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.

No apologies had been received.

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.

Independent Member, Mr Reyaaz Jacobs stated that he had worked with the Senior Manager who had worked on the BDO assignment as part of his previous role at Deloitte. 

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.

As part of the Action Tracker, Mr Jonathan Kirby, Director of Placemaking & Housing, Ms Sarah Lavery, Head of Property Change and Mr Andrew Meek, Assistant Director for Capital Projects & Property, presented a verbal update on the commercial properties audit. Mr Kirby and Mr Meek stated that a full report would be submitted at a future Audit Committee. A previous audit that had been carried out had received a nil assurance. Since the previous audit, a limited assurance had been attained. This showed progress in a positive direction of systems and processes being put in place. There was an aim to progress to ‘full Assurance’. An upcoming report would demonstrate that across the large number of action areas, good progress was being made, but more needed to be done. A lot of work was being done with debt, arrears and engaging with tenants in order to deal with expired or held-over leases and renew them. The progress was quite significant in that area. There was also some good progress in some of the safety aspects. There were four recommendations including a general health and safety recommendation, fire safety and other safety aspects. This would be addressed through the process of renewing leases. One of the difficult areas was around managing the data. There was a recommendation about the management of data which was at the heart of managing property. The acquisition of a new property management system was key to be able to manage the data better. Not as much progress had been made in relation to this. Taking stock of the Council's overall financial situation and ensuring that a robust business case was in place to support the acquisition of a new system had taken priority. This had an affect across other areas.

In response to questions, Mr Kirby and Mr Meek stated that:

·         The data was held in different systems and was not always consistent. Some of it was of lower quality. Sometimes, certain data was not present such as the detail of conditions contained within a lease. This could be in a paper document and a new system could assist in marshalling the data.

·         The property review split into three distinct areas. One was data cleansing and data gathering, one was the procurement of a property management system in which to store that data and the third was around delivering improved policies and strategies for the property assets. It was important to prove the business case that cleansing and collecting data in a sensible way would help. In the intervening period, the Council was prioritising events that happened through the property cycle. Where contingent liabilities had arisen or there were other major reviews, this would be dealt with and the data would be stored in an appropriate way so that when the case for a new system was made (and to review the property data), the exercise  ...  view the full minutes text for item 6.

Report to follow.

The Committee noted the late submission of the report, leaving very little time for the Committee to consider the documentation.

Ms Rachel Britton, BDO, introduced the report.

The meeting heard:

·         The disclaimer opinion that BDO would give would state that there was no assurance over the balances within the stated years. The new auditor, KPMG, would undertake an audit for the 2023/24 financial year. As part of that audit, they would do their normal audit and they would be able to get assurance over the closing balances for the 2024 financial year. There was likely to be some form of modification of their opinion. There was guidance in place for this. The Government had set out some recovery guidance on building back to full assurance. The way the accounts worked, the open balances would still have questions and there would probably be some form of qualification modification over the opening balances. The following year, the Council would be able to build further, as the closing balances would become the opening balances and it should take around two years to get back to a clean opinion position.

·         In relation to the three objections received, there was one in relation to the purchase of a site in Woodside ward. The Council had undertaken a full investigation into that. The other two related to parking charge notices (PCNs).

·         In relation to assurances, this was a question that could be examined in the January meeting of the Committee when KPMG present their findings and provide an idea about the assurance on the closing balances. It became apparent approximately nine months ago that lots of local authorities were going to be in difficult position over this and therefore it would take that number of years for the Council to get full assurance. A disclaimed set of accounts was slightly different to a qualified set of accounts. A disclaimed set was when work had not been undertaken. A qualified set was where, usually, the detailed work had been undertaken.

·         This was the first full audit that the Council had been through for three years. At this point, there was nothing specific that needed to be disclosed to the Committee.

·         Within the guidance that was issued, there were two exemptions; if there was material objection to the financial statements or indication of non-compliance with laws and regulations. In this case, the Council would have to publish a notification on their website to say why the process was not completed by 13 December 2024 and then the process would have to be completed as quickly as possible. This was to have more time fully investigate and resolve the potential material issue before an opinion on the financial statements could be issued.

·         Efforts would be made to resolve any objections by 13 December 2024. The Council ideally did not wish to publish the notice on the website. The Council had provided everything required and this was subject to some internal checks at BDO. 

·         If there was anything of a  ...  view the full minutes text for item 7.

This report provides Audit Committee with details of the progress made by Housing Services in implementing the key recommendations of the recently completed Housing Services audits conducted by Mazars, the Council’s independent internal auditors, which received a limited assurance rating.

Mr Jahedur Rahman, Operational Director, Housing & Building Safety, introduced the report.

The meeting heard:

·         For the last three years, on average, the Council received around 250 right to buy applications per year. The listed 700 applications were probably about three four years’ worth of right buy applications received in a space of about three weeks. The pattern was not specific to Haringey. Some directors had received applications worth 10 years or more. Most people were trying to get their application qualified for the previous discount and the Council had taken a strict approach to this. All applications received up until 21 November 2024 would be considered. If there had been an error on the way the form had been completed, the tenant would be given another five days to correct the error. If the five-day deadline was missed, then the application would not be considered for the discount.

·         Statutorily, the Council was required to issue Section 125s within 12 weeks from the point the Council had accepted the right to buy application. Ordinarily the Council would need to issue the Section 125 within 12 weeks. If the Council was not able to achieve the Section 125 within 12 weeks and the sale was completed, the resident could ask for a reduction on their rent should they proceed to complete the process on time. The Council had recruited additional staff to help with the influx of applications received to be able to meet the demand. Work was being done with the Valuations team to make sure on there was surveyor capacity to be able to value properties within the timescale set out.

·         The audit picked up fraud checks for right to buy applications. When a right to buy application was received, before it was accepted, the application was passed to the internal fraud team. Financial checks were made and if need be, follow-ups would be made. The audit recognised that significant due diligence had been done around minimising fraud for right to buy, but a housekeeping recommendation was made to make sure that information captured was saved centrally. At the time of the audit, it was saved locally.

·         There could be an increase in work for the internal audit team.

·         The time period to qualify for the original discount was 21 November 2024. The arrangements after 21 November 2024 was unclear. The Council decided it would take the date of 21 November 2024 plus five days, so anything received after the additional five days would not be eligible for the previous discount. However, if the Council received an application by 21 November 2024 and an error had been made on the application, an additional five days would be given to correct the error.

·         Any applications received after 21 November 2024 plus five days would be not eligible for the previous discount.

·         The audit did look at valuation and methodology and there were no concerns raised around the accuracy of the valuation, but there had been on the backlog of valuations -  ...  view the full minutes text for item 8.

This report details the work undertaken by Internal Audit for the period 1 September to 30 October 2024 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 (Forvis Mazars).

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

The meeting heard:

·         The My Conversations process being recorded on the system was to be across the organisation. The My Conversations process may be taking place currently, but they were not logged on a system. Auditors had suggested that there needed to be a regime in the absence of a formal recording for that information to be captured. This was crucial in understanding how effective the Council was in appraising staff on a regular basis. Haringey had been benchmarked against other authorities and it was found that doing it would improve management arrangements or staff performance.

·         The responsibility for making sure that staff were formally appraised rested within the directorates. However, there was a HR function which straddled the whole of the organisation and this applied a second line of defence. This was to ensure that where compliance was not as strong as it should be, efforts could be made to ensure that compliance occurred.

·         The responsibility for setting the standards for the organisation rested with HR and in that regard, this audit and the recommendations raised in it had been addressed to HR.

·         The agency element of the workforce was not part of the audit. A separate audit had been done in that area. It was really important as an organisation that staff resources were used as effectively as possible. Regular conversations through the process was an important way of making sure that staff were fully appraised on what the Council was trying to achieve, what the goals of the organisations were and aligning them to the work that they were doing and feeding back regularly regarding progress. Improvements in that area would lead to a host of outcomes.

·         A number of London boroughs were finding it difficult to position themselves to be able to deal with the new Procurement Act. It was likely that there would be a period of settling in for a year or so. The audits were seen as a means of making sure that the Council was as prepared as possible. Hopefully though the work, the service could be encouraged to make the necessary progression by the time the Council needed to settle into the Procurement Act fully.

·         The Council had accepted all the recommendations that had been put forward in the report. The Council was not where it needed to be, particularly in terms of the training. The Strategic Procurement team was mobilising itself for the Act. They were getting themselves up to speed with what was required. Not all procurement activity happened within that team so it was important to identify the right people across the organisation to ensure all efforts were made achieve compliance. A full update could be provided at one of the upcoming meetings of the Committee.

·         There were three elements of procurement that the Committee needed assurance over; system implementation, compliance with the Procurement Act and a general assurance around procurement processes and contract management processes.  ...  view the full minutes text for item 9.

This report details the work undertaken by the in-house resources in the Audit and Risk team and communicates a second update on completion of the work plan for 2024/25.

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

The meeting heard:

·         The approximate 60% of cases that result in no further action after fixed penalty notices had been issued did not necessarily mean that an error had occurred. The extent of the evidence involved meant that prioritising resources to most serious or repeat offenders would be ones most readily pursued.

·         The risk assessment was used to drive the activity of the team. This activity and the the financial sanctions being applied was bringing an income stream into the team which would be used to bolster resources. The Council had an experienced Fraud team, but needed a succession plan.

·         The Council had to take a step back from the housing fraud work while the Housing Improvement Program works progressed. As a team of six investigators, the team would have to come back together and focus on housing fraud. This would be a priority next year. However, cooperation from other teams across the Council was needed to make sure that substantial outcomes could be sought.

·         The team had looked at all of the right buy applications from both the fraud and the money laundering regulations perspectives. This was expected to decrease. The team had two or three employee investigations, but once those investigations got to a certain point, the investigators could come back and take on a greater housing caseload.

·         There were quite a lot of cases where the fraud team would focus on the seriousness or the criminality of a fraud, but would separate out any contractual breaches that fell under the disciplinary policy. Investigations would be done under the fraud strategy, but some matters needed to move through the disciplinary process quickly so the employee would have left the Council, but this did not mean that a fraud investigation would not continue. The case mentioned in the report referred to the team shortly before the person had left. The issue was around the person having a conflict of interest. The issue related most closely as a breach of employment contract, not a fraud matter. HR and the service had been informed about the lessons learnt. The declaration of interest had not been made by the officer and the the potential conflict of interest was reasonably well recognised by other staff.

·         The figures outlined on page 50 of the agenda papers were notional figures, not actual money. About two years ago, a case was prosecuted where someone had got a Council property, but were not using it as their main residential unit and the misuse had been going on for a number of years - five or six years. It was possible to get the notional figures quite high. For example, the current rent in London alone was around £15,000 to £18,000 a year.

·         The Tenancy Management service was currently restructuring to reduce patch sizes so that the officers had more manageable workloads. Although fraud was a priority in Housing, there were a lot of other priorities  ...  view the full minutes text for item 10.

This report provides an update to the Audit Committee on the Council’s treasury management activities and performance during the first half of the 2024/25 financial year, in accordance with the CIPFA Code.

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

·         In response to a query regarding to the £73 million that was subject to short term borrowing, the meeting heard that, on average, the borrowing rate the Council had was at 5.11 %. Compared with some of the rates in terms of the PWLB, they were much higher over that period. The Council was always looking for opportunities where it could get the best value in terms of borrowing decisions.

·         In relation to LOBOs, the Council had one LOBO that was refinanced - or the option was available every two years - this had been refinanced in the last financial year. Since then, the Council had £50 million worth of it. It would be three years before it was called, so the risk of that being actioned remained low. The Council also had a variety of loans - about two or three of them - that had shorter dates, but Arlingclose had advised that there was no appetite for them to get out of those deals, because the way they were structured through the use of swap contracts. Therefore, it was more expensive for them to come out those contracts. The main lenders had been keen to exit this as they did not want it on their balance sheets. This would result in the loan being subject to a higher rate. The Council would look to refinance this with the involvement of the PWLB. On both of these, the risk remained low.

·         Most of the LOBOs were around over 20 years. It would be around 2050 or 2060 when their full terms were completed. 

RESOLVED:

1.       To note the treasury management activity undertaken during the financial year to 30 September 2024 and the performance achieved attached as Appendix 1 to the report.

2.       To note that all treasury activities were undertaken in line with the approved Treasury Management Strategy.

The Chair noted that Mr Mpofu would be leaving the Council during the Christmas period. Members thanked Mr Mpofu for his hard work and dedication in his role.