Agenda and minutes

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The Chair referred to the notice of filming at meetings and this information was noted.

To receive any apologies for absence.

There were none. 

The Chair will consider the admission of any late items of Urgent Business. (Late items will be considered under the agenda item where they appear. New items will be dealt with under item 10 below).

There was no urgent business. 

A member with a disclosable pecuniary interest or a prejudicial interest in a matter who attends a meeting of the authority at which the matter is considered:

(i) must disclose the interest at the start of the meeting or when the interest becomes apparent, and

(ii) may not participate in any discussion or vote on the matter and must withdraw from the meeting room.

A member who discloses at a meeting a disclosable pecuniary interest which is not registered in the Register of Members’ Interests or the subject of a pending notification must notify the Monitoring Officer of the interest within 28 days of the disclosure.

Disclosable pecuniary interests, personal interests and prejudicial interests are defined at Paragraphs 5-7 and Appendix A of the Members’ Code of Conduct.

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.

The meeting noted that Corporate Committee held an action tracker. This would be updated and brought forward to the next meeting of the Audit Committee.             

The appointments process for independent members to the Audit Committee was still in progress and one member will be appointed by the next meeting  and the other will be interviewed in August 2023.

The Council has adopted the Chartered Institute of Public Finance and Accountancy’s Treasury Management in the Public Services: Code of Practice (the CIPFA Code) which requires the Council to approve treasury management reports on a semi-annual and annual basis.

Mr Tim Mpofu, Head of Finance (Pensions & Treasury), presented the item. 

The meeting heard that:

·      The local authorities that were benchmarked were those that were clients of Arlingclose, the Council’s treasury advisor. Those boroughs not associated with Arlingclose were not included as part of the quarterly benchmarking exercise.  

·      Section 2 of the appendix marked dates starting from June 2023 and should read from June 2022.

·      During course of the year, the gilt yields (which is a proxy for the cost of UK government debt) tended to fluctuate either through interest rate movements or the fiscal position of the UK government. During the time Liz Truss was Prime Minister, there was economic uncertainty around the UK government’s fiscal position when the budget was announced. This caused a sudden increase in gilt yields during September 2022 but the yields stabilised after a change in government. At the time of the meeting, the 10 year gilt yield was at 4.2% and ranged between 4% to 5% throughout the period. This was a direct result of the change in monetary policy over the past 18 month.

·      Officers were monitoring the economic situation on an ongoing basis and if gilt yields dropped, then it would be possible to capitalise on this and undertake further long term borrowing. At this point, the changes were so significant, that it was unlikely that interest rates would return to their pre-April 2022 levels.

·      Section on 6.4 of the appendix displayed the guiding principles which were based on the CIPFA code. In deciding on how to make treasury investments, the Council has a requirement to prioritise security (ensuring that the money was deposited with secure counterparties) then liquidity (meaning that the money could be accessed as required) so that there did not need to be any unnecessary borrowing. Once the security and liquidity requirements were met, investments would be placed taking into account the attractiveness of the prevailing yields (to make the best return on capital). The Council’s treasury investment policy was generally conservative. The deposits were in place with the Debt Management Office (DMO) which was a government agency that enabled the Council to place deposits overnight up to six months. The Council had increased the duration term of the deposits made to increase the Council’s interest receivable potential..  Other local authorities may place their deposit with banks and banks were considered to be riskier than the DMO and may not pass on the interest rate increases immediately.. Therefore, it appeared that the Council was taking less risk but receiving a higher return. 

·      The bail-in exposure was introduced when some banks were bailed out during the financial crises of 2008 and related to the probability of the assets being subject to that bail-in if the assets were they to go under. If the Council had a deposit with the bank, then it would be considered to be subject to a higher bail-in or rescue programme from the Government.

·      From a Treasury management perspective, the Council aimed to  ...  view the full minutes text for item 6.

This report details the work undertaken by the in-house resources in the Audit and Risk team and communicates a final update on completion of the work plan for 2022/23.

Ms Vanessa Bateman, Deputy Head of Audit and Risk Management, introduced the report.

The meeting heard that:

·      In relation to tenancy fraud, the teams involved were legal and tenancy management officers. Referrals could be received from anywhere, but they were mostly received from tenancy management officers. There was a case management system and it was imbedded. Prosecutions may take time – up to a few years. An analysis could be done for this in future reports.  

·      Fraud relating to blue badges was a new area of work. There have been a lot of investments in blue badges and Technology in relation to the area of blue badges. It was important to focus on deterrents and this came with sanctions and prosecutions. There had been an employee related case in relation to blue badges and this case was prosecuted.

·      An income-flow would be generated from the work.

·      It was ideal that this income was streamed into Parking and Fraud teams as the teams were small. 

·      A significant amount of time had been spent in the year to get officers to follow through on actions, although chasing actions from a practical perspective was not particularly taxing.

·      The case management system allowed the cases to be monitored and accessed easily.  Legal and the Housing Management Tenancy teams have their own systems. There was good working relationship between the three teams.

·      The no recourse to public funds team performed a lot of checks and balances. The Audit and Risk team would usually get complex cases perhaps where financial fingerprints needed to be established. 

·      Temporary Accommodation was one area where savings could be made. It was clear that there was a lack of preventative checks in the housing system. More data intelligence needed to be used to be able to foresee issues.  However, improvements in systems were always being sought.

·      Audit and Risk tended to understand risk, quantify and identify it and collate the work to help everybody else involved to understand the issue before the relevant management was approached.

The Chair felt it would be useful to have an update on Temporary Accommodation. It would also be useful to highlight areas of greatest risks to the Council via regular reporting.

RESOLVED:

To note the activities of the team during quarter four of 2022/23

To inform the Audit Committee of the statutory requirements to produce an Annual Governance Statement for 2022/23 (AGS) and to provide a draft statement relating to the 2022/23 financial year for review and approval.

Mr Minesh Jani, Head of Audit & Risk Management, introduced the report.

The meeting heard that:

·      The table outlined on page 27 of the agenda papers, attempted to show new values and behaviours in how the Council wanted to carry out its operations.

·      The two columns sought to define what the Council would do differently in all operations of the Council.

·      An update would be provided on proposed action plans outlined on page 45 of the agenda papers within six months’ time and may take longer to address fully. For example, the need for financial savings was something that had been ongoing for the past few years and was likely to go on for some years due to the nature of what the issues were and the financial positions of all local authorities. 

·      The second issue listed on page 47 of the agenda papers referred to a governance issue being raised last year. At the time, the Council were expecting the transition of Homes for Haringey into the Council.  The Council was not confident that it had all the appropriate governments arrangements to fully return Homes for Haringey to the Council to a satisfactory level. At the presentation of the last annual report, a number of failings within key operations had been identified. There was concern that when Homes for Haringey was transferred into the Council, there would be a number of services which were not performing as well as they could. 

·      Under the Audit Committee’s terms of reference, the Audit Committee could invite directors to attend the Audit Committee and answer questions or to present to the Committee regarding concerns in the three areas of the Committee’s terms. These were internal controls (how to ensure that business operates in a way that provided the right outcome. For example, the reports indicating limited assurance for controls were not effective), risk management (this allowed the Committee to request that the services explain how the risks were managed) and governance (the level in which the Council was carrying out its operations).

·      Members asked if it may be useful to have any significant issues identified in the report from last year be carried forward and were asked to note the update at para 4.2 of the report relating to significant governance issues raised in last year’s AGS.

·      The Chair could refer matters onto Chairs of other committees and to the Leader of the Council.

·      It would be useful to receive a report on risk management strategy which included an update (or a risk management strategy) on leisure services by the next meeting.

Councillors felt it would be useful to receive an update on Housing from the Lead Member or Director of Housing in addition to a report.

RESOLVED

1.    The Audit Committee approve the draft 2022/23 AGS, attached at Appendix A.

2.    To note the approval timescale and processes for the draft 2022/23 Audit Governance Statement.

To inform Members of the overall adequacy and effectiveness of the system of internal control and risk management operating throughout 2022/23 and present a summary of the audit work undertaken to formulate the opinion, including reliance placed on work by other bodies.

Mr Minesh Jani, Head of Audit & Risk Management presented the report.

The meeting heard that:

·      A culture of learning and development was prominent in some parts of the Council.

·      When a review was carried out, the reason why information may not be up to date ranged from a host of different reasons. For example, systems hadnot been implemented in a way the service was expecting and therefore it was unclear how the data needed to be utilised. 

·      Housing Systems had gone through a big change to a new system but had not finished with relevant updates so the records were not as thorough as they needed to be. This was true of other parts of the Council.

·      Record keeping also suffered from other issues such as information not being held properly on systems; they may be held in directories or folders and it may be difficult to get hold of certain information when approaching a department collectively. Some information simply was not recorded in a diligent manner and there were also inconsistencies in how information was recorded such as the use of shorthand or abbreviations.  These issues needed to be put right. It would be helpful to have the issues dealt with before a full audit was carried out. This was probably likely to take place next year.

·      Approximately two years ago, a number of reviewstesting procurement in different parts of the Council. The Council was found to be not as effective as it should bein procurement matters. The reports highlighted a number of areas with recommendations and as a result the Council had decided to review procurement operations and the operating model and redesign it along with applications and systems as they were not particularly effective.

·      A decision had also been made to review the staff arrangements regarding the manner in which procurements were carried out. There were three strands to this; how to be clear on when to let and manage a contract, how to be clear on ensuring that the Council accurately gets what it needs (how to specify the proposals) and finally contract registers (how to ensure that the procurement is not something another organisation had procured).

·      The Head of Procurement could be able to provide an update to the Committee.  

·      For voids, the process would change and this may take up until the end of the year. There was an urgency that the voids would be dealt with and brought back to use.  The Housing Directors would be asked for an update.

·      There was oversight of the procurement team independent from the procurement team. This occurred when the value of a contract exceeded £160,000, at which point, strategic procurement became involved in the procurement activity. There was a proposal to reduce the threshold to £25,000 and this would then account for most of the procurement activity.

·      Full Council had noted the different cost amounts delegated to heads of services.

·      Contract management and leisure services was part of plan for 2023/24. The  ...  view the full minutes text for item 9.

There were no new items of urgent business.

21 September

14 November

1 February

7 March

The next meeting would be held on 21 September 2023.