Agenda and minutes

To approve as a correct record the Minutes of the meeting of this Committee held on 15 June 2020.

The Minutes of the meeting held on 15 June 2020 were approved as a true and correct record and signed by the Chairman, subject to the following amendment:

Item 4 – Minutes, first paragraph, second sentence:

He reminded Members that if the external auditors wished to address the Committee standing orders would need to be suspended to allow them to do so.

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).

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

Purpose: The Public Sector Internal Audit Standards (PSIAS) require the Audit Manager to make a formal annual report to those charged with governance within the Council.

The Committee considered the Internal Audit Annual Assurance Report for 2019/20 (Agenda Item 5). It was noted that it was a requirement of the Public Sector Internal Audit Standards for the Audit Manager to make a formal annual report to those charged with governance within the Council.

The report was required to include an opinion on the Council’s governance, risk management and internal control framework, which in turn supported the Annual Governance Statement.

The audit opinion was based upon the assurance work undertaken during the year; knowledge gained from previous assurance work; as well as intelligence gained from other sources of assurance, both internal and external, for example Ofsted and the Council’s Finance and Governance Group.

Julie Gillhespey, Audit Manager, was able to provide reasonable assurance that the governance, risk management and control framework remained robust.

She reported that there were two audits conducted in 2019/20 that were found to be weak and both would be subject to a follow up review. The outcome of the first follow up review (Purchase of Residential Care) was satisfactory. The second follow up review (S106 Agreements) was currently work in progress.

Four follow up reviews were completed during 2019/20 and for two of these it was concluded that unsatisfactory progress had been made. When these outcomes were reported to Committee in November 2019, it was agreed that a second stage follow up would be carried out to check on progress. This follow up work commenced in June 2020 and was work in progress. The outcome would be reported to the next Governance and Ethics Committee.

Paragraph 5.11 of the report provided a summary of the outcomes of the Internal Audit Team’s assurance work during the year. This showed that the majority of audit opinions were satisfactory or above. This supported the reasonable assurance view given by the Audit Manager.

Julie Gillhespey also reported that the Internal Audit Team had achieved 94% productivity of the audit plan for 2019/20 against a target of 80%. This was a very good result for the team, the performance for 2018/19 was 81%.

An addition to the annual report was contained in paragraph 5.23. This covered the Council’s requirement, under the Local Government Transparency Code 2015, to publish certain information regarding fraud.

Councillor Jeremy Cottam noted from paragraph 5.23 that the Council had no professionally accredited counter-fraud internal investigators and queried whether this impacted on the ability to conduct investigations.

Julie Gillhespey explained that this accreditation had been introduced for the investigation of housing benefit and tenancy fraud. However, Julie felt this would only be necessary if there was a large volume of such cases going to court. She assured Members that while this specific qualification was not held, investigations could still be conducted.

Councillor Cottam followed this by asking if this was a gap which needed to be filled. Julie Gillhespey advised that much experience was held within the team. She held much experience personally in undertaking fraud related work. The qualification would be useful but it  ...  view the full minutes text for item 12.

Purpose: To set out the Annual Governance Statement (AGS) for the Council for 2019-20 and to outline issues that Corporate Board considered should be included in the 2019-20 AGS as requiring action to resolve.

The Committee considered the report (Agenda Item 6) which set out the Annual Governance Statement (AGS) for the Council for 2019/20. The report outlined those issues that Corporate Board considered should be included in the 2019/20 AGS as requiring action to resolve.

The AGS set out the Council’s governance arrangements and reviewed their effectiveness. The AGS needed to be reviewed and approved by the Committee on an annual basis and was published with the financial statements.

The review for 2019/20 had highlighted four key areas to include in the AGS and these were incorporated into an accompanying action plan. The four key areas of focus identified as requiring improvement were:

·         Delivering effective engagement

·         Capacity to deliver projects

·         Improving asset management

·         Commercial investment

Councillor Jeremy Cottam noted that training in the use of project management methodology was listed in the action plan and he queried the software to be used. Joseph Holmes, Executive Director for Resources, advised that training would be on the use of the PRINCE2 project management methodology. Approximately 50% of the relevant officers had been trained prior to the outbreak of the Covid-19 pandemic and the remainder would be trained via Zoom.

Joseph confirmed that it was mandatory for all projects to be managed via the project management methodology. The necessary officers would be involved in the production of business cases, all which would be presented to the Corporate Programme Board for approval.

Councillor Rick Jones queried if progress on the action to deliver effective engagement would be reported to the Governance and Ethics Committee. Joseph Holmes explained that it was his intention for the AGS to be a live working document. As part of this, a biannual report would be provided to the Committee that set out progress being made with the action plan. It was the aim to provide the first of these reports in early 2021.

Councillor Jones commended the document. The complexities of the AGS were clearly explained within the document. He pointed out a minor typographical error for correction in paragraph 5.12 of the report. This needed to state that the focus on commercial investment had been brought forward to 2020/21.

Councillor Andy Moore queried the process undertaken in reviewing the Constitution, including the involvement of the Finance and Governance Group, and how this aligned with the work of the Constitution Review Task Group. Joseph Holmes explained that the Finance and Governance Group was an officer group. A key role of the group was to prepare reports prior to submission to this Committee. It was important for the Finance and Governance Group to have the opportunity to review the Constitution on an annual basis, but he was aware that the Constitution Review Task Group was working through the Constitution in much more detail.

Councillor Cottam next queried the Council’s approach to commercial investment and the extent to which this would continue. Joseph Holmes explained that a consultation exercise had been undertaken by Central Government with regard to the ability to borrow from the  ...  view the full minutes text for item 13.

Purpose: This report summarises the management assessment of the Council continuing to operate as a going concern for the purposes of producing the Statement of Accounts for 2019/20. 

The Committee considered the report (Agenda Item 7) which summarised the management assessment of the Council continuing to operate as a going concern for the purposes of producing the Statement of Accounts for 2019/20. The going concern assessment took account of Covid specific financial risks.

Joseph Holmes, Executive Director for Resources, advised that the assessment contained assurances of the Council’s resilience and stability. This included reserve levels and capital funding.

He then added that non ring-fenced funding of £8.6m had been provided by Central Government to support the Council in its response to Covid-19. This figure had been received in three separate tranches.

Central government was also introducing an income share scheme and this could be used to help offset income pressures as a result of Covid-19. The full detail on this had yet to be provided but it was anticipated that the Council would need to fund the first 5% of losses. All further losses would be shared between the Council (25% of all further losses) and the Government covering 75% of all further losses.

In conclusion, Joseph Holmes reported that the Council would continue as a going concern for this financial year and beyond.

RESOLVED that:

·         On the basis of the S151 Officer’s assessment, it be agreed that this report be provided as a working paper to the external auditor confirming the going concern assessment had been completed and the conclusion maintained the assertion that the Council was a going concern as at the Balance Sheet date of 31 March 2020.

·         The draft Narrative Statement be noted.