Agenda and minutes

To approve as a correct record the Minutes of the meeting of this Committee held on 29 January 2024.

The Minutes of the meeting held on 29 January 2024 were approved as a true and correct record and signed by the Chairman.

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 Committee Forward Plan (Agenda Item 4).

RESOLVED that the Governance Committee Forward Plan be noted.

Purpose: to update the Committee on the status of Internal Audit work as at the end of quarter three 2023/24.

The Committee considered a report (Agenda Item 5) concerning Internal Audit Update Report - Quarter Three 2023/24 Ms Julie Gillhespey introduced the report.

Councillor Chris Read queried whether there were any tools that could help speed up the process of the anti-fraud work plan. Ms Gillhespey explained that the process needed human intervention to evaluate the reports from a national database.

RESOLVED to note the contents of the report.

Purpose:to inform Members of the accounting policies to be applied in the production of the Council’s 2023/24 Financial Statements. It is also to confirm any amendments to these accounting policies arising from changes in operational activities and/or the impact of any new accounting standards issued.

The Committee considered a report (Agenda Item 6) concerning Financial Year End 2023-24 Year End Planning Document. Ms Shannon Coleman-Slaughter introduced the report.

Councillor Iain Cottingham expressed frustration over the lack of audit for the 2023 – 2024 financial accounts, emphasising the need for West Berkshire Council (the Council) to have audited accounts. The Councillor held Grant Throton accountable for not upholding the terms of their contract.

Councillor Jeremy Cottam questioned whether the Council would get a refund from Grant Thornton for the undelivered audit and called for the Council to withdraw from the contract.

Councillor David Marsh asked whether another auditor could be found.

Councillor Read queried why revenue prepayments were raised from £5,000 to £10,000. Ms Coleman-Slaughter explained that it would bring the figure in-line with the rest of the Council.

Councillor Howard Woollaston proposed to approve the accounting policies which will be applied in the production of the Council’s 2023/24 Financial Statements as shown in Appendix A of the report, and this was seconded by Councillor Billy Drummond.

The proposal was put to a vote, and it was RESOLVED that the accounting policies which will be applied in the production of the Council’s 2023/24 Financial Statements as shown in Appendix A of the report.

Purpose: the report provides members with the interim audit report provided by Grant Thornton in respect of financial years 2021/22 and 2022/23.

The Committee considered a report (Agenda Item 7) concerning External Auditor's Interim Annual Report Financial Years 2021/22 and 2022/23. Ms Coleman-Slaughter introduced the report and Ms Sophia Brown provided a presentation from Grant Thornton.

Councillor Cottam asked why the audit had not been carried out and Ms Brown explained it was not her intention to abandon the Council adding that the team did not have enough time to review all of the accounts.

Mr Joseph Holmes explained that the Council was awaiting a government disclaimer, which would state the Council was not at fault for the lack of audit. Until the disclaimer was issued the new contractor, KPMG, could not carry out the work, which was forecasted to be in early autumn, however the work would not be carried out in time. Mr Holmes emphasised that West Berkshire Council was one of 30% of Councils to produce their figures on time.

Councillor Cottam exclaimed that the whole system was running blind through a difficult financial period and the lack of an external audit left the Council in a difficult situation. The Councillor questioned why the Council was not notified sooner.

Councillor Woollaston stressed that this was the second year of accounts not to be audited and wanted reassurance that KPMG would audit the accounts.

Councillor Cottingham reassured members that in a meeting with KPMG he was satisfied they had the correct provisions to deliver an audit. He reaffirmed that the audit was a critical part of Councillors financial integrity, which was important as they looked after public money. The Councillor criticised competitive tendering as a reason for the lack of deliverability and explained that Grant Throton was not able to carry out a light audit.

Mr David Southgate asked what the plan was going forward and Mr Holmes explained that the previous accounts are to be disclaimed, but the longer the Council has to wait the greater the risk of next years accounts not being done.

Ms Brown reasoned that Grant Thorton did not want to leave the Council behind and noted that only 25% of Councils had been audited. She explained that they could not do a light audit as this would go against legislation and that they were awaiting the wording for the disclaimer. Ms Brown stated that West Berkshire Council was in a better place then some Councils, because of the hard work of the Finance Team. 

Councillor Cottingham added that the lack of an external audit had an operational risk, as any external organisation looking to do business, may not want to take on a contract with a Council with unaudited accounts. He called into question how much work Grant Thorton had carried out in the period and questioned the effect the Council’s Financial Review Panel had on curbing the overspend.

Ms Brown stated that the team that carried out the Value for Money work were separate from the audit team and that it had been noted that the tightening of budget controls had been  ...  view the full minutes text for item 15.

Purpose: the Council, through its Finance & Governance Group, has reviewed a self-assessment against the CIPFA FM code for the 2023-24 financial year. This self-assessment will likely be used by the Council’s external auditors as part of their Value for Money work, but it is a helpful piece of work to undertake in its own right to highlight where the Council can improve and how it compares to the CIPFA FM code.

The Committee considered a report (Agenda Item 8) concerning CIPFA Financial Management Code. Mr Holmes introduced the report.

Councillor Read asked about the financial resilience assessment. Mr Holmes explained that CIPFA had a good financial resilience summary, and the Council would assess whether it would be worth to have an external review by CIPFA to help provide clear indicators.

Councillor Steevenson asked whether KPMG would deliver, and Mr Holmes stated that KPMG would not meet the September deadline and were due to start in November. He added that the accounts could only be audited once the previous year’s accounts were disclaimed.

Councillor Woolaston quoted a previous study which pinpointed West Berkshire Council as the 8^th most financially resilient and queried how concerned the Council should be now. Mr Holmes explained that the study looked at a broad range of factors. At the time of speaking the Council had some of the lowest levels of reserves in the country, however the Council was not alone. Mr Holmes explained that in an ideal world the Council would have around 12 million pounds within its reserves.

Councillor Cottingham explained that internal audits tended to be optimistic, recalling the need for an external audit.

Councillor Woollaston questioned whether KPMG had any Key Performance Indicators (KPIs) within their contract and Mr Holmes stated that the contract was commissioned externally by Public Sector Audit Appointments, so he was unsure of the specifics. Mr Holmes explained that he would find out the specifics for the Committee.

RESOLVED to note the contents of the report.