Agenda and minutes

To approve as a correct record the Minutes of the meeting of this Committee held on 16 November 2020.

The Minutes of the meeting held on 16 November 2020 were approved as a true and correct record and signed by the Chairman.

In relation to Item 19 Response to the Audit Review of the Governance and Ethics Committee Julie Gillhespey confirmed that the action plan with timescales would be brought to the April 2021 meeting in order for them to be in place for the 2021/22 Municipal Year. The training programme would also be brought to that meeting along with the revised terms of reference.

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.

Councillor Tom Marino declared that he had a personal interest in Agenda Item 8 (Risk Management – Quarter 2 of 2019/20). As his interest was personal and not another or disclosable pecuniary interest he determined to remain in the meeting and take part in the discussion.

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

The Committee considered the Governance and Ethics Committee Forward Plan (Agenda Item 4). It was noted that Items 3934 and 3892 were included on this agenda and could therefore be removed from the 19 April 2021 meeting.

Councillor Rick Jones noted that there was no item that followed up on the action plan that was instituted last year and queried whether that should be on the agenda.Moira Fraser confirmed that this was an omission and that it would be added.

RESOLVED that the Governance and Ethics Committee Forward Plan be noted and that the action plan instituted last year would be added to the 19 April 2021 meeting.

To receive the report from the external auditors.

The Committee considered a report (Agenda Item 5) which provided Members with the draft audit findings report provided by Grant Thornton in respect of their external review of the 2019/20 Financial Statements. The purpose of the report was to consider the findings of the external auditors and any implications for the Governance and Ethics Committee in approving the financial statements.

Joseph Holmes introduced the report and noted that Item 5 and 6 were interlinked. He started with Item 6, which was the revised statements, and confirmed these were put on the Council’s website in August, in line with the statutory deadlines.

There were two opinions provided within the statements, one regarded the financial statements and the other related to the value for money; both of which the auditors had indicated would receive an unqualified opinion, albeit that there was still some work to be concluded.

There were some amendments made since the draft papers were produced at the end of August, and these were recognised within the report. The most significant of these related to an adjustment of £6m in relation to assets. The S151 Officer confirmed however that this was an accounting adjustment and would not affect the outturn position. Grant Thornton had provided an action plan and officers had provided responses.

The Chairman stated that in accordance with paragraph 7.12.4 of the Constitution he proposed from the Chair that standing orders be suspended in order to allow the external auditors to address the Committee. Councillor Jeremy Cottam seconded this proposal and the Committee voted in favour to allow it.

Barrie Morris from Grant Thornton discussed Item 5 and reiterated what Joseph Holmes said. In regards to their audit opinion, he stated that the reason for the delay was due to awaiting responses to a few queries from the financial team and the outcome of the audit of the Berkshire Pension Fund. He reiterated that even after the adjustment had been made they would be issuing an unqualified opinion on both the Financial Statements and the Value for Money audits.

He also noted that they were in a better position than they were the previous year in terms of certifying the 2020 accounts, despite the onset of Covid, and were quite close to concluding their audit opinion. He wished to place, on record, his thanks the WBC finance team who worked very effectively to help them achieve this.

David Johnson from Grant Thornton picked out a couple of key points and some of the issues they encountered. They were as follows:

• Page 14, one of the significant risks related to the valuation of land and buildings included in the Property Investment Portfolio where there had been double counting in relation to one of the assets and one of the assets had been incorrectly classified. It was also felt that it was necessary to reflect the uncertainty of the market arising from the Covid pandemic.
• Page 15, received a letter of assurance in which there were some issues that needed  ...  view the full minutes text for item 23.

This report is to inform Members of the final external audit opinion for financial year 2019/20.

The Committee considered a report (Agenda Item 6) which informed Members of the final external audit opinion for financial year 2019/20.

This item was discussed under Agenda Item 5.

RESOLVED that:

1.    The financial statements for 2019/20 be approved following consideration of the external audit report.

2.    Final sign-off of the financial statements be delegated to the Chair of the Governance and Ethics Committee in consultation with the s151 Officer following completion of the external auditors’ work, final figures from the Berkshire Pension Fund which would amend the financial statements and associated completed letter of representation from the Council.

To set out the key findings from the Independent Review into the Oversight of Local Audit and the Transparency of Local Authority Financial Reporting, or ‘Redmond Review’, undertaken by Sir Tony Redmond and to consider any impacts for the Governance and Ethics Committee.

The Committee considered a report (Agenda Item 7) which summarised the key findings from the Independent Review into the Oversight of Local Audit and the Transparency of Local Authority Financial Reporting, or ‘Redmond Review’, undertaken by Sir Tony Redmond. The Redmond Review took place between summer 2019 and summer 2020, with the final report issued in September 2020.

Given the significant challenges to the effectiveness of both the local public audit and the presentation of Local Government financial reporting, this review was timely and the report highlighted how the Council might wish to respond to these, and specifically, for the Governance and Ethics Committee to consider if there was anything further that it might wish to undertake that had been raised as part of the review.

Councillor Jeremy Cottam commented on Section 3 of the report and the 25% increase in fees and asked if that was definite figure. Joseph Holmes explained that there was a fee variation that was up to 25% but that future fees would be for the external auditors to propose.

Councillor Rick Jones asked if there was anything that the Council should be doing as a result of this report. Joseph Holmes responded that it was presented for information purposes and to show there would be changes to some of the roles of Councillors at meetings in the future.

Grant Thornton stated that they supported the finding of the Redmond Review and how the government would take that forward. They would continue to work with the Council to ensure the delivery of a high quality audit service. They defended the 25% cost increase against the backdrop of the savings that had occurred over the last ten years, the outcome of the quality reviews which had increased significantly and the changing nature of the standards that had created more work.

RESOLVED that the comments made by the Committee be noted and the suggested amendments to its terms of reference be implemented in light of the Redmond Review.

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.

To highlight the corporate risks that need to be considered by Corporate Board and Operations Board and to outline the actions that are being taken to mitigate those risks. Full details regarding the Corporate Risks are provided in Appendix C together with the method used to score risks for the Council which is included in Appendix F.

(Councillor Tom Marino declared a personal interest in Agenda item 9 by virtue of the fact that he was a member of one of the organisations referred to in the document. As his interest was personal and not a disclosable pecuniary interest he determined to take part in the debate and vote on the matter).

The Committee considered an exempt report (Agenda item 9) concerning the Council’s corporate risks and outlined any mitigation action that was being taken.

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