Agenda and minutes

Audit & Governance Committee
Wednesday 17th July 2019 6.00 pm

Venue: Gipping Room, Grafton House

Contact: Jess Dool  01473 432513

Items
No. Item

1.

Election of Chair

Minutes:

It was RESOLVED:-

 

that Councillor J Cook be elected as Chair of the Audit & Governance Committee for the municipal year 2019/20.

2.

Appointment of Vice-Chair

Minutes:

It was RESOLVED:-

 

that Councillor A Leeder be appointed as Vice-Chair of the Audit & Governance Committee for the municipal year 2018/19.

3.

Apologies for Absence

Minutes:

Apologies for absence were received from Councillor Cook.  

4.

Unconfirmed Minutes of the Meeting held on 26 February 2019 pdf icon PDF 74 KB

Minutes:

It was RESOLVED:-

 

that the Minutes of the Meeting held on 26 February 2019 be signed as a true record.

5.

To Confirm or Vary the Order of Business

Minutes:

It was RESOLVED:-

 

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

6.

Declarations of Interest

Minutes:

Agenda Item 10 – Annual Statement of Accounts 2019/19 and the Annual Report to those charged with Governance.

Councillor Daniel Maguire declared a non-pecuniary interest as an employee of Ipswich Buses.

7.

AG/19/01 Code of Corporate Governance and Annual Governance Statement 2018/19 pdf icon PDF 96 KB

Additional documents:

Minutes:

7.1         The Head of Sport and Programmes, Justin Jupp, explained that the report had been compiled in line with the Principles of the Chartered Institute of Public Finance and Accountancy and the Society of Local Authority Chief Executives’ Guidelines and that the committee was invited to consider its contents before consideration by Council.

 

7.2         Councillor Leeder noted that the report demonstrated the Council’s policies and processes in relation to governance and asked whether there was any measure of the governance culture within the organisation. The Head of Audit, Siobhan Martin, explained that an ethics review was included in the Internal Audit Team’s work programme and commented that the Staff Survey would also give an indication of the governance culture at the Council.

 

It was RESOLVED:-

 

that the Code of Corporate Governance and the Annual Governance Statement for the year ended 31st March 2019 be noted, prior to Council consideration and authorisation for the Chief Executive and Leader of the Council to sign and date the Statement.

8.

AG/19/02 Financial Management and Control Out-turn Report 2018/19 pdf icon PDF 616 KB

Minutes:

8.1         The Head of Finance and Revenues, John Chance, introduced the report, explaining that it set out the final position for the 2018/19 financial year.

 

8.2         Councillor Phillips asked whether there had been any changes to the revenue budget carry forward process. The Operations Manager – Finance, Tom Minnican, explained that the process had not changed but that the language used might have altered. Any proposed carry forwards had to be agreed by the Council’s Corporate Management Team and then approved by Executive.

 

8.3         Councillor Phillips asked for more information regarding the write off of debts owed by Cheltenham Developments Ltd. Mr Minnican agreed to provide this information outside of the meeting.

 

8.4         Councillor Leeder noted that the Council’s estimates of spending by services had been quite accurate but asked for more information on what centrally held item had caused the General Fund to be significantly underspent. Mr Minnican confirmed that this related to the income received as part of the business rates retention pilot.

 

It was RESOLVED:-

 

i.             that the contents of the 2018/19 out-turn report and the resulting budget changes made be noted;

Reason: to fulfil Audit & Governance Committee’s role in financial management.

 

ii.            that the budget carried forward to 2019/20 for the General Fund (paragraph 3.2 and Appendix 5), the Housing Revenue Account (paragraph 8.2 and Appendix 7) and the Capital Programme (paragraph 10.3 and Appendix 9) be noted;

Reason: to ensure adequate budgetary provision for commitments made in 2018/19 but not completed in that year.

 

iii.          that the transfers to/from reserves (paragraphs 7.10, 8.2 and 8.3) be noted;

Reason: to facilitate effective budgetary control.

 

iv.          that the position on the 2018/19 and future years Capital Programme and the additions to the capital programme identified in paragraph 10.7 be noted;

Reason: to facilitate effective budgetary control.

 

v.            that the £75,000 transfer from the ‘Contingency – additional commitments’ budget to the Finance System capital scheme, bringing the total project value to £429.813 (paragraph 10.9) be noted;

Reason: to facilitate development of the finance system.

 

vi.          that the write off totalling £430,592.50 relating to rent payable by Cheltenham Developments Ltd, as identified in paragraph 17.1, against the provision made be noted;

Reason: to recognise that the debt is irrecoverable and allow the necessary accounting entries to be made.

9.

AG/19/03 Treasury Management Annual Report 2018/19 pdf icon PDF 138 KB

Minutes:

9.1         The Head of Finance and Revenues, John Chance, introduced the report, explaining that the Council held a number of investments which had been spread so that they would mature at different times.

 

9.2         Councillor Leeder asked whether the Council’s investment strategy was performing well. Mr Chance explained that the Council’s investment strategy was relatively risk averse and that yields were low as a result of low interest rates but that in the context of the market the Council’s investment strategy was performing satisfactorily.

 

It was RESOLVED:-

 

that the Treasury Management Operations for the period 1 April 2018 to 31 March 2019 be noted.

10.

AG/19/04 Annual Statement of Accounts 2018/19 and the Annual Report to those charged with Governance pdf icon PDF 88 KB

Additional documents:

Minutes:

10.1      The Head of Finance and Revenues, John Chance, explained that the Council was obliged to publish a Statement of Accounts by 31 May each year and that these had been published on 30 May 2019. These Accounts were currently being audited by Ernst and Young LLP.

 

10.2      Debbie Hanson, Associate Partner Ernst and Young LLP, explained that the audit at Ipswich Borough Council had started on site on 1 July 2019; unfortunately due to the shortened statutory timeline it had not been possible to present a written report giving the findings of the audit. Ms Hanson explained that it was likely that an unqualified opinion would be issued and that the Council’s governance arrangements were adequate. There were likely to be a small number of recommendations made, which had been discussed with management and would be agreed.

 

10.3      Ms Hanson proposed that the report on audit matters to those charged with governance (ISA 260) which Ernst and Young were required to share with the Audit and Governance Committee be discussed with the Chair and then sent to the committee.

 

10.4      Councillor Phillips asked for more information regarding the loan from Suffolk County Council of £3,812,000.  Mr Chance agreed to provide this information outside of the meeting.

 

10.5      Councillor Phillips asked why Stage Security Ltd had gone from making a profit to making a £133,000 loss since its purchase by the Council. Mr Chance explained that there had been a significant expansion in the business which would take time to return to profit but that this was starting to happen. Mr Chance agreed to provide further information outside of the meeting.

 

10.6      Councillor Fisher asked for more information regarding the Council’s investment properties, as detailed on page 166 of the agenda pack. Mr Chance agreed to provide this information outside of the meeting.

 

10.7      Councillor Fisher asked whether the overspend on refuse collection staffing reported on page 118 of the agenda pack related to an increased use of agency staff. Mr Chance agreed to seek clarification on this and respond by email.

 

10.8      Councillor Grant asked whether the introduction of Universal Credit had had an impact on the Council’s financial position. Mr Chance explained that there had not been a significant impact on the Council’s overall financial position, although the Council had needed to increase the budget for Discretionary Housing Payments. Mr Chance agreed to provide figures on the changes to the level of rent arrears to the committee.

 

It was RESOLVED:-

 

i.             that the Annual Statement of Accounts 2018/19, prior to Council approval, be noted;

 

ii.            that the annual report to those charged with Governance (ISA 260) be discussed with the Chair of the Audit and Governance Committee and then circulated to its members;

 

iii.          that the availability of accounts and supporting information for inspection by the public be noted.

11.

AG/19/05 Internal Audit Recently Issued Reports pdf icon PDF 96 KB

Additional documents:

Minutes:

11.1      The Head of Audit, Siobhan Martin, introduced the report, inviting Councillors to make comments on the recently issued reports.

 

Real Asset Management (RAM) ICT Key Controls [FR024]

11.2      Councillor Leeder asked whether the Council’s Asset Management Plan was satisfactory. Ms Martin explained that there was room for improvement with the Asset Management Plan but that the controls on the ICT system used to manage property were judged to be good.

 

Cash & Bank Reconciliations 2018/19 [FR003]

11.3      Councillor Fisher questioned how the staffing issues which had caused the problems identified in this report had been allowed to happen. Ms Martin said that the secondment policy which dealt with this issue had not been properly followed but confirmed that the high priority recommendation from the report had been completed.

 

Council Tax 2018/19 [FR008]

11.4      Councillor Fisher asked whether the overall Council Tax collection rate was considered by Internal Audit. Ms Martin confirmed that this was considered but that cyclical testing had been adopted so that only some controls were considered each year. Mr Chance confirmed that collection rates were similar to those in similar local authorities.

 

National Non-Domestic Rates 2018/19 [FR011]

11.5      Councillor Fisher asked whether the recommendation within the report related to annual bills. Ms Martin agreed to look into this and respond by email.

 

It was RESOLVED:-

 

that the contents of the following Audit reports be noted:

 

1.    NRB ICT Key Controls [SRPi021]

2.    Creditors 2018/19 [FR001]

3.    Debtors 2018/19 [FR002]

4.    Real Asset Management (RAM) ICT Key Controls [FR024]

5.    Paris ICT Key Controls [FR023]

6.    Cash & Bank Reconciliations 2018/19 [FR003]

7.    Council Tax 2018/19 [FR008]

8.    Housing Benefits 2018/19 [FR008]

9.    Homelessness [HCS035]

10.IHMS ICT Key Controls [HCS039]

11.National Non-Domestic Rates 2018/19 [FR011]

12.

AG/19/06 Internal Audit - Corporate Fraud - Annual Report 2018/19 pdf icon PDF 233 KB

Minutes:

12.1      The Head of Audit, Siobhan Martin, introduced the report, giving an overview of the Corporate Fraud Team’s work over the 2018/19 year.

 

12.2      Councillor Phillips asked how market value was determined in Right to Buy Sales. Ms Martin explained that valuations were made by an external valuer and that those purchasing their homes had a right to appeal this valuation.

 

12.3      Councillor Phillips asked if more detailed information could be supplied in relation to the team’s work reported in paragraph 3.21. Ms Martin explained that the individual who was indebted to the Council had been traced using the team’s intelligence sharing capabilities, whilst the attempted fraud in London had been prevented by the Council confirming that the applicant was actually resident in Ipswich. The refund prevented related to an individual trying to claim money back which had been correctly paid to Sport and Leisure. Ms Martin agreed to provide further information about the engagement and enforcement of a tenant outside of the meeting.

 

12.4      Councillors commented that the work of the team was good and justified the cost of having a Corporate Fraud Service.

 

It was RESOLVED:-

 

that the performance of the Corporate Fraud Service for the financial year ending 31 March 2019 be noted.

13.

AG/19/07 Internal Audit - Annual Report and Head of Internal Audit Opinion 2018/19 pdf icon PDF 227 KB

Minutes:

13.1      The Head of Audit, Siobhan Martin, explained the work carried out by Internal Audit over the 2018/19 year and reported that she had given a reasonable assurance, meaning that the vast majority of systems, processes and controls were working well. Ms Martin noted that this opinion was based on the areas tested but explained that a risk based approach was used to select areas for testing. Ms Martin highlighted that key areas for improvement were governance in the procurement process and the alignment of the Asset Management Strategy with the Council’s Corporate Plan.

 

13.2      Councillor Fisher asked whether it was possible to benchmark the Head of Internal Audit’s Opinion against other Councils. Ms Martin explained that a reasonable assurance opinion was the highest level most Councils would gain as it would be very difficult to gather sufficient evidence to justify a higher rating.

 

13.3      Councillor Fisher requested that a report be brought to each meeting of the committee regarding the implementation of high priority recommendations. Councillor Leeder, Vice-Chair, agreed that this would be a useful report to bring to each meeting and members concurred.

 

13.4      Councillor Leeder noted that work to improve Procurement and Asset Management was ongoing and asked what other areas of potential risk existed. Ms Martin said that there were some areas where a significant amount of information was held by a few officers but that none of these caused serious concern. Ms Martin noted that Internal Audit had had no involvement with the Council’s wholly owned companies and so couldn’t comment on them, although she noted that Ernst and Young had considered their governance arrangements.

 

It was RESOLVED:-

 

that the Head of Internal Audit’s Opinion for 2018/19 as set out in Appendix A and the report, be noted.

14.

AG/19/08 Audit & Governance Committee: Future Work Programme pdf icon PDF 76 KB

Additional documents:

Minutes:

It was RESOLVED:-

 

that the Audit & Governance Committee Future Work Programme 2019/20 be noted.

15.

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.

Minutes:

It was RESOLVED:-

 

that the public (including the Press) be excluded from the meeting during consideration of the remaining items under Section 100 (A) of the Local Government Act 1972 as it was likely that if members of the public were present during these items there would be disclosure to them of exempt information as defined within paragraphs 3 and 4 of Part 1 of Schedule 12A of the Act.

 


 

NOT FOR PUBLICATION

16.

Unconfirmed Exempt Minutes of the Meeting held on 26 February 2019

17.

AG/19/09 Internal Audit - Status of Recommendations

18.

AG/19/10 Internal Audit - Exempt Recently Issued Reports