Agenda and minutes

Please note this meeting may be filmed or recorded by the Council for live or subsequent broadcast via the Council’s internet site or by anyone attending the meeting using any communication method.  Although we ask members of the public recording, filming or reporting on the meeting not to include the public seating areas, members of the public attending the meeting should be aware that we cannot guarantee that they will not be filmed or recorded by others attending the meeting.  Members of the public participating in the meeting (e.g. making deputations, asking questions, making oral protests) should be aware that they are likely to be filmed, recorded or reported on.  By entering the meeting room and using the public seating area, you are consenting to being filmed and to the possible use of those images and sound recordings.

The Chair of the meeting has the discretion to terminate or suspend filming or recording, if in his or her opinion continuation of the filming, recording or reporting would disrupt or prejudice the proceedings, infringe the rights of any individual, or may lead to the breach of a legal obligation by the Council.

The Chair referred Members present to agenda item 1 in respect of filming at this meeting and Members noted the information contained therein.

Apologies for absence were received from Cllr Ejiofor and Cllr Griffith.

The Chair will consider the admission of any late items of urgent business. (late items will be considered under the agenda items where they appear.  New items will be dealt with at item 12).

There were no items of urgent business.

There were no declarations of interest.

To consider any requests received in accordance with Part 4, section B, Paragraph 29 of the Council’s Constitution.

There were no such items.

To consider and agree the minutes of the meeting held on 29 November 2016.

The Committee noted that the attendance for the previous meeting needed to be amended to reflect Cllr Engert’s attendance and that apologies for absence had been received from Cllr Rice. With these amendments it was:

RESOLVED

That the minutes of the meeting of the Corporate Committee held on 29 November 2016 be approved as a correct record and signed by the Chair.

Report of the Chief Operating Officer to present the Treasury Management Strategy Statement and Prudential Indicators for 2017/18 – 2019/20 to this Committee for scrutiny before it is presented to Corporate Committee and then Full Council for final approval. 

The Committee considered the report on the Treasury Management Strategy Statement (TMSS) 2017/18, introduced by Oladapo Shonola, Head of Finance, Treasury and Pensions. It was noted that the strategy covered borrowing to cover capital expenditure, investment principles and the prudential indicators. The Council’s strategy complied with guidance from the CLG, the CIPFA Prudential Code and the CIPFA Treasury Management Code of Practice. It was noted that there was broadly no change to the previous TMSS as economic conditions remained much the same as they had been, and the Committee was advised that the only proposed change to the TMSS was in relation to the Minimum Revenue Provision, which had been revised in order to better reflect the rules set out in the prudential code and government guidance and which would have a positive impact on the Council’s finances.

The Committee asked about the borrowing expected for the coming year, what this was for, the length of term and whether such borrowing was prudent in the current financial climate. The Head of Finance - Treasury and Pensions, advised that the Council’s Capital Programme, approved by Cabinet, established the borrowing required and that some borrowing may also be required for the refinancing of maturing debt. It was noted that all borrowing was provided for in the Council’s revenue budget, and was therefore considered prudent; in particular, the refinancing of any maturing debt would be at a much lower interest rate than the existing loans and would therefore be positive for the Council. With regards to the term of any proposed borrowing, it was confirmed that the maturity rate would be spread in line with the indicators set out in the strategy, in order to minimise risk to the Council.

The Committee noted the section on bail-in legislation within the TMSS, which meant that depositors would carry the risk of any bank failure, and asked whether a risk assessment was undertaken to ensure that the Council was able to deal with the implications of any such event; it was confirmed that this was taken into consideration in the formulation of the limits that the Council set for itself within the TMSS. The Committee asked about the implications of Brexit on the Council’s Treasury Management strategy, in particular where current guidance was based on EU legislation. The Head of Finance – Treasury and Pensions, advised that it was not anticipated that Brexit would have a material impact on the areas of activity covered in the TMSS, and that a briefing would be provided for Members on the potential implications for the Council’s Treasury Management arrangements arising from the decision to leave the EU.

Action: Head of Finance - Treasury and Pensions

The Committee asked whether loans taken out by the Council were secured against Council property. The Head of Finance – Treasury and Pensions advised that this was not the case, and it was agreed that this would be confirmed outside the meeting and a briefing circulated to Members.

Action: Head of Finance  ...  view the full minutes text for item 119.

Report of the Assistant Director, Corporate Governance to detail the work undertaken by Internal Audit in the quarter ending 31 December 2016 and focuses on progress on internal audit coverage relative to the approved internal audit plan, including the number of audit reports issued and finalised – work undertaken by the external provider (Mazars).

The Committee considered the Internal Audit Progress Report 2016-7, Quarter 3, as presented by Anne Woods, Head of Audit and Risk Management.

Further to the Quarter 2 update presented at the previous meeting and the audit recommendations made in respect of the audit of the Procurement of Contracts under the OJEU Threshold, follow up work on the original two recommendations had been undertaken and the Committee was advised that the first recommendation that Central Procurement should periodically review spend reports per supplier was now in progress. The second recommendation regarding the recording of contracts and the introduction of a central online procurement portal had yet to be implemented, but it was reported that this was due to a delay in the implementation of a new e-procurement system for technical reasons and it was anticipated that the new system would be in place by the end of March 2017. It was confirmed that further work would be undertaken  in 2017/18, when more information was available and the new system was in place, to ensure that these recommendations were fully implemented.

With regard to the school audits and the high number of schools receiving ‘limited’ assurance, it was reported that the selection of schools being audited during the period did include a number where concerns had been raised by previous audits and there did not appear to have been an improvement in performance. The Head of Audit and Risk Management had met with the Director of Children’s Services and AD Schools and Learning, and work was taking place to establish next steps for improving performance across these schools. The Committee and Chair had expressed particular concern regarding the ‘Nil’ assurance arising from the audit of Stamford Hill school during Quarter 2; a follow up audit had been undertaken in December 2016 and the draft audit report was currently with the school for review. Of the 29 recommendations from the audit, 5 had been found to be fully implemented, 10 were partly implemented, 12 were not implemented and the deadlines for the others had not yet been reached. The AD Schools and Learning and Schools Improvement Team were working to support the school and manage the process of implementing the audit recommendations. As an interim measure, funding had been granted to the school to enable it to meet its statutory responsibilities, subject to a detailed budget and repayment plan being submitted by the school. Further decisions on next steps to be taken at the school would be made after meetings had been held between the school and Council officers.

The Committee noted that in the current economic climate it was to be anticipated that more schools may be encountering financial difficulties, and felt that the Council should be doing more to lobby Government regarding school funding. The Head of Audit and Risk Management noted that at the recent Children and Young People’s Scrutiny Panel there had been a general correlation between those schools with deficit funding and those achieving limited audit assurance ratings,  ...  view the full minutes text for item 120.

Report of the Assistant Director, Corporate Governance to detail the work undertaken by the Counter Fraud Team in the quarter ending 31 December 2016 and focuses on details of pro-active and reactive investigative work undertaken relating to fraud and/or irregularities – work undertaken by the in-house Fraud Team.

The Committee considered the Counter Fraud Update report 2016/17, Quarter 3, presented by Anne Woods, Head of Audit and Risk Management.

The Committee welcomed the proactive approach reflected in the report, and asked about the nature of the visits by the counter fraud team undertaken alongside gas safety engineers; it was reported that an initial exercise had been undertaken where officers attended routine gas safety checks with engineers, and as a result of this it had been identified that attending those properties where engineers had not at first been able to gain access was an area where such visits could have the most impact. Adopting a risk-based approach, counter fraud officers were therefore now accompanying warrant officers on execution of warrant of entry visits where it was suspected that the named tenant was not in occupation. In response to a question from the Committee regarding what happened if people did not respond to a Notice To Quit, it was confirmed that there were legal processes to work through where this was the case, and officers worked with Legal Services and Homes for Haringey to progress these.

In response to a question from the Committee as to whether the introduction of the Haringey Development Vehicle would have an impact on the Council’s proactive counter fraud work, the Head of Audit and Risk Management advised that as with all counter fraud work, the team would work on a risk-based approach and would therefore respond as appropriate to any change in the Council’s risk profile arising from the Haringey Development Vehicle.

The Committee asked about the outcomes from the recent exercise in publishing ways of contacting the Council to report suspected fraud on the back of Argos receipts. The Head of Audit and Risk Management advised that this exercise had finished just before Christmas and analysis of its effectiveness was currently being undertaken. Depending on the outcome of that analysis, the counter fraud team would then liaise with Homes for Haringey regarding rolling this exercise out more widely.

RESOLVED

That the Committee note the counter fraud work completed in the quarter to 31 December 2016. 

Report of the External Auditor.

The Committee considered the report on the Grants Claims and Returns Certification, presented by Leigh Lloyd-Thomas, BDO. Mr Lloyd-Thomas advised that a significant number of errors in the Council’s administration of Housing Benefits claims had been identified in the course of the auditors’ work, the outcome of which was that there could potentially be a £1.5m reduction in the amount that the Council could claim back from the Government as the level of errors had exceeded the threshold allowable. It was noted that although management had implemented action plans to address such issues in the past, these appeared not to have gained significant traction and there was therefore a need for a step-change in order to prevent the Council from finding itself in a similar situation in future years.

Amelia Hadjimichael, Head of Benefits, advised the Committee that an action plan had been drawn up in response to the findings of the audit and was in the process of being implemented. A response from the Department for Work and Pensions was expected very shortly, and re-testing of the errors identified was currently being undertaken in order to try and minimise the impact on the Council. Analysis of the identified errors indicated that up to 50% of those errors were historic and pre-dated measures that had since been implemented to prevent such errors in future, but as they had had a knock-on effect on subsequent calculations, they still affected this year’s audit findings. It was also found that 50% of the identified errors had been made by staff who had subsequently left the authority. A recruitment and training drive had recently been undertaken, and new staff were being closely monitored in respect of the quality of their work.

The Committee was very concerned about the findings of the report, in particular the amount of reduction in the Council’s claim when considered in the context of the significant financial constraints facing the Council and the cuts that were being made in order to respond to these. It was agreed that a further update report on progress with the implementation of the action plan in order to address the issues raised should be brought back to the Committee in order that this could be closely monitored by Members. The Committee advised that they needed to consider the action plan in full, and the timescales attached to this, in order to seek some reassurance; it was concerning that previous action plans did not appear to have addressed to issues, which had been occurring for several years, and that performance had in fact deteriorated. The Committee also expressed concern that the problem appeared to be worse in Haringey than other local authorities. It was acknowledged that this was a very complex area of work, but it was essential that this was addressed effectively, and the Committee hoped that the relevant Cabinet Member was fully aware of the issue and working to address this. Officers advised that in particular this Committee would have a role  ...  view the full minutes text for item 122.

Report of the External Auditor.

The Committee considered the external audit progress report as presented by Leigh Lloyd-Thomas, BDO.

RESOLVED

That the content of the report be noted.

There were no new items of urgent business.

21 March 2017, 7pm.

Tuesday 21 March 2017, 7pm.

The meeting closed at 9.15pm.