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.  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’, 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 to the notice of filming at meetings and this information was noted.

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 none.

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

There were none.

To confirm and sign the minutes of the Audit Committee meeting held on 20 July 2023 as a correct record.

To review the Action Tracker.

RESOLVED:That the minutes of the meeting on 20 July 2023 be agreed and signed as a correct record.

In relation to the Action Tracker, members queried the contracts and frameworks list. The meeting noted that the procurement systems the Council had at the moment were not fully operable as of yet. Internal audit had carried out a number of reviews around procurement sites. A number of the reviews that that had been carried out had been assigned limited assurance. There were concerns about the operational procurement activities in the organisation. They could relate to issues like how contracts were let. For example, consideration needed to be given to when the Council let contracts and if the Council would be satisfied that it was getting value for money through the number of bidders.  Contract management and how the contract register was maintained had also been examined. These three areas had all been assigned limited assurance.

The formally constituted Corporate Committee received a presentation from the Head of Procurement in September 2022, which was where the actions first arose. At that meeting, the Head of Procurement explained that he wanted to make changes and that those changes would take time including the need for replacement for IT systems that the Council used. Councillors’ comments would be raised by the Head of Procurement and he would be asked to review his comments in light of councillors suggestions to see if it was possible to get a rough estimate so that some clarity could be attained regarding the number of tenders that went through. Depending on the threshold of the value of the contracts, the Council was required to follow up the process. It was important for the procurement team to have that information available to them as well. There was large element of work that was ongoing at the moment in terms of what needed to change. It would be helpful to invite the Head of Procurement to the next meeting to give an update on progress.

Members expressed that, as it sounded like the work that procurement had to complete would take a long time, it would be ideal for the Committee to receive a rough estimate sample from different dates, so that the Committee could get an idea of processes in place and where the risks still lay.

Organising members’ training on the right to buy process would be followed up and an update would be provided to the Committee.

The Committee asked for an update on Temporary Accommodation including the cost of Temporary Accommodation at a future meeting.

The meeting felt 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. The meeting heard that these two matters were separate. The former matter was around the Council's policy and process for dealing with risk and for the identification of the key risks in the organisation. The Council had appointed a company  ...  view the full minutes text for item 6.

This report provides an update to the Audit Committee on the Council’s treasury management activities and performance during the quarter ending 30 June 2023, in accordance with the CIPFA Code

Mr Tim Mpofu, Head of Finance, presented the item.

Members queried the report and asked questions. In response to questions, Mr Mpofu and Mr Kaycee Ikegwu, Head of Finance (Housing and Chief Accountant) provided the answers to the queries.

•             A query was raised regarding paragraph 6.13 which noted that a significant capital programme which extended into the foreseeable future and a large portion of this would need to be financed by borrowing. With the cost of borrowing having increased, it raised a question of checks or risk management being in place to ensure that there was an appropriate balance and if the high interest rate and uncertainty put that balance at risk. In response, the meeting heard that there were various times in the economic cycle where there could be opportunities to take advantage of lower rates. When the Treasury strategy was set, the target rate at the time was at 4.5% and it was assumed that any new borrowing would be at that rate. There were times when it was possible for the rate to fall below 4.5%, creating an opportunity to borrow whilst still being within budget. The maturity structure displayed on page 24 of the agenda papers showed the spread of risk of when loans needed to be refinanced and provided an opportunity to take advantage of the different maturity structures. The Council would assess how risk could be spread over time and will keep in touch with the Treasury advisor who would advise on rates. During times of economic uncertainty, it was not always the case that rates continued to increase as there were occasions when there could be a downward movement. In such circumstances, actions would be taken wen borrowing to ensure that the Council would be able to stay within its budget. Various efforts were being made such as ensuring that cash balances remained healthy so that there would not be an over-reliance on borrowing whilst attempting to provide certainty on what the cost of any borrowing would be. The main difference was that the cost of borrowing was originally at 2% and was now at 4.5%, which was higher, but was within the MTFs guidelines.

•             A query was raised regarding capital projects, particularly, long-term capital projects and the appropriateness of determining which capital projects should go ahead. In response, the meeting heard that for general fund capital schemes to progress, there was an overall model of capital programmes set at the beginning of the year in line with the borrowing strategy. The schemes would be expressed with assumptions, costs and level of borrowing. Any scheme that did not meet those viability tests were not included in the programme.  A scheme generally would not progress if viability tests were not met. From a Treasury perspective, it was important to advise on what the cost would be and anticipate the trajectory of interest. In light of the economic conditions this year, the assumption had been raised to 5% for the  ...  view the full minutes text for item 7.

This report details the work undertaken by Internal Audit in the period 1 April to 14 August 2023 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).

Mr Minesh Jani, Head of Audit and Risk Management, presented the item.

The meeting heard that:

•  There were some specific aspects relating to the service in the recommendations that had been raised in respect of the “Limited” assurance assigned to the Community Alarms, but there are some commonalities as well.

•  Regarding the performance management regime, a lot of the Council’s services, especially our social care function services, focused a lot on the delivery of service to residents. Many of whom were known to be vulnerable and relied on the Council. There was a level of trust that went into the delivery of that service. One of the things that had been found was that regime for an analytical process monitoring how well the service was performing at any moment was not always built into the provision of the service. The general focus was to  deliver the service to the best standard possible and this was taken on trust. When the auditors carried out their tests, they had not found too many issues with how the service was being delivered, but did find that the measure of how it was being done was not in place. Although there was some specific focus on certain services, there were some generalities that could be taken away and applied to other aspects.

•  In relation to the charging policy, auditors did raise an issue that there should be more clarity around how this was done, but there were no instances found where the opposite was true. For example, people were paying when actually they should have been eligible for a discount or no payment was needed at all. There seemed to be quite a robust process for assessment. If people believed that they may be entitled to some exemption, then a working process was in place. However, this should be fully documented and tested to make sure that the Council was not doing something out of step with management wishes.

•  In relation to service design, it was important to note that in the Annual Governance Statement, in the introduction, a lot of time was allocated to how much the Council wanted to change, how the services were considered and the provisions that needed to be provided and how the Council engaged with communities, including listening to communities. This was now an integral part of how the organisation wished to proceed.

•  The purpose of the report was to give members an opportunity to see what had been finalised and the work that the auditors had started at the various stages. If the report was at the draft stage, management responses would be expected within two weeks and sometimes this could get extended, particularly during the summer, but the process involved auditors issuing a report with management responding within two weeks and then, if there was a question or queries around the content, it would contribute to the final version of the report. If there were any specific audits that the  ...  view the full minutes text for item 8.

This report details the work undertaken by the in-house resources in the Audit and Risk team and communicates a first update on completion of the work plan for 2023/24.

Ms Vanessa Bateman, Deputy Head of Audit and Risk Management, presented the item.

The meeting heard that:

•  There was a commitment to having a dedicated team for housing resources, so when other priorities came to light, the team working on housing resources would not be affected.

•  The Blue Badge project would bring an income stream into the team which would enable an increase in resources. Sanctions would be applied for blue badge frauds. However, the objective of the fraud strategy was to reduce and deter fraud. Some of the income stream would be reinvested into housing.

•  A considerable amount of work was being done with Housing and the Housing Improvement Plan. The team had a lot of cases and referrals, but they were not all subletting fraud cases. The team had ended up with a lot of issues regarding processes that simply were not working efficiently. Ideally, these issues would not be passed to a fraud team, but resolving the issues would help with progress generally and a lower housing caseload.

•  Part of the work involved trying to help ensure properties that should be void and should be in the list to be worked on were visible, properly accounted for and were in the plan to be completed. This work spanned over into the audit territory. The outcomes were being tracked and it was anticipated that some fraud would be found. There were a number of properties that had been identified as void, but there were also properties that may be void that the Council were not yet aware of. An exercise had been done about two months ago, where the Council data matched Council tax records with property records to help identify these. A list was passed with housing so they could visit the properties. An update could be brought forward for the next meeting.

•  As there were issues with staffing, it may be a good idea for the Council to have a trainee role being developed in the fraud area.

•  Cases of fraud were higher than previous years. The Council had a good network of people that it consulted. This allowed staff to proactively seek to understand where the frauds might be occurring and then attempt to devote resources to it. Any services the Council offered had a potential to be subject to fraud. It was important to have the right controls in place to strengthen system processes and data use. The Council would take every step to take full action in cases of fraud, including prosecution. This responsibility fell upon the Council as a whole.

RESOLVED

To note the activities of the team during quarter one of 2023/24.

This report updates the Committee on the Council’s Draft Statement of Accounts 2022/23.

Mr Kaycee Ikegwu, Head of Finance (Housing and Chief Accountant), presented the item.

•     A query was raised regarding page 68 of the agenda papers which appeared to indicate that the HRA section had a net expenditure of in 2022 compared to net income in 2023 and it was not clear why there was such a large difference. The meeting heard that the table displayed on that page only shows the net cost of services provided. However, to understand the accounts better, the HRA section provided a clearer picture of the two years as it highlights adjustments between accounting basis and funding basis. HRA was a balanced account. The way that the Council set up its HRA is such that should balance at the end of the period. Within the balancing of the account, there was a listed revenue contribution to capital usually called HRA ‘surplus’ and there was always an expectation of a revenue contribution which was used to fund the capital programme. If the HRA was unable to generate this revenue contributions, then there would be an issue with the HRA viability The Council had set a minimum of £8 million year on year. If one was to examine the budget set and the HRA plans that were brought every year to Cabinet, it would show that it ensured that the borough maintained a minimum of £8 million. This provided financial resilience. If there were changes in the interest rate, the Council would be able to react because it had a larger cushion. The contribution would go back into funding capital programmes.

•    Members queried a report that had been submitted to Cabinet which had stated that the Council’s reserves were lower than average and queried what the plans were to improve upon it. In response, the meeting heard that, in relation to other boroughs, the Council reserves was in midpoint (it was not as high as some boroughs, but not as low as other boroughs). Every year, the Council tried to maintain a reasonable reserve. It must be noted that doing so was difficult at present time. Part of the Project Fortnight Programme was to look at the Council’s position and come up with ideas on how it will improve its financial position. This was an ongoing process through different service areas. The Council was doing a lot to ensure that, at the very least, it was able to maintain the reserves that it had. The borough did not take too many risks and often found alternative solutions when required. Details of what the Council was doing would come as part of the paper scheduled to be presented to Cabinet in December 2023.

•  A query was raised regarding debtors for local taxation and how this would be expected to increase. Members enquired as to how this could be better managed.  In response, the meeting heard that measures were being sought to improve debt collection as a whole going forward. The effect of the income had  ...  view the full minutes text for item 10.

There were none.

14 November 

1 February 2024

 7 March 2024

The date of the next meeting was scheduled on 16 November 2023.