Agenda and minutes

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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 as shown on the agenda in respect of filming at this meeting, and Members noted the information contained therein.

Apologies for absence were received from Cllr Ejiofor.

Apologies for lateness were received from Cllr Ibrahim.

Cllrs Rossetti and Demir attended the meeting virtually.

There were no items of Urgent Business.

None.

None.

To consider and agree the minutes of the meeting held on 17^th March 2021.

The Committee requested an update around the follow-up audit of the purchase of Alexandra House. In response, officers set out that at its last meeting, the Committee received a report from Mazars into the initial decision not to purchase Alex House when the opportunity first arose. Subsequent to this, Internal Audit received a report from the external auditors around the later decision to purchase, which set out a number of areas of assurance that the Head of Audit accepted. The Head of Audit advised that he was happy to consider any further concerns raised by the Committee and whether a further piece of audit work was required. The Chair suggested that this could be picked up outside of the meeting.

A Member of the Committee sought clarification around what issues the Chair was hoping to pursue outside of the meeting. The Chair set out that there were still some outstanding issues around the initial decision not to purchase and the decision making processes involved therein. The Chair suggested that he would like to see some further assurances that similar mistakes would not be made in the future. The Chair proposed that he would have some further discussions with officers outside of the meeting and that the issue would come back to the Committee at a subsequent meeting.

A Committee Member suggested that these concerns should be outlined in the meeting in a public forum. It was commented that the Committee had already received a report at a previous meeting, and it was suggested that the justification for a further report was unclear. The Member cautioned against other members of the Committee being seen to pursue a political agenda. The Chair reiterated his concerns around good governance and value for money and advised that the discussions he had initially suggested were merely around the scope of further inquiry. The Chair accepted the point raised about the need for any future report to come back to a future meeting and be discussed in public.

The Committee Member in question reiterated the need for decisions to be taken in the meeting and suggested that, given this was a new Committee, perhaps the initial report should be brought back to the Committee in the first instance, with questions put to officers.

Cllr Amin requested that her strong opposition to the process be recorded in the minutes along with her concerns that this seemed to be part of a political agenda.

The Chair requested that an item around a possible follow-up audit on the decision to purchase Alex House would be added to the agenda for the next Committee. (Action: Clerk).

RESOLVED

That the minutes of the meeting held on 17^th March 2021 were agreed as a correct record.

Verbal Update.

The Committee received a verbal update in relation to the Statement of Accounts 2020/21. At the last meeting, the Committee set out that it would like to see the establishment of a working group to look into some of the operational issues that had been raised in the external audit report on the annual Statement of Accounts. Subsequent to that meeting, the Director of Finance met with the previous Chair of the Committee and advised that officers would provide updates to the Committee on this issue instead. The Chief Accountant advised the Committee that:

• The final Audit Letter (for 2019/20) had been circulated to members of the Committee and had been published on the Council’s website. In the letter, the authority received an unmodified audit opinion of the Council’s accounts.
• The three areas of concern raised by the external auditors as part of the audit of the 2019/20 accounts were accounts receivables, valuation of non-current assets and uncleared balances in the suspense account.
• The concerns raised by the external auditors on accounts receivables related to bad debt provision and the fact that the basis/percentages used for this had not be amended in light of Covid. Following the auditors raising this issue, offices fed back that the provisions were adequate, and that the over-provisions made by authority in the past years will mitigate any potential impact COVID might have on accounts receivables. The officers pointed out that as at the said time, no one could have reasonably estimated the impact of COVID. Subsequent to this, Finance officers had been working with services to go through every account receivable in detail to ensure that there was adequate provision in the 2020/21 accounts and that the impact of Covid was accurately captured. There were also some concerns raised by the auditors about the documentation of basis of the provision made. Officers advised that, since the audit report, the basis of provision made have documented in preparation for the audit of the 2020/21 accounts.
• The valuations of non-current assets related to plant, property, and equipment, as well as investment properties. The key areas of concern were:
  • A specific property that had been transferred and still appeared in the books
  • Errors in the valuations of gross internal areas of schools and other buildings.

Officers advised that the readjusting to the new ways of working due to COVID led to the final accounts team not picking up on the disposal of the Laurels that took place just 3 months before the lockdown. This was however, picked up before the audit started and corrected it but auditors still had to report it as it was corrected after the draft account was produced.

On the error relating to gross internal areas, officers advised that these were usually spotted once we receive the data from external valuers. That these are usually corrected by physically visiting and remeasuring. This did not happen in this case due to COVID restrictions. Officers advised that in response to the  ...  view the full minutes text for item 34.

The Committee received a report which set out the Council’s Treasury Management activities and performance in the year to 31^st March 2021, in accordance with the CIPFA Treasury Management Code of Practice. The report was introduced by Tim Mpofu, Head of Pensions and Treasury as set out in the agenda pack at pages 15-29.  The following arose during the discussion of the report:

1. The Committee sought clarification around the outlay on lending to third parties and what the payback rate was. The Committee also sought reassurances around how this compared to other boroughs. In response, officers advised that Table six of the report set out the outlay to third parties, these included other local authorities and some local charities. The biggest balance was £49.3m to Alexandra Palace, which was largely historical. Officers advised that they did not have information in relation to how this compared with other local authorities about agreed to provide this information in a future update to the Committee. (Action: Tim Mpofu).
2. The Committee sought clarification around the government’s plans to set up a UK Infrastructure Bank, with money available for carbon net-zero projects and whether the Council would be looking to apply. In response, officers advised that the bank had just been set up, with £4 billion specifically earmarked to local authorities. Officers advised that an initial review of these proposals had been undertaken and would continue to be monitored going forwards. However, the borrowing costs were comparable to existing loans from the PWLB, but the bidding process would impact the flexibility needed to fund the capital programme. In addition, there was a limit of a £5m on the value of loans, which was quite small in comparison to the total value of the capital programme.
3. The Committee sought assurances around the borrowing costs being significantly less than the budget for those costs. In response, officers acknowledged that there had been less activity on borrowing within the HRA and that no long terms loans had been taken out on the HRA this year. Borrowing on the HRA and General Fund was dependant on cashflow needs and that the borrowing rates for shorter term loans had resulted in the Council needing to take out less long term borrowing. There had also been other opportunities within the GF to make sure that the authority was not overpaying on borrowing costs.

RESOLVED

That the Corporate Committee:

1. Noted the Treasury Management activity undertaken during the year

to 31st March 2021; and the performance achieved which was set out in Appendix 1 of the report;

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

The Committee received a report from the Head of Audit and Risk Management which set out the draft annual governance statement (AGS) relating to the 2020/21 financial year, for review and approval. The report was included in the agenda pack at pages 31-64. The following arose during the discussion of the report:

1. In response to a question around who was responsible for reporting data breaches, officers advised that as part of the GDPR regulations, it was the Council that was responsible for assessing the severity of any breaches and, if necessary, reporting them to the Information Commissioner. In response to a follow-up, it was noted that HfH had systems in place to monitor and report their own data beaches and that those were not included in the report, notwithstanding the corporate services that HfH commissioned the Council to undertake on its behalf.
2. The Chair sought clarification as to whether the table on page 56 should read 6^th June 2021, rather than 6^th June 2020. Officers confirmed that this was a typo and should read 2021. The Chair commented that, in which case, it did not appear that much progress had been made in relation to moving leaseholders out of the two blocks on Broadwater Farm. In response, officers advised that there were a small number of leaseholders who were not willing to relinquish their leases, which had caused significant delays. The local authority was looking into alternative courses of action to acquire those leases.
3. In response to a follow-up question around whether this would impact the purchase price, officers advised that they would ask colleagues in the housing service to provide a written response on this. (Action: Minesh Jani).

RESOLVED

1. That the Corporate Committee reviewed and approved the draft 2020/21 AGS attached at Appendix A of the report.

2. That the Corporate Committee noted the approval timescale and processes for the draft 2020/21 AGS.

The Committee received a report which sought to inform Members of the overall adequacy and effectiveness of the system of internal control and risk management operating throughout 2020/21 and present a summary of the audit work undertaken to formulate the opinion, including reliance placed on work by other bodies. The report fulfilled the relevant statutory requirements of the 2017 UK Public Sector Internal Audit Standards; the 2017 Local Government Transparency Code; and the Committee’s own Terms of Reference. The report was introduced by Minesh Jani, Head of Audit and Risk Management, as set out in the agenda pack at pages 65-101. The following arose as part of the discussion of the report:

1. The Committee noted that an adequate assurance rating was given overall, which was the second highest level of assurance. 13 audits received limited assurance and there were no instances of audits being assigned a nil assurance rating.
2. The Committee sought clarification as to whether there was any link between the key issues highlighted with the audits carried out within the Council and those carried out in relation to schools. Officers advised that, although there may be similar issues involved, these should be treated as separate and that the report at Agenda Item 12 on the Annual Schools Audit would set out the key issues in relation to schools in more detail.
3. The Committee sought clarification on why the IT change management follow-up audit on page 85 did not receive an assurance rating. In response, officers advised that this part of the report summarised the audits carried out by Mazars and that some of these audits were not assurance related works. Not all of the audits undertaken required an assurance rating, such as if the audit related to the implementation of  a new system or if management requested an audit as they knew there was a specific problem. The Committee were advised that the IT change management follow up audit was not assigned a separate audit score to the initial audit score as it was reviewing the extent to which the recommendations from the earlier audit had been implemented. The other two audits in this section of the report without assurance scores were, the Early Years audit and a CCTV audit. In both of these instances, the audits were requested by management following a series of issues raised by complainants and were not assurance related pieces of work.
4. The Committee sought clarification on the statement in the report at paragraph 3.11 that ‘the action in relation to school audits in the Annual Governance Statement had been closed’. In response, officers advised that because so many schools received low levels of assurances last year, that this was significant enough to warrant inclusion in the AGS as an area of concern. Because there had been an improvement in this area, it was no longer felt necessary to include it in the AGS. Officers assured the Committee that school audits work would continue throughout the year and that a robust process of  ...  view the full minutes text for item 37.

The Committee received a report which detailed the work undertaken by the in-house Audit and Fraud team as well as Mazars, for the quarter ending 31 March 2021. The report was introduced by Minesh Jani, Head of Audit and Risk Management as set out in the agenda pack at pages 103-116. The following arose during the discussion of the report:

1. The Committee sought clarification around waivers to Contract Standing Orders and how often these were used. The Committee specifically queried which contracts these had been used for, how often they were used and whether this had resulted in extra costs as a result. In response, the Head of Audit advised that he would ask the service to provide a written response on this. (Action: Minesh Jani).

The Head of Audit advised that during the process of auditing the Procurement service, it was apparent that the two main reasons for seeking waivers were because of the need to procure something quickly or in instances where a contractor had a particular speciality.

RESOLVED

That the Corporate Committee noted the activities of the Audit and Fraud team during quarter four of 2020/21.

The Committee received a report which set out of the outcomes of the 2020/21

schools audit programme and the follow-up of 2019/20 audits carried out in

2020/21. The report was introduced by Minesh Jani, Head of Audit and Risk Management as set out in the agenda pack at pages 117-131. The following arose during the discussion of the report:

1. The Committee sought assurances around the progress on the implementation of recommendations from school audits and whether these were being followed up on. In response, officers confirmed that they were.
2. In relation to page 131, the Chair queried the fact that the assurance levels remained the same for the following year except for the Brook special school. Officers advised that the assurance level stated in the table was the assurance level assigned during the original audit and that assigning a new assurance level was not part of the process of following-up on the audit recommendations. Officers agreed to make that clearer in future reports and would also look at the assurance rating for the Brook, as the change in assurance rating was clearly an error.
3. The Committee sought assurances around the impact of Covid and whether officers had effectively lost a year of school audits. In response, officers advised that they had been able to carry out all but two of the scheduled audits and that these two had been rolled into the current year’s audit plan instead.

RESOLVED

That the Committee noted the report.

None

23 September 2021

9^th September