Agenda and minutes

To remind Members of the need to record the existence and nature of any personal, disclosable pecuniary or other registrable interests in items on the agenda, in accordance with the Members’ Code of Conduct.

There were no declarations of interest received.

To approve as a correct record the Minutes of the meetings of this Committee held on 27 April 2020 and 14 May 2020.

The Chairman welcomed Barrie Morris and David Johnson from Grant Thornton, the Council’s external auditors, to the meeting. He reminded Members that if the external auditors wished to address the Committee standing orders would need to be amended to allow them to do so.

The Minutes of the meeting held on 27 April 2020 were approved as a true and correct record and signed by the Chairman subject to the inclusion of the following correction:

Item 36 Internal Audit Review of the Governance and Ethics Committee. penultimate paragraph, final sentence:

Councillor Abbs made the suggestion that the survey be repeated.

(As Councillor Claire Rowles was not present at the meeting on the 27 April 2020 she abstained from voting on the minutes.)

The Minutes of the meeting held on 14 May 2020 were approved as a true and correct record and signed by the Chairman.

Purpose: To consider the Forward Plan for the next 12 months.

The Committee considered the Governance and Ethics Committee Forward Plan (Agenda Item 4).

The following additions to the forward plan were proposed:

·         The inclusion of an item on risk appetite at a future meeting;

·         Action Plan arising from the report on the effectiveness of the Governance and Ethics Committee to be included at a future meeting.

RESOLVED that the Governance and Ethics Committee Forward Plan be noted.

Purpose: To inform Members of the proposed 2019/20 external audit fee and proposed external audit plan for 2019/20.

The Committee considered a report (Agenda Item 5) which sought to inform Members of the proposed 2019/2020 external audit fee and proposed external audit plan for 2019/2020.

Andy Walker introduced the item. The Chairman noted that the proposal was to increase the external audit fee by 28.4%. This was, in the main, to cover costs associated with additional audit requirements emanating from Central Government. The fee for 2019/20 was broadly similar to the 2017/18 fees.

Standing Orders were suspended in order to allow the external auditors to address the Committee.

Barrie Morris in responding to queries raised by Councillor Rick Jones explained that the Financial Reporting Council (FRC) oversaw the audits of all large public sector bodies and corporate organisations. There had been a large number of high profile corporate failings, most notably in corporate bodies, in recent times.

The FRC had therefore called into question the robustness of the work of some external audit firms especially in areas where high levels estimations were used. There had therefore been a lot of focus around areas where there was a high level of expenditure including property, plant, equipment and pensions. In the public sector they had also been asked to consider carefully activity around commercial property investment which was considered to be a higher risk activity given the frequent changes in the value of these assets. This required additional work and challenge of management to be undertaken by the auditors during the preparation of the authority’s accounts.

An interim report was required because of the slippage in the timetable for the production of the accounts. The Council would be required to produce the accounts by the end of August instead of the end of May. The review of those accounts by the auditors was due by the end of November. The interim report would therefore give the auditors an opportunity to see what progress had been made with the implementation of the recommendations previously made.

Councillor Andy Moore queried if Officers would be ready to respond to the interim report in July and if they thought it would be beneficial to do so. Andy Walker confirmed that Officers were prepared for the interim review and considered it to be a positive and worthwhile exercise. Barrie Morris commented that this was standard practice. The interim report would usually be prepared in February or March before the final accounts were prepared but had been delayed until July due to the slippage in the timetable for preparing the accounts. This was not an additional piece of work that the Council was paying for.

The ‘Going Concern Assumption’ pertained to the organisation’s ability to meet its financial requirements for the following 12 months without having to curtail its activities. There had been an increase in the number of failures in public sector organisations in recent years and a number of directors of finance had needed to issue section 114 notices. This meant that the authority had ‘run out of money’ and could only spend money  ...  view the full minutes text for item 6.

RECOMMENDATION: That members of the press and public be excluded from the meeting during consideration of the following items as it is likely that there would be disclosure of exempt information of the description contained in the paragraphs of Schedule 12A of the Local Government Act 1972 specified in brackets in the heading of each item.

RESOLVED that members of the press and public be excluded from the meeting for the under-mentioned item of business on the grounds that it involves the likely disclosure of exempt information as contained in Paragraphs 3,5 and 6 of Part 1 of Schedule 12A of the Local Government Act 1972, as amended by the Local Government (Access to Information)(Variation) Order 2006. Rule 8.10.4 of the Constitution also refers.

(Paragraph 3 – information relating to financial/business affairs of particular person)

(Paragraph 5 – information relating to legal privilege)

(Paragraph 6 – information relating to proposed action to be taken by the Local Authority)

Purpose: To highlight the corporate risks that need to be considered by Corporate Board and to outline the actions that are being taken to mitigate those risks.

(Paragraph 3 – information relating to financial/business affairs of particular person)

(Paragraph 5 – information relating to legal privilege)

(Paragraph 6 – information relating to proposed action to be taken by the Local Authority)

The Committee considered an exempt report (Agenda Item 7) which concerned the Council’s corporate risks and outlined the actions that were being taken to mitigate those risks.

RESOLVED that the recommendations as set out in the exempt report be agreed.