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.

To receive any apologies for absence.

Apologies had been received from Independent Member, Reene Deba, who joined the meeting online.

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 13 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

There were none.

To confirm and sign the minutes of the Audit Committee meeting held on 7 March 2024 as a correct record.

To review the Action Tracker.

RESOLVED: That the minutes of the meeting held on 7 March 2024 be agreed and signed as a correct record.

On the Action Tracker, it was unclear whether the second action on page 11 and the last action on page 14 of the agenda papers should be marked as completed.

This report provides an update to the Audit Committee on the Council’s treasury management activities and performance during the financial year ending 31 March 2024, in accordance with the CIPFA Code.

Mr Tim Mpofu, Head of Finance (Pensions & Treasury), introduced the report.

The meeting heard:

·      A query was raised regarding the decrease in LOBOs (Lender Option Borrower Option). In response, the meeting heard that over the last year, the Council had refinanced one of the Lobos, which was worth about £25 million. The LOBO lender had exercised their option in this case. This had been expected and prior discussions were held with the Council’s treasury advisors. As a result, the Council were able to refinance that specific loan at a lower rate. There was about £15 million of LOBOs which would be due at some point this year. The Council was still communicating with its treasury advisor and it was unlikely that any of the lenders would want to exercise their options. These were considered to be relatively low risk, unless markets started operating differently. However, the bigger portion of it - the £50 million - was due in four years’ time so there was no risk of refinancing for these. 

·      In relation to the credit rating, a lower score was better. The table in the report suggested that the Council’s risk was lower than other local authorities. This was mainly because the Council only had invested through the debt management office.

·      A query was raised regarding the Private Finance Initiative (PFI). The meeting heard that the number for PFI included finance leases as well and that the PFI had actually decreased by £5 million during the year. However, the leases had increased because of renewals throughout the cost of the year.

·      A query was raised regarding section 4.7 of the appendix which stated that a new HRA PWLB (Housing Revenue Account Public Works Loan Board) rate was made available to qualifying authorities at a further 0.40% discount, if the Council qualified for it and if there had been any plans to replace the HRA loans. The meeting heard that the Council did qualify and that the rate had been in place since last year. A lot of the borrowing the Council took was more for the HRA than it was for the Council. It had been a great opportunity for the Council to be able to replace some of the previous borrowing. This included the LOBOs as much of the refinancing for the LOBOs was done using the HRA rate resulting in a better rate.

·      A query was raised regarding the implication of section 6.2 of the appendix which stated a rate of return of 4.93%, with the Council having an investment portfolio balance of £81 million. The meeting heard that the paragraph was articulating that at the beginning of the year, the Council had made some assumptions of what it felt its average balances would be, but also what the Council could earn in interest rates. The Council had underestimated both of these and as a result, the Council was able to receive more treasury income than had been expected at the beginning of the year. The average  ...  view the full minutes text for item 7.

The CPO (Chief Procurement Officer) attended the Audit Committee to present an update on outstanding audit recommendations which were primarily reliant on the implementation of the new e-procurement system.

This report intends to cover the information requested.

Ms Jeanine Long, THF Change Consultant and Mr Barry Phelps, Chief Procurement Officer, introduced the report:

The meeting heard:

·      There were some concerns with the project at the moment. There was a review which was currently underway. This was anticipated to be completed by the end of the coming week and then further details could be provided in terms of the progress of the report once the review was completed.

·      In relation to the training, the intention was to have a “train the trainer” model. The internal administration would be trained and then focus would be placed on “super users”. These were the key contract managers, procurement officers internally before moving out to general users and suppliers externally. The intention at the moment was to not have an external resource to do the training.

·      Part of the project cost was the training and this was included. The training would be delivered by Council officers, not external organisations.

·      In relation to if the budget was contained for the additional extensions, this would have to be referred to Digital Services because it came under their budget. The Committee could be updated in relation to this. 

·      Digital Services had overall responsibility for the project. This was why the report was drafted from Digital Services. Some concerns had been raised which was why the review was underway. Appropriate action was being taken and the concerns were being addressed through the review. Once the review had been undertaken, then there would be a better understanding as to whether the concerns could be addressed.

·      There were some risks, but the risks were predominantly around the functionality and whether the functionality requested would be delivered and around the time scales outset in the original requirement. Most of these were covered within the report.

·      This was an important project for the organisation. Procurement and contracts was a big area in spending and it was important to support the review that was underway to ensure that the right process and the right project management was in place. At the next meeting, the Committee would have a more general discussion around procurement and compliance around contract management.

·      The chosen supplier was already in place with other councils. The Council had explored trying to work with other authorities in terms of some procurement platforms more regionally. This had been challenging because different boroughs were at different points and had different digital strategies. This was not just the procurement platform, but also finance systems, HR systems and other systems. If further opportunities arose, then they would be explored.

·      Testing of the system would be done before it went live.

·      On page 39 of the agenda papers, there were some key gateways listed and these were key points to evidence the testing the data migration and the usabilities in place.

·      The costings or budget allocations would be looked into, but as far as the subject matter expertise of using the system, especially the ‘train the trainer’ model would be part of the internal  ...  view the full minutes text for item 8.

This report updates the Committee on the Council’s Draft Statement of Accounts 2023/24.

Mr Kaycee Ikegwu, Head of Finance (Housing) and Chief Accountant, introduced the report.  Mr Tim Cutler, KPMG, was asked a query regarding how well the Council was doing or if other approaches needed to be sought and regarding the reduction of balances by £30 million. In response, the meeting heard that it would be premature for KPMG to offer assurance or nervousness about the process about to be conducted. KPMG had been met with positive engagement from the Council. Originally there was a nervousness upon the appointment that the Council would be very risk averse in how the Council interacted with KPMG and how the Council shared information, but the Council had engaged well. A document producing a set of accounts covering the operations as large and diverse as Haringey was a fair achievement.

The meeting heard:

·      Regarding the use of balances in the overspend position, page 60 of the agenda papers summarised the draw down from reserves that the Council had to make at the end of 2023/24 (£19.2 million). This was not where the Council wanted to be and it was aware of what was driving the drawdown, such as social care cost and temporary accommodation cost. It was not ideal for the Council to be in such a position as levels of reserves were not excessively high especially when compared with other authorities. The Council would like to, in the next few years, rebuild the reserves. This was important due to the uncertainty over the next few years and it was important to be in a position where reserves were adequate for unexpected events should they arise. Work was underway on next year's budget. Some of this work being done was looking at what was driving the overspend and its impact on the current and future years.

·      In terms of Haringey reserves, compared to other Councils that issued Section 114 notices, the benchmarking information published by certain government departments would be useful in assessing this. For boroughs that had issued Section 114 notices the level of reserves would not be the only reason why and therefore it was important that a direct correlation not be assumed between one and the other.

·      The Committee was considering the Draft Statement of Accounts. The outturn report had been considered by Cabinet in the prior week and would be considered by the Overview & Scrutiny Committee. This was a more detailed outline of what drove the overspend. Members would be encouraged to read the narratives to the statement of accounts and the outturn report because the context was better set in these documents than the Statement of Accounts. It was important to see if the reasons for the overspend impacted on 2024/25 and its impact on future years and what actions could be taken if needed. 

·      The work that was underway examining next year's budget and future budgets involved looking at internal processes and services subject to increased demand especially social care and temporary accommodation. The Council was looking internally to  ...  view the full minutes text for item 9.

To inform the Audit Committee of the statutory requirements to produce an Annual Governance Statement for 2023/24 (AGS) and to provide a draft statement relating to the 2023/24 financial year for review and approval.

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

RESOLVED:

1.      That the Committee approve the draft 2023/24 Annual Governance Statement, attached at Appendix A of the report.

2.      That the Committee note the approval timescale and processes for the draft 2023/24 Annual Governance Statement.

This report also fulfils the relevant statutory requirements of the 2017 UK Public Sector Internal audit Standards (PSIAS); the 2017 Local Government Transparency Code; and the Audit Committee’s terms of reference.

Mr Minesh Jani, Head of Audit and Risk Management, introduced the report. Members welcomed the report stating that it was easy to follow and had provided clear information.

The meeting heard:

·      In addition to the audits that the Council did which were compliance type audits, there were some audits classed as “consultancy”. In those specific areas, the work that the auditors tended to more to inform what the service was trying to do. In regard to recommendations for community engagements, the Council had an audit on the plan to carry out a review of how effective it was in engaging with the community, but the service was of the view that if Mazars could share some of their expertise from other boroughs or organisations, the information could be used to inform the Council’s methods.  Any recommendations that were made would be shared with the Committee.

·      The Council had asked Mazars for their expertise and this contributed to the audit process. Management also put time and effort into allowing audit to look at their systems and also contributed to how it was possible to improve the dialogue between auditors and management to make improvements. This was lost if recommendations were not implemented. More focus would be placed on this for the future. The number of recommendations not implemented had come down, but some of the older recommendations were worth reflecting on. If a recommendation was valid - and some older ones were - they would remain on the register, but if things had moved on or if they could be combined with other recommendations, this would be actioned. In relation to resources, the Council had compared the level of audit resource in other London boroughs and Haringey was not the lowest. There were some boroughs with very low levels of audit days. The Council’s audit plan tended to be about 820 days whilst other London boroughs probably ranged from 900 to 950. Boroughs with a lower number of days would be around 500. There was no concern regarding the assurances the Council could bring to members to fulfil professional auditing needs. There had been a lot of focus on areas where things needed to improve. On balance, this was probably the right approach. The Committee would see audits where the risk was relatively high, but less so where the risk was lower.

·      In relation to how auditors could work in a way where their recommendations were implemented so that risks were managed even after they had left, the Council had arrangements whereby it reported on the follow-ups that were done. There was a mechanism to report the status of recommendations to the Statutory Officers Group. This was the Chief Executive, Director of Finance and the Head of Legal. Previous reporting had been done where recommendations which did not get implemented quickly enough. An audit was a point in time reference. When an audit was completed, a certain level of assurance could be given at the time with a view to  ...  view the full minutes text for item 11.

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

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

The meeting heard:

·      In relation to gas safety, the risks the team were capturing were for properties that had been abandoned or the person there had died or even that the occupant had moved into sheltered accommodation. These cases were tracked. Sometimes the tenancy management team struggled to keep oversight of everything that was going on. There was a backlog of visits to do and some teams were still clearing backlogs from the lockdown period.

·      Quite a lot of the pure fraud work of the team was hindered by the control breakdowns within the organisation. There were cases where there was an element of fraud ready to be pursued, but holistically there were control failures around this.

·      The Council had reasonable systems of internal control and fraudsters would always try to find a way of breaking that system. A balanced and mindful approach was needed as there were people who presented to the Council to make a claim and it was important to balance what was needed from them against the fraud risk that existed. This was difficult, but the Council tried to get to a point where it would not over-inconvenience residents genuinely in need of services, but also deter fraudsters from being able to get through. Part of dealing with this involved keeping abreast of continuous changes.

·      There was an audit in this year's plan looking at how the Council as an authority enforced its regulatory powers where necessary and this was really with a view to establishing whether the Council had the right control environment to take action or whether there was any actually monitoring arrangements to ensure compliance. Fraud Call was a tool for people to report any worries about fraud, the Council likely had tools for reporting other concerns that did not technically fit the fraud category. This could be pursued and publicised. 

RESOLVED:

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

There were no new items of urgent business.

The date of the next meeting is 8 October 2024.

The next meeting would be held on 8 October 2024.