Agenda and minutes

To approve as a correct record the Minutes of the meeting of this Committee held on 1 February 2021.

The Minutes of the meeting held on 1 February 2021 were approved as a true and correct record and signed by the Chairman.

Councillors Rowles and Linden were not present at the previous meeting and therefore could not approve the accuracy of the minutes. It was agreed that the Chair’s electronic signature would be inserted into the agreed 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.

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

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

Julie Gillhespey noted that the Forward Plan did not include internal audit updates after July 2021 and had asked Strategic Support to include the items in the future. Councillor Claire Rowles asked why there was no reference to September and November in the Forward Plan.  Sarah Clarke, Service Director, Strategy & Governance, confirmed that she would ensure that the Forward Plan was fully populated and re-circulated.

RESOLVED that the Forward Plan be noted with the additional reference to fully populating and re-circulating the document.

Purpose: To provide an update on local and national issues relating to ethical standards and to bring to the attention of Members any complaints or other problems within West Berkshire.

The Committee considered a report (Agenda Item 5) which provided an update on local and national issues relating to ethical standards and to bring to the attention of Members any complaints or other problems within West Berkshire.

It was recommended that the Annual Governance and Ethics Report be presented to Full Council.

Sarah Clarke, Service Director, Strategy & Governance, introduced the report which noted the work which had been undertaken over the past year and highlighted matters of significance.  It had been agreed that the Monitoring Officer would produce an annual report following the introduction of the Localism Act 2011.  The key points to note from the report were as follows:

•         Thanks were offered to independent persons who had dealt with the complaints that had been received.

•         Thanks were also given to the Parish Council representatives who had assisted the work of the Governance & Ethics Committee.

•         Sarah Clarke thanked members of the Advisory Panel and the Parish Council representatives who had volunteered in the past year but who had not actually met in the current year. She confirmed that an advert had been circulated to all Parish Councils for further volunteers or expressions of interest to fulfil those roles in order to increase transparency.

Complaints

Members noted the significant increase in the number of complaints over the past year. However, a number of complaints related to each other, for example 16 complaints were connected to the same issues at a single Parish Council. None of the complaints to-date had been referred for investigation although one remained outstanding where the initial hearing had taken place but the decision notices had not yet been issued and that outcome would be updated by the time the report was considered at Full Council. 

Other actions had been requested as follows:

•     Training had been suggested in relation to one of the Parish Councillors in declaring an interest at the beginning of meetings. 

•     The Monitoring Officer had written to the Leaders of the political parties regarding Social Media use. Those e-mails had been issued on the 17 March 2021.

•     A request had been made for additional training on the use of social media to be given to Members to improve outcomes and perception.

Gifts and Hospitality

Details of Officers’ gifts and hospitality declared over the past year had been included in the report.  However, there had been a reduction in gifts and hospitality received which was likely reflected in the altered circumstances in which Officers had found themselves working in since the onset of the Covid pandemic. No declarations of gifts and hospitality had been made by Members which, again, reflected the working at home circumstances that Members had adhered to in respect of Covid 19 guidelines. 

Sarah Clarke concluded that, in general, despite the rise in complaints, standards of conduct remained high in the District.

Councillor Jeff Beck thanked Sarah Clarke for her summary of the report.

Councillor Claire Rowles asked if there was any mechanism in place to  ...  view the full minutes text for item 31.

Purpose: At the Governance and Ethics Committee on 16th November 2020, a paper was presented which set out an Action Plan to address the recommendations made in the Internal Audit report covering the review of the effectiveness of the Governance and Ethics Committee.  Members requested some minor amendments and further detail for some aspects of the Action Plan, this report provides the further details and amended documents.

Julie Gillhespey, Audit Manager, introduced the report (Agenda item 6) which was a follow-up to the report which had been presented in November 2020 around improving the effectiveness of the Committee for which the Committee had requested a number of amendments and clarification. The Terms of Reference had been extensively re-drafted and clarification of the time needed to cover some of the activities of the plan was given:

Terms of Reference - This now identified the frequency of activity – quarterly, annually or ad-hoc.

Action Plan - An end-date had now been included for each of the activities together with a progress update.

Training Schedule - This had been revised and allowed for additional training time with a recommendation for mandatory training for the first year and thereafter every four years or if and when Members requested a training re-fresh.

Councillor Jeff Beck thanked Julie Gillhespey for her summary of the report.

Councillor Rick Jones said he had noted in the action plan that a training plan was being produced and queried when this would commence.  Julie Gillhespey confirmed that dates had not yet been set but it was hoped additional training would commence this year.

With regard to the skills survey, Councillor Rick Jones asked whether the results had been published.  Julie Gillhespey responded that the results had been included in the initial report but had not yet been refreshed.

Councillor Rick Jones noted that a number of the work in progress items were timed for completion in the summer of 2021 but had not seen reference made to them in the Forward Plan for the corresponding dates in terms of anticipated progress.  Julie Gillhespey said, following the recommendation, it was intended to update this progress to the Committee and Full Council in the Annual Report along with an update on the external Auditors report.

RESOLVED that the report be noted.

Purpose: This report provides Members with the revised draft audit findings report provided by Grant Thornton in respect of their external review of the 2019/20 Financial Statements.

Shannon Coleman-Slaughter presented the report (Agenda item 7).  This was a covering report presenting the external auditor’s revised audit findings on the Council’s 2019/20 accounts.  The key element of the report was around the section related to a material adjustment of £4.4 million to the Council’s financial statements in respect of the pension reserve.

Barrie Morris, Key Audit Partner and David Johnson, Audit Manager from Grant Thornton summarised the revised audit plan as set out in the accompanying appendix to the report. 

Mr Morris advised that revisions to the audit report were in light blue for ease of reference from the original report presented in February 2021. The report set out the remaining outstanding areas but all of the work of the external auditors had now been completed subject to the receipt of the updated Pension Fund auditor (Deloitte) letter of assurance.

Under guidance from the National Audit Office an agreement was in place for the external auditor to place assurance upon the work of the Pension Fund auditor, as such the external auditor would not be issuing their audit opinion on the Council’s accounts until receipt of the letter of assurance indicating that there were no outstanding matters which would impact upon that opinion.  Grant Thornton had been in liaison with Deloitte over recent months who had confirmed they were hoping to review the letter on 26 April 2021, following which the letter of assurance was imminently expected.  Subject to no new issues being identified within the letter of assurance, Grant Thornton would be in a position to issue their audit opinion as soon as practicable thereafter. 

Barrie Morris drew Members’ attention to the final fees charged for the audit and provision of non-audit services which showed an additional charge of £14,250 in respect to the additional cost arising out of Covid-19.  This reflected the delays and inefficiencies caused as a result of auditing the accounts remotely.  Mr Morris confirmed that no additional cost had been made as a result of the delay of the Pension Fund letter. The total fee of £109,273 compared favourably to the previous year’s fee of £119,773.

David Johnson summarised the key changes as a result of the Pension Fund liability:

•         An adjustment of £1.7m to the balance sheet as a result of the adjustment from the Pension Fund auditor work.

•         A letter of assurance had been provided by the Pension Fund auditor which had highlighted a number of issues, including:

­            Write-down of Pension Fund assets by approximately £31.5m. The Council’s share of this was approximately 13% and based on the figures disclosed equated to an adjustment of £4.4m. The accounts had been adjusted for this error.

­            Variances in membership data numbers between those submitted to the actuary and the data held on the Altair membership data system. Work completed at the Council to confirm data provided to the pension fund had been undertaken and no issues had been identified.

­            A variance of £8.5m in contributions at a Pension  ...  view the full minutes text for item 33.

Purpose: To provide a Code of Corporate Governance to the Governance & Ethics Committee to approve. The code is part of the overall system of internal control at the Council and supports the provision of the Annual Governance Statement (AGS) which is approved annually by the Governance and Ethics Committee.

The Committee considered the report (Agenda item 8) presented by Andy Walker on behalf of Joseph Holmes, Executive Director – Resources.

The Code of Corporate Governance detailed how the Council complied with the CIPFA/SOLACE (The Chartered Institute of Public Finance and Accountancy, (“CIPFA”) and the Society of Local Authority Chief Executives (“SOLACE”) framework for good governance and supported the principles of good governance contained within this.

The report concluded that the Council had strong measures in place at various levels of governance to ensure there was good governance across the Council. 

RESOLVED that the Code of Corporate Governance be approved.

Purpose: To set out the overarching framework for managing risk at the Council, the Council’s risk appetite and the risk management objectives for the next three years.

Catalin Bogos, Performance and Risk Manager, presented the Risk Management Strategy (Agenda item 9) which set out the overarching framework for managing risk at the Council, the Council’s risk appetite and the risk management objectives for the next three years. The recommendation was for the Committee to endorse the strategy ahead of its approval by the Executive on 29th April 2021.

Catalin Bogos advised Members that the current risk arrangements of the Council had been reviewed and consideration had been given to the best practice of the Treasury, the Government’s finance function, the Institute of Risk Management as well as bench-marking against other local authorities.

The report highlighted the internal and external context within which the Council delivered its objectives which must be considered in order to ensure that the management of risk was effective.

Internal context

The significant points relating to the internal organisational context of risk management were the continuation of the three line of defence arrangements: the streamlined internal governance arrangements, the implementation of the organisational restructure Senior Management Review 2019 and a relative reduction of the financial pressures experienced before 2019/2020.

External context

The external context for the organisation was dominated by the materialisation of one of the highest risks on the National Risk Register – an influenza type pandemic. The long-term nature of the international crisis meant that the response period overlapped with the recovery stage. The response activities translated into immediate changes in working practices (e.g. significant levels of remote working). As more information emerged about the impact, it would inform the risk identification and assessment activities. In particular, special attention would be given to requirements to re-consider the existing/traditional controls and make any relevant re-adjustments.

Council Strategy 2019 – 2023, highlighted the strong social, economic and environmental features of the District. The focus of the Strategy was to build on these strengths and achieve further improvements. This was another important factor considered in defining the Council’s risk management approach, including the risk appetite.

The report set out each stage of the risk management process and provided details about how each stage was delivered, following which relevant objectives had been set out for the next 3 years.  Because a strong risk management culture existed within the Council, most of the objectives referred to a continuation – or further development – of current arrangements.

The full list of the objectives of the risk management strategy were contained within the report, however, significant changes made to planned objectives included:

•         A slight increase to the risk appetite due to internal and external factors as outlined above, details of which had been provided in the report.

•         The threshold on the risk management matrix had been adjusted between amber and red to a figure of 8 reflecting an increased risk appetite.

•         Maintaining a risk aware culture through a common language, training and engagement, with a particular focus on the involvement of Councillors through more in-depth training.

•         Support for the introduction of a controls assurance  ...  view the full minutes text for item 35.

Purpose: To update the Committee on the outcome of Internal Audit work carried out during quarter three of 2020/21.

Julie Gillhespey provided Members with a summary of the Internal Audit Update Report (Agenda item 10) on the work carried out during quarter three of 2020/21. 

Key findings of the report included the fact that three central audits had been finalised and given a weak opinion though this did not indicate a reduction in the control environment/processes generally. The key findings for the weak opinions were detailed in the report and related to Early Years Grant, Deprivation of Liberty Safeguards and the Digitalisation Agenda.

Appendix A of the report listed the completed audits carried out to the end of December 2020 and work in progress was detailed in Appendix B.

Following a request by the Committee at the meeting in November 2019, two follow-up reviews had been carried out – for the implementation of the Property Database and the Asset Management Strategy/Plan as these had both been given an unsatisfactory opinion. Unfortunately, in both cases the second stage follow-up concluded that progress to implement the agreed recommendations was still unsatisfactory.  Richard Turner, Property Services Manager, provided further detail on the findings of the two internal audits which were rated unsatisfactory following second stage follow-up reviews:

Property Database

This database contained all of the built and land assets of the Council and a key element of the audit findings had been around the database being updated. Historically there had been recruitment and retention issues for the post which had now been resolved. This stability was already showing dividends in that the database had now been fully updated which allowed the remaining actions to be progressed with a plan to be concluded in summer 2021.

Asset Management Strategy/Plan

A temporary resource had been recruited in January 2021 to specifically deal with the findings of this audit and a series of actions was being progressed that should be concluded within the current financial year.

Councillor Jeff Beck thanked Julie Gillhespey and Richard Turner for their update.

Councillor Tony Linden asked whether a further update would be provided to ensure that the progress being made was continuing as expected. Julie Gillhespey said, barring any loss to the recruited posts, she did not feel a further update was necessary as she had been provided with a detailed response in terms of timeframes for completion of the outstanding recommendations by Richard Turner. 

Councillor Jeremy Cottam expressed his concern that the overall opinion following the audit of Deprivation of Liberty Safeguards had been weak given this related to individuals in care homes and other vulnerable persons.  Julie Gillhespey said within Adult Social Care, annual reviews took place both for Deprivation of Liberty Safeguards and a review of the provision of social care carried out by social care practitioners. A further review of Deprivation of Liberty Safeguards would depend on how long the audit had been signed-off for.  There was a national issue with regard to local authorities meeting the timeframes and a revision to the DoLS legislation was being made to acknowledge the need to streamline the  ...  view the full minutes text for item 36.

Purpose: This report sets out the proposed Internal Audit Work for the three year period from 2021/22 to 2023/24.

Julie Gillhespey introduced the proposed Internal Audit Plan (Agenda item 11) for the three year period from 2021/22 to 2023/24. The report set out the change to the Internal Audit Charter (Appendix A) showing a change to the reporting line to Strategic Support and set out the title, type and method of audits to be carried out over the next three years.

Councillor Andy Moore asked whether the team was adequately resourced to deliver the substantial audit plan over the next three years. Julie Gillhespey said the team had been increased in the last year by one member to a total of five staff members and she was confident this provided the right resource coverage to carry out the works in the audit plan.

Councillor Claire Rowles highlighted that the report stated an external review of the internal audit team was required every five years to ensure the team complied with the professional practices of internal audit as stated in the PSIAS.  Councillor Rowles queried whether the five year period of time should be shortened in order to ensure, for instance, that adequate staffing levels remained in place to carry out the works of the internal plan. Julie Gillhespey responded that the five year period complied with PSIAS guidance but that an annual review of the team’s effectiveness should also be carried out.  A detailed external review had taken place in 2018 which had been reported on in 2020.  This report had highlighted areas that required improvement by the team which was now subject to a programme of improvement as detailed in the report. 

RESOLVED that the Proposed Audit Plan, the amended Internal Audit Charter and Internal Audit Reporting Protocol be approved.

Purpose: To provide the Governance and Ethics Committee with an update on progress being made with the review of the Constitution.

Councillor Jeff Beck firstly offered his profound thanks to the Officers and Members involved with this review, in particular to Councillor Graham Bridgman as Chairman of the Group, in recognition of the intensity and hard work required to undertake such a review.

Sarah Clarke, Service Director, Strategy & Governance, provided the Committee with an update on progress being made with the Review of the Constitution (Agenda item 12).  In July 2019, the Governance and Ethics Committee had approved a review of the Constitution with an ambitious timeframe for the review to be completed by December 2020.  Sarah Clarke said that it had originally been intended to update parts of the Constitution in a piecemeal fashion and bring them forward as they were completed.  However, it became apparent that a more fundamental review of the Constitution was required, in part because the Constitution was comprised of 15 parts that had been reviewed on a rolling programme over many years which had resulted in various parts of the Constitution being duplicated as well as inconsistencies in the pattern of review.  The review of the Constitution had therefore been delayed by work undertaken to resolve those issues as well as being temporarily interrupted by the snap General Election in late 2019.  The work of the Group had also been paused for a period during the initial response phase to Covid-19, as Officers supporting the project were diverted to other matters.

The Task Group had, however, met on 11 occasions and a sample of work that had been completed and work that was planned was appended to the report.  Sarah Clarke said that in addition to providing an update to Committee, the group was also seeking an endorsement of the new-look Constitution. In addition, there were some changes that would benefit from an earlier review, such as the process for allowing questions at meetings. These would therefore be brought forward with a view to proposed changes being considered at the July meeting of Council.

Councillor Jeremy Cottam said he believed there were Motions from Council that had been put forward as suggestions for changes to the Constitution and asked if there was an intention to include those changes.  Sarah Clarke confirmed that those suggestions had been referred to the Task Group and the intention was that those matters that needed to be dealt with first would be picked up in the report to Council in July. 

Councillor Andy Moore, a member of the Task Group, was reticent about the conclusion that good progress had been made, but acknowledged the reasons for the delays which had occurred. Councillor Moore felt an opportunity had been missed to do some useful work around the Budget meeting this year and hoped this would be sorted for next year and reported on to Council in July.  Sarah Clarke advised that following the Budget meeting in March, it was proposed to timetable an additional Council meeting so that there would be a specific, single item meeting to deal with the Budget  ...  view the full minutes text for item 38.