet
Rea
ched
1
19
20
5
85
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 4
Com
plet
ed
sinc
e la
st
Aud
it C
omm
ittee
O
utst
andi
ng /
Ove
rdue
O
utst
andi
ng
with
Ext
ende
d Pe
riod
No
t Rea
ched
Not Y
et D
ue fo
r im
plem
enta
tion
P1
P2
P1
P2
P1
P2
P1
P2
A
udit
Ref
Aud
it A
rea
Date
Pr
esen
ted
to A
udit
Com
mitt
ee
Ass
uran
ce
Leve
l
2016
/17
Inte
rnal
Aud
it Re
view
s
NSC1
703
Tran
spor
t Se
p-16
Re
ason
able
2
1
NSC1
707
Duty
Man
agem
ent
Dec-
16
Lim
ited
3
NSC1
714
Ove
rtim
e, E
xpen
ses
Mar
-17
Reas
onab
le
1
NSC1
716
Pens
ions
M
ar-1
7 Re
ason
able
1
2017
/18
Inte
rnal
Aud
it Re
view
s
NSC1
804
L&D
Skills
Ju
l-18
Lim
ited
1
8
NSC1
810
Tem
pora
ry R
ecru
itmen
t Fe
b-18
Re
ason
able
1
NSC1
811
Proc
urem
ent
Sep-
17
Reas
onab
le
1
NSC1
812
Busi
ness
Inte
rest
s M
ay-1
8 Re
ason
able
2
1
NSC1
814
Risk
Man
agem
ent
May
-18
Reas
onab
le
1
NSC1
817
Data
Qua
lity -
Ath
ena
Nov-
17
Lim
ited
2
1
NSC1
819
HR A
bsen
ce
Man
agem
ent
Mar
-18
Lim
ited
1 1
NSC1
822
Safe
guar
ding
and
In
vest
igat
ions
Ju
l-18
Subs
tant
ial
1
NSC1
823
Ove
rtim
e, E
xpen
ses
May
-18
Lim
ited
2
86
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 5
Com
plet
ed
sinc
e la
st
Aud
it C
omm
ittee
O
utst
andi
ng /
Ove
rdue
O
utst
andi
ng
with
Ext
ende
d Pe
riod
No
t Rea
ched
Not Y
et D
ue fo
r im
plem
enta
tion
P1
P2
P1
P2
P1
P2
P1
P2
NSC1
825
Corp
orat
e Po
licie
s M
ay-1
8 Li
mite
d
2
1
NSC1
829
Payr
oll
Mar
-18
Lim
ited
1
2
2018
/19
Inte
rnal
Aud
it Re
view
s
NSC1
906
Enac
t Rep
lace
men
t No
v-18
Re
ason
able
2
NSC1
907
GDP
R No
v-18
N/
A
2
NSC1
910
Capi
tal P
rogr
amm
e No
v-18
Re
ason
able
1
NSC1
912
Allo
wan
ces
Nov-
19
Lim
ited
1
2
NSC1
916
Duty
Man
agem
ent
Oct
-19
Lim
ited
9
NSC1
917
Vet
ting
Nov-
18
Reas
onab
le
1
2
NSC1
921
Esta
tes
Stra
tegy
No
v-18
Re
ason
able
1
NSC1
922
Stat
ions
, incl
udin
g bu
ildin
g ac
cess
and
ve
hicl
e se
curit
y
Jul-1
8 Re
ason
able
3
1
1
NSC1
929
Lone
Wor
king
1
2
TOTA
LS
1 10
0 9
2 24
1
19
KEY
FIND
ING
S
3.
Ther
e ar
e tw
o ur
gent
rec
omm
enda
tion
outs
tand
ing
and
past
the
agre
ed d
eadl
ines
:
3.1
Pay
roll
(NS
C18
29)
– th
is i
s re
gard
ing
chec
ks a
nd b
alan
ces
for
pens
iona
ble
pay,
for
whi
ch a
rep
ortin
g to
ol i
s be
ing
purs
ued.
A r
evis
ed d
ate
was
agr
eed
and
appl
ied.
3.2
L&D
Ski
lls (
NS
C18
04)
– th
is is
sue
is a
roun
d th
e sk
ills
data
hel
d by
Lea
rnin
g an
d D
evel
opm
ent,
the
times
cale
s w
ere
ambi
tious
, fo
llow
ing
whi
ch t
he s
ervic
e m
anag
er h
as le
ft th
e C
onst
abul
arie
s. D
iscu
ssio
ns a
re b
eing
hel
d w
ith th
e de
part
men
t to
iden
tify
reas
onab
le t
imes
cale
s fo
r im
plem
enta
tion.
3.3
Any
rec
omm
enda
tions
in
rela
tion
to p
olic
ies
are
advis
ed a
s in
pro
gres
s an
d re
quire
con
sulta
tion
prio
r to
im
plem
enta
tion.
A r
evis
ed p
olic
y re
view
pro
cess
ha
s co
mm
ence
d to
redu
ce t
he e
xten
t of t
ime
take
n to
upd
ate
/ app
rove
pol
icie
s, w
hich
will
con
tinue
to
be m
onito
red
as p
art
of th
e fo
llow
up
proc
ess.
87
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 6
3.4
It is
not
ed t
hat
the
maj
ority
of
reco
mm
enda
tions
con
tinui
ng t
o re
mai
n ou
tsta
ndin
g ar
e la
rgel
y du
e to
res
ourc
e an
d IT
req
uire
men
ts t
o be
sou
rced
. Lo
ng
stan
ding
rec
omm
enda
tions
hav
e be
en r
etai
ned
on th
e re
port,
as
the
risks
are
stil
l pre
sent
and
req
uire
add
ress
ing.
THE
BREA
KDO
WN
OF
THE
ACTI
ONS
ON
RECO
MM
END
ATI
ONS
KEY
:
The
dire
ctio
n of
tra
vel
for
impl
emen
ting
reco
mm
enda
tions
is
show
n fro
m r
ight
to
left.
The
audi
t w
ill r
emai
n on
the
tab
le u
ntil
all P
1 an
d P
2 re
com
men
datio
ns r
elat
ing
to t
hat
audi
t ar
e co
mpl
ete
and
repo
rted
as s
uch
to A
udit
Com
mitt
ee,
incl
udin
g th
ose
prev
ious
ly r
epor
ted.
Onc
e an
aud
it is
repo
rted
as c
ompl
ete
(hig
hlig
hted
in
grey
), th
e au
dit
will
be
rem
oved
fro
m t
he ta
ble.
Out
stan
ding
with
ext
ende
d pe
riod
agre
ed –
out
stan
ding
pas
t orig
inal
dea
dlin
e an
d an
ext
ensi
on h
as b
een
agre
ed w
ith m
anag
emen
t.
Out
stan
ding
and
pre
vious
ly r
epor
ted
as s
uch
to A
udit
Com
mitt
ee –
out
stan
ding
pas
t agr
eed
dead
line
and
no e
xten
sion
has
bee
n ag
reed
.
New
sin
ce th
e la
st A
udit
Com
mitt
ee m
eetin
g –
dead
line
has
rece
ntly
pas
sed
and
the
reco
mm
enda
tion
is o
utst
andi
ng.
Tota
l out
stan
ding
– in
clud
es;
exte
nded
per
iod
agre
ed,
prev
ious
ly r
epor
ted
as o
utst
andi
ng a
nd n
ew o
utst
andi
ng.
Not
yet
due
for
impl
emen
tatio
n –
the
agre
ed i
mpl
emen
tatio
n de
adlin
e ha
s no
t bee
n re
ache
d.
SCO
PE A
ND L
IMIT
ATIO
NS O
F TH
E RE
VIEW
4.
The
revie
w c
onsi
ders
the
pro
gres
s m
ade
in i
mpl
emen
ting
the
reco
mm
enda
tions
mad
e in
the
pre
vious
int
erna
l au
dit
repo
rts a
nd t
o es
tabl
ish
the
exte
nt t
o w
hich
m
anag
emen
t ha
s ta
ken
the
nece
ssar
y ac
tions
to
addr
ess
the
cont
rol
issu
es t
hat
gave
ris
e to
the
int
erna
l au
dit
reco
mm
enda
tions
. Th
e im
plem
enta
tion
of t
hese
re
com
men
datio
ns c
an o
nly
prov
ide
reas
onab
le a
nd n
ot a
bsol
ute
assu
ranc
e ag
ains
t m
isst
atem
ent o
r los
s.
5.
The
resp
onsi
bilit
y fo
r a
soun
d sy
stem
of
inte
rnal
con
trols
res
ts w
ith m
anag
emen
t an
d w
ork
perfo
rmed
by
inte
rnal
aud
it sh
ould
not
be
relie
d up
on t
o id
entif
y al
l st
reng
ths
and
wea
knes
ses
that
may
exi
st.
Nei
ther
sho
uld
inte
rnal
aud
it w
ork
be r
elie
d up
on t
o id
entif
y al
l ci
rcum
stan
ces
of f
raud
or
irreg
ular
ity,
shou
ld t
here
be
any,
alth
ough
the
aud
it pr
oced
ures
hav
e be
en d
esig
ned
so t
hat
any
mat
eria
l irre
gula
rity
has
a re
ason
able
pro
babi
lity
of d
isco
very
. E
ven
soun
d sy
stem
s of
inte
rnal
co
ntro
l may
not
be
proo
f ag
ains
t col
lusi
ve f
raud
.
6.
For
the
purp
oses
of
this
rev
iew
rel
ianc
e w
as p
lace
d on
man
agem
ent
to p
rovid
e in
tern
al a
udit
with
full
acce
ss t
o st
aff,
acco
untin
g re
cord
s an
d tra
nsac
tions
and
to
ensu
re t
he a
uthe
ntic
ity o
f the
se d
ocum
ents
.
RELE
ASE
OF
REPO
RT
7.
The
tabl
e be
low
set
s ou
t the
his
tory
of t
his
repo
rt.
88
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 7
Date
dra
ft re
port
issu
ed:
N/A
Date
man
agem
ent r
espo
nses
recd
: N
/A
Date
fina
l rep
ort i
ssue
d:
8th J
anua
ry 2
019
89
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 8
Det
aile
d R
epor
t FO
LLO
W U
P
8.
Man
agem
ent
repr
esen
tatio
ns w
ere
obta
ined
on
the
actio
n ta
ken
to a
ddre
ss t
he r
ecom
men
datio
ns.
Onl
y lim
ited
test
ing
has
been
ca
rried
out
to
conf
irm t
hese
man
agem
ent
repr
esen
tatio
ns.
9.
Rec
omm
enda
tions
are
spl
it in
to th
ose
past
thei
r orig
inal
/ re
vised
dea
dlin
e an
d th
ose
with
a re
vised
dea
dlin
e th
at h
as n
ot b
een
reac
hed.
The
follo
win
g m
atte
rs w
ere
iden
tifie
d as
out
stan
ding
pas
t the
ir or
igin
al/re
vise
d de
adlin
e:
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st
Resp
onse
NS
C17
03
Tran
spor
t S
ervi
ces
The
Join
t Tr
ansp
ort P
olic
y be
sub
ject
to
docu
men
t con
trol
and
appr
oval
pr
oces
s an
d cu
rren
t ope
ratin
g pr
oced
ures
sho
uld
be u
pdat
ed a
nd
mai
ntai
ned.
2 Th
e Jo
int T
rans
port
Pol
icy
Forc
e P
olic
y O
ffice
r, C
orpo
rate
D
evel
opm
ent a
nd
Cha
nge
to b
e co
nsul
ted
rega
rdin
g do
cum
ent
cont
rol a
nd a
ppro
val
proc
ess.
It s
houl
d be
no
ted
this
is a
Tra
nspo
rt S
ervi
ces
only
Pol
icy
as
it w
as d
eter
min
ed th
e P
olic
y w
as m
ore
alig
ned
to a
sta
ndar
d op
erat
ing
proc
edur
e.
The
stan
dard
ope
ratin
g pr
oced
ures
are
in th
e pr
oces
s of
bei
ng
upda
ted
to re
flect
T13
re
stru
ctur
e an
d pr
oces
s ch
ange
s.
Hea
d of
Tr
ansp
ort
31/1
0/16
30
/9/1
8 27
/6/1
8 Th
e Tr
ansp
ort
polic
y/S
OP
s ha
ve
all b
e re
vise
d an
d th
e fir
st d
raft
sent
fo
r for
mal
pol
icy
revi
ew. A
rev
ised
da
te w
as s
et b
y in
tern
al a
udit
to
asse
ss p
rogr
ess.
D
ue to
sta
ff si
ckne
ss a
dat
e to
mee
t to
disc
uss
outs
tand
ing
reco
mm
enda
tions
ha
s be
en s
et a
s 25
/10/
2018
.
NS
C18
12
Bus
ines
s Th
e bu
sine
ss
inte
rest
pol
icy
to
2 Th
e po
licy
is o
ut to
co
nsul
tatio
n, w
aitin
g to
S
enio
r C
ompl
aint
s,
30/9
/18
31/1
2/18
11
/10/
18
The
Bus
ines
s In
tere
st P
olic
y is
90
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 9
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st
Resp
onse
Inte
rest
s be
exp
ande
d to
in
clud
e w
hat
cons
titut
es a
bu
sine
ss in
tere
st,
whe
n an
d ho
w th
is
shou
ld b
e de
clar
ed a
nd
thos
e al
low
able
; po
lice
fund
ed
cour
ses,
to e
nsur
e th
at in
divi
dual
s on
ly u
nder
take
co
urse
s in
the
inte
rest
of t
he
Con
stab
ular
ies
and
not f
or
pers
onal
gai
n;
requ
irem
ent f
or
man
ager
s to
co
nsid
er a
ppro
val
for s
taff
unde
rtaki
ng p
olic
e fu
nded
cou
rses
to
be c
onsi
dere
d on
an
indi
vidu
al
basi
s.
be ra
tifie
d an
d on
to
JNC
C. T
he c
ompl
etio
n da
te is
to re
ach
this
po
int i
n th
e ap
prov
al
proc
ess,
as
the
subs
eque
nt s
tage
s ar
e ou
tsid
e of
the
depa
rtmen
t's c
ontro
l.
Appe
als
&
Pol
icy
Man
ager
st
ill u
nder
revi
ew
by P
SD
. The
re is
an
issu
e ar
ound
ca
tego
risin
g P
oliti
cally
R
estri
cted
Pos
ts.
Rec
ent
disc
ussi
ons
wer
e th
at th
e po
sts
to
be in
clud
ed w
ere
to b
e ag
reed
by
HR
, PS
D a
nd
UN
ISO
N a
t the
ne
xt In
tegr
ity
Boa
rd o
n 29
th
Nov
embe
r. Th
e B
usin
ess
Inte
rest
P
olic
y pu
blis
hed
on th
e in
trane
t is
the
Bus
ines
s In
tere
st P
olic
y th
at is
dat
ed J
une
2016
.
NS
C18
12
Bus
ines
s In
tere
sts
Bus
ines
s in
tere
st
revi
ews
be
unde
rtake
n at
the
desi
gnat
ed re
view
pe
riods
, as
agre
ed
whe
n th
e bu
sine
ss
inte
rest
was
ap
prov
ed.
2 Th
e le
vel o
f out
stan
ding
re
view
s ha
s im
prov
ed,
how
ever
ther
e is
stil
l a
back
log
to c
lear
. A
proc
ess
is in
pla
ce fo
r tim
ing
of re
view
s de
pend
ing
on th
eir r
isk,
w
ith lo
w le
vel r
isks
be
ing
revi
ewed
eve
ry
two
year
s, u
p to
hig
h
Sen
ior
Com
plai
nts,
Ap
peal
s &
P
olic
y M
anag
er
30/1
1/20
18
03
/10/
2018
91
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 1
0
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st
Resp
onse
risk
case
s be
ing
revi
ewed
eve
ry f
ew
mon
ths.
N
SC
1817
IM -
D
ata
Qua
lity
A re
solu
tion
be
soug
ht o
n th
e ou
tsta
ndin
g an
d gr
owin
g du
plic
ate
Athe
na re
cord
s ac
ross
eac
h of
the
cate
gorie
s.
2 Th
e 50
0 lim
ited
is a
te
chni
cal li
mita
tion
set
by th
e AM
O.
A c
urre
nt
chan
ge n
otic
e is
bei
ng
prop
osed
to re
mov
e ca
ses
whi
ch h
ave
been
re
view
ed b
ut th
at
cann
ot b
e m
erge
d, fr
om
the
mat
ch &
mer
ge lis
t.
Ther
e is
a c
ost e
lem
ent
to th
is c
hang
e w
hich
ha
s to
be
agre
ed a
nd
prio
ritis
ed b
y the
BD
A an
d AM
O.
A nu
mbe
r of
issu
es re
mai
n un
reso
lved
with
in
Athe
na w
hich
has
a
dire
ct im
pact
of t
he
leve
l of d
uplic
ates
in th
e sy
stem
.
Hea
d of
In
form
atio
n M
anag
emen
t /
D/S
upt J
oint
Ju
stic
e C
omm
and
- At
hena
Lea
d
1/4/
18
31/1
2/18
20
/9/1
8 Th
e H
ead
of
Info
rmat
ion
Man
agem
ent i
s m
eetin
g w
ith th
e At
hena
Pro
ject
Te
am to
dis
cuss
th
e fo
rce
busi
ness
cas
e pr
opos
als
on h
ow
this
can
be
reso
urce
d in
fu
ture
.
NS
C18
25
Cor
pora
te –
P
olic
ies
A fo
rmal
act
ion
plan
be
deve
lope
d st
atin
g th
e ke
y ta
sks
and
targ
et
com
plet
ion
date
fo
r sep
arat
ing
polic
ies
and
proc
edur
al
guid
ance
.
2 Li
nked
to A
ctio
n P
lan
Find
ing
1.
An a
ctio
n pl
an w
ill b
e dr
awn
up to
con
side
r th
e ac
tions
and
de
adlin
es a
ssoc
iate
d w
ith s
plitt
ing
the
docu
men
tatio
n in
to
polic
ies
and
proc
edur
es.
Cor
pora
te
Sup
port
M
anag
er
31/1
2/20
18
03
/10/
2018
92
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 1
1
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st
Resp
onse
In a
dditi
on th
e P
olic
y C
reat
ion
docu
men
t sh
ould
be
upda
ted
to
refle
ct th
e ch
ange
s to
la
yout
s ar
ticul
ated
ab
ove.
N
SC
1825
C
orpo
rate
–
Pol
icie
s
A re
view
of
with
draw
n po
licie
s be
und
erta
ken
to
iden
tify
if th
e po
licy
deta
ils a
re
addr
esse
d by
an
othe
r pol
icy,
an
d fo
r th
ose
that
ar
e no
t cov
ered
by
anot
her p
olic
y, a
fo
rmal
act
ion
plan
be
dra
wn
up w
hich
re
cord
s th
e ac
tion
to b
e ta
ken
to
ensu
re th
at th
ese
are
revi
ewed
pr
ompt
ly a
nd a
ne
w p
olic
y de
velo
ped.
2 Li
nked
to A
ctio
n P
lan
Find
ing
1 &
4
A re
view
of t
he P
olic
y C
reat
ion
docu
men
t will
in
corp
orat
e gu
idan
ce
on h
ow w
ithdr
awn
polic
ies
are
revi
ewed
an
d co
nsid
ered
goi
ng
forw
ard.
Cor
pora
te
Sup
port
M
anag
er
31/1
2/20
18
03
/10/
2018
NS
C19
17
Vetti
ng
A se
rvic
e re
ques
t be
put
to W
PC
, th
e C
oreV
et
syst
em s
uppl
ier,
to
iden
tify
whe
ther
pa
ssw
ord
cont
rols
co
uld
be
intro
duce
d to
im
prov
e au
then
ticat
ion
2 W
PC
hav
e ad
vise
d th
at
they
can
am
end
the
setti
ngs.
The
y w
ill g
ive
the
forc
es a
dmin
istra
tor
acce
ss to
ena
ble
spec
ified
offi
cers
to
upda
te.
Sen
ior
Com
plai
nts,
Ap
peal
s an
d P
olic
y M
anag
er
31/1
0/20
18
22
/11/
2018
93
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 1
2
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st
Resp
onse
cont
rol in
line
with
th
e IT
Sec
urity
P
olic
y. I
n th
e m
eant
ime,
sta
ff be
ad
vise
d to
set
st
rong
pas
swor
ds
and
to c
hang
e th
ese
on a
pe
riodi
c ba
sis.
N
SC
1922
S
tatio
ns,
incl
udin
g bu
ildin
g ac
cess
an
d ve
hicl
e se
curit
y
A re
view
of
offic
ers
that
hav
e ac
cess
to th
e B
ury
St E
dmun
ds
arm
oury
be
unde
rtake
n to
en
sure
that
onl
y of
ficer
s th
at h
ave
curr
ent i
n da
te fi
re
arm
s tra
inin
g an
d re
quire
acc
ess
are
able
to a
cces
s th
e ar
mou
ry.
2 Fi
rear
ms
Offi
cers
use
th
e C
hron
ical
ap
plic
atio
n to
acc
ess
the
arm
oury
and
the
cont
ents
con
tain
ed in
it.
e-P
erso
nnel
file
s ne
ed
to b
e up
date
d to
refle
ct
the
offic
ers’
cur
rent
tra
inin
g st
atus
. ER
P
does
not
hav
e an
ac
cura
te re
cord
of
offic
ers
that
hav
e un
derta
ken
firea
rms
train
ing.
Wor
k is
un
derw
ay to
add
ress
th
e in
accu
raci
es o
f re
cord
s w
ithin
ER
P.
Onl
y of
ficer
s th
at h
ave
unde
rtake
n fir
earm
s tra
inin
g ar
e gr
ante
d ac
cess
to th
e ar
mou
ry,
it is
the
train
ing
reco
rds
on E
RP
bei
ng in
corr
ect.
The
Join
t L&
D
and
The
Join
t In
form
atio
n S
ecur
ity D
ept
30/1
1/20
18
12
/11/
2018
NS
C19
29 L
one
Wor
king
A
mor
e th
orou
gh
chec
k of
risk
as
sess
men
ts b
e
2 Th
e Jo
int C
onst
abul
ary
Hea
lth a
nd S
afet
y Ar
rang
emen
t mak
es th
e
Hea
lth a
nd
Saf
ety
Man
ager
/
Advi
sors
01/1
1/20
18
19
/10/
2018
94
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 1
3
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st
Resp
onse
cond
ucte
d, a
t le
ast o
n a
sam
ple
basi
s, to
ens
ure
that
all
risks
, in
clud
ing
thos
e re
latin
g to
lone
w
orke
rs h
ave
been
iden
tifie
d an
d ap
prop
riate
co
ntro
ls m
easu
res
have
bee
n pu
t in
plac
e.
requ
irem
ent t
o en
sure
th
at ri
sk a
sses
smen
ts
are
in p
lace
upo
n th
e re
leva
nt H
eads
of
Dep
artm
ent.
Lin
e M
anag
ers/
Com
man
ders
ar
e al
so e
xpec
ted
to
ensu
re th
at ri
sk
asse
ssm
ents
are
in
plac
e an
d th
is in
clud
es
iden
tifyi
ng a
nd e
nsur
ing
that
per
sons
who
are
lo
ne w
orke
rs h
ave
spec
ific
cont
rol
mea
sure
s in
pla
ce
whe
re a
haz
ard
and
risk
to th
em e
xist
s fo
r lo
ne
wor
king
. The
Hea
lth
and
Saf
ety
Team
un
derta
ke p
erio
dic
revi
ews
of ri
sk
asse
ssm
ents
and
this
is
reco
rded
via
our
mon
itorin
g sp
read
shee
t. T
he
purp
ose
of th
e H
ealth
an
d S
afet
y Te
am
outs
ide
of b
eing
lega
lly
requ
ired
is to
pro
vide
su
ppor
t and
gui
danc
e to
the
Con
stab
ular
ies
on c
ompl
ying
with
he
alth
and
saf
ety
legi
slat
ion.
Hea
lth a
nd
Saf
ety
Man
ager
has
pr
evio
usly
issu
ed
95
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 1
4
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st
Resp
onse
Hea
rth a
nd S
afet
y Ad
viso
rs w
ith a
n ob
ject
ive
to ‘a
udit’
risk
as
sess
men
ts m
ore
thor
ough
ly a
nd a
te
mpl
ate
form
to
supp
ort t
his
proc
ess
has
been
des
igne
d.
96
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 1
5 Th
e fo
llow
ing
mat
ters
wer
e id
entif
ied
as o
utst
andi
ng, w
ith a
rev
ised
dea
dlin
e no
t yet
reac
hed:
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st R
espo
nse
NS
C17
07 D
uty
Man
agem
ent
Sys
tem
A fu
ll au
dit t
rail
for
all a
spec
ts o
f DM
S
to b
e m
ade
func
tiona
l.
2 It
has
been
rais
ed w
ith
Cro
wn
the
requ
irem
ent t
o ha
ve
an a
udit
on th
e no
tes
sect
ion
on D
MS
, as
have
oth
er P
olic
e Fo
rces
. Thi
s is
with
th
eir R
esea
rch
and
Dev
elop
men
t tea
m to
be
look
ed a
t in
the
rela
tion
to fu
ture
re
leas
es.
Chi
ef
Fina
nce
Offi
cer
(Nor
folk
)
30/6
/17
31/3
/19
17/9
/18
This
is s
till b
eing
co
nsid
ered
by
Cro
wn
for a
futu
re
rele
ase
of th
e D
MS
sy
stem
. Whe
n au
dit
func
tiona
lity
is
impl
emen
ted
this
of
ten
affe
cts
the
syst
ems
perfo
rman
ce, w
hich
w
ill re
quire
test
ing
and
revi
ew p
rior t
o be
ing
used
. N
SC
1707
Dut
y M
anag
emen
t S
yste
m
DM
S to
be
used
fo
r rec
ordi
ng
over
time,
and
in
vest
igat
ed to
es
tabl
ish
if ap
prov
al o
f ov
ertim
e ca
n be
re
cord
ed o
n D
MS
.
2 Th
e R
MU
is w
orki
ng to
re
duce
exc
eptio
ns
befo
re e
mba
rkin
g on
th
e is
sues
with
ov
ertim
e. D
eliv
erin
g ov
ertim
e w
ill re
quire
a
proj
ect t
o be
set
up
to
deliv
er tr
aini
ng a
nd
unde
rsta
ndin
g to
all
line
man
ager
s an
d th
e co
nfid
ence
that
cla
ims
will
be
accu
rate
ly
reco
rded
.
Chi
ef
Fina
nce
Offi
cer
(Nor
folk
)
31/1
/18
31/3
/19
17/9
/18
A sm
art f
orm
is
bein
g de
velo
ped
for
reco
rdin
g po
lice
offic
er o
verti
me.
D
MS
can
not b
e us
ed
for o
verti
me
until
the
num
ber o
f ex
cept
ions
has
re
duce
d. A
ltern
ativ
e pr
oces
ses
are
in
plac
e to
man
age
over
time.
NS
C17
07 D
uty
Man
agem
ent
Sys
tem
Mon
thly
re
conc
iliat
ions
to
be u
nder
take
n be
twee
n D
MS
and
pa
yrol
l to
esta
blis
h if
the
valu
e of
2 N
ot a
ll are
as o
f the
bu
sine
ss p
rovi
de
info
rmat
ion
of
Ove
rtim
e to
the
RM
U,
and
ther
efor
e th
is is
ch
alle
ngin
g to
del
iver
.
Hea
d of
Tr
ansa
ctio
nal
Ser
vice
s
30/6
/17
31/3
/19
17/9
/18
A re
view
of a
ll the
ex
cept
ions
bei
ng
gene
rate
d by
DM
S is
un
derw
ay to
agr
ee
wha
t is
requ
ired
to
upda
te D
MS
or
97
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 1
6
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st R
espo
nse
over
time
on D
MS
ag
rees
with
the
valu
e of
ove
rtim
e pa
id b
y pa
yrol
l.
This
wou
ld b
e a
Fina
nce
task
. ch
ange
wor
king
pr
actic
es to
el
imin
ate,
whe
re
poss
ible
exc
eptio
ns.
This
wor
k is
bei
ng
com
plet
ed b
y th
e E
RP
Pro
gram
me
Del
iver
y M
anag
er
and
the
RM
U-
Sys
tem
/Sup
port
and
Man
agem
ent
Info
rmat
ion
man
ager
. A p
roce
ss
for a
ppro
ving
ch
ange
s to
the
set-
up o
f DM
S h
as b
een
agre
ed.
NS
C17
14
Ove
rtim
e,
Exp
ense
s an
d Ad
ditio
nal
Pay
men
ts
Join
t exp
ense
s po
licie
s fo
r Nor
folk
an
d S
uffo
lk
Con
stab
ular
ies
for
polic
e of
ficer
s an
d po
lice
staf
f to
be
deve
lope
d. T
he
upda
ted
expe
nses
po
licie
s to
be
plac
ed o
n th
e in
trane
t.
2 N
ew C
ondi
tions
of
Ser
vice
for
Pol
ice
Sta
ff ar
e to
be
intro
duce
d fro
m A
pril
2017
(thi
s w
as e
xpec
ted
to b
e im
plem
ente
d in
O
ctob
er 2
016
but w
as
dela
yed
natio
nally
). As
a
resu
lt w
e w
ill ta
ke
this
opp
ortu
nity
to
revi
se o
nce
the
new
C
ondi
tions
hav
e be
en
agre
ed a
nd
impl
emen
ted.
Hea
d of
Tr
ansa
ctio
nal
Ser
vice
s
30/6
/17
31/3
/19
19/9
/18
Whi
lst i
t is
ackn
owle
dged
and
ac
cept
ed th
at th
is
need
s to
be
done
, re
sour
ces
and
time
have
lim
ited
wha
t ac
tion
can
be ta
ken,
as
suc
h an
ex
tens
ion
to th
e or
igin
al d
eadl
ine
is
requ
ired.
NS
C17
16
Pen
sion
s Ad
min
istra
tion
The
payr
oll s
yste
m
to b
e in
vest
igat
ed
to e
stab
lish
if a
repo
rt ca
n be
run
2 Th
e pe
nsio
n co
ntrib
utio
ns a
re s
et a
t sy
stem
leve
l and
the
appr
opria
te
N/A
1/
3/17
31
/3/1
9 7/
3/18
C
heck
s, b
alan
ces
and
reco
ncili
atio
ns
that
are
com
plet
ed in
re
spec
t of
98
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 1
7
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st R
espo
nse
to c
alcu
late
pe
nsio
nabl
e pa
y fo
r sta
ff.
cont
ribut
ion
is
dedu
cted
from
the
empl
oyee
in
acco
rdan
ce w
ith th
eir
pens
iona
ble
pay e
ach
mon
th.
I acc
ept t
hat
we
cann
ot c
heck
this
at
a g
loba
l leve
l, ho
wev
er I
am
conf
iden
t tha
t the
de
duct
ions
mad
e ar
e co
rrec
t at a
n em
ploy
ee le
vel a
nd
the
nece
ssity
for a
pe
nsio
nabl
e pa
y fig
ure
is n
ot c
onsi
dere
d as
a
sign
ifica
nt is
sue.
H
owev
er w
hen
repo
rting
for E
RP
is
revi
ewed
then
this
will
be
con
side
red
as p
art
of th
e re
quire
men
ts.
pens
iona
ble
pay,
in
clud
ing
som
e ve
ry
chal
leng
ing
retu
rns
to L
ocal
Gov
ernm
ent
Pen
sion
Sch
eme
and
Pol
ice
Offi
cer
pens
ion
adm
inis
trato
rs a
t ye
ar e
nd. T
he A
udit
Com
mitt
ee a
ccep
ted
thes
e m
itiga
tions
. In
ad
ditio
n, th
e C
onst
abul
ary i
s pu
rsui
ng a
new
re
porti
ng to
ol th
at
will
add
ress
the
issu
es b
ut th
is w
ill
not b
e im
plem
ente
d un
til th
e en
d of
the
2018
/19
finan
cial
ye
ar.
NS
C18
04 H
R
– Le
arni
ng a
nd
Dev
elop
men
t
Suc
cess
ion
plan
ning
be
linke
d to
the
wor
kfor
ce
plan
to e
nsur
e th
at
ther
e ar
e ap
prop
riate
ly
qual
ified
and
tra
ined
offi
cers
.
2 A
fram
ewor
k fo
r su
cces
sion
pla
nnin
g ha
s be
en e
stab
lishe
d,
and
a pi
lot h
eld
invo
lvin
g se
nior
le
ader
s w
ithin
the
Con
stab
ular
ies
(Chi
ef
Insp
ecto
r and
abo
ve).
This
incl
uded
car
eer
conv
ersa
tions
, chi
ef
offic
er m
eetin
gs in
or
der t
o dr
aw u
p sh
ort,
med
ium
and
long
term
su
cces
sion
pla
ns. T
he
Dire
ctor
of
HR
30
/9/1
8 31
/3/1
9 4/
10/1
8 Fe
edba
ck h
as b
een
colla
ted
and
is b
eing
re
view
ed b
y th
e D
irect
or o
f HR
. Thi
s fe
edba
ck w
ill
influ
ence
how
this
is
rolle
d ou
t acr
oss
the
cons
tabu
larie
s –
incl
udin
g po
lice
staf
f.
99
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 1
8
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st R
espo
nse
feed
back
from
the
pilo
t w
ill b
e us
ed to
refin
e an
d de
velo
p th
e fra
mew
ork
in
conj
unct
ion
with
w
orkf
orce
pla
nnin
g fo
r th
e re
st o
f the
or
gani
satio
n.
NS
C18
04 H
R
– Le
arni
ng a
nd
Dev
elop
men
t
A st
anda
rd
proc
ess
be
deve
lope
d fo
r the
ap
prov
al o
f tra
inin
g. T
his
shou
ld in
clud
e th
e Le
arni
ng a
nd
Dev
elop
men
t de
partm
ent t
o ap
prov
e al
l re
ques
ts fo
r tra
inin
g, a
nd b
e no
tifie
d w
hen
cour
ses
are
arra
nged
by
area
s su
ch a
s S
peci
alis
t O
pera
tions
and
Fi
rear
ms.
2 Le
arni
ng a
nd
Dev
elop
men
t are
pr
ogre
ssin
g w
ork
to
unde
rsta
nd th
e flo
w o
f re
quire
men
ts a
roun
d ex
tern
al tr
aini
ng.
Thro
ugh
unde
rsta
ndin
g th
e flo
w, L
earn
ing
and
Dev
elop
men
t will
be
able
to d
eter
min
e ex
pend
iture
aga
inst
pl
anne
d an
d pr
opos
ed
bids
. Fol
low
ing
this
ex
erci
se, L
earn
ing
and
Dev
elop
men
t will
pr
esen
t the
DC
Cs
with
al
l tra
inin
g bi
ds fo
r sc
rutin
y w
ith
reco
mm
enda
tions
fro
m L
earn
ing
and
Dev
elop
men
t and
ju
stifi
catio
n fro
m th
e de
partm
ent h
eads
.
Tem
pora
ry
Chi
ef
Insp
ecto
r -
Ope
ratio
nal
Trai
ning
M
anag
er
30/9
/18
30/6
/19
4/10
/18
This
pro
cess
has
be
en a
gree
d w
ith th
e D
CC
s an
d is
bei
ng
rolle
d ou
t for
pl
anni
ng
prep
arat
ions
for
2019
/20
year
.
NS
C18
04 H
R
– Le
arni
ng a
nd
Dev
elop
men
t
ER
P b
e in
vest
igat
ed to
see
if
adeq
uate
qua
lity
2 Le
arni
ng a
nd
Dev
elop
men
t are
w
orki
ng w
ith C
ap
Tem
pora
ry
Chi
ef
Insp
ecto
r -
30/9
/18
31/3
/19
4/10
/18
A te
chni
cal f
ix is
stil
l be
ing
prog
ress
ed b
y C
ap G
emin
i.
100
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 1
9
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st R
espo
nse
cont
rol m
easu
res
can
be s
et u
p to
pr
even
t pol
ice
staf
f be
ing
assi
gned
co
urse
s an
d sk
ills
that
onl
y po
lice
offic
ers
can
achi
eve.
Gem
ini a
nd h
ave
iden
tifie
d a
num
ber o
f ch
ange
requ
ests
to
the
ER
P B
oard
to
impr
ove
the
wor
k flo
w,
and
ther
efor
e im
prov
e th
e qu
ality
of d
ata
inpu
t int
o th
e sy
stem
.
Ope
ratio
nal
Trai
ning
M
anag
er
NS
C18
04 H
R
– Le
arni
ng a
nd
Dev
elop
men
t
Trai
ning
and
use
r gu
ides
be
prov
ided
to
the
Lear
ning
an
d D
evel
opm
ent
Adm
inis
trato
rs s
o th
at s
kills
dat
a is
ac
cura
tely
and
co
rrec
tly re
cord
ed
on E
RP
.
2 Th
is w
ill b
e dr
afte
d an
d co
mpl
eted
as
part
of th
e w
ork
liste
d.
Tem
pora
ry
Chi
ef
Insp
ecto
r -
Ope
ratio
nal
Trai
ning
M
anag
er
30/9
/18
31/3
/19
4/10
/18
This
is s
till in
pr
ogre
ss.
NS
C18
04 H
R
– Le
arni
ng a
nd
Dev
elop
men
t
Trai
ning
exp
iry
date
s be
ass
igne
d fo
r all
cour
ses,
to
enab
le re
min
ders
to
be
sent
at
desi
gnat
ed
inte
rval
s an
d/or
E
RP
upd
ated
with
a
new
exp
iry d
ate.
2 Au
tom
ated
ER
P
rem
inde
rs a
re
prob
lem
atic
ow
ing
quan
tity.
For
ce
Anno
unce
men
ts h
ave
advi
sed
indi
vidu
als
that
it is
thei
r re
spon
sibi
lity t
o un
ders
tand
thei
r ow
n sk
ill p
rofil
e.
Tem
pora
ry
Chi
ef
Insp
ecto
r -
Ope
ratio
nal
Trai
ning
M
anag
er
30/6
/18
31/3
/19
4/10
/18
A se
mi-a
utom
ated
m
etho
d th
at re
cord
s ex
piry
dat
es h
as
been
dev
elop
ed. I
n co
njun
ctio
n w
ith th
e se
mi-a
utom
ated
m
etho
d an
d tra
inin
g le
ader
s th
is e
nabl
es
bette
r tra
ckin
g of
co
mpe
tenc
ies.
A
long
er te
rm s
olut
ion
surr
ound
ing
a se
lf-he
lp fu
nctio
n w
ill b
e av
aila
ble
via
the
Lear
ning
M
anag
emen
t S
yste
m.
101
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 2
0
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st R
espo
nse
NS
C18
04 H
R
– Le
arni
ng a
nd
Dev
elop
men
t
Sta
ndar
d tit
les
be
assi
gned
for a
ll co
urse
s an
d th
ese
to b
e up
load
ed o
n to
ER
P s
o th
at
Lear
ning
and
D
evel
opm
ent s
taff
sele
ct th
e ap
prop
riate
cou
rse
for s
taff.
2 Th
e E
RP
Pro
ject
has
id
entif
ied
nam
ing
disc
repa
ncie
s w
ithin
sk
ills.
The
pro
ject
is
setti
ng n
amin
g co
nven
tions
whe
n ne
w
cour
se d
etai
ls.
Tem
pora
ry
Chi
ef
Insp
ecto
r -
Ope
ratio
nal
Trai
ning
M
anag
er
30/9
/18
31/3
/19
4/10
/18
This
wor
k is
stil
l in
prog
ress
. Th
e Ta
sk
and
Fini
sh g
roup
is
the
gove
rnan
ce
mec
hani
sm fo
r thi
s w
ork.
An
actio
n pl
an
has
been
pro
duce
d to
add
ress
this
, pr
ogre
ss a
gain
st th
is
is m
onito
red
by th
e Ta
sk a
nd F
inis
h G
roup
. N
SC
1804
HR
–
Lear
ning
and
D
evel
opm
ent
Eva
luat
ion
of
train
ing
be
unde
rtake
n at
the
desi
gnat
ed
inte
rval
s at
bot
h tw
o w
eeks
afte
r th
e co
urse
is
com
plet
ed a
nd
thre
e m
onth
s af
ter
the
train
ing
cour
se
is c
ompl
eted
.
2 Th
e O
pera
tiona
l Tr
aini
ng M
anag
er is
cu
rren
tly w
ritin
g a
new
ev
alua
tion
stra
tegy
w
hich
will
sit
acro
ss a
ll tra
inin
g. A
s pa
rt of
the
impl
emen
tatio
n of
P
EQ
F (a
nd th
e P
olic
e C
onst
able
Deg
ree
Appr
entic
eshi
p),
eval
uatio
n w
ill b
e m
ore
rigor
ous
give
n th
e C
onst
abul
arie
s'
rela
tions
hip
with
a
high
er e
duca
tion
Inst
itutio
n. T
he
stra
tegy
is b
eing
w
ritte
n to
sup
port
this
. C
urre
ntly
all s
tude
nts
are
track
ed th
roug
hout
th
e tw
o ye
ar p
roba
tion
perio
d, a
nd e
xit
inte
rvie
ws
and
case
Tem
pora
ry
Chi
ef
Insp
ecto
r
30/0
9/20
18
31/0
3/20
19
03/1
0/20
18
This
is s
till in
pr
ogre
ss.
102
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 2
1
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st R
espo
nse
conf
eren
ces
are
mon
itore
d to
ens
ure
that
any
less
ons
lear
ned
are
capt
ured
an
d in
corp
orat
ed in
to
futu
re tr
aini
ng.
NS
C18
04 H
R
– Le
arni
ng a
nd
Dev
elop
men
t
A fu
ll re
view
of t
he
skill
s da
ta
reco
rded
on
ER
P
to b
e un
derta
ken,
re
ques
ting
skills
da
ta h
eld
and
train
ers
from
in
divi
dual
de
partm
ents
, to
ensu
re th
at E
RP
ha
s an
acc
urat
e re
cord
and
can
be
used
to id
entif
y sk
ill re
quire
men
ts
and
gaps
acr
oss
the
forc
es.
1 Th
e E
RP
ski
lls re
view
is
wel
l und
erw
ay. T
he
findi
ngs
are
bein
g fe
d in
to th
e E
RP
Boa
rd fo
r fu
ture
cha
nges
to th
e E
RP
sys
tem
, whi
ch
will
requ
ire c
hang
e re
ques
ts. T
he E
RP
B
oard
has
agr
eed
the
proc
urem
ent o
f new
m
anag
emen
t in
form
atio
n so
ftwar
e fo
r the
ER
P s
yste
m,
whi
ch w
ill a
lso
prov
ide
assi
stan
ce in
this
ar
ea.
Tem
pora
ry
Chi
ef
Insp
ecto
r -
Ope
ratio
nal
Trai
ning
M
anag
er
27/6
/18
31/3
/19
4/10
/18
A re
view
is
unde
rway
. Pro
gres
s ag
ains
t thi
s re
view
is
bein
g m
onito
red
by
the
Task
and
Fin
ish
Gro
up.
NS
C18
04 H
R
– Le
arni
ng a
nd
Dev
elop
men
t
ER
P b
e us
ed fo
r re
cord
ing
all
sche
dulin
g of
tra
inin
g co
urse
s an
d ex
pect
ed
atte
ndee
s by
the
Lear
ning
and
D
evel
opm
ent
Adm
inis
trato
rs,
and
be u
pdat
ed
whe
n of
ficer
s ha
ve
com
plet
ed
cour
ses.
2 P
rote
ctiv
e S
ervi
ces
wer
e re
quire
d to
hol
d th
e "M
ercu
ry R
epor
t" w
hich
is a
nat
iona
l re
quire
men
t. S
igni
fican
t sec
tions
of
this
hav
e to
be
unde
rtake
n m
anua
lly.
ER
P c
ould
be
bette
r ut
ilise
d to
com
plet
e th
is. W
ork
cont
aine
d w
ithin
the
othe
r m
anag
emen
t
Tem
pora
ry
Chi
ef
Insp
ecto
r -
Ope
ratio
nal
Trai
ning
M
anag
er
30/9
/18
31/3
/19
4/10
/18
Map
ping
of t
hose
el
emen
ts o
f the
M
ercu
ry r
epor
t tha
t ar
e no
t sto
red
with
in
ER
P h
as b
een
unde
rtake
n, a
nd
thes
e ar
eas
have
be
en h
ighl
ight
ed to
st
akeh
olde
rs.
Sta
keho
lder
s ha
ve
been
info
rmed
of t
he
bene
fits
of a
n au
tom
ated
app
roac
h
103
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 2
2
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st R
espo
nse
Dis
cont
inui
ng th
e us
e of
sp
read
shee
ts.
resp
onse
s w
ill en
able
th
is to
be
prog
ress
ed.
to th
is s
ubm
issi
on
whi
ch w
ill a
lso
enab
le m
ore
info
rmed
wor
kfor
ce
plan
ning
. N
SC
1811
P
rocu
rem
ent –
C
ompl
ianc
e w
ith C
SO
w
ithin
de
partm
ents
Ord
ers
on
Tran
man
to b
e au
thor
ised
el
ectro
nica
lly, a
nd
auth
ority
lim
its o
n Tr
anm
an to
be
set
so th
at th
ey a
re in
lin
e w
ith th
e C
onst
abul
arie
s jo
int c
ontra
ct
stan
ding
ord
ers.
2 A
revi
ew o
f the
pr
esen
t and
pot
entia
l au
tom
atio
n of
Tr
anm
an w
ill b
e ca
rrie
d ou
t with
a v
iew
to
cos
t effe
ctiv
ely
max
imis
ing
the
abili
ty
of th
e sy
stem
whe
re
appr
opria
te. T
rans
port
serv
ice
will
ado
pt th
e or
gani
satio
ns
purc
hasi
ng a
ctiv
ity
limits
.
Hea
d of
Fi
nanc
e an
d H
ead
of
Tran
spor
t S
ervi
ces
31/3
/18
31/3
/19
27/6
/18
Tran
man
was
up
date
d by
Civ
ica
back
in D
ecem
ber
2017
. The
au
thor
isat
ion
was
ad
ded
at in
voic
e st
age
on T
ranm
an,
whi
ch is
inco
rrec
t an
d ha
s no
w b
een
rem
oved
. C
ivic
a pr
ovid
ed a
qu
otat
ion,
as
they
w
ant t
o ch
arge
for
the
appr
oval
pro
cess
in
the
right
pla
ce.
Unf
ortu
nate
ly a
t a
cost
of £
10k.
A
mee
ting
was
hel
d ag
ain
with
Civ
ica
to
and
nego
tiate
a
bette
r dea
l but
this
w
as n
ot p
ossi
ble.
A
requ
est f
or c
hang
e fo
rm is
to b
e su
bmitt
ed to
the
Org
anis
atio
nal
Boa
rd fo
r ap
prov
al o
f th
e fu
ndin
g.
NS
C18
12
Bus
ines
s E
mpl
oym
ent
cont
ract
s be
2
The
polic
y ha
s be
en
revi
sed
to re
flect
S
enio
r C
ompl
aint
s,
30/9
/18
31/3
/19
9/10
/18
This
is s
till w
ork
in
prog
ress
. A re
view
104
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 2
3
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st R
espo
nse
Inte
rest
s re
view
ed fo
r st
aff
that
atte
nd p
olic
e fu
nded
cou
rses
to
be re
quire
d to
re
imbu
rse
the
Con
stab
ular
ies
if th
ey le
ave
with
in
set t
ime
perio
ds o
f at
tend
ing
the
cour
se. A
s w
ell a
s se
tting
rest
rictio
ns
on w
orki
ng w
ithin
a
set g
eogr
aphi
cal
area
for
a gi
ven
perio
d.
setti
ng re
stric
tions
on
geog
raph
ical
are
a fo
r w
orki
ng a
nd o
n co
urse
re
imbu
rsem
ent.
Con
side
ratio
n is
bei
ng
give
n to
incl
udin
g re
imbu
rsem
ents
with
in
empl
oym
ent c
ontra
cts
and
wha
t wou
ld b
e en
forc
eabl
e. A
n im
plem
enta
tion
date
of
30th
Sep
tem
ber 2
018
is p
rovi
ded
for
the
cons
ider
atio
n pe
riod,
to
asc
erta
in w
heth
er
this
is fe
asib
le to
fully
im
plem
ent.
Appe
als
&
Pol
icy
Man
ager
of c
ontra
cts
has
not
been
und
erta
ken
due
to re
sour
cing
is
sues
.
NS
C18
14 R
isk
Man
agem
ent –
M
itiga
ting
Con
trols
Con
trols
on
the
stra
tegi
c ris
k re
gist
er b
e m
ade
spec
ific,
app
lyin
g th
e 's
o w
hat'
appr
oach
, to
enab
le th
em to
ad
dres
s th
e ris
k id
entif
ied.
2 Li
nked
to A
ctio
n P
lan
Find
ing
4 (a
bove
).A
pilo
t of t
he re
vise
d te
mpl
ate
for t
he J
oint
S
trate
gic
Ris
k re
gist
er
will
inco
rpor
ate
this
re
com
men
datio
n.
Ris
k &
C
ompl
ianc
e M
anag
er
8/6/
18
28/2
/19
13/9
/18
An o
vera
rchi
ng
repo
rt an
d re
vise
d te
mpl
ate
for t
he
Stra
tegi
c R
isk
Reg
iste
r was
pr
esen
ted
to C
hief
O
ffice
rs o
n th
e 18
/06/
18. I
t was
ag
reed
that
a s
ix
mon
th tr
ial w
ould
ta
ke p
lace
to a
sses
s th
e be
nefit
s. T
he
tem
plat
e ha
s be
en
amen
ded
to
inco
rpor
ate
addi
tiona
l con
trols
fo
r the
Joi
nt
Stra
tegi
c R
isk
regi
ster
and
will
be
105
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 2
4
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st R
espo
nse
repo
rted
upon
in
Febr
uary
201
9. T
his
trail
is u
nder
way
and
du
e to
repo
rt ba
ck to
C
hief
Offi
cers
in
Febr
uary
201
9.
NS
C18
23
Ove
rtim
e,
Exp
ense
s an
d Ad
ditio
nal
Pay
men
ts
Sam
ple
test
ing
on
10%
of c
laim
s to
in
clud
e th
e va
lidity
of
the
clai
m a
nd
whe
ther
they
are
su
bmitt
ed w
ithin
th
e gu
idel
ines
.
2 Th
e cl
aim
s se
lect
ed
for t
estin
g ar
e ch
ecke
d th
at th
ey c
ompl
y w
ith
the
polic
y an
d re
ject
ed
if th
ey d
o no
t. W
ith
rega
rds
to th
e va
lidity
it
had
been
agr
eed
that
thro
ugh
publ
icat
ion
of th
e ap
prop
riate
pol
icy
alon
g w
ith a
n un
ders
tand
ing
of
pote
ntia
l dis
cipl
inar
y pr
ocee
ding
s fo
r non
-co
mpl
ianc
e th
at th
e C
onst
abul
ary w
ould
m
anag
e th
e re
mai
ning
ris
k.
Hea
d of
Tr
ansa
ctio
nal
Ser
vice
s
30/9
/18
31/4
/19
19/9
/18
The
repo
rting
so
lutio
n is
cur
rent
ly
bein
g de
velo
ped,
w
hich
is a
ntic
ipat
ed
to b
e re
ady
for
the
new
fina
ncia
l yea
r.
NS
C18
23
Ove
rtim
e,
Exp
ense
s an
d Ad
ditio
nal
Pay
men
ts
Reg
ular
sam
ple
chec
king
of
expe
nses
cla
imed
th
roug
h pu
rcha
se
card
s, p
urch
asin
g an
d ie
xpen
ses
be
unde
rtake
n to
id
entif
y an
y du
plic
atio
n in
cl
aim
s.
2 Th
e ris
k w
ill a
sses
sed
by v
alid
atin
g cl
aim
s in
20
17/1
8 an
d th
ese
will
be
repo
rted
in d
ue
cour
se.
Hea
d of
Tr
ansa
ctio
nal
Ser
vice
s
30/9
/18
31/4
/19
03/1
0/18
Th
e re
porti
ng
solu
tion
is c
urre
ntly
be
ing
deve
lope
d,
whi
ch is
ant
icip
ated
to
be
read
y fo
r th
e ne
w fi
nanc
ial y
ear.
106
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 2
5
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st R
espo
nse
NS
C18
25
Cor
pora
te –
P
olic
ies
Rev
iew
and
up
date
of H
R
prot
ocol
s be
un
derta
ken,
and
am
alga
mat
ed in
to
a po
licy
whe
re
poss
ible
.
2 Li
nked
to A
ctio
n P
lan
findi
ng 2
.As
all o
f the
pr
otoc
ols
belo
ng to
the
HR
Dep
artm
ent,
this
w
ill fo
rm p
art o
f the
JC
OT
deci
sion
pap
er
to b
e ta
bled
in J
uly
2018
.
Dire
ctor
of
HR
16
/7/1
8 31
/3/1
9 13
/9/1
8 Th
e P
rogr
amm
e M
anag
emen
t Offi
ce
advi
sed
that
it h
as
been
agr
eed
with
H
R th
at th
ese
prot
ocol
s w
ill b
e lo
aded
ont
o th
eir
Hea
lth &
Saf
ety
intra
net s
ite fo
r em
ploy
ees
to vi
ew.
A lin
k ba
ck to
any
m
ore
form
al p
olic
y do
cum
enta
tion
will
be
ava
ilabl
e on
the
sam
e in
trane
t pag
e.
Thes
e H
R h
ealth
an
d sa
fety
pro
toco
ls
will
no
long
er b
e re
porte
d on
as
part
of th
e po
licy
upda
tes.
An
actio
n pl
an h
as b
een
deve
lope
d by
HR
to
revi
ew a
ll pol
icie
s,
prot
ocol
s ar
e to
be
inco
rpor
ated
into
an
appr
opria
te p
olic
y w
here
app
ropr
iate
. N
SC
1829
P
ayro
ll,
incl
udin
g E
RP
R
epor
ting
Sys
tem
con
trols
on
Ena
ct to
be
inve
stig
ated
, to
ensu
re E
nact
fo
rms
can
only
be
appr
oved
by
the
rele
vant
au
thor
ised
1 E
nact
has
onl
y on
e m
ore
year
und
er
cont
ract
, and
the
inte
ntio
n is
not
to
rene
w th
is p
rodu
ct.
Inst
ead
a re
view
is
unde
rway
into
pr
oduc
ts th
at a
re
Hea
d of
Tr
ansa
ctio
nal
Ser
vice
s
30/6
/18
31/3
/19
19/9
/18
Apex
is c
urre
ntly
be
ing
impl
emen
ted
and
the
cont
act w
ith
Enc
ircle
(Ena
ct) w
ill
be te
rmin
ated
in d
ue
cour
se.
107
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 2
6
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st R
espo
nse
sign
ator
y and
pr
even
t em
ploy
ees
from
app
rovi
ng
thei
r ow
n E
nact
fo
rms.
eith
er a
lread
y pa
rt of
th
e O
racl
e E
RP
sui
te,
or in
tegr
ate
into
that
pl
atfo
rm. H
owev
er,
conv
ersa
tions
are
un
derw
ay w
ith th
e E
nact
pro
vide
r E
ncirc
le a
nd e
arly
in
dica
tions
are
that
th
ey c
an m
ake
this
ch
ange
at m
inim
al
cost
. How
ever
, if
sign
ifica
nt in
vest
men
t w
as re
quire
d th
is w
ill
not b
e un
derta
ken
as
any
inve
stm
ent w
ill b
e in
to th
e re
plac
emen
t sy
stem
. N
SC
1829
P
ayro
ll,
incl
udin
g E
RP
R
epor
ting
The
repo
rting
fu
nctio
nalit
y on
E
RP
to b
e ex
plor
ed s
o th
at a
ll ne
cess
ary r
epor
ts
can
be p
rovi
ded
to
enab
le li
ne
man
ager
s to
hav
e al
l nec
essa
ry
info
rmat
ion,
in
clud
ing
a re
port
of n
ew s
tarte
rs,
leav
ers
and
chan
ges
with
in th
e m
onth
ly p
ayro
ll.
2 H
eads
of D
epar
tmen
t ha
ve re
gula
r mee
tings
w
ith th
eir m
anag
emen
t te
ams,
and
with
HR
an
d Fi
nanc
e B
usin
ess
Par
tner
s to
un
ders
tand
thei
r st
affin
g po
sitio
n.
How
ever
, a b
usin
ess
case
is in
dra
ft in
co
nnec
tion
to a
new
re
porti
ng s
olut
ion
and
fund
ing
has
been
pr
ovid
ed w
ithin
the
MTF
P.
The
repo
rting
so
lutio
n w
ill h
ave
muc
h w
ider
ben
efits
th
an th
e m
ore
narr
ow
Hea
d of
Tr
ansa
ctio
nal
Ser
vice
s
30/6
/18
31/4
/19
19/9
/18
The
new
repo
rting
to
ol is
ant
icip
ated
to
be im
plem
ente
d by
th
e ne
w fi
nanc
ial
year
201
9/20
, with
re
porti
ng a
vaila
bilit
y fo
llow
ing
this
.
108
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
orf
olk
an
d S
uff
olk
an
d C
hie
f Co
nst
ab
les
of
No
rfo
lk a
nd
Su
ffo
lk C
on
sta
bu
lari
es
Foll
ow
Up
Re
vie
w
AUDI
T CO
MM
ITTE
E 15
Jan
uary
201
9 Ag
enda
Item
7B
2018
/19
Pa
ge 2
7
Audi
t Ti
tle
Reco
mm
enda
tion
Prio
rity
Man
agem
ent
Resp
onse
Re
spon
sibl
e O
ffice
r Du
e Da
te
Revi
sed
Date
La
st
Upda
te
Late
st R
espo
nse
issu
e ou
tline
d he
re.
NS
C18
29
Pay
roll,
in
clud
ing
ER
P
Rep
ortin
g
Res
ourc
es to
be
allo
cate
d to
ad
dres
sing
the
issu
e fo
r the
70
empl
oyee
s th
at
have
not
bee
n in
clud
ed o
n th
e FP
S re
port,
to
rect
ify th
at fo
r th
ese
empl
oyee
s th
eir a
bilit
y to
cl
aim
sta
te
pens
ion
is n
ot
affe
cted
.
2 Th
is is
a c
ompl
ex
issu
e an
d w
ork
has
been
ong
oing
with
in
Cap
gem
ini t
o ar
rive
at
a so
lutio
n. A
lso
disc
ussi
ons
have
bee
n ta
king
pla
ce w
ith
HM
RC
on
the
issu
e.
The
late
st p
ositi
on is
th
at a
n E
arlie
r Yea
r U
pdat
e (E
YU)
proc
ess
will
be
run
to c
orre
ct
the
posi
tion
and
prov
ide
HM
RC
with
th
e co
rrec
t inf
orm
atio
n ab
out t
he in
divi
dual
s co
ncer
ned.
Hea
d of
Tr
ansa
ctio
nal
Ser
vice
s
30/6
/18
31/3
/19
19/9
/18
The
payr
oll t
eam
has
no
w b
een
rest
ruct
ured
and
a
spec
ial p
roje
cts
role
cr
eate
d to
reso
lve
the
outs
tand
ing
issu
es w
ithin
ER
P.
A fix
has
bee
n pr
ovid
ed b
y C
apG
emin
i and
has
be
en te
sted
su
cces
sful
ly in
the
test
in e
nviro
nmen
t.
NS
C19
06
Ena
ct
Rep
lace
men
t P
roje
ct
ER
P M
anag
emen
t to
ens
ure
that
all
test
ing
of th
e ne
w
form
s an
d re
late
d pr
oces
ses
are
form
ally
do
cum
ente
d in
to
test
ing
scrip
ts w
ith
resu
lts re
porte
d to
re
leva
nt s
enio
r m
anag
emen
t as
this
will
hel
p de
mon
stra
te th
at
appr
opria
te te
stin
g ha
s ta
ken
plac
e an
d w
ill a
lso
help
2 Te
st s
crip
ts w
ill b
e cr
eate
d as
par
t of t
he
form
bui
ld in
an
ticip
atio
n of
use
r ac
cept
ance
test
ing.
Toni
O
sbor
ne
ER
P
Sys
tem
s an
d D
evel
opm
ent
Man
ager
17/1
2/20
18
31/0
1/20
19
22/1
1/20
18
This
is o
ngoi
ng a
nd
is d
ue fo
r co
mpl
etio
n in
Jan
uary
201
9.
109
Poli
ce a
nd
Cri
me
Co
mm
issi
on
ers
fo
r N
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111
AUDIT COMMITTEE 15 January 2019
AGENDA ITEM: 8A
ORIGINATOR: Chief Finance Officer
REASON FOR SUBMISSION: To review and note. SUBJECT: Mid-Year Treasury Management Monitoring Report 2018/19 SUMMARY: The regulatory framework for treasury management requires the Police and Crime Commissioner (PCC) to receive a mid-year monitoring report on treasury activities. This report provides information on the treasury management activities of the PCC for the period 1st April 2018 to 30th September 2018. The first half of 2018/19 has seen UK economic growth post a modest performance, but sufficiently robust for the Monetary Policy Committee, (MPC), to unanimously (9-0) vote to increase Bank Rate on 2nd August from 0.5% to 0.75%. Although growth looks as if it will only be modest at around 1.5% in 2018, the Bank of England’s August Quarterly Inflation Report forecast that growth will pick up to 1.8% in 2019, albeit there were several caveats – mainly related to whether or not the UK achieves an orderly withdrawal from the European Union in March 2019. At the 30th September 2018, the PCC’s external debt excluding PFI was £16.111m, its investments totalled £10m and bank balances £12.3m. RECOMMENDATION: The Committee is asked to review and note the report.
112
Audit Committee 15 January 2019 2 Agenda Item 8A – Mid-Year Treasury Management Update 2018/19
1. Introduction 1.1 The Chartered Institute of Public Finance and Accountancy’s (CIPFA) Code
of Practice for Treasury Management in the Public Sector (the Code), requires that the PCC receives a mid-year review of treasury activities in addition to the forward looking annual investment and treasury strategy and backward looking annual treasury report. The Annual Investment and Treasury Strategy for the current year (2018/19) was reviewed by the Audit Committee on 9 January 2018 and approved by the PCC in February 2018.
1.2 The PCC operates a balanced budget, which broadly means income
receivable during the year will cover expenditure payable and any planned movement on reserves. Part of the treasury management operations ensure this cash flow is adequately planned, with surplus monies being invested in low risk counterparties, providing adequate liquidity initially before considering maximising investment return.
1.3 The second main function of the treasury management service is the
financing of the PCC’s capital plans. These capital plans provide a guide to the borrowing need of the PCC, essentially the longer term cash flow planning to ensure the PCC can meet its capital spending operations. This management of longer term cash may involve arranging long or short term loans, or using longer term cash flow surpluses, and on occasion any debt previously drawn may be restructured to the PCC’s risk or cost objectives.
1.4 As a consequence treasury management is defined as:
“The management of the local authority’s investments and cash flows, its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.”
1.5 The PCC has delegated responsibility for treasury management decisions
taken within the approved strategy to the PCC’s Chief Finance Officer. Day to day execution and administration of investment and borrowing decisions are undertaken by the Constabulary.
1.6 The PCC recognises the importance of monitoring treasury management
activities, with regular reports being presented to the Audit Committee throughout the year.
1.7 This mid-year review provides commentary on economic conditions produced
by Link Asset Services (the PCC’s external treasury consultant) and details treasury activities for the period 1st April 2018 to 30th September 2018 including; cash balances and cash flow management, investment performance, counterparty management and long term borrowing/debt management.
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Audit Committee 15 January 2019 3 Agenda Item 8A – Mid-Year Treasury Management Update 2018/19
2. Link Asset Services Economic Overview - October 2018 2.1 Economic performance year to date
UK. The first half of 2018/19 has seen UK economic growth post a modest performance, but sufficiently robust for the Monetary Policy Committee, (MPC), to unanimously (9-0) vote to increase Bank Rate on 2nd August from 0.5% to 0.75%. Although growth looks as if it will only be modest at around 1.5% in 2018, the Bank of England’s August Quarterly Inflation Report forecast that growth will pick up to 1.8% in 2019, albeit there were several caveats – mainly related to whether or not the UK achieves an orderly withdrawal from the European Union in March 2019. Some MPC members have expressed concerns about a build-up of inflationary pressures, particularly with the pound falling in value again against both the US dollar and the Euro. The Consumer Price Index (CPI) measure of inflation rose unexpectedly from 2.4% in June to 2.7% in August due to increases in volatile components, but is expected to fall back to the 2% inflation target over the next two years given a scenario of minimal increases in Bank Rate. The MPC has indicated Bank Rate would need to be in the region of 1.5% by March 2021 for inflation to stay on track. Financial markets are currently pricing in the next increase in Bank Rate for the second half of 2019. As for the labour market, unemployment has continued at a 43 year low of 4% on the Independent Labour Organisation measure. A combination of job vacancies hitting an all-time high in July, together with negligible growth in total employment numbers, indicates that employers are now having major difficulties filling job vacancies with suitable staff. It was therefore unsurprising that wage inflation picked up to 2.9%, (3 month average regular pay, excluding bonuses) and to a one month figure in July of 3.1%. This meant that in real terms, (i.e. wage rates higher than CPI inflation), earnings grew by about 0.4%, near to the joint high of 0.5% since 2009. (The previous high point was in July 2015.) Given the UK economy is very much services sector driven, an increase in household spending power is likely to feed through into providing some support to the overall rate of economic growth in the coming months. This tends to confirm that the MPC were right to start on a cautious increase in Bank Rate in August as it views wage inflation in excess of 3% as increasing inflationary pressures within the UK economy. However, the MPC will need to tread cautiously before increasing Bank Rate again, especially given all the uncertainties around Brexit. In the political arena, there is a risk that the current Conservative minority government may be unable to muster a majority in the Commons over Brexit. However, our central position is that Prime Minister May’s government will endure, despite various setbacks, along the route to Brexit in March 2019. If, however, the UK faces a general election in the next 12 months, this could result in a potential loosening of monetary policy and therefore medium to longer dated gilt yields could rise on the expectation of a weak pound and concerns around inflation picking up.
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Audit Committee 15 January 2019 4 Agenda Item 8A – Mid-Year Treasury Management Update 2018/19
USA. President Trump’s massive easing of fiscal policy is fuelling a (temporary) boost in consumption which has generated an upturn in the rate of strong growth which rose from 2.2%, (annualised rate), in quarter 1 to 4.2% in quarter 2, but also an upturn in inflationary pressures. With inflation moving towards 3%, the Fed increased rates another 0.25% in September to between 2.00% and 2.25%, this being four increases in 2018, and indicated they expected to increase rates four more times by the end of 2019. The dilemma, however, is what to do when the temporary boost to consumption wanes, particularly as the recent imposition of tariffs on a number of countries’ exports to the US, (China in particular), could see a switch to US production of some of those goods, but at higher prices. Such a scenario would invariably make any easing of monetary policy harder for the Fed in the second half of 2019. EUROZONE. Growth was unchanged at 0.4% in quarter 2, but has undershot early forecasts for a stronger economic performance in 2018. In particular, data from Germany has been mixed and it could be negatively impacted by US tariffs on a significant part of manufacturing exports e.g. cars. For that reason, although growth is still expected to be in the region of 2% for 2018, the horizon is less clear than it seemed just a short while ago. CHINA. Economic growth has been weakening over successive years, despite repeated rounds of central bank stimulus; medium term risks are increasing. Major progress still needs to be made to eliminate excess industrial capacity and the stock of unsold property, and to address the level of non-performing loans in the banking and credit systems. JAPAN - has been struggling to stimulate consistent significant GDP growth and to get inflation up to its target of 2%, despite huge monetary and fiscal stimulus. It is also making little progress on fundamental reform of the economy.
2.2 Interest rate forecasts
The PCC’s treasury advisor, Link Asset Services, has provided the following forecast:
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Audit Committee 15 January 2019 5 Agenda Item 8A – Mid-Year Treasury Management Update 2018/19
The flow of generally positive economic statistics after the end of the quarter ended 30 June meant that it came as no surprise that the MPC came to a decision on 2 August to make the first increase in Bank Rate above 0.5% since the financial crash, to 0.75%. However, the MPC emphasised again, that future Bank Rate increases would be gradual and would rise to a much lower equilibrium rate, (where monetary policy is neither expansionary or contractionary), than before the crash; indeed they gave a figure for this of around 2.5% in ten years’ time but they declined to give a medium term forecast. We do not think that the MPC will increase Bank Rate in February 2019, ahead of the deadline in March for Brexit. We also feel that the MPC is more likely to wait until August 2019, than May 2019, before the next increase, to be followed by further increases of 0.25% in May and November 2020 to reach 1.5%. However, the cautious pace of even these limited increases is dependent on a reasonably orderly Brexit.
The balance of risks to the UK The overall balance of risks to economic growth in the UK is probably
neutral. The balance of risks to increases in Bank Rate and shorter term PWLB
rates, are probably also even and are broadly dependent on how strong GDP growth turns out, how slowly inflation pressures subside, and how quickly the Brexit negotiations move forward positively.
Downside risks to current forecasts for UK gilt yields and PWLB rates currently include: Bank of England monetary policy takes action too quickly over the next
three years to raise Bank Rate and causes UK economic growth, and increases in inflation, to be weaker than we currently anticipate.
A resurgence of the Eurozone sovereign debt crisis, possibly Italy, due to its high level of government debt, low rate of economic growth and vulnerable banking system, and due to the election in March of a government which has made a lot of anti-austerity noise. This is likely to lead to friction with the EU when setting the target for the fiscal deficit in the national budget. Unsurprisingly, investors have taken a dim view of this and so Italian bond yields have been rising.
Austria, the Czech Republic and Hungary now form a strongly anti-immigration bloc within the EU while Italy, this year, has also elected a strongly anti-immigration government. In the German general election of September 2017, Angela Merkel’s CDU party was left in a vulnerable minority position as a result of the rise of the anti-immigration AfD party. To compound this, the result of the Swedish general election in September 2018 has left an anti-immigration party potentially holding the balance of power in forming a coalition government. The challenges from these political developments could put considerable pressure on the cohesion of the EU and could spill over into impacting the euro, EU financial policy and financial markets.
The imposition of trade tariffs by President Trump could negatively impact world growth. President Trump’s specific actions against Turkey pose a particular risk to its economy which could, in turn, negatively impact Spanish and French banks which have significant exposures to loans to Turkey.
Weak capitalisation of some European banks.
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Audit Committee 15 January 2019 6 Agenda Item 8A – Mid-Year Treasury Management Update 2018/19
Rising interest rates in the US could negatively impact emerging countries which have borrowed heavily in dollar denominated debt, so causing an investor flight to safe havens e.g. UK gilts.
Geopolitical risks, especially North Korea, but also in Europe and the Middle East, which could lead to increasing safe haven flows.
Upside risks to current forecasts for UK gilt yields and PWLB rates President Trump’s fiscal plans to stimulate economic expansion causing
a significant increase in inflation in the US and causing further sell offs of government bonds in major western countries.
The Fed causing a sudden shock in financial markets through misjudging the pace and strength of increases in its Fed. Funds Rate and in the pace and strength of reversal of QE, which then leads to a fundamental reassessment by investors of the relative risks of holding bonds, as opposed to equities. This could lead to a major flight from bonds to equities and a sharp increase in bond yields in the US, which could then spill over into impacting bond yields around the world.
The Bank of England is too slow in its pace and strength of increases in Bank Rate and, therefore, allows inflation pressures to build up too strongly within the UK economy, which then necessitates a later rapid series of increases in Bank Rate faster than we currently expect.
UK inflation, whether domestically generated or imported, returning to sustained significantly higher levels causing an increase in the inflation premium inherent to gilt yields.
3. Cash Balances and Cash Flow Management 3.1 The PCC’s cash and short term investment balances comprise revenue and
capital resources, such as general balances and earmarked reserves and the timing differences between the receipt and payment of monies required to meet the cost of PCC services and the capital programme. The average level of cash and short term-investment balances in the year to date totals £16.268m.
3.2 Cash and short term investment balances are managed internally and have
been invested in accordance with the PCC’s approved Authorised Lending List.
3.3 A key objective of cash flow management is to minimise balances held in the
PCC’s bank accounts in order to ensure that the maximum interest is earned. However presently the interest returned on instant access accounts is similar to those earned on short term lending arrangements. These accounts are therefore frequently utilised within counterparty limits as they provide greater liquidity.
3.4 The PCC operates seven bank accounts. Cash balances across all seven
accounts are aggregated and surplus cash balances are invested on a daily basis.
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Audit Committee 15 January 2019 7 Agenda Item 8A – Mid-Year Treasury Management Update 2018/19
3.5 Year to date (excluding investments and repayments), monies received amounts to £130.8m, while payments total £112.8m, resulting in an overall increase in cash balances of £18m.
3.6 By continuing to delay borrowing for capital purposes (Section 6) while at the
same time actively managing levels of liquid cash, the PCC on occasions has needed to borrow short-term from the money markets to cover daily liquidity.
4. Investment Performance
4.1 In accordance with the Code, it is the PCC’s priority to ensure security of
capital and liquidity, and to obtain an appropriate level of return which is consistent with the PCC’s risk appetite. As set out in Section 3, it is a very difficult investment market in terms of earning the level of interest rates commonly seen in previous decades as rates are very low and in line with the current 0.5% Bank Rate. The continuing potential for a re-emergence of a Eurozone sovereign debt crisis together with other risks which could impact on the creditworthiness of banks, prompts a low risk strategy. Given this risk environment, investment returns are likely to remain low.
4.2 At the 30th September 2018, the PCC held £10m of investments. The profile of these investments is shown below.
*Includes: Other Local Authorities 4.3 A more detailed investment profile at 30th September 2018 is shown at
Appendix 1. 4.4 The average interest rate earned for the year to date is 0.5041% compared
with the estimated average 3 month day London Interbank Bid Rate (LIBID) of 0.6713%.
4.5 Gross interest earned for the period 1st April 2018 to 30th September 2018 is
£0.040m. 5. Counterparty Maintenance
5.1 The PCC CFO is responsible for maintaining an Approved Counterparty List in
accordance with the criteria as set out in the approved Annual Investment and
118
Audit Committee 15 January 2019 8 Agenda Item 8A – Mid-Year Treasury Management Update 2018/19
Treasury Strategy 2018/19. Credit rating information is supplied by our treasury consultants on all active counterparties. Any rating changes, rating watches (notification of a likely change) and rating outlooks (notification of a possible longer term change) are provided by our treasury consultants immediately they occur. A wide range of market information such as Credit Default Swap prices and share price is also taken into account. The Approved Counterparty List is therefore actively managed on a day-to-day basis and when an institution no longer meets the PCC approved counterparty criteria, it is immediately removed.
5.2 There have been no credit rating downgrades during the period 1st April 2018
to 30th September 2018 that have resulted in counterparties being removed from the authorised counterparty list.
6. Long Term Borrowing/Debt Management
6.1 The PCC undertakes capital expenditure on long-term assets. This activity gives rise to the need to borrow. Part of the PCC’s treasury management activity is to address this borrowing need, either through long term borrowing from external bodies (PWLB or commercial banks) or utilising temporary cash resources within the PCC pending long term borrowing.
6.2 In accordance with the approved 2018/19 Investment and Treasury Strategy,
the PCC continues to delay new borrowing for capital purposes, using cash balances on a temporary basis to avoid the cost of ‘carrying’ debt in the short term. Delaying borrowing and running down the level of investment balances also reduces the PCC’s exposure to investment counterparty risk.
6.3 At the 30th September 2018, the PCC’s external borrowing (debt outstanding,
excluding PFI) totaled £16.111m (PWLB) 6.4 The PCC’s overall capital financing requirement (excluding PFI) at 31.3.18
was £29.1m. The projected capital financing requirement at 31.3.19 is approximately £31.2m. This represents unfunded capital expenditure for which approved borrowing can be drawn down. The PCC’s CFO, under delegated powers, will take the most appropriate form of borrowing depending on the prevailing interest rates at the time, taking into account the risks identified in the economic forecast (Section 2).
6.5 The Public Works Loans Board (PWLB) provides a facility to restructure debt,
including early repayment of loans and encourages local authorities to do so when circumstances permit. This can result in net savings in overall interest charges. Current circumstances do not suggest that refinancing existing PWLB debt would be economically prudent due to the significant repayment penalties. However prevailing PWLB interest rates continue to be monitored in order to identify repayment opportunities.
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Audit Committee 15 January 2019 9 Agenda Item 8A – Mid-Year Treasury Management Update 2018/19
7. Other 7.1 In December 2017, the Chartered Institute of Public Finance and
Accountancy, (CIPFA), issued revised Prudential and Treasury Management Codes. As from 2019/20, all local authorities are required to prepare a Capital Strategy which is intended to provide the following: -
a high-level overview of how capital expenditure, capital financing and
treasury management activity contribute to the provision of services an overview of how the associated risk is managed the implications for future financial sustainability
A report setting out our Capital Strategy will be included in the Budget and Medium Term Financial Plan 2019/23 which will be presented to the Police and Crime Panel on 5 February 2019. The Chartered Institute of Public Finance and Accountancy, (CIPFA) has recently consulted local authorities (and PCCs) on revising the Treasury Management Code and Cross Sectoral Guidance Notes, and the Prudential Code. CIPFA will publish the revised codes shortly.
7.2 MiFID II (Markets in Financial Instruments Directive).
On 3 January 2018 the EU introduced regulations under MiFID II. These regulations govern the relationship that financial institutions conducting lending and borrowing transactions have with local authorities (and PCCs). This has little effect on the PCC apart from having to fill in forms sent by each institution dealing with the PCC and for each type of investment instrument in use - apart from for cash deposits with banks and building societies.
8 Conclusion 8.1 The Mid-Year Treasury Management Monitoring Report 2018/19 provides
information on the Treasury Management activities of the PCC for the period 1st April 2018 to 30th September 2018.
9 Recommendation 9.1 It is recommended that Audit Committee notes the Mid-Year Treasury
Management Monitoring Report 2018/19.
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Audit Committee 15 January 2019 10 Agenda Item 8A – Mid-Year Treasury Management Update 2018/19
Appendix 1
Counterparty Deal Date Maturity Date RateGoldman Sachs Intl 05/07/2018 05/12/2018 0.80%
Goldman Sachs Intl 05/07/2018 05/11/2018 0.74%
Nationwide BS 05/07/2018 05/10/2018 0.57%
Barclays Bank 07/09/2018 Instant Access 0.60%
Barclays Bank 10/09/2018 Instant Access 0.60%
Barclays Bank 19/09/2018 Instant Access 0.60%
Lloyds Bank 13/08/2018 Instant Access 0.50%
Lloyds Bank 19/09/2018 Instant Access 0.50%
Lloyds Bank 24/09/2018 Instant Access 0.50%
Barclays Bank (Current A/C)
Total
0.30
22.30
2.25
2.00
1.00
0.50
5.00
1.25
Outstanding Deposit Profile @ 30th September 2018
Principal(£m)2.00
4.00
4.00
121
AUDIT COMMITTEE 15 JANUARY 2019 AGENDA ITEM: 8B
Audit Committee 15 January 2018 Page 1 Agenda Item 8B – Treasury Management Strategy Statement 2019/20
ORIGINATOR: Chief Finance Officer
REASON FOR SUBMISSION: To review and endorse. SUBJECT: Annual Investment and Treasury Strategy for 2019/20 SUMMARY: Government regulations require the Police and Crime Commissioner (PCC) to approve an Annual Investment Strategy prior to the start of the financial year. This is incorporated within an over-arching Treasury Management Strategy. The Strategy, attached to this report, will be included in the budget and precept report presented by the PCC to the Police and Crime Panel (PCP) on 5 February 2019. There are no significant changes in the 2019/20 Strategy compared to the prior year. RECOMMENDATION: The Committee is asked to review and endorse the Strategy for inclusion in the PCC’s precept report for 2019/20.
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Audit Committee 9 January 2018 Page 2 Agenda Item 6b – Treasury Management Strategy Statement 2018/19
Appendix 1
The Office of the Police and Crime Commissioner for Norfolk Annual Investment and Treasury Management Strategy Statement 2019/20
1. Background
1.1 The PCC is required to operate a balanced budget, which broadly means that cash raised during the year will meet cash expenditure. Part of the treasury management operation is to ensure that this cash flow is adequately planned, with cash being available when it is needed. Surplus monies are invested in low risk counterparties or instruments commensurate with the PCC’s low risk appetite, providing adequate liquidity initially before considering investment return.
1.2 The second main function of the treasury management service is the funding of the
PCC’s capital plans. These capital plans provide a guide to the borrowing need of the PCC, essentially the longer-term cash flow planning, to ensure that the PCC can meet his capital spending obligations. This management of longer-term cash may involve arranging long or short-term loans, or using longer-term cash flow surpluses. On occasion, when it is prudent and economic, any debt previously drawn may be restructured to meet PCC risk or cost objectives.
1.3 The contribution the treasury management function makes to the PCC is critical, as
the balance of debt and investment operations ensure liquidity or the ability to meet spending commitments as they fall due, either on day-to-day revenue or for larger capital projects. The treasury operations will see a balance of the interest costs of debt and the investment income arising from cash deposits affecting the available budget. Since cash balances generally result from reserves and balances, it is paramount to ensure adequate security of the sums invested, as a loss of principal will in effect result in a loss to the General Fund Balance.
1.4 CIPFA defines treasury management as: “The management of the local authority’s borrowing, investments and cash flows, its
banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.”
1.5 Revised reporting is required for the 2019/20 reporting cycle due to revisions of
the Ministry of Housing, Communities and Local Government (MHCLG) Investment Guidance, the MHCLG Minimum Revenue Provision (MRP) Guidance, the CIPFA Prudential Code and the CIPFA Treasury Management Code. The primary reporting changes include the introduction of a capital strategy, to provide a longer-term focus to the capital plans, and greater reporting requirements surrounding any commercial activity undertaken under the Localism Act 2011. The capital strategy is being reported separately.
1.6 This PCC has not engaged in any commercial investments and has no non-
treasury investments.
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Audit Committee 9 January 2018 Page 3 Agenda Item 6b – Treasury Management Strategy Statement 2018/19
2. Reporting requirements
2.1 Capital Strategy
The CIPFA revised 2017 Prudential and Treasury Management Codes require, for 2019/20, all local authorities to prepare an additional report, a capital strategy report, which will provide the following: a high-level long term overview of how capital expenditure, capital financing
and treasury management activity contribute to the provision of services an overview of how the associated risk is managed the implications for future financial sustainability
The aim of this capital strategy is to ensure that the PCC fully understands the overall long-term policy objectives and resulting capital strategy requirements, governance procedures and risk appetite. The Capital Strategy will be published separately but is included within the PCC’s Budget and MTFP report.
2.2 Treasury Management reporting
The PCC is currently required to receive and approve, as a minimum, three main treasury reports each year, which incorporate a variety of policies, estimates and actuals.
a. Prudential and treasury indicators and treasury strategy (this report) - The first, and most important report is forward looking and covers: the capital plans, (including prudential indicators); (Appendix 1) a minimum revenue provision (MRP) policy, (how unfunded capital expenditure
is charged to revenue over time); (Appendix 2) the treasury management strategy, (how the investments and borrowings are to
be organised), including treasury indicators; and an investment strategy, (the parameters on how investments are to be
managed). b. A mid-year treasury management report – This is primarily a progress report and will update the PCC on the capital position, amending prudential indicators as necessary, and whether any policies require revision. c. An annual treasury report – This is a backward looking review document and provides details of a selection of actual prudential and treasury indicators and actual treasury operations compared to the estimates within the strategy.
3. Treasury Management Strategy for 2019/20
3.1 The strategy for 2019/20 covers two main areas:
Capital issues the capital expenditure plans and the associated prudential indicators; see
Appendix 1.
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the minimum revenue provision (MRP) policy. See Appendix 2.
Treasury management issues the current treasury position; treasury indicators which limit the treasury risk and activities of the PCC; prospects for interest rates; the borrowing strategy; policy on borrowing in advance of need; debt rescheduling; the investment strategy; creditworthiness policy; and the policy on use of external service providers. These elements cover the requirements of the Local Government Act 2003, the CIPFA Prudential Code, MHCLG MRP Guidance, the CIPFA Treasury Management Code and MHCLG Investment Guidance.
Training
3.2 The CIPFA Code requires the responsible officer to ensure that officers with responsibility for treasury management receive adequate training in treasury management. This also applies to Audit Committee members responsible for scrutiny. Training on the Prudential Code and the Capital Strategy was provided to Audit Committee members in October 2018.
Treasury management consultants
3.3 The PCC uses Link Asset Services, Treasury solutions as its external treasury management advisors.
3.4 The PCC recognises that responsibility for treasury management decisions remains
with the organisation at all times and will ensure that undue reliance is not placed upon the services of our external service providers. All decisions will be undertaken with regard to all available information, including, but not solely, our treasury advisers.
3.5 It is also recognised that there is value in employing external providers of treasury
management services in order to acquire access to specialist skills and resources. The PCC will ensure that the terms of their appointment and the methods by which their value will be assessed are properly agreed and documented, and subjected to regular review.
The Treasury Management Function 3.6 The CIPFA Code defines treasury management activities as “the management of
the PCC’s investments and cash flows, its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.”
3.7 The PCC regards the successful identification, monitoring and control of risk to be
the prime criteria by which the effectiveness of its treasury management activities
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will be measured. Accordingly, the analysis and reporting of treasury management activities will focus on their risk implications for the PCC, and any financial instruments entered into to manage these risks.
3.8 The PCC acknowledges that effective treasury management will provide support
towards the achievement of its business and service objectives. It is therefore committed to the principles of achieving value for money in treasury management, and to employing suitable comprehensive performance measurement techniques, within the context of effective risk management.
3.9 The PCC is required to operate a balanced budget, which broadly means that
cash raised during the year will meet its cash expenditure. Part of the treasury management operations ensures this cash flow is adequately planned, with cash being available when it is needed. Surplus monies are invested in low risk counterparties, providing adequate liquidity before considering investment return.
3.10 A further function of the treasury management service is to provide for the
borrowing requirement of the PCC, essentially the longer term cash flow planning, typically 30 years plus, to ensure the PCC can meet its capital spending obligations. This management of longer term cash may involve arranging long or short term loans, or using internal cash balances on a temporary basis. Debt previously borrowed may be restructured to meet PCC risk or cost objectives.
3.11 The PCC has delegated responsibility for treasury management decisions taken
within the approved strategy to the PCC CFO. Day to day execution and administration of investment and borrowing decisions is undertaken by Specialist Accountants based in the Joint Finance Department for Suffolk and Norfolk Constabularies.
3.12 External treasury management services continue to be provided by Link Asset
Services in a joint contract with the PCC for Suffolk. Link Asset Services provides a range of services which include:
Technical support on treasury matters and capital finance issues.
Economic and interest rate analysis.
Debt services which includes advice on the timing of long term borrowing.
Debt rescheduling advice surrounding the existing portfolio.
Generic investment advice on interest rates, timing and investment instruments.
Credit ratings/market information service for the three main credit rating agencies (Fitch, Moody’s and Standard & Poors).
3.13 Whilst Link Asset Services provide support to the treasury function, under market rules and in accordance with the CIPFA Code of Practice, the final decision on treasury matters remains with the PCC.
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3.14 Performance will continue to be monitored and reported to the PCC as part of the budget monitoring report.
3.15 Link Asset Service’s Economic Forecast is set out in Appendix 3. 4. Investment Strategy 2019/20
4.1 The Bank Rate is forecast to stay flat at 0.75% until quarter 2 2019 and not to rise above 1.25% until quarter 4 2020. Bank Rate forecasts for financial year ends (March) are:
2018/19 0.75% 2019/20 1.25% 2020/21 1.50% 2021/22 2.00%
4.2 The suggested budgeted investment earnings rates for returns on investments
placed for periods up to about three months during each financial year are as follows:
Financial Year Budgeted Interest Earnings
2018/19 0.75%
2019/20 1.00%
2020/21 1.50%
2021/22 1.75%
2022/23 1.75%
2023/24 2.00%
Later Years 2.50%
4.3 There are 3 key considerations to the treasury management investment process.
MHCLG’s Investment Guidance ranks these in the following order of importance:
security of principal invested,
liquidity for cash flow, and
investment return (yield).
Each deposit is considered in the context of these 3 factors, in that order.
4.4 MHCLG‘s Investment Guidance requires local authorities and PCCs to invest prudently and give priority to security and liquidity before yield, as described above. In order to facilitate this objective, the Guidance requires the PCC to have regard to CIPFA’s Code of Practice for Treasury Management in the Public Sector.
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4.5 The key requirements of both the Code and the Investment Guidance are to produce an Annual Investment and Treasury Strategy covering the following:
Guidelines for choosing and placing investments – Counterparty Criteria and
identification of the maximum period for which funds can be committed – Counterparty Monetary and Time Limits (Section 5).
Details of Specified and Non-Specified investment types (Section 10).
5. Investment Strategy 2019/20 - Counterparty Criteria
5.1 The PCC works closely with its external treasury advisors to determine the criteria for high quality institutions.
5.2 The criteria for providing a pool of high quality investment counterparties for
inclusion on the PCC’s ‘Approved Authorised Counterparty List’ is provided below
UK Banks which have the following minimum ratings from at least one of the three credit rating agencies:
UK Banks Fitch Standard &
Poors Moody’s
Short Term Ratings
F1 A-1 P-1
Long Term Ratings
A- A- A3
Non-UK Banks domiciled in a country which has a minimum sovereign rating
of AA+ and have the following minimum ratings from at least one of the credit rating agencies:
Non-UK Banks
Fitch Standard & Poors
Moody’s
Short Term Ratings
F1+ A-1+ P-1
Long Term Ratings
AA- AA- Aa3
Part Nationalised UK Banks – Royal Bank of Scotland Group (including Nat
West). These banks are included while they continue to be part nationalised or they meet the minimum rating criteria for UK Banks above.
The PCC’s Corporate Banker – If the credit ratings of the PCC’s corporate banker (currently Barclays Bank plc) fall below the minimum criteria for UK Banks above, then cash balances held with that bank will be for account operation purposes only and balances will be minimised in terms of monetary size and time.
Building Societies – The PCC will use Building Societies which meet the ratings for UK Banks outlined above.
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Money Market Funds (MMFs) – which are rated AAA by at least one of the three major rating agencies. MMF’s are ‘pooled funds’ investing in high-quality, high-liquidity, short-term securities such as treasury bills, repurchase agreements and certificate of deposit. Funds offer a high degree of counterparty diversification that include both UK and Overseas Banks.
UK Government – including the Debt Management Account Deposit Facility & Sterling Treasury Bills. Sterling Treasury Bills are short-term (up to six months) ‘paper’ issued by the UK Government. In the same way that the Government issues Gilts to meet long term funding requirements, Treasury Bills are used by Government to meet short term revenue obligations. They have the security of being issued by the UK Government.
Local Authorities, Parish PCCs etc. – Includes those in England and Wales (as defined in Section 23 of the Local Government Act 2003) or a similar body in Scotland or Northern Ireland.
5.3 All cash invested by the PCC in 2019/20 will be either Sterling deposits (including certificates of deposit) or Sterling Treasury Bills invested with banks and other institutions in accordance with the Approved Authorised Counterparty List.
5.4 The Code of Practice requires local authorities and PCCs to supplement credit
rating information. Whilst the above criteria relies primarily on the application of credit ratings to provide a pool of appropriate counterparties for use, additional market information will be used to inform investment decisions. This additional market information includes, for example, Credit Default Swap rates and equity prices in order to compare the relative security of counterparties.
5.5 The current maximum lending limit of £10m for any counterparty will be
maintained in 2019/20 to reflect the level of cash balances and to avoid large deposits with the DMO.
5.6 In addition to individual institutional lending limits, “Group Limits” will be used
whereby the collective investment exposure of individual banks within the same banking group is restricted to a group lending limit of £10m.
5.7 The Strategy permits deposits beyond 365 days (up to a maximum of 2 years) but
only with UK banks which meet the credit ratings at paragraph 5.2. Deposits may also be placed with UK Part Nationalised Banks and Local Authorities for periods of up to 2 years.
5.8 A reasonable amount will be held on an instant access basis in order for the PCC
to meet any unexpected needs. Instant access accounts are also preferable during periods of credit risk uncertainty in the markets, allowing the PCC to immediately withdraw funds should any concern arise over a particular institution.
6. Investment Strategy 2019/20 – Specified and Non-Specified Investments
6.1 As determined by CLG’s Investment Guidance, Specified Investments offer “high security and high liquidity”. They are Sterling denominated and have a maturity of less than one year. Institutions of “high” credit quality are deemed to be Specified Investments. From the pool of high quality investment counterparties identified in
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Section 5, the following are deemed to be Specified Investments where the period of deposit is 365 days or less:
Banks: UK and Non-UK;
Part Nationalised UK Banks;
The PCC’s Corporate Banker (Barclays Bank plc)
Building Societies (which meet the minimum ratings criteria for Banks);
Money Market Funds;
UK Government;
Local Authorities, Parish PCCs etc.
6.2 Non-Specified Investments are those investments that do not meet the criteria of
Specified Investments. From the pool of counterparties identified in Section 5, they include:
Any investment greater than 365 days.
6.3 The categorisation of ‘Non-Specified’ does not in any way detract from the credit quality of these institutions, but is merely a requirement of the Government’s guidance.
6.4 The PCC’s proposed Strategy for 2019/20 therefore includes both Specified and
Non-Specified Investment institutions. 7. Borrowing Strategy 2019/20
7.1 Capital expenditure can be funded immediately by applying capital receipts, capital grants or revenue contributions. Capital expenditure in excess of available capital resources or revenue contributions will add to the PCC’s borrowing requirement. The PCC’s need to borrow is measured by the Capital Financial Requirement, which simply represents the total outstanding capital expenditure, which has not yet been funded from either capital or revenue resources.
7.2 For the PCC, borrowing principally relates to long term loans (i.e. loans in excess
of 365 days). The borrowing strategy includes decisions on the timing of when further monies should be borrowed.
7.3 The main source of long term loans is the Public Works Loan Board (PWLB),
which is part of the UK Debt Management Office (DMO). The maximum period for which loans can be advanced by the PWLB is 50 years.
7.4 External borrowing currently stands at £16.11m (excluding PFI). At 31 March 2018
there was a £29.1m Capital Financing Requirement (CFR) relating to unfunded capital expenditure which had been financed from internal resources. The CFR is estimated to be £31.2m at 31 March 2019, £40.3m at 31 March 2020 and £45.8 at 31 March 2021. Additional long term borrowing is estimated at £4.0m for 2018/19,
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£11.7m for 2019/20 and £6.95m for 2020/21. The borrowing requirement does not include the funding requirement in respect of assets financed through PFI.
7.5 The challenging and uncertain economic outlook outlined by Link Asset Services
in Section 3, together with managing the cost of “carrying debt” requires a flexible approach to borrowing. The PCC, under delegated powers, will take the most appropriate form of borrowing depending on the prevailing interest rates at the time, taking into account the risks identified in Link Asset Services economic overview (Section 3).
7.6 The level of outstanding debt and composition of debt, in terms of individual loans,
is kept under review. The PWLB provides a facility to allow the restructure of debt, including premature repayment of loans, and encourages local authorities and PCCs to do so when circumstances permit. This can result in net savings in overall interest charges. The PCC CFO and Link Asset Services will monitor prevailing rates for any opportunities during the year. As short term borrowing rates will be considerably cheaper than longer term fixed interest rates, there may be potential opportunities to generate savings by switching from long term debt to short term debt. However, these savings will need to be considered in the light of the current treasury position and the size of the cost of debt repayment (premiums incurred). Consideration will also be given to identify if there is any residual potential for making savings by running down investment balances to repay debt prematurely as short term rates on investments are likely to be lower than rates paid on current debt
7.7 The PCC has flexibility to borrow funds in the current year for use in future years,
but will not borrow more than or in advance of its needs purely in order to profit from the investment of the extra sums borrowed. Any decision to borrow in advance will be within forward approved Capital Financing Requirement estimates, and will be considered carefully to ensure that value for money can be demonstrated and that the PCC can ensure the security of such funds
7.8 The PCC will continue to use the most appropriate source of borrowing at the time of making application, including; the PWLB, commercial market loans, Local Authorities and the Municipal Bond Agency.
8. Treasury Management Prudential Indicators 8.1 In addition to the key Treasury Indicators included in the Prudential Code and
reported separately, there are two treasury management indicators. The purpose of the indicators is to restrict the activity of the treasury function to within certain limits, thereby managing risk and reducing the impact of an adverse movement in interest rates. However, if these indicators are too restrictive, they will impair the opportunities to reduce costs/improve performance. The Indicators are:
Maturity Structures of Borrowing – These gross limits are set to reduce
the PCC’s exposure to large fixed rate sums falling due for refinancing and require upper and lower limits. It is recommended that the PCC sets the following limits for the maturity structures of its borrowing at 31.3.19:
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Actual* Lower Limit
Upper Limit
Under 12 months
0.3%
0% 15%
12 months and within 24 months
0.3% 0% 15%
24 months and within 5 years
11.2% 0% 45%
5 years and within 10 years
33.7% 0% 75%
10 years and above
54.5% 0% 100%
* Actual is based on existing balances at 31.12.18
Upper Limits to the Total of Principal Funds Invested for Greater than 365 Days – This limit is set with regard to the PCC’s liquidity requirements. It is estimated that in 2019/20, the maximum level of PCC funds invested for periods greater than 365 days will be no more than £4.475m.
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Appendix 1
Prudential Code Indicators 2019/20, 2020/21, 2021/22
1. Background 1.1 The Prudential Code for capital investment came into effect on 1st April 2004. It
replaced the complex regulatory framework, which only allowed borrowing if specific government authorisation had been received. The Prudential system is one based on self-regulation. All borrowing undertaken is self-determined under the prudential code. A revised Prudential Code was published in December 2017 and is has applied from 2018/19
1.2 Under Prudential arrangements the PCC can determine the borrowing limit for
capital expenditure. The Government does retain reserve powers to restrict borrowing if that is required for national economic reasons.
1.3 The key objectives of the Code are to ensure, within a clear framework, that capital
investment plans are affordable, prudent and sustainable. The Code specifies indicators that must be used and factors that must be taken into account. The Code requires the PCC to set and monitor performance on:
capital expenditure affordability external debt treasury management (now included within Treasury Management strategy)
1.4 The required indicators are:
Capital Expenditure Forecast Capital Financing Requirement Actual External Debt Authorised Limit for External Debt Operational Boundary Limit for External Debt However authorities are now advised to use local indicators, where this would be beneficial, especially if carry out commercial activities.
1.5 Once determined, the indicators can be changed so long as this is reported to the PCC.
1.6 Actual performance against indicators will be monitored throughout the year. All the
indicators will be reviewed and updated annually.
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2. The Indicators 2.1 The Capital Expenditure Payment Forecast is detailed in Appendix x (of the
PCC’s Budget and MTFP report 2019/23). The total estimated payments are:
2019/20 2020/21 2021/22 £m £m £m Capital Expenditure Forecast 15.147 11.004 7.417
The PCC is being asked for approval to an overall Capital Programme based on the level of capital financing costs contained within the draft revenue budget.
2.2 The ratio of capital financing costs to net revenue budget shows the estimated
annual revenue costs of borrowing (net interest payable on debt and the minimum revenue provision for repaying the debt), as a proportion of annual income from local taxation and non-specific government grants. The estimates include PFI MRP and interest costs. Estimates of the ratio of capital financing costs to net revenue budget for future years are:
Ratio of Capital Financing Costs to Net Revenue Budget 2019/20 Estimate 2020/21 Estimate 2021/22 Estimate
5.18% 5.31% 5.39% 2.3 The capital financing requirement represents capital expenditure not yet financed
by capital receipts, revenue contributions or capital grants. It measures the underlying need to borrow for a capital purpose, although this borrowing may not necessarily take place externally. Estimates of the end of year capital financing requirement for future years are:
Capital Financing Requirement
31/03/19 Estimate
31/03/20 Estimate
31/03/21 Estimate
31/03/22 Estimate
£91.499m £99.441m £103.637m £105.702m 2.4 The guidance on net borrowing for capital purposes advises that:
“In order to ensure that over the medium term net borrowing will only be for a capital purpose, the PCC should ensure that net external borrowing does not, except in the short term, exceed the total of capital financing requirement in the preceding year plus the estimates of any additional capital financing requirement for the current and next two financial years.”
Net borrowing refers to the PCC’s total external borrowing net of any temporary cash investments and must work within this requirement.
2.5 The Code defines the authorised limit for external debt as the sum of external
borrowing and any other financing long-term liabilities e.g. finance leases. It is recommended that the PCC approve the 2019/20 and future years limits.
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For 2019/20 this will be the statutory limit determined under section 3(1) of the Local Government Act 2003.
As required by the Code, the PCC is asked to delegate authority to the Chief Finance Officer (OPCCN), within the total limit for any individual year, to effect movement between the separate limits for borrowing and other long term liabilities. Any such changes made will be reported to the PCC.
Authorised Limit for External Debt 2019/20 2020/21 2021/22
£m £m £m PWLB borrowing 31.633 38.278 40.455 Other long term liabilities (OCC PFI)
24.552 23.994 23.373
Other long term liabilities (PIC PFI)
34.564 33.834 33.049
Headroom 13.664 12.712 14.109
Total 104.413 108.818 110.987
These proposed limits are consistent with the Capital Programme. They provide headroom to allow for operational management, for example unusual cash movements.
2.6 The Code also requires the PCC to approve an operational boundary limit for
external debt for the same time period. The proposed operational boundary for external debt is the same calculation as the external debt limit without the additional headroom. The operational boundary represents a key management tool for in year monitoring.
Within the operational boundary, figures for borrowing and other long-term liabilities are separately identified again. The PCC is asked to delegate authority to the Chief Finance Officer (OPCCN), within the total operational boundary for any individual year, to make any required changes between the separately agreed figures for borrowing and other long-term liabilities. Any changes will be reported to the PCC.
Operational Boundary Limit for External Debt
2019/20 2020/21 2021/22 £m £m £m
PWLB borrowing 3.633 38.278 40.455
Other long term liabilities (OCC PFI)
24.552 23.994 23.373
Other long term liabilities (PIC PFI)
34.564 33.834 33.049
Total 90.749 96.107 96.878
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Appendix 2
Minimum Revenue Provision (MRP) Proposal to change MRP Policy and MRP Statement for 2019/20. 1. Introduction 1.1 The PCC is required to make a charge against the revenue budget each year in
respect of capital expenditure financed by borrowing or credit arrangement. The annual charge is set aside for the eventual repayment of the loan and is known as the Minimum Revenue Provision (MRP). This is separate from any annual interest charges that are incurred on borrowing.
1.2 The Local Authorities (Capital Finance and Accounting) (England) (Amendment)
Regulations 2008 amend the way in which MRP can be calculated so that each authority must consider what is “prudent”. The regulations are backed up by statutory guidance which gives advice on what might be considered prudent.
2. Options for Making Prudent Provision 2.1 Four options are included in the guidance, which are those likely to be most
relevant for the majority of local government bodies. Although other approaches are not ruled out, local government bodies must demonstrate that they are fully consistent with the statutory duty to make prudent revenue provision. Option 1 - Regulatory Method Authorities may continue to use the formulae put in place by the previous regulations. Option 2 - Capital Financing Requirement (CFR) Method Under this option, MRP is equal to 4% of the non-housing CFR at the end of the preceding financial year. Option 3 – Asset Life Method This is to make provision over the estimated life of the asset for which the borrowing is undertaken. This could be done by: (a) Charging MRP in equal instalments over the life of the asset (b) Charge MRP on an annuity basis, where MRP is the principal element for the year of the annuity required to repay over the asset’s useful life the amount of capital expenditure financed by borrowing or credit arrangements. The authority should use an appropriate interest rate to calculate the amount. Adjustments to the calculation to take account of repayment by other methods during repayment period (e.g. by the application of capital receipts) should be made as necessary. Option 4 - Depreciation MRP is deemed to be equal to the provision required in accordance with deprecation accounting in respect of the asset on which expenditure has been financed by borrowing or credit arrangements. This should include any amount for impairment charged to the income and expenditure accounts.
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2.2 The regulations make a distinction between capital expenditure incurred before 1 April 2008 and capital expenditure incurred from 1 April 2008 in terms of the options available.
2.4 Options 1 and 2 are to be used for capital expenditure incurred pre April 2008.
Options 3 and 4 are to be used for Capital expenditure incurred post April 2008. 3. Proposed Change to MRP Policy 3.1 In previous accounting periods the option adopted for expenditure incurred after 1
April 2008 was Option 3a (Equal Instalment method). This method was deemed prudent whilst assets were primarily being internally financed.
3.2 As reserves, cash and investment balances have been consumed following the
decrease in direct government funding, it is now necessary to externally finance capital expenditure on long life assets. The current preferred financing method is via the Public Works Loans Board (PWLB) borrowed on an annuity basis.
3.3 It is proposed that option 3b (Annuity Method) is adopted for capital expenditure
chargeable as MRP for the first time after 1 April 2019. The principal reason for the proposed change is for the charge to revenue to reflect the capital repayment basis on the associated finance. This method will therefore adopt a similar MRP basis as those assets financed through lease or PFI arrangements.
3.4 Under the revised Statutory Guidance released on 2 February 2018, this proposed
change in policy cannot be applied retrospectively to assets placed in service prior to the date the revised policy was introduced. Therefore it is proposed that Option 3a is still applied to capital expenditure chargeable as MRP for the first time prior to 1 April 2019.
3.5 Based on projected capital spend in the latest medium term financial plan
(2019/2023) the change in policy will generate MRP reductions of £16k in 2020/21, £211k in 2021/22, £232k in 2022/23 and £271k in 2023/24. Savings will continue to be made until 2048/49. From 2049/50, the change in policy will generate additional charges to the revenue budget until 2070/71.
4. Recommendations 4.1 It is proposed that the MRP policy is changed for capital expenditure chargeable as
MRP for the first time after 1 April 2019 and that the following MRP charges will apply for 2019/20:
Capital expenditure incurred before April 2008 is treated in accordance with
Option 1 of the regulatory guidance; Capital expenditure chargeable as MRP for the first time from 1 April 2008 to 31
March 2019, is treated in accordance with Option 3(a) of the regulatory guidance.
Capital expenditure chargeable as MRP for the first time after 1 April 2019 is treated in accordance with Option 3(b) of the regulatory guidance.
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Appendix 3
LINK ASSET SERVICES
ECONOMIC BACKGROUND
GLOBAL OUTLOOK. World growth has been doing reasonably well, aided by strong growth in the US. However, US growth is likely to fall back in 2019 and, together with weakening economic activity in China, overall world growth is likely to weaken.
Inflation has been weak during 2018 but, at long last, unemployment falling to remarkably low levels in the US and UK has led to a marked acceleration of wage inflation which is likely to prompt central banks into a series of increases in central rates. The EU is probably about a year behind in a similar progression.
KEY RISKS - central bank monetary policy measures Looking back on nearly ten years since the financial crash of 2008 when liquidity suddenly dried up in financial markets, it can be assessed that central banks’ monetary policy measures to counter the sharp world recession were successful. The key monetary policy measures they used were a combination of lowering central interest rates and flooding financial markets with liquidity, particularly through unconventional means such as quantitative easing (QE), where central banks bought large amounts of central government debt and smaller sums of other debt.
The key issue now is that that period of stimulating economic recovery and warding off the threat of deflation, is coming towards its close. A new period has already started in the US, and more recently in the UK, of reversing those measures i.e. by raising central rates and, (for the US), reducing central banks’ holdings of government and other debt. These measures are now required in order to stop the trend of a reduction in spare capacity in the economy, and of unemployment falling to such low levels that the re-emergence of inflation is viewed as a major risk. It is, therefore, crucial that central banks get their timing right and do not cause shocks to market expectations that could destabilise financial markets. In particular, a key risk is that because QE-driven purchases of bonds drove up the price of government debt, and therefore caused a sharp drop in income yields, this also encouraged investors into a search for yield and into investing in riskier assets such as equities. Consequently, prices in both bond and equity markets rose to historically high valuation levels simultaneously. This now means that both asset categories are vulnerable to a sharp downward correction. It is important, therefore, that central banks only gradually unwind their holdings of bonds in order to prevent destabilising the financial markets. It is also likely that the timeframe for central banks unwinding their holdings of QE debt purchases will be over several years. They need to balance their timing to neither squash economic recovery, by taking too rapid and too strong action, or, conversely, let inflation run away by taking action that was too slow and/or too weak. The potential for central banks to get this timing and strength of action wrong are now key risks.
The world economy also needs to adjust to a sharp change in liquidity creation over the last five years where the US has moved from boosting liquidity by QE purchases, to reducing its holdings of debt. In addition, the European Central Bank has cut back its QE purchases substantially and is likely to end them completely by the end of 2018.
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UK. The flow of positive economic statistics since the end of the first quarter this year has shown that pessimism was overdone about the poor growth in quarter 1 when adverse weather caused a temporary downward blip. Quarter 1 at 0.1% growth in GDP was followed by a return to 0.4% in quarter 2; quarter 3 is expected to be robust at around +0.6% but quarter 4 is expected to weaken from that level.
At their November meeting, the MPC repeated their well-worn phrase that future Bank Rate increases would be gradual and would rise to a much lower equilibrium rate, (where monetary policy is neither expansionary of contractionary), than before the crash; indeed they gave a figure for this of around 2.5% in ten years time but declined to give a medium term forecast. However, with so much uncertainty around Brexit, they warned that the next move could be up or down, even if there was a disorderly Brexit. While it would be expected that Bank Rate could be cut if there was a significant fall in GDP growth as a result of a disorderly Brexit, so as to provide a stimulus to growth, they warned they could also raise Bank Rate in the same scenario if there was a boost to inflation from a devaluation of sterling, increases in import prices and more expensive goods produced in the UK replacing cheaper goods previously imported, and so on. In addition, the Chancellor has held back some spare capacity to provide a further fiscal stimulus if needed.
It is unlikely that the MPC would increase Bank Rate in February 2019, ahead of the deadline in March for Brexit. Getting parliamentary approval for a Brexit agreement on both sides of the Channel will take well into spring next year. However, in view of the hawkish stance of the MPC at their November meeting, the next increase in Bank Rate is now forecast to be in May 2019. The following increases are then forecast to be in February and November 2020 before ending up at 2.0% in February 2022.
Inflation. The Consumer Price Index (CPI) measure of inflation has been falling from
a peak of 3.1% in November 2017 to 2.4% in October. In the November Bank of England quarterly inflation report, inflation was forecast to still be marginally above its 2% inflation target two years ahead, (at about 2.1%), given a scenario of minimal increases in Bank Rate. This inflation forecast is likely to be amended upwards due to the Bank’s inflation report being produced prior to the Chancellor’s announcement of a significant fiscal stimulus in the Budget; this is likely to add 0.3% to GDP growth at a time when there is little spare capacity left in the economy, particularly of labour.
As for the labour market figures in September, unemployment at 4.1% was
marginally above a 43 year low of 4% on the Independent Labour Organisation measure. A combination of job vacancies hitting an all-time high, together with negligible growth in total employment numbers, indicates that employers are now having major difficulties filling job vacancies with suitable staff. It was therefore unsurprising that wage inflation picked up to 3.2%, (3 month average regular pay, excluding bonuses). This meant that in real terms, (i.e. wage rates less CPI inflation), earnings are currently growing by about 0.8%, the highest level since 2009. This increase in household spending power is likely to feed through into providing some support to the overall rate of economic growth in the coming months. This tends to confirm that the MPC was right to start on a cautious increase in Bank Rate in August as it views wage inflation in excess of 3% as increasing inflationary pressures within the UK economy.
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In the political arena, there is a risk that the current Conservative minority government may be unable to muster a majority in the Commons over Brexit. However, our central position is that Prime Minister May’s government will endure, despite various setbacks, along the route to reaching an orderly Brexit in March 2019. If, however, the UK faces a general election in the next 12 months, this could result in a potential loosening of monetary and fiscal policy and therefore medium to longer dated gilt yields could rise on the expectation of a weak pound and concerns around inflation picking up.
USA. President Trump’s massive easing of fiscal policy is fuelling a, (temporary),
boost in consumption which has generated an upturn in the rate of strong growth which rose from 2.2%, (annualised rate), in quarter 1 to 4.2% in quarter 2 and 3.5%, (3.0% y/y), in quarter 3, but also an upturn in inflationary pressures. In particular, wage rates were increasing at 3.1% y/y in October and heading higher due to unemployment falling to a 49 year low of 3.7%. With CPI inflation over the target rate of 2% and on a rising trend towards 3%, the Fed increased rates another 0.25% in September to between 2.00% and 2.25%, this being the fourth increase in 2018. They also indicated that they expected to increase rates four more times by the end of 2019. The dilemma, however, is what to do when the temporary boost to consumption wanes, particularly as the recent imposition of tariffs on a number of countries’ exports to the US, (China in particular), could see a switch to US production of some of those goods, but at higher prices. Such a scenario would invariably make any easing of monetary policy harder for the Fed in the second half of 2019. However, a combination of an expected four increases in rates of 0.25% by the end of 2019, together with a waning of the boost to economic growth from the fiscal stimulus in 2018, could combine to depress growth below its potential rate, i.e. monetary policy may prove to be too aggressive and lead to the Fed having to start on cutting rates. The Fed has also been unwinding its previous quantitative easing purchases of debt by gradually increasing the amount of monthly maturing debt that it has not been reinvesting.
The tariff war between the US and China has been generating a lot of heat during
2018, but it is not expected that the current level of actual action would have much in the way of a significant effect on US or world growth. However, there is a risk of escalation. The results of the mid-term elections are not expected to have a material effect on the economy.
Eurozone. Growth was 0.4% in quarters 1 and 2 but fell back to 0.2% in quarter 3,
though this is probably just a temporary dip. In particular, data from Germany has been mixed and it could be negatively impacted by US tariffs on a significant part of manufacturing exports e.g. cars. For that reason, although growth is still expected to be in the region of nearly 2% for 2018, the horizon is less clear than it seemed just a short while ago. Having halved its quantitative easing purchases of debt in October 2018 to €15bn per month, the European Central Bank has indicated it is likely to end all further purchases in December 2018. Inflationary pressures are starting to build gently so it is expected that the ECB will start to increase rates towards the end of 2019.
China. Economic growth has been weakening over successive years, despite
repeated rounds of central bank stimulus; medium term risks are increasing. Major progress still needs to be made to eliminate excess industrial capacity and the stock of unsold property, and to address the level of non-performing loans in the banking and credit systems. Progress has been made in reducing the rate of credit creation, particularly from the shadow banking sector, which is feeding through into lower
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economic growth. There are concerns that official economic statistics are inflating the published rate of growth.
Japan - has been struggling to stimulate consistent significant GDP growth and to get
inflation up to its target of 2%, despite huge monetary and fiscal stimulus. It is also making little progress on fundamental reform of the economy. It is likely that loose monetary policy will endure for some years yet to try to stimulate growth and modest inflation.
Emerging countries. Argentina and Turkey are currently experiencing major
headwinds and are facing challenges in external financing requirements well in excess of their reserves of foreign exchange. However, these countries are small in terms of the overall world economy, (around 1% each), so the fallout from the expected recessions in these countries will be minimal.
INTEREST RATE FORECASTS
The interest rate forecasts provided by Link Asset Services above, are predicated on an assumption of an agreement being reached on Brexit between the UK and the EU. In the event of an orderly non-agreement exit, it is likely that the Bank of England would take action to cut Bank Rate from 0.75% in order to help economic growth deal with the adverse effects of this situation. This is also likely to cause short to medium term gilt yields to fall. If there was a disorderly Brexit, then any cut in Bank Rate would be likely to last for a longer period and also depress short and medium gilt yields correspondingly. It is also possible that the government could act to protect economic growth by implementing fiscal stimulus.
The balance of risks to the UK The overall balance of risks to economic growth in the UK is probably
neutral. The balance of risks to increases in Bank Rate and shorter term PWLB rates,
are probably also even and are broadly dependent on how strong GDP growth turns out, how slowly inflation pressures subside, and how quickly the Brexit negotiations move forward positively.
One risk that is both an upside and downside risk, is that all central banks are now working in very different economic conditions than before the 2008 financial crash as there has been a major increase in consumer and other debt due to the exceptionally low levels of borrowing rates that have prevailed for ten years since
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2008. This means that the neutral rate of interest in an economy, (i.e. the rate that is neither expansionary nor deflationary), is difficult to determine definitively in this new environment, although central banks have made statements that they expect it to be much lower than before 2008. Central banks could therefore either over or under do increases in central interest rates.
Downside risks to current forecasts for UK gilt yields and PWLB rates currently include: Brexit – if it were to cause significant economic disruption and a major
downturn in the rate of growth. Bank of England monetary policy takes action too quickly, or too far, over
the next three years to raise Bank Rate and causes UK economic growth, and increases in inflation, to be weaker than we currently anticipate.
A resurgence of the Eurozone sovereign debt crisis, possibly in Italy, due to its high level of government debt, low rate of economic growth and vulnerable banking system, and due to the election in March of a government which has made a lot of anti-austerity noise. At the time of writing, the EU has rejected the proposed Italian budget and has demanded cuts in government spending which the Italian government has refused. The rating agencies have started on downgrading Italian debt to one notch above junk level. If Italian debt were to fall below investment grade, many investors would be unable to hold it. Unsurprisingly, investors are becoming increasingly concerned by the actions of the Italian government and consequently, Italian bond yields have risen sharply – at a time when the government faces having to refinance large amounts of debt maturing in 2019.
Weak capitalisation of some European banks. Italian banks are particularly vulnerable; one factor is that they hold a high level of Italian government debt - debt which is falling in value. This is therefore undermining their capital ratios and raises the question of whether they will need to raise fresh capital to plug the gap.
German minority government. In the German general election of September 2017, Angela Merkel’s CDU party was left in a vulnerable minority position dependent on the fractious support of the SPD party, as a result of the rise in popularity of the anti-immigration AfD party. Then in October 2018, the results of the Bavarian and Hesse state elections radically undermined the SPD party and showed a sharp fall in support for the CDU. As a result, the SPD is reviewing whether it can continue to support a coalition that is so damaging to its electoral popularity. After the result of the Hesse state election, Angela Merkel announced that she would not stand for re-election as CDU party leader at her party’s convention in December 2018. However, this makes little practical difference as she is still expected to aim to continue for now as the Chancellor. However, there are five more state elections coming up in 2019 and EU parliamentary elections in May/June; these could result in a further loss of electoral support for both the CDU and SPD which could also undermine her leadership.
Other minority eurozone governments. Spain, Portugal, Netherlands and Belgium all have vulnerable minority governments dependent on coalitions which could prove fragile. Sweden is also struggling to form a government due to the anti-immigration party holding the balance of power, and which no other party is willing to form a coalition with.
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Austria, the Czech Republic and Hungary now form a strongly anti-immigration bloc within the EU while Italy, this year, has also elected a strongly anti-immigration government. Elections to the EU parliament are due in May/June 2019.
Further increases in interest rates in the US could spark a sudden flight of investment funds from more risky assets e.g. shares, into bonds yielding a much improved yield. In October 2018, we have seen a sharp fall in equity markets but this has been limited, as yet. Emerging countries which have borrowed heavily in dollar denominated debt, could be particularly exposed to this risk of an investor flight to safe havens e.g. UK gilts.
There are concerns around the level of US corporate debt which has swollen massively during the period of low borrowing rates in order to finance mergers and acquisitions. This has resulted in the debt of many large corporations being downgraded to a BBB credit rating, close to junk status. Indeed, 48% of total investment grade corporate debt is now rated at BBB. If such corporations fail to generate profits and cash flow to reduce their debt levels as expected, this could tip their debt into junk ratings which will increase their cost of financing and further negatively impact profits and cash flow.
Geopolitical risks, especially North Korea, but also in Europe and the Middle East, which could lead to increasing safe haven flows.
Upside risks to current forecasts for UK gilt yields and PWLB rates Brexit – if both sides were to agree a compromise that removed all threats of
economic and political disruption. The Fed causing a sudden shock in financial markets through misjudging
the pace and strength of increases in its Fed. Funds Rate and in the pace and strength of reversal of QE, which then leads to a fundamental reassessment by investors of the relative risks of holding bonds, as opposed to equities. This could lead to a major flight from bonds to equities and a sharp increase in bond yields in the US, which could then spill over into impacting bond yields around the world.
The Bank of England is too slow in its pace and strength of increases in Bank Rate and, therefore, allows inflation pressures to build up too strongly within the UK economy, which then necessitates a later rapid series of increases in Bank Rate faster than we currently expect.
UK inflation, whether domestically generated or imported, returning to sustained significantly higher levels causing an increase in the inflation premium inherent to gilt yields.
Brexit timetable and process at 13.12.18 March 2017: UK government notified the European PCC of its intention to leave
under the Treaty on European Union Article 50 on 29 March 2019. 25.11.18 EU27 leaders endorsed the withdrawal agreement 11.12.18 vote in UK Parliament on the agreement (postponed) 21.12.18 – 6.1.19 UK Parliamentary recess Before 21.1.19 vote in UK Parliament on the agreement 8.1.19 – 29.3.19 second vote (?) in UK parliament if first vote rejects the deal 21.1.19 vote in Parliament on a ‘no deal’ scenario; if approved... By 29.3.19 then ratification by EU Parliament requires a simple majority By 29.3.19 if UK and EU parliaments agree the deal, EU PCC needs to approve
the deal; 20 countries representing 65% of the EU population must agree
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29.3.19 UK leaves the EU (or asks the EU for agreement to an extension of the Article 50 period if UK Parliament rejects the deal and no deal departure?)
29.3.19: if an agreement is reached with the EU on the terms of Brexit, then this will be followed by a proposed transitional period ending around December 2020.
UK continues as a full EU member until March 2019 with access to the single market and tariff free trade between the EU and UK. Different sectors of the UK economy may leave the single market and tariff free trade at different times during the transitional period.
The UK and EU would attempt to negotiate, among other agreements, a bi-lateral trade agreement over that period.
The UK would aim for a negotiated agreed withdrawal from the EU, although the UK could also exit without any such agreements in the event of a breakdown of negotiations.
If the UK exits without an agreed deal with the EU, World Trade Organisation rules and tariffs could apply to trade between the UK and EU - but this is not certain.
On full exit from the EU: the UK parliament would repeal the 1972 European Communities Act.
Link Asset Services October/November 2018 (updated)
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AUDIT COMMITTEE 15 January 2019
AGENDA ITEM 9
Audit Committee 15 January 2019 Page 1 Agenda Item 9 – Forward Work Plan
Audit Committee
Forward Work Plan 16 April 2019 Welcome and Apologies Declarations of Interest Minutes of meeting 15 January 2019 Internal Audit 2018/19 Progress Report and Follow Up Review 2018/19 Annual Report 2019/20 Internal Audit Plan (Final)
Reports from Head of Internal Audit
Annual Governance Statement 2018/19 Report from CFO External Audit Plan 2018/19
Report from Director, EY
Strategic Risk Register update Report from Chief Exec and CC Forward Work Plan Report from CFO 11 June 2019 Private (informal meeting) Draft Statements of Accounts 2018/19 Reports from CFO 30 July 2019 Welcome and Apologies Declarations of Interest Minutes of meeting 16 April 2019 Internal Audit 2019/20 Progress Report (including outstanding reports from 2018/19)
Report from Head of Internal Audit
Final Accounts 2018/19 Approval including External Auditor’s Audit Results Report Reports from CFO and EY
Forward Work Plan Report from CFO
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Audit Committee 15 January 2019 Page 2 Agenda Item 9 – Forward Work Plan
22 October 2019 Welcome and Apologies Declarations of Interest Minutes of meeting 30 July 2019 Annual Audit Letter Report from EY Internal Audit 2019/20 Plan update and follow-up Report
Report from Head of Internal Audit
Strategic Risk Register update Report from Chief Exec and CC Forward Work Plan Report from CFO 14 January 2020 Welcome and Apologies Declarations of Interest Minutes of meeting 22 October 2019 Audit Committee Terms of Reference Report from CFO Internal Audit 2019/20 Plan update 2020/21 Internal Audit Plan (draft)
Reports from Head of Internal Audit
External Audit 2018/19 Accounts Annual Audit Letter 2019/20 Audit Plan
Reports from Director, E&Y
Treasury Management 2019/20 Half Year Update 2020/21 Strategy
Report from CFO
Strategic Risk Register Update Report from Chief Exec and CC Forward Work Plan Report from CFO Report Author John Hummersone Chief Finance Officer 01953 424484 Email: [email protected]
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