Agenda and minutes

The Committee is asked to confirm as a correct record the minutes of the meeting of the Committee held on 16^th November 2021.

The minutes of the meeting of the Committee held on 16^th November 2021 were confirmed as a correct record and signed.

No disclosures were made.

No questions were submitted.

No questions had been submitted.

At the approval of the Chair the following item was brought forward: External Audit – Audit Completion Report – Charnwood Borough Council – Year Ended 31 March 2021

A report of the External Auditors.

A report of the External Auditor was submitted summarising the audit conclusions during the External Auditor’s audit of the Council’s financial statements for the year ended 31 March 2021 (item 7 on the agenda filed with these minutes).

Mark Surridge representing the External Auditors, the Strategic Director, the Head of Strategic Support and the Head of Financial Services, attended the meeting to assist with the consideration of the item.

The Committee was advised that:

·         The External Auditors were prepared to sign and close the statements as there were no concerns.  However, the Audit Certificate could not yet be issued as this was formally linked to a statute on closing the audit and the required information on the whole of government accounts, had not been received.  This was an issue for all local authorities and not just Charnwood Borough Council.

·         Regarding the Executive Summary on Audit Opinion and Value for Money, accounts were concluded to be fair, and this was an unqualified opinion without modification.  The structure of the Value for Money assessment had changed in 2021 through the Code of Audit Practice.  No significant weaknesses were found in arrangements.

·         The authority’s arrangements for financial sustainability, informed decision making and improving economy efficiency and effectiveness were deemed adequate, which was the best outcome possible.

·         Regarding the work on the Financial Statements, accounts were deemed to be true and fair.

·         Risk assessment was found to be in line with other local authorities.  The risks identified were not unusual or out of the ordinary.  All procedures had been carried out and concluded on.

·         A small number of minor matters were identified regarding internal control recommendations.  Officers would be worked with to close these out in the 2021/22 audit and none of these were a cause for concern.

·         Differences in the Statement above the £55,000 threshold were reported upon and an item that extrapolated to £271,000 was identified in the report.  It was suggested that this was due to the way the 52-week cycle was adjusted to match the financial year and it was requested that the Committee noted the acceptance of this.

·         Work was not complete on the approach to Value for Money until the new-style annual auditors report was issued.  However, no significant weaknesses had been identified.  The code required the report to be issued within three months of signing the Audit Opinion, as such this was a matter of timing rather than unidentified risk.

·         No adjusted material misstatements had been identified for 2020/21.  The accounts submitted for audit was of good quality and the external auditors had been given the full support of officers.

Councillor Snartt thanked the Officers involved for their efforts in ensuring a good result for the authority.

The Chair remarked that it was good to see the full cooperation of management and to see progress made.

The Committee were advised in response to questions that:

·         An issue was identified with rental receipts from commercial properties being accounted for on a cash rather than accruals basis. This was  ...  view the full minutes text for item 46.

A report of the Head of Strategic Support.

A report of the Head of Strategic Support was submitted setting out the Annual Governance Statement 2020/21 and the results of the annual review of the Council’s Code of Corporate Governance (item 5 on the agenda filed with these minutes).

The Head of Strategic Support attended the meeting to assist with the discussion of the item.

The Committee were advised that the Annual Governance Statement summarised the Council’s corporate governance arrangements and the review that was undertaken to confirm that they were operating efficiently and effectively along with additional recommendations for further actions required.  It was reported that there were no additional actions required that were not already being carried out.  

The Code of Corporate Governance detailed the corporate governance requirements.  Five years previous, CIPFA and Solace provided guidance on how the Code of Corporate Governance should be produced and as such the Council had amended the Code of Corporate Governance to comply with this and arrangements had been kept up to date.

Councillor Snartt recommended that the reference to whistleblowing with regard to corruption and misuse of power within the Code of Corporate Governance be amended to include a specific reference to fraud.

In response to a question from Councillor Snartt, it was clarified that the officer code of conduct was part of the constitution and approved by Council.  It followed the national code of conduct and therefore was seen as fit for purpose.  Attention was also drawn to the disciplinary procedure for officers who broke the code of conduct.

In response to a question from Councillor S. Bradshaw, it was confirmed that the web page containing information on transparency could be found via a search engine.

The Chair drew attention to some inconsistencies including the role of the Audit Committee being different to that in the Committee’s Terms of Reference.  She further suggested that the report could include a table showing the different policies and which part of the Annual Governance Statement they covered.  It was further suggested that Mazars could provide examples of good practice for the presentation of the Annual Governance Statement.  Annual Governance Statement.

Councillor Snartt suggested that Freedom of Information Act requests could be included in the Annual Governance Statement.

The Chair suggested that new issues could be added more easily if it was presented as a table.  She clarified that suggested changes for the presentation of Annual Governance Statement were for next year’s Statement rather than the current one.

RESOLVED

1.    That the Annual Governance Statement be approved.

2.    That the updated Code of Corporate Governance be approved with an amendment to include a specific reference to fraud with regard to whistleblowing on corruption and misuse of power.

Reasons

1.    So that the Annual Governance Statement can be finalised and signed by the Leader of the Council and the Chief Executive in accordance with the required timescales.

2.    To ensure that the Code of Corporate Governance is kept up to date and complies with best practice.

A report of the Head of Finance.

A report of the Head of Financial Services was submitted setting out the Council’s Statement of Accounts 2020/21 (item 6 on the agenda filed with these minutes).

The Head of Financial Services, the Strategic Director, the Head of Strategic Support and Mark Surridge representing the External Auditors attended the meeting to assist with the consideration of the item.

The Committee were advised that statutory accounts were in line with the CIPFA code of practice.  Attention was drawn to the changes from 2019 within the report.

The Head of Financial Services thanked the accountancy team for supplying Mazars with the paper.

The Committee were advised in response to questions that:

·         In theory, the deficit of the collection of business rates should cause nil impact as the Council should be compensated for business rates relief.  The issue was complicated by the fact that Section 31 money should go into the fund to match the rates, however, it went directly into the reserves thus leaving a deficit in the collection fund.  Central government advised about how the deficit should be spread and how the account should work as well as how the deficit should be closed.  It was thought that the difference over the 3-5 year period should not be material.  There was a one-off Covid-reserve set up for 7,346,000 to offset the deficit.

·         In terms of year-end figures, compensation of commercial difference would be examined and it would be ensures that here were 12 months or four quarters in the accounts.

·         A legal dispute with a contractor had been reviewed also the amount that the claim included had been reviewed.  This was not considered to be a material liability from the Head of Service and the external auditors had been provided with emails and working papers to reflect this.  The numbers and the name of the contractor had been omitted to protect the organisation.  Figures would not be included in the accounts as they were in legal proceedings.  The event was contingent on an act that had not yet taken place and as such there was insufficient evidence to put the numbers in the statement.  If the dispute resulted in the Council having to make the payment then it would have to be put in the accounts, but it would not be a material amount from an accounts perspective.

·         Budgets were monitored throughout for both Income and Expenditure and filter to Finance and Performance Scrutiny as well as being separately audited and externally audited.  In terms of assurance they were a robust set of account that tallied to the Unit 4 System.

·         Regarding whether movement of money in and out of reserves was based on policy or circumstance, it was clarified that there was no general policy on when money was moved in and out of reserves, and usually occurred in response to circumstances. However standard custom and practice operates in respect of the Reinvestment Reserve which is topped up to a £500k on a regular basis (subject to the working balance  ...  view the full minutes text for item 48.