Agenda and draft minutes

Audit & Governance Committee - Tuesday 17th September 2019 6.00 pm

Venue: Gipping Room, Grafton House

Contact: Jess Dool  01473 432513

Items
No. Item

19.

Apologies for Absence

Minutes:

Apologies for Absence were received from Councillor Maguire

 

The Chair reminded the meeting that the Committee was one member short following Mr Leeder’s resignation from the Council. The meeting recorded its thanks to Mr Leeder for his service on the Committee.

20.

Unconfirmed Minutes of Previous Meeting held on 17 July 2019 pdf icon PDF 78 KB

Minutes:

Resolved:

 

that the minutes of the meeting held on 17 July 2019, be signed as a true record.

21.

To Confirm or Vary the Order of Business

Minutes:

Resolved:

 

that the Order of Business be as printed on the agenda.

22.

Declarations of Interest

Minutes:

Councillor Kreidewolf declared a non-pecuniary interest in Item 5 External Audit – Annual Audit Letter 2018/19 and Item 6 Financial Management and Control Corporate Budget Monitoring 2019/20 Quarter 1 as he was a Director of IPSERV Limited, Director of Handford Homes Ltd, Director of Ipswich Borough Assets Ltd and a Member of the Suffolk Pension Fund Authority.

23.

AG/19/11 External Audit - Annual Audit Letter 2018/19 pdf icon PDF 72 KB

Additional documents:

Minutes:

23.1.    It was confirmed that the Annual Audit Letter 2018/19 would be considered at the Audit & Governance Committee meeting in December 2019.

 

23.2.    The External Auditor, Ms Hanson, introduced the Audit Results Report which had been completed by Ernst & Young LLP and confirmed that an unqualified opinion of the financial statements had been achieved.

 

23.3.    Ms Hanson advised that key areas of focus for the audit of the Councils financial statements had been identified which included misstatements due to fraud or error (in which no errors had been identified) and incorrect capitalisation of revenue expenditure, in which an amendment had been required, although this hadn’t had any impact on the Council’s revenue and had not indicated any misreporting of the Council’s financial position.

 

23.4.    Specialists had been involved in the audit of the Pension Liability Valuation and the key judgements used by the actuary and how reasonable these were. Following the review, the draft Ipswich Borough Council Group Accounts had been amended to reflect changes in the company auditors assessment of Ipswich Buses Ltd.’s pension arrangements, as this had been re-defined as a defined contribution scheme. Therefore, as this was in line with Ernst & Youngs and the Council auditors assessments, there would now be a consistent treatment in the accounts of Ipswich Busses and of Ipswich Borough Council. In response to a question from Councillor Fisher, Ms Hanson confirmed that the change in definition of Ipswich Busses would not have any affect on the beneficiaries of the scheme.

 

23.5.    Ms Hanson confirmed that specialists had reviewed the Council’s retail park assets and identified that the valuation of the retail parks had not deducted the purchaser costs and this had led to a material overstatement of the assets value. Therefore, the audit difference for this had been adjusted.

 

23.6.    With regards to the Martlesham Heath Retail Park, the valuation for this had been above the expected range of the internal valuer and the Council had chosen not to adjust for this audit difference.  Mr Minnican, Operations Manager – Finance, confirmed that the reason the Council had chosen not to adjust their figures had been because third party valuers and specialists with local knowledge had been involved with the valuation of the retail park and they had agreed that this had been a realistic figure. 

 

23.7.    A value for money risk assessment had been undertaken which focussed on the governance and decision making arrangements between the Council and their subsidiaries, of which they had been satisfied that appropriate provisions had been implemented.

 

23.8.    Updated guidance stated that ‘authorities must not borrow more than or in advance of their needs purely in order to profit from the investment of the extra sums borrowed’ however, should a local authority choose to disregard this guidance, the Council had to ensure that their investment strategy included the reasons why and how the risks associated with this would be minimised. It had therefore been recommended that, due to the scale of the borrowing and the increased risk  ...  view the full minutes text for item 23.

24.

AG/19/12 Financial Management and Control Corporate Budget Monitoring 2019/20 Quarter 1 pdf icon PDF 384 KB

Minutes:

24.1.    In response to a question raised by Councillor Fisher, Mr Minnican confirmed that the Mid Term Financial Plan had been based on the financial forecasts of what services would require over the year. However, throughout the year funding for additional items would be agreed by Executive and this would be transferred from the General Fund to the relevant Service Area. For example, money from an unspent project could be carried over and spent elsewhere. It was agreed that the next Budget monitoring 2019/20 Quarter 2 report should note how much of the balance referred to in the budget had been carried forward.

Action: That the Financial Management and Control Corporate Budget Monitoring 2019/20 Quarter 2 report note how much of the balance referred to in the budget had been carried forward.

 

24.2.    It was confirmed that the £500,000 loan to Ipswich Busses had been part of an existing loan previously agreed.

 

24.3.    Mr Minnican confirmed that at the end of Quarter 1, the Council’s financial system had been updated which meant invoices could not be processed for ten days and this had impacted on the percentage of invoices paid within the 30 days of receipt. It was expected that there would be a significant improvement in the next two Quarters and it was agreed that future reports would include information from the previous quarters so that any trends could be monitored.

            Action: That the previous financial quarters’ payment      performance figures be included within future reports.

 

24.4.    In response to Councillor Kreidewolf, Mr Minnican agreed to confirm whether there was a Key Performance Indicator in accordance to the payment performance.

Action: Mr Minnican to confirm whether there was a Key Performance Indicator in accordance to the payment performance.

 

24.5.    Councillor Fisher asked why the one-off £150,000 charge to the Property Services rental income, in relation to 1 Cornhill and no tenant, hadn’t been budgeted and asked what the £124,000 in relation to Corporate Property income covered. Mr Minnican agreed to provide a response to this after the meeting.

Action: Mr Minnican agreed to provide a response as to why the one-off charge to the Property Services rental income, in relation to 1 Cornhill, had not been budgeted and further information around what the £124,000 in relation to Corporate Property income covered.

 

24.6.    Councillor Phillips asked what dividend Ipswich Borough Council would receive from Ipswich Borough Assets and it was confirmed that this would be approximately £200,000.

 

Resolved:

 

that the Financial Management and Control Corporate Budget Monitoring 2019/20 Quarter 1 report be noted.

 

25.

AG/19/13 Review of Corporate Risk Register 2019/20 pdf icon PDF 102 KB

Additional documents:

Minutes:

Resolved:

 

that the Corporate Risk Register be agreed.

26.

AG/19/14 Internal Audit - Recently Issued Reports pdf icon PDF 94 KB

Additional documents:

Minutes:

Resolved:

 

That the contents of the Audit report below be noted

 

1.    Agresso ICT Key Controls 2018-19 [FR022]

27.

AG/19/15 Audit & Governance Committee - Future Work Programme pdf icon PDF 76 KB

Additional documents:

Minutes:

27.1.    It was confirmed that the External Audit – Annual Audit Letter 2018/19 would be considered at the December meeting and both the Internal Audit Charter Review and the External Audit Plan would be considered in February 2020.

 

27.2.    It was agreed that a standing item be placed on the Audit & Governance Committee Future Work Programme for a report to be brought to each meeting of the Committee regarding the implementation of high priority recommendations.

 

Resolved:

 

that the Audit & Governance Committee Future Work Programme 2019/20 be amended as per the above and noted.

28.

Exclusion of Public

To consider excluding the public (including the Press) from the meeting during consideration of the following items under Section 100 (A) of the Local Government Act 1972 as it is likely that if members of the public were present during that item there would be disclosure to them of exempt information as defined within paragraphs 3 & 4 of Part 1 of Schedule 12A of the Act.

 

29.

Unconfirmed Exempt Minutes of the Meeting held on 17 July 2019

30.

AG/19/16 Internal Audit - Exempt Recently Issued Reports