Agenda and draft minutes

The Chair welcomed all to the meeting, introduced the substitutes and noted the apologies as above.

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It was noted that Agenda Items 16 and 17 were exempt from publication and the webcast would be paused during discussion.

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RESOLVED that the minutes of the meeting held on the 17^th July 2024 were agreed as a true and accurate record.

The Head of Facilities and Asset Managementpresented the Health and Safety report covering the period 1^st April to 30^th June 2024 andprovided an overview of health and safety issues relating to South Yorkshire Future Trams Ltd (SYFTL).

It was noted that:

·       Following an incident where a passenger had been taken ill onboard a tram, a protocol had been agreed whereby the tram carrying the individual would return to the depot and be met by an ambulance.

·       There had been a derailment incident during a driver training session caused by low speed and ‘climb out’. A lessons learned exercise had been undertaken and amendments made to the training programme.

·       To further improve safety, a Head of Safety, Health, Environment and Quality for SYFTL had been appointed and would start in December.

·       The implications of pending UK wide legislation that will place a requirement on those responsible for certain publicly accessible locations to consider the threat from terrorism and implement appropriate and proportionate mitigation measures (Martyn’s Law) were being considered.

ACTION: The Head of Facilities and Asset Management to update on the progress around Martyn’s Law to November’s meeting.

ACTION: The Head of Facilities and Asset Management to update the Committee on the queried data in appendices.

ACTION: The Head of Facilities and Asset Management to include more detail regarding closed actions in future reports.

RESOLVED: that the Committee noted the update.

The South Yorkshire Future Trams Ltd Managing Director presented an update on improvements to the health and safety culture of Supertram.

It was noted that five core changes had resulted in a positive change over the last six months:

• Leadership.
• Governance.
• Engagement tactics and learning from stakeholders.
• Developing transparent reporting.
• The 100 day and full year plan.

Members queried why the ‘slips, trips and falls’ figures were high. The Managing Director explained that the extensive work on improving culture change around reporting incidents, regardless of the severity, had resulted in an increase in small injuries being reported.

The Chair enquired about the statistics on staff assaults, especially considering recent press interest in the figures. The Managing Director explained that previously, assaults were being under reported and that substantial work had been undertaken to map where incidents were taking place and that training had been provided to staff on conflict management and de-escalation, in addition to wellbeing support and resources. The team were also working with colleagues across other transport modes to learn and share experiences.

ACTION: The SYFTL Managing Director to share any available data with the Committee on incident rates for tram operations in other cities at the November meeting.

RESOLVED: that the Committee noted the update.

The EY External Auditor provided an update on the 2022/23 accounts.

It was noted that:

• The value for money report was an overall positive opinion.
• No significant weakness had been identified for either South Yorkshire Passenger Transport Executive (SYPTE) or South Yorkshire Mayoral Combined Authority (SYMCA).

In response to questions on nuanced figures and the finalisation of the report from Members, the EY External Auditor advised that the report was finalised, and no further amends could be made.

ACTION: The Democratic Services Officer to circulate both External Audit papers for SYPTE and SYMCA.

RESOLVED that the Committee note the update.

The KPMG External Auditor provided an update on the progress made since July in developing the External Audit Plan for 2023-24.

It was noted that the materiality balance had been reduced from £450k to £375k and that risks relating to the evaluation of land and buildings had been updated due to only three assets being subject to annual re-evaluation as part of year end process.

Members queried how material levels compared to the previous year. It was confirmed that overall materiality figures were higher, but auditing standards were within relevant benchmarks. It was also confirmed that bus shelters had been reclassified as infrastructure assets.

Members noted that the report highlighted the absence of finance committee as a risk. The Auditor stated that no detriment had been noted but best practice would be to have one however, the absence of a finance committee would not prevent the MCA from securing a value for money opinion.

RESOLVED that the Committee note the update.

The Head of Contracts and Performance provided an update on the Adult Skills Fund (ASF) formerly the Adult Education Budget (AEB).

The report provided an update on processes and details of actions taken to manage the programme throughout the academic year.

It was noted that:

• ASF has a devolved budget of £40million in the 2023/24 academic year to facilitate training and learning through grants to colleges, local authorities, and procedure provision.
• Within the performance process for ASF, the team also managed Free Courses for Jobs through a separate delegated fund.
• Where there is an underspend against ASF targets, money is diverted to an innovation fund within the ASF budget instead of funds being subject to clawback by Government.

ACTION: The Head of Contracts and Performance to provide an update on the innovation fund projects for the November meeting.

In response to Members queries around performance outcomes, the Head of Contracts and Performance explained outcome and destination data was not available for all courses and an outcomes framework to gain further insight of this was in development.

Members raised concerns that the MCA would be at risk if a participant unenrolled from an ASF funded course. The Head of Contracts and Performance outlined the payment process which pays a fee to the provider when a participant enrols and then again when they complete, resulting in a financial incentive for participants to be supported throughout the course.

It was noted that the current pass rate for participants in the 23/24 academic year is 85%.

Members queried whether being on track to achieve 98% of the overall budget for ASF and Free Courses for Jobs was a positive outcome. It was explained how skills delivery depends on learners enrolling and completing courses to fulfil the budget allocation. The Department for Education considered organisations achieving 97% of their financial allocation as successful, with no funds subject to clawback. The MCA followed the same approach.

Members were given an overview of the fraud protection measures following a recent review of Fraud in Skills undertaken by the MCA’s internal auditors.

RESOLVED that the Committee note the update.

The Executive Director Resources and Investment prefaced the report by reminding the Committee that, after receiving the Treasury Management Strategy at the previous meeting, they had requested a separate report outlining the differences in minimum revenue provision policies for the MCA and the former Office of the Police and Crime Commissioner (OPCC), noting that the functions and liabilities of the OPCC had been transferred in May to the Mayor and SYMCA following the election.

The Executive Director Resources and Investment made Committee aware of a newly identified issue that was being investigated. It was noted that the Chair and Vice Chair had been briefed along with the Chair of the Joint Independent Audit Committee, and that the External Auditors would be briefed post Committee. When appropriate the Executive Director Resources and Investment committed to bringing a full update on the matter.

The Assistant Director Financial Services presented the report and highlighted the following key points:

• The examples in the report were purely theoretical to best illustrate how slight differences play out over time.
• The MCA and Police Fund use two different financial methods to provide for debt provisions.
• It was recommended that the current approach of the Police Fund should not be amended to mitigate unexpected costs outside of the budget.

ACTION: The Assistant Director Financial Services to provide an update to the November meeting regarding the implications of aligning the Police fund debt repayment model to the MCA’s approach.

RESOLVED: that the Committee accept the recommendations of the report.

The RSM Internal Auditor provided an update on the progress of the 2023/24 Audit Plan.

It was noted that dates for the remaining internal audits have been scheduled and that the plan is on target to be completed by the end of the financial year. Further to this, the annual report and Head of Internal Audit opinion would be scheduled for the first Committee meeting of the new financial year.

The Committee noted that there had been an amendment to the schedule for the internal audit on the integration of the Office of the Police and Crime Commissioner. Due to a delay in the appointment of an Executive Director for Policing and Reform, it had been agreed that this review would now be conducted in two parts, the first in November 2024 followed by the second part in quarter four.

RESOLVED: that the Committee consider the progress outlined in the report.

•           Fraud in Skills

•           IT Asset Management

Members considered the findings and recommendations of the recent internal audits on Fraud in Skills and IT Asset Management.

The key findings from the Fraud in Skills audit were that:

• The overall opinion was positive with evidence of good processes and procedures in place.
• Fraud risks could not be entirely ruled out, but the MCA’s procedures should enable early detection and swift response to any issues.

Key recommendations included:

• The incorporation of fraud and bribery procedures in the provider due diligence checklist.
• Ensuring the due diligence process remained updated and aligned with best practices.
• Clarification of expectations around corporate criminal offences during market warming sessions.
• Definition of robust sub-contracting procedures and conduct sample checks to be included in subcontractor documentation.

Recommended good practices included introducing fraud-related policy checklists, a fraud awareness presentations, and considering the implications of the Economic Crime and Corporate Transparency Act 2023, which holds large organisations accountable for fraud committed by their employees.

Members asked whether there was any evidence of fraud due to non-existent learners being enrolled. It was explained that investigating ‘ghost students’ had been part of the audit but, no incidents were reported. It was noted that after a ‘ghost student’ incident in 2021 the team had implemented sample checks and processes to prevent and identify such fraud.

ACTION: The Head of Corporate Governance to organise Committee training around the new Economic Crime and Corporate Transparency Act 2023.

The key findings for IT Asset Management internal audit were:

• An overall a positive opinion.
• No formal escalation process existed for retrieving unreturned IT equipment from leavers. However, all unreturned equipment was subject to immediate access blocking ensuring data protection.
• Informal rolling audits of the IT asset register had been conducted but not formally documented posing a risk if staff turnover occurred. Draft procedures for IT hardware maintenance and secure disposal were in place, but responsibilities and alignment with good practice needed to be finalised.

A query was raised around the classification of the management action relating to standardising the process for the retrieval of assets and whether this should be ‘medium’ rather than ‘low’ due to the potential for data breach. The Assistant Director Digital & Technology Services explained that there was a robust process in place to ensure access to systems was revoked when a member of staff leaves, whether hardware is recovered or not, therefore limiting the risk of data compromise.

RESOLVED that the Committee note the findings and recommendations of recent internal audit activity.

·         Follow up Report (2)

Item restricted.

Item restricted.

(The meeting recommenced at 1pm)

The Director of Corporate Delivery updated the Committee on activity being undertaken to address the corporate risk relating to the organisation’s insight capacity and capability.

It was noted that the project is focussed on three key areas:

• Improving business case development skills.
• Collaboration with local authority and wider partners across South Yorkshire especially considering resourcing issues.
• Identifying how the organisation may need to adapt for further phases of devolution and integrated settlement arrangements.

The Director of Corporate Delivery reported that the Director of Insight, who is leading the work, will attend the meeting in November to provide an update on progress. The Committee were asked to indicate any particular areas they would like to receive more information on.

Members requested that the update include:

• How data will be used for scenarios plannng.
• How expertise would be shared across local authority and wider partners.
• Whether links to universities could be a useful tool for collaboration.

ACTION: The Director of Insight to present an update on this item for the November meeting.

RESOLVED that the Committee noted the update.

The Vice Chair delivered a verbal update from JIAC.

It was noted that there have been no meetings held since July. The next meeting is scheduled for 26^th September and a full update will be provided in November.

RESOLVED that the Committee noted the update.

The Chair of the Transport Risk Working Group provided a summary of the issues considered at the meeting held on 19^th September. 

This included:

• The progress of infrastructure maintenance work on the Commercial Street bridge and balance anchor weights for tram overhead lines.
• A review of the risk dashboard.
• Discussion around the Transport CRM risk.

The Director of Public Transport Operations elaborated, after questions from Members, on the Commercial Street bridge which had been impacted by extreme weather over several years and explained the design solutions that will make the bridge repair sustainable.

An update on the A61 roadworks was also provided. It was noted that further phases of the project were now rescheduled.

The Chair of the Transport Risk Working Group acknowledged that the Director of Public Transport Operations would be leaving the organisation and expressed thanks for his hard work supporting the group and wished him well for the future.

ACTION: The Director of Public Transport Operations to share the A61 report with the Committee.

RESOLVED that the Committee note the update.

The Head of Corporate Governance introduced the Risk Management Dashboard.

It was noted that:

• The risk relating to the Bus Service Improvement Plan (BSIP) and Enhanced Partnership (EP) delivery had increased in score due to uncertainty around funding continuity.
• The residual score for the risk relating to galvanising support to achieve regional net zero targets had reduced due to the realignment of resources internally and a substantive update would be provided at the next meeting.
• There were several corporate risks that had dependencies on the outcome of the Government’s spending review in October.

Members asked what work was being undertaken to mitigate the risk of discontinued funding sources. The Executive Director Resources and Investment explained how the MCA avoids multi-year spending commitments, underwrites risk through the reserve strategy as well as working closely with the Government about the funding needs of South Yorkshire.

Members highlighted the importance of the continuation of Brownfield Housing funding to Sheffield City Council’s local plan.

The Committee enquired about the potential impact of BSIP funding withdrawal on the MCA. The Director of Public Transport Operations explained that network changes would be necessary, but the MCA was accustomed to managing such changes and was well prepared to handle the additional workload.

RESOLVED that the Members consider the Risk Management Dashboard and note the progress.

The Head of Corporate Governance updated the Committee on the progress against the 2023/24 Governance Improvement Plan.

Members noted that all actions were on track and queried whether any   were more difficult to deliver than others. The Head of Corporate Governance indicated that some actions were more complex than others such as the development of the around the consultation and engagement framework.

The Executive Director Resources and Investment also made the Committee aware that the timeline for the harmonisation process had been impacted by the election and subsequent integration of the Police and Crime functions and the appointment of a new HR Director. Work was continuing with Unions to ensure the harmonisation process benefited all staff.

ACTION: The Executive Director Resources and Investment to bring an update on the harmonisation process progress for the November meeting.

RESOLVED that the Committee consider progress against the Plan.

The Head of Corporate Governance presented the 2024/25 Work Plan.

In response to Members’ questions, the Head of Corporate Governance confirmed that arrangements for risk management training for the committee were in progress.

RESOLVED that the Members consider the work plan and agree any changes or additional items to be scheduled. 

The Executive Director Resources and Investment updated the Committee on one instance of a breach of internal controls.

It was noted that there had been technical breach in the procurement process within the Policing and Reform directorate. A senior officer had approached a supplier without going through the usual MCA process for spend above £50,000. It was reported that staff have received further training, and that the incident was ascribed to the differences between how the MCA and previous OPCC operated. Activity scheduled as part of the internal audit plan will further test the application of the process in this area.

The Vice Chair queried whether training alone was sufficient to avoid a repeat incident. The Executive Director Resources and Investment explained how he now attends finance meetings for the Directorate to ensure new ways of working are understood.

RESOLVED that the Committee note the Breach.

There were no issues for escalation.

(The meeting concluded at 14:14)